2015 (4) TMI 277 - AT - Customs

Waiver of pre deposit - Confiscation of goods - Misdeclaration of goods - consignment received in name of bogus company and bogus owner - Held that - From the material facts and evidence as well as enquiry conducted by investigation prima facie shows that the importer M/s Planet Overseas was not in existence and IEC was obtained fraudulently using fabricated and fake documents. There was racket of a group of persons as stated herein before who were operating the smuggling and brought endangering item of fire cracker illegally without license from Explosive Authority. The racket was busted out only due to investigation. They have deceived Revenue. When customs was defrauded and all these racketeers in adjudication do not appear to be innocent and they had hand in glove in the fraudulent design as described herein before, all of them are liable to make pre-deposit as follows with in 4(four) weeks of pronouncement of the order - Partial stay granted.

Summary

Issues:
1. Existence of fake importer and proprietor.
2. Mis-declaration of imported goods.
3. Role of various individuals in illegal import.
4. Compliance with Customs regulations by Clearing House Agent (CHA).
5. Violation of licensing requirements for importing fireworks.

Analysis:
1. The investigation revealed that the importer, M/s Planet Overseas, and its proprietor, Mr. Karandeep Singh, were non-existent, leading to suspicions of a fake concern. Further inquiries exposed a network of individuals involved in the illegal importation of firecrackers from China.

2. The imported consignments were mis-declared, with firecrackers being concealed as toys, a restricted item under the EXIM policy. The mis-declaration violated Sections 111(d) and 111(m) of the Customs Act, 1962, warranting absolute confiscation of the goods.

3. Various individuals, including Mr. Sanjay Anand, Mr. Surender, Mr. Ravish Kumar, and Mr. Amit Sharma, were found complicit in the illegal importation scheme. They faced penalties under different sections of the Customs Act for their roles in facilitating the fraudulent imports and using fake documentation.

4. The Clearing House Agent (CHA), Mr. Gunjan Sharma, failed to adhere to the prescribed KYC norms and verify the antecedents of the importer, M/s Planet Overseas. His negligence and involvement in the clearance of goods based on fraudulent documents led to penalties under Sections 114AA and 117 of the Customs Act.

5. The investigation also uncovered violations of licensing requirements for importing fireworks, as no valid license had been issued under the Explosive Rules 2008 for such imports from China. The lack of proper licensing further highlighted the illegal nature of the importation scheme.

In conclusion, the adjudicating authority imposed penalties and confiscations based on the fraudulent importation of firecrackers, the involvement of various individuals in the scheme, and the failure to comply with Customs regulations and licensing requirements. The judgment underscored the importance of verifying the authenticity of importers and goods to prevent fraudulent activities in the import-export sector.