2016 (4) TMI 970 - AT - Customs

Imposition of penalty - Section 112(a) and 114 AA of the Customs Act, 1962 - Import of Measuring Tapes of Malaysian origin from Singapore by M/s. Western Impex - Held that - there is no dispute about the fact that M/s. Western Impex being an actual importer, in terms of the definition of Importer as per the provisions of Section 2(26) of the Customs Act. By confirming the differential demands, as also by giving an option to M/s. Western Impex, Revenue has accepted the said fact. Revenue stand that by helping M/s. Western Impex in placing the orders on the foreign sellers as also by financing the imported consignments would lead to an inevitable conclusion that the appellant was the master mind in the entire export, thus making him liable them to penalties in terms of Section 112(a) or Section 114AA of the Customs Act, 1962 does not appeal to us. The Tribunal in the relied upon decision has clearly held that the appellant having no role to play as regards the declarations required to be made to the Customs Authorities, no penalties upon him can be called for, even if he was the financer of the consignments, since he cannot be said to have done any act or omitted to do as act which have rendered the goods liable to confiscation. In terms of the said decision, we find no justifiable reasons to impose penalty upon the present appellant. - Decided in favour of appellant with consequential relief

Summary

Issues:
Challenge to penalty under Section 112(a) and 114 AA of the Customs Act, 1962.

Analysis:
The appeal challenged a penalty of ?8,50,000 imposed by the Adjudicating Authority under Sections 112(a) and 114 AA of the Customs Act, 1962. The case involved M/s. Western Impex importing Measuring Tapes from Singapore, with the appellant allegedly assisting in procuring orders and financing the imports. A show cause notice was issued proposing penalties and confiscation of goods. The appellant argued that M/s. Western Impex, as the actual importer, had accepted the order, paid dues, and cleared the goods, hence the penal provisions should not apply to him. The Revenue contended that the appellant abetted in mis-declaring the value by assisting the importer. The Tribunal found that M/s. Western Impex was the actual importer, and the appellant's involvement did not warrant penalties under the Customs Act. Relying on a precedent, the Tribunal concluded that the appellant's actions did not render the goods liable to confiscation, thus setting aside the penalty and allowing the appeal.

In the detailed analysis, the Tribunal considered the definition of "Importer" under Section 2(26) of the Customs Act, highlighting that M/s. Western Impex was the actual importer, as accepted by the Revenue. Despite the appellant's involvement in financing and guiding the importer, the Tribunal found no evidence to hold him liable for penalties under Section 112(a) or Section 114AA. Citing a previous decision, the Tribunal emphasized that the appellant's actions, even as a financer, did not contribute to rendering the goods confiscatable. Therefore, the Tribunal concluded that there were no justifiable reasons to impose penalties on the appellant, ultimately setting aside the impugned order and allowing the appeal with any consequential relief.