2015 (3) TMI 246 - AT - Customs

Confiscation of goods - duty is sought to be recovered from so many persons without ascertaining or apportioning the duty amount in respect of each person - Duty is sought to be recovered on joint and several basis - Held that - It is a settled position in law, that duty cannot be demanded on joint and several basis. The liability of each person has to be determined separately and therefore, the impugned order is clearly unsustainable in law. Therefore, the matter has to go back to the adjudicating authority for fresh consideration for determination of the facts as to who is the person responsible for payment of duty in respect of each bill of entry. If more than one person is found to be responsible, then the liability of each person has to be determined separately. Thereafter, the adjudicating authority has to consider the roles played by others to see that if they are liable to any penalty under the provisions of the Customs Act. - Matter remanded back - Decided in favour of appellants.

Summary

Issues:
- Duty demand confirmation and recovery from multiple individuals
- Variance between show-cause notice and impugned order
- Applicability of joint and several liability in customs duty cases

Analysis:

Issue 1: Duty demand confirmation and recovery from multiple individuals
The judgment involves eight appeals and stay petitions arising from an Order-in-Original passed by the Commissioner of Customs (Imports), Mumbai. The adjudicating authority confirmed a duty demand in two separate instances, one related to goods cleared through the New Customs House, Mumbai, and the other related to goods imported through Air Cargo Complex, Sahar. The duty amounts were ordered to be recovered from multiple individuals associated with the transactions. Penalties were also imposed for contravention of Customs Act provisions, and goods were held liable to confiscation under specific sections of the Customs Act, 1962. The appellants challenged this order, arguing that duty recovery from multiple persons without ascertaining or apportioning the amount for each individual was legally flawed.

Issue 2: Variance between show-cause notice and impugned order
The appellants contended that there was a discrepancy between the show-cause notice and the impugned order regarding the persons from whom duty was sought to be recovered. While the notice proposed recovery from only two individuals for a specific bill of entry, the final order demanded duty from several persons, leading to confusion and inconsistency. Citing previous tribunal decisions, the appellants argued that duty liability must be determined separately against each individual involved in the transaction. The tribunal acknowledged the legal principle that duty cannot be demanded on a joint and several basis, emphasizing the need for a clear determination of each person's liability for duty payment.

Issue 3: Applicability of joint and several liability in customs duty cases
The tribunal, after considering the submissions from both sides, reiterated the established legal position that duty liability must be determined individually for each person involved in a transaction. Relying on previous decisions, the tribunal concluded that the impugned order, seeking duty recovery from multiple persons without specific apportionment, was legally unsustainable. Therefore, the matter was remanded back to the adjudicating authority for a fresh consideration to determine the duty liability of each person concerning the transactions. The tribunal emphasized the importance of separately assessing the roles and liabilities of each individual before imposing penalties under the Customs Act.

In conclusion, the appeals were allowed by way of remand, with all issues kept open for further consideration by the adjudicating authority. The stay petitions were also disposed of accordingly.