2014 (11) TMI 111 - AT - Customs

Contravention of the provisions of Section 111(d) and 111(m) - activity of arranging IEC of some other persons for unauthorized/illegal imports of toiletries, paraffin wax, tiles and fabrics by mis-declaring the value of the goods. - Held that - Allegation has to be proved by the adjudicating authority that the appellant has violated the provisions of the Section 111(d) and 111(m) of the Act. Section 111(d) of the Act deals with the provisions of imports of prohibited/restricted goods. Admittedly, in this case the impugned goods are freely importable therefore, appellant had not violated the provisions of Section 111(d) of the Act. Further I find that while assessing the goods, 52% of the value has been loaded on the basis of NIDB data therefore, the allegation of under-valuation of the goods is not sustainable. - demand and penalty set aside - Decided in favour of assessee.

Summary

Issues:
Penalty imposed under Section 112(a) and 114 AA of the Customs Act, 1962 for contravention of Section 111(d) and 111(m) - Allegation of arranging unauthorized imports by mis-declaring goods' value.

Analysis:
The appellant, a Customs House Agent (CHA), appealed against a penalty of Rs. 8,00,000 imposed for contravention of Sections 111(d) and 111(m) of the Customs Act, related to unauthorized imports of toiletries, paraffin wax, tiles, and fabrics by mis-declaring values. The appellant argued that the impugned goods were freely importable, thus Section 111(d) did not apply. Additionally, they contested mis-declaration of value, citing a 52% loading based on NIDB data during assessment, refuting the allegation. The Revenue contended that using other persons' IEC for imports warranted penalty and confiscation of goods.

Upon review, the tribunal found the allegations unsubstantiated. As the impugned goods were freely importable, Section 111(d) was deemed inapplicable. The 52% value loading based on NIDB data negated the under-valuation claim under Section 111(m). The tribunal concluded that the appellant did not violate the said provisions, warranting no penalty. Consequently, the impugned penalty order was set aside, allowing the appeal with any consequential relief.

This judgment clarifies the application of Sections 111(d) and 111(m) in cases of alleged unauthorized imports and mis-declaration of goods' values. It emphasizes the need for substantiated allegations and adherence to statutory provisions before imposing penalties under the Customs Act.