2013 (12) TMI 233 - AT - Customs

Waiver of pre-deposit of duty - Import of injection moulding machines took place by misdeclaring the assessable value - No proper authorization for clearance of the goods - Held that - There are decisions of this Tribunal holding that for non-obtaining proper authorization, penalty cannot be imposed under Section 112(a) of the Customs Act. For lending of IEC, there is no violation of the Customs Act and if at all any violation is found only Foreign Trade (Development and Regulation) Act will apply and under Customs Act no penalty can be imposed - applicant has agreed to make the pre-deposit of differential duty - Therefore applicant directed to make the pre-deposit of the agreed amount within four weeks and report compliance - The CHA and the IEC holder have made out the case of waiver of pre-deposit, therefore pre-deposit is waived and stayed recovery thereof during the pendency of the appeals - Partial stay granted.

Summary

Issues:
Waiver of pre-deposit of duty and penalty on the actual importer, imposition of penalties on CHA and IEC holder for clearance and misdeclaration, applicability of Customs Act and Foreign Trade Act, compliance with pre-deposit directives, waiver of pre-deposit for CHA and IEC holder.

Analysis:
The case involved the applicants seeking waiver of pre-deposit of duty on the actual importer and penalties on all the applicants. The import of injection moulding machines was done by misdeclaring the assessable value, with M/s. Arahaman Traders as the IEC holder and goods actually imported by T.M. Rahmathullah. A penalty of Rs. 70,000/- was imposed on the CHA for lack of proper authorization under Section 112(a) of the Customs Act. A penalty of Rs. 1.50 lakhs was imposed on the IEC holder for lending the IEC, and duty and penalty were imposed on the actual importer for misdeclaration of goods' valuation.

The Tribunal noted previous decisions stating that penalty cannot be imposed under Section 112(a) of the Customs Act for non-obtaining proper authorization. It was clarified that lending of IEC does not violate the Customs Act, and any violation would fall under the Foreign Trade (Development and Regulation) Act, not the Customs Act. The actual importer agreed to make a pre-deposit of differential duty of Rs. 46,983/-, and was directed to comply within four weeks.

Upon compliance, the penalty on the importer was waived during the appeal's pendency. The CHA and IEC holder successfully made a case for waiver of pre-deposit, leading to the waiver and stay of recovery during the appeals' pendency. The order was dictated and pronounced in open court, providing clarity on the waiver of pre-deposit for the CHA and IEC holder based on the specific circumstances and legal provisions involved in the case.