2015 (12) TMI 1437 - AT - Customs

Confiscation of goods - Non declaration of goods - Held that - There is no rational, sound reason and any redeeming factor giving scope to reduce the penalties imposed on these appellants. The matter is quite serious when the restricted items like 49 air pistols and 37 air rifles have been imported and the said imports were not declared; they were found concealed in 12 cartons containing light fittings and furniture. It has also come on record that invoices were fabricated by making use of the appellants office; though invoices were submitted by the other person but the office owned by Shri K. Nithyananda Pai, the appellant was allowed to be used. Consequently both these appeals are dismissed and disposed of as having no substance and reason to interfere with the impugned order-in-appeal passed by the Commissioner of Customs (Appeals) Cochin. - Decided against assessee.

Summary

Issues:
1. Stay petitions and appeals against penalty imposition.
2. Use of IE code for importing restricted items.
3. Fabrication of invoices by CHA's clerk.
4. Argument of mens rea absence in allowing importation.
5. Gravity of the offense and penalty imposition.

Analysis:
1. The judgment pertains to two appeals against a common order-in-appeal imposing a penalty of Rs. 25,000 each on both appellants. The appeals were heard in the context of a stay petition, with the presiding member deciding to address the issues promptly due to the straightforward nature of the case.

2. The case involved the unauthorized use of an Importer Exporter Code (IE code) by one appellant to import restricted items, namely air pistols and air rifles concealed within cartons of other goods. The concealment of these items, without proper declaration or permissions, led to their confiscation under the Customs Act and the Arms Act.

3. It was established that one appellant allowed their office to be used by a Clearing House Agent's (CHA) clerk to fabricate invoices, contributing to the illegal importation scheme. The other appellant permitted their IE code to be used for importing the prohibited goods, further implicating them in the offense.

4. The appellants argued through their advocate for leniency, claiming the absence of mens rea, or criminal intent, in their actions. They contended that they only facilitated the importation of declared goods, unaware of the concealed restricted items, and that the main importer had taken responsibility for the illegal imports.

5. However, the respondent's representative argued that the gravity of the offense warranted the penalty imposed and that there were no mitigating factors to warrant a reduction in the fines. The presiding member, after considering all arguments and evidence, found no valid reason to interfere with the penalties imposed, given the seriousness of the offense involving the illegal importation of restricted items.

In conclusion, the appeals were dismissed, upholding the penalty imposition as per the order-in-appeal by the Commissioner of Customs (Appeals) Cochin, as the presiding member found no grounds to reduce the penalties based on the facts and arguments presented during the proceedings.