2019 (1) TMI 1730 - AT - Customs

Valuation of imported goods - polished marble slabs imported into containers - rejection of declared value - HELD THAT - The documents are silent as to whether they placed an order for polished marble or otherwise. Until the Customs opened the container and examined, it was never discovered that they actually imported unpolished marble. An ex post facto undated letter from their supplier does not, in any way, alter the confiscability of the goods which have been imported. If it is held to the contrary the entire system of restrictions on imports in the country become meaningless. Anybody can import any prohibited goods and simply produce an e-mail or a letter from their overseas supplier saying that prohibited goods were sent to them by mistake. Holding such a view would defeat all the legal provisions of the country under various enactments with respect to restrictions on imports. The goods in question are liable for confiscation under Section 111 of the Customs Act. Redemption fine imposed by the adjudicating authority was already reduced by the first appellate authority to ₹ 3,50,000/- which is a fair amount of redemption fine and we find no reason to interfere with it. Penalty - HELD THAT - In so far as the penalty under Section 112(a) is concerned, the penalties imposed on the importer firm also need to be upheld - As far as the personal penalty is concerned, there are no sufficient justification to impose a personal penalty on Shri L.N. Maru in this case and set it aside - As far as the penalty on the CHA, M/s. Nanda International is concerned, the allegations in the show cause notices and in the Order-in-Original are that they failed to discharge their obligations as a CHA. Section 112 is not the provision under which penalty can be imposed for violations of CHA Licensing Regulations. Therefore, the penalty on the CHA is unsustainable and needs to be set aside. Appeal allowed in part.

Summary

Issues:
Import of unpolished marble slabs instead of polished ones, quantity discrepancy, absence of required import license, confiscation of goods, penalties imposed on importer, director, and CHA.

Analysis:
The case involved appeals against Orders-in-Appeal related to the import of unpolished marble slabs by M/s. Madhusudhan Grani Marmo Pvt. Ltd. without the necessary import license. The lower authority rejected the declaration made in the Bill of Entry due to discrepancies in quantity and type of marble imported. Confiscation of marble slabs, duty imposition, interest payment, and penalties were ordered under various sections of the Customs Act, 1962 and Foreign Trade Act. The first appellate authority upheld the decision but reduced fines and penalties.

The appellant argued that they ordered polished marble slabs but received unpolished ones due to a mistake by the overseas supplier, supported by correspondence. The Departmental Representative contended that the documents were an afterthought. The Tribunal found that the appellant imported unpolished marble slabs without the required license, making them liable for confiscation under the Customs Act. The argument that the mistake was on the supplier's end was dismissed as the documents did not prove the claim. The Tribunal emphasized the importance of adhering to import restrictions and rejected the argument that post-import communications could alter the confiscability of the goods.

The Tribunal upheld the confiscation of goods and the redemption fine imposed on the importer. The penalty on the importer was also upheld. However, the personal penalty on the director of the importer was set aside, finding no sufficient justification. The penalty on the CHA was deemed unsustainable as it was not under the appropriate provision, leading to its setting aside. The final order confirmed the confiscation and penalties on the importer, set aside personal penalties, and revoked the penalty on the CHA.

In conclusion, the Tribunal maintained the confiscation of goods, upheld penalties on the importer, set aside personal penalties on the director and CHA, emphasizing the importance of compliance with import regulations and the consequences of non-compliance.