2015 (11) TMI 258 - AT - Customs

Imposition of penalty under Section 112(b) of Customs Act - Import of old and second hand textile machineries more than 10 years old - Invoices declared as less than 10 years - Appellant contends that machines are 10 years old and hence require specific import licence and it is on their instance that same were declared as less than 10 years old - Further contended that penalty should not be imposed on appellant as he has not got any extra financial benefit by misdeclaration. Held That - It is at the instance of both importers as also the present appellant that year of manufacture would be misdeclared thus penalty imposed on appellant is correct - Restriction of 10 years old was removed later, same is of no consequence as appellant has intentionally manipulated the documents - Penalty imposed not on higher side - Decided in favour of Revenue.

Summary

Issues:
Imposition of penalty under Section 112(b) of the Customs Act against the appellant for importing old and second-hand machinery declared as less than 10 years old but found to be more than 10 years old.

Analysis:
1. Facts and Background:
The appellant, a commission agent dealing in the import of old and second-hand textile machineries, imported machines declared as less than 10 years old but were later found to be more than 10 years old. Investigations revealed that both the importers and the appellant were aware of the true age of the machines but intentionally misdeclared them to avoid the requirement of a specific import license under the Import Policy.

2. Appellant's Defense:
The appellant argued that he had no role in the misdeclaration and received a standard commission without any extra financial benefit from the misrepresentation. It was also highlighted that the Import Policy restrictions were later removed, implying leniency should be granted.

3. Revenue's Argument:
The Revenue contended that the appellant was complicit in the misdeclaration to circumvent the law, acting in connivance with the importers. It was asserted that the penalty under Section 112(b) was rightly imposed due to the appellant's mala fide intention and habitual offending behavior across multiple cases.

4. Decision and Rationale:
The tribunal found that the appellant, as a key player in dealing with old machinery and representing foreign suppliers, was actively involved in the misdeclaration scheme. Both the importers and the appellant were implicated in the intentional misrepresentation of the machines' age. Despite the subsequent removal of the 10-year restriction, the tribunal held that the appellant's deliberate manipulation of documents to evade the law justified the penalty. Considering the value of the goods involved, the tribunal deemed the penalty appropriate and upheld its imposition. Consequently, all appeals were dismissed.

This detailed analysis encapsulates the key aspects of the judgment, outlining the arguments presented by both parties and the tribunal's rationale for upholding the penalty against the appellant for the misdeclaration of old and second-hand machinery.