2015 (8) TMI 354 - AT - Customs

Demand of duty from the courier agency - Waiver of pre-deposit - importing non-bonafide unaccompanied baggage and goods intended for trade/business and clearing the same in the guise of bonafide gifts - appellant produce the consignee authorizations - Held that - Not a single authorization has been produced before the investigating officers or before the Commissioner at the time of adjudication. There is not even a claim that such an authorisation has been collected. Therefore it becomes very clear that in the absence of post facto authorization, the Bill of Entry filed by the appellant has to be considered as filed without any authorization. Once the Bill of Entry has been filed without any authorization, and in contravention of regulations, it has to be considered as the one filed by the appellant in their own capacity. Therefore, the burden of showing that the consignment was a bona fide gift falls on the appellant and in the absence of discharge of such obligation, the appellant prima facie becomes liable to pay duty. Period of limitation - Held that - , if the authorizations were to be kept for one year and if the appellants were to keep KYC records for one year that would have been sufficient and duty demand for the period beyond one year may have to be considered in the light of statutory provisions, relevant notifications, Board s circulars issued in this regard and documents and records. Therefore, at present we consider that for the purpose of pre-deposit it would be sufficient if the appellant deposits the duty amount for the period of one year from the date of show-cause notice. No breakup is available in any of the records and therefore on a proportionate basis, we consider that the same would amount to ₹ 10,00,00,000/-. Accordingly the appellant is directed to deposit ₹ 10,00,00,000/- (rupees ten crores only) within twelve weeks and report compliance on 04.09.2014 - Stay granted partly.

Summary

Issues:
1. Allegations of illegal import of goods under the guise of bonafide gifts.
2. Failure to obtain consignee authorizations and falsification of records.
3. Demand for customs duty, interest, and penalties under the Customs Act 1962.
4. Compliance with Courier Import and Export (Clearance) Regulations, 1998.
5. Obligations of authorized couriers under Regulation 12.
6. Requirement to verify the antecedents and identity of clients.
7. Applicability of previous tribunal decisions to the current case.
8. Financial difficulties faced by the appellants in paying the duty amount.

Analysis:
1. The judgment involves allegations of illegal import of goods disguised as bonafide gifts, causing a loss to the exchequer. The appellant was accused of misusing duty exemptions by clearing non-bonafide goods without payment, leading to a substantial duty demand of Rs. 27,77,16,984 under the Customs Act, 1962. The investigation revealed falsified records and fabricated documents to avail duty exemptions fraudulently.

2. The failure to obtain consignee authorizations and the admission of not verifying consignee identities led to non-compliance with regulations. The appellant's actions of importing goods without proper authorization and falsifying records were deemed as violations of the Courier Import and Export (Clearance) Regulations, 1998. The appellant's argument regarding the demand for duty and penalties was refuted based on the lack of evidence showing efforts to recover duty from the importer.

3. The judgment confirmed the demand for customs duty, interest, and penalties under Sections 114 A and 114AA of the Customs Act, 1962. The appellant's defense regarding the sustainability of the demand in terms of regulations and lack of investigation into consignees' genuineness was considered but ultimately dismissed.

4. The analysis focused on the appellant's compliance with the obligations of authorized couriers under Regulation 12 of the CIECR, 1998. The requirement to obtain consignee authorizations at the time of delivery and preserve them for audit purposes was emphasized. The absence of such authorizations and failure to fulfill these obligations rendered the appellant liable for duty payment.

5. Another key issue was the appellant's failure to verify the antecedents and identity of clients as required by regulations. The lack of evidence or claims regarding fulfilling this verification obligation raised concerns about the appellant's knowledge of importers and the genuineness of the imported goods.

6. The judgment distinguished previous tribunal decisions cited by the appellants, noting the dissimilarity of facts in those cases. The court emphasized the unique circumstances of the current case and the inapplicability of prior decisions in the current context.

7. Financial difficulties faced by the appellants were considered, but the judgment directed the appellant to deposit a significant amount of Rs. 10,00,00,000 within a specified timeframe. Compliance with this deposit requirement would lead to a waiver of pre-deposit for the remaining dues and a stay against recovery during the appeal process. The judgment highlighted the importance of fulfilling regulatory obligations and making necessary deposits to address duty demands effectively.