2020 (1) TMI 1347 - AT - Customs

Imposition of penalty under section 112(a) of Customs Act, 1962 - appellant had not cleared the goods for home consumption and had sought re-export owing to the statutory impossibility of registration of the vehicle in India - HELD THAT - The appellant had not cleared the goods for home consumption and had sought re-export owing to the statutory impossibility of registration of the vehicle in India. It would appear that the goods, procured on lease, was intended for use as equipment and there is no evidence that the appellant had any intention to misuse of the same. From the submissions made, and absence of any finding to the contrary, it would appear that the awareness of ineligibility for import came to the attention of the appellant only upon it be pointed out to them. In any case, the goods could not have been deployed, under any circumstances, without proper registration by the competent authority. There is, therefore, no evidence that the appellant would have been complicit in attempting to import goods that could be concealed from the registering authorities. There is no reason for burdening the importer with penalty, intended by law for deterrence, under section 112 of Customs Act, 1962 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenge against penalty imposed under section 112(a) of Customs Act, 1962 for violation of provisions of Foreign Trade Policy.

Analysis:
The appeal was filed by M/s NYK Line (India) Limited against the penalty imposed under section 112(a) of the Customs Act, 1962. The penalty was challenged in response to order-in-original no. 133/2009/CAC/CC(I) SHH/GR. VB dated 4th September 2009 by the Commissioner of Customs (Import), New Custom House, Mumbai. The appellant had imported a 'tug master with goose neck' against a specific bill of entry. Upon realizing that the goods, procured on lease, could not be registered under the Motor Vehicles Act, 1988 by the competent authority, the appellant sought re-export of the goods. Despite the adjudicating authority holding the goods liable to confiscation for violating the provisions of the Foreign Trade Policy, no fine for redemption was imposed. However, the penal provision under section 112 of the Customs Act, 1962 was invoked.

The appellant had not cleared the goods for home consumption and opted for re-export due to the statutory impossibility of registering the vehicle in India. It was noted that the goods, procured on lease, were meant for equipment use, with no evidence indicating any intention to misuse them. The appellant seemed to become aware of the ineligibility for import only upon being notified. Moreover, the goods could not have been utilized without proper registration by the competent authority, indicating no intention to conceal the goods from registering authorities. Consequently, there was no evidence suggesting complicity in attempting to import concealable goods.

After considering the submissions and the absence of any contrary findings, it was concluded that there was no justification for imposing a penalty under section 112 of the Customs Act, 1962 on the importer. The penalty, meant for deterrence as per the law, was deemed unnecessary in this case. Consequently, the impugned order was set aside, and the appeal was allowed. The decision was pronounced in open court.