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2015 (6) TMI 42 - AT - CustomsPenalty u/s 112 - import made in the name of other firm - Held that - Imports have been made in the name of IEC holder. Bills of entries have also been filed in the name of IEC holder. Further, the appellants has produced the IEC holder before the Revenue authorities and there is no bar for imports under the Customs Act to import the goods in the name of IEC holder and there is no offence under the Customs Act for lending of IEC code. In these circumstances, relying on the decision of Atul D Sonpal (2011 (4) TMI 1141 - CESTAT, MUMBAI), I hold that the appellant has not violated the provisions of Customs Act and there is no allegation of any misdeclaration, mis-representation or under-valuation of the goods - Merely IEC holder lending the IEC to a third party is not an offence under the Customs Act and penalty for violation of Section 7 of Foreign Trade Development and Regulation Act 1992 cannot be imposed under Customs Act. - Decided in favour of assessee.
Issues:
- Imposition of penalty under section 112 of the Customs Act, 1962 for importing goods in the name of other firms. - Violation of provisions of the Customs Act and Foreign Trade Policy. - Existence of IEC holders and their role in import transactions. - Interpretation of the Customs Act regarding imports in the name of IEC holders. - Applicability of penalties for lending IEC code to a third party. Analysis: The appellant appealed against an order imposing a penalty of Rs. 10 lakhs under section 112 of the Customs Act, 1962, for importing compact disc rewritable (CDR) in the name of other firms. The Revenue alleged that the appellant imported goods in the name of other firms with valid IEC codes, but the imports were actually for the appellant's use, leading to the imposition of the penalty. The appellant argued that no provisions were violated, as all documents were filed in the name of IEC holders, and there is no prohibition in the Customs Act against such imports. Reference was made to a previous Tribunal case to support this argument. The Revenue contended that the IEC holders were non-existent, and the appellant had to produce the actual IEC holder after bail was granted. It was argued that importing goods in the name of non-existent IEC holders warranted the penalty, as only the IEC holder is authorized to import goods. Another Tribunal case was cited in support of this argument. After hearing both sides, the Tribunal considered that imports were indeed made in the name of the IEC holder, and the appellant had produced the actual IEC holder. It was clarified that there is no offense under the Customs Act for lending an IEC code to a third party. The Tribunal held that the appellant did not violate the Customs Act, as there was no misdeclaration or under-valuation of goods. It was further emphasized that lending an IEC code is not an offense, and penalties under the Foreign Trade Development and Regulation Act cannot be imposed under the Customs Act. Consequently, the penalty was deemed not imposable, the impugned order was set aside, and the appeal was allowed with any consequential relief.
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