2014 (6) TMI 446 - AT - Customs

Confiscation of goods - Redemption fine - Penalty imposed on partnership firm and partner each u/s 112 - import of memory cards of STRONTIUM brand Micro SD Memory cards of 2GB capacity - declared as PERSONAL EFFECTS/CLOTHS/SEE INLAY - Difference of opinion - Majority order - Held that - under Notification issued by the Central Government under Section 11 of the Customs Act, 1962 import of dutiable goods through letter, packet or post parcel is restricted to the cases where such letter, packet or post parcel is accompanied by a declaration stating the nature, weight and value of its contents and such declaration is either enclosed therein or is pasted on to the parcel and the Commissioner of Customs is satisfied that the nature, weight and value of the contents of the letter, packet or post parcel had been correctly stated in the declaration. In this case, undisputedly the nature of the contents and the value has been grossly mis-declared and hence this import is in contravention of the prohibitions imposed by the Central Government under Section 111 and hence irrespective of the applicability of Clause (l) and (m) of Section 111, the goods would be liable for confiscation under Section 111 (d). In this case while the Commissioner has imposed redemption fine of ₹ 12,00,000/- and the same has been upheld by Hon ble Member (Technical), Hon ble Member (Judicial) has reduced the fine to ₹ 6,00,000/-. No calculation of the margin of profit has been given by the Department and this is the ground on which the redemption fine has been reduced. Since, the redemption fine in lieu of confiscation is dependent upon the profit margin in respect of which there is no evidence, on the question of redemption fine, I agree with the decision of Hon ble Member (Judicial). Penalty of partner of the firm - Held that - since penalty has been imposed on partnership firm under Section 112 (a), separate penalty on its partner, Shri Aditya Batra would not be justified under Section 112 (a). Penalty under Section 112 (b) is attracted when in respect of any illicitly imported goods liable for confiscation under Section 111, any person acquires their possession or deals with them in the manner mentioned Clause (b) of Section 112. In this case, the goods imported had not even been cleared and, as such, there was no question of Shri Aditya Batra having acquired their possession or being concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or any other manner dealing with the imported goods. For this reason penalty under Section 112 (b) on Shri Aditya Batra is not justified. Thus, while penalty on Shri Aditya Batra is not imposable under Section 112 (b), penalty on him as imposed under Section 112 (a) is not justified when for the same offence penalty has been imposed under Section 112 (a) on M/s Siddhant Enterprises of which Shri Aditya Batra is a partner - Decided partly in favour of assessee.

Summary

Issues Involved:
1. Mis-declaration of goods and value.
2. Confiscation of goods.
3. Imposition of redemption fine.
4. Imposition of penalties on the partnership firm and the individual partner.

Issue-wise Detailed Analysis:

1. Mis-declaration of Goods and Value:
The appellant imported a consignment of 40,000 pieces of 'STRONTIUM' brand Micro SD Memory cards from Taiwan, declaring them as 'PERSONAL EFFECTS/CLOTHS/SEE INLAY' with a value of HKD 720. Upon examination, the contents were found to be memory cards, contrary to the declared description and value. The declared value was significantly lower than the actual value, which was reassessed to Rs. 56,36,400/- based on contemporary imports of identical goods. The appellant admitted the mis-declaration and agreed to pay the differential duty and penalty.

2. Confiscation of Goods:
The goods were confiscated under Sections 111(l) and 111(m) of the Customs Act, 1962, due to the mis-declaration of the description and value. The Commissioner of Customs found that the goods were fraudulently imported and liable for confiscation. The Tribunal upheld the confiscation, noting that the goods were imported in contravention of the prohibitions imposed under Section 11 of the Customs Act, 1962.

3. Imposition of Redemption Fine:
The Commissioner imposed a redemption fine of Rs. 12,00,000/-. However, there was a difference of opinion between the members of the Tribunal regarding the quantum of the fine. One member argued for reducing the fine to Rs. 6,00,000/- due to the lack of inquiry into the margin of profit, while the other member upheld the original fine. The third member agreed with reducing the fine to Rs. 6,00,000/-.

4. Imposition of Penalties on the Partnership Firm and the Individual Partner:
A penalty of Rs. 3,00,000/- was imposed on M/s Siddhant Enterprises, and a personal penalty of Rs. 1,00,000/- was imposed on Shri Aditya Batra. The Tribunal upheld the penalty on the partnership firm but had differing views on the penalty for the individual partner. One member argued that the penalty on Shri Aditya Batra should be set aside, as the partnership firm had already been penalized. The third member agreed, noting that separate penalties on the partner were not justified when the firm had already been penalized.

Conclusion:
The Tribunal upheld the findings of the Commissioner regarding the mis-declaration and confiscation of goods. The redemption fine was reduced to Rs. 6,00,000/-, and the penalty on Shri Aditya Batra was set aside, while the penalty on the partnership firm was upheld. The judgment emphasizes the importance of accurate declarations in imports and the consequences of mis-declaration.