2015 (12) TMI 403 - AT - Customs

Confiscation of goods - Import of restricted items - ownership of goods - Held that - In this case the container arrived at ICD TKD New Delhi on 06.06.2011 and remained unclaimed. On enquiry it was found that documents of the said container are in the name of the appellant but appellant has disowned the ownership of the said container. As per section 2(26) of the Customs Act 1962 the importer is a person who cleared the goods for home consumption or claims to be owner of the said goods. Admittedly, in this case the appellant has not cleared the goods for home consumption or not claimed to be the owner of the said goods. Under the said circumstances, the observation of the lower authorities that appellant is the owner of the said goods or the importer of the said goods is not tenable. Revenue has also not brought out on record any corroborative evidence to say that whether appellant is the regular importer from the same supplier of the goods or appellant is importing old and worn clothes. In these circumstances, benefit of doubt goes in favour of the appellant. - Decided in favour of assessee.

Summary

Issues:
Imposition of penalty under section 112 of the Customs Act, 1962 for unclaimed consignment of old and worn clothes imported in the name of the appellant.

Analysis:
The appellant appealed against an order imposing a penalty of Rs. 7.5 lakhs under section 112 of the Customs Act, 1962 for an unclaimed consignment of old clothes. The consignment arrived in the name of the appellant, but no Bill of Entry was filed for clearance. The appellant was issued a show cause notice for confiscation of the goods, which were eventually confiscated and a penalty imposed. The appellant contended that they were not the owner of the goods, did not file any Bill of Entry, and the show cause notice was issued late. The appellant argued that they should not be penalized based on precedents like Nalin Z. Mehta Vs. CC Ahmedabad and Chemworld Inc. Vs. CC Nhava Sheva.

The appellant's counsel argued that the show cause notice was issued late, and the appellant had disowned ownership of the goods upon learning about them from the bankers. The appellant had not claimed ownership or cleared the goods for home consumption. The counsel cited Customs Act provisions defining an importer and highlighted the lack of evidence regarding the appellant's regular importation or the nature of the goods imported. The counsel emphasized that the appellant should benefit from the doubt, and the penalty was unwarranted.

The tribunal considered the facts that the consignment arrived unclaimed, and the appellant had disowned ownership. It was noted that the appellant did not clear the goods for home consumption or claim ownership, as required by the Customs Act. The tribunal found that the lower authorities' assumption of the appellant's ownership was untenable, given the lack of evidence. The tribunal ruled in favor of the appellant, stating that the penalty imposition was not justified. Consequently, the impugned order imposing the penalty was set aside, and the appeal was allowed in favor of the appellant.