2011 (4) TMI 1141 - AT - Customs

Seizure and confiscation - redemption fine and penalties - search - statement was recorded wherein it was stated that he has lost the original IEC and has not lodged any compliant with the police department. He further submitted that he is working for some person on commission basis and he is not the real importer of the said goods imported under the impugned bill of entry these goods pertain to one Shri Atul Sanpal - appellants submits that it is admitted fact that the goods were imported by M/s. Sharp Enterprises for Shri Atul Sonpal- Held that - no violation of the provisions of Customs Act order is set aside appeals are allowed

Summary

Issues:
- Confiscation and redemption of goods under Customs Act, 1962
- Allegation of misuse of Importer Exporter Code (IEC)
- Applicability of redemption fine and penalties on the appellant
- Interpretation of Foreign Trade (Development and Regulation) Act, 1992

Confiscation and Redemption of Goods:
The appeal involved a case where goods were seized and confiscated by the Commissioner, with the option for redemption on payment of fines and penalties under Sections 111(d) and 114AA of the Customs Act, 1962. The appellant challenged this order before the Appellate Tribunal CESTAT, Mumbai.

Allegation of Misuse of Importer Exporter Code (IEC):
The case revolved around the misuse of the Importer Exporter Code (IEC) by individuals other than the registered importer. It was alleged that the goods were imported under the IEC of one entity, but the actual importer was a different person. The appellant argued that there was no misrepresentation or undervaluation of goods, contending that the only issue was the lending of the IEC for importation.

Applicability of Redemption Fine and Penalties:
The appellant's advocate argued that since there was no violation of customs laws apart from the misuse of the IEC, redemption fines and penalties should not be imposed. Reference was made to a Bombay High Court decision supporting this argument, emphasizing that the customs duty was paid, and there was no legal provision preventing a person with a valid IEC from importing goods for another.

Interpretation of Foreign Trade (Development and Regulation) Act, 1992:
The Departmental Representative (DR) cited the Foreign Trade (Development and Regulation) Act, 1992, to support penalizing the appellants for importing goods without the actual importer having a valid IEC. The DR argued that the imports were in contravention of the EXIM policy and the Act, justifying the imposition of penalties under the Customs Act. A tribunal decision was also referenced to strengthen this argument.

In the judgment, the presiding judge analyzed the arguments presented by both sides. The judge noted that the goods were imported under a valid IEC and that there was no evidence of misdeclaration or undervaluation. Drawing from a relevant High Court decision, the judge concluded that there was no violation of the Customs Act in this case. Consequently, the impugned order was set aside, and the appeals were allowed with any necessary consequential relief.