2007 (11) TMI 37 - AT - Customs

Mis-declaration of goods imported Ferro-Titanium was stocked in containers with top layer as Brass Scrap Foreign supplier disclosed the modus operandi directed by importer Confiscation and penalty sustainable Personal penalty not imposable on firm CHA and intermediary

Summary

Issues:
Mis-declaration of goods, under-valuation, personal penalties imposed.

Analysis:
The case involved mis-declaration of goods by an importer, M/s. Vaibhav Laxmi Impex Pvt. Ltd., who declared valuable Tin Bearing Sand as "Brass Scrap" to evade customs duty. Investigations revealed the mis-declaration, with the goods actually being Ferro Titanium. The Commissioner of Customs confiscated the goods and imposed personal penalties under Section 112(a) and (b) of the Customs Act, 1962.

The Tribunal upheld the penalty on M/s. Vaibhav Laxmi Impex Pvt. Ltd., reducing it from Rs. 2 crores to Rs. 75 lakhs. The Tribunal found the importer liable for penalty due to the deliberate mis-declaration, despite attempts to shift blame to the foreign supplier. The Tribunal noted the lack of correspondence indicating a mistake by the supplier, supporting the finding of fraudulent intent.

Regarding M/s. Vishal Impex, the High Sea sale purchaser, the Tribunal set aside the penalty of Rs. 2 crores. They were not found to be aware of the mis-declaration, as the deal was facilitated by a middleman, Shri Chetan Malani, who also had his penalty set aside due to lack of evidence against him.

The penalty on M/s. Prime Forwarders, the customs house agent, was also set aside as there was no evidence of their involvement in the mis-declaration. The Tribunal noted that the CHA acted based on the documents provided and was not aware of the actual contents of the containers.

In conclusion, the Tribunal disposed of all appeals, affirming the penalty on the importer but setting aside penalties on the High Sea purchaser, middleman, and customs house agent based on lack of evidence of their involvement in the mis-declaration.