2009 (3) TMI 111 - AT - Customs

Confiscation and Penalty - It is settled law that quoting of wrong Section or not mentions of specific Section of Customs Act, does not vitiate the proceedings - Both the broker as well as Director could not produce any evidence to show that the goods have been legally imported into the country. This obligation rests on them in view of the fact that the goods are notified under Section 123 of the Customs Act 1962 and they have failed to discharge this burden. - confiscation upheld - no duty can be demanded from the appellant in view of the fact that they had procured the goods from the foreign origin from open market without any bill and therefore cannot be treated as importer for the purpose of demand customs duty u/s 28 since the goods are liable to confiscation penalty upheld but reduced.

Summary

Issues:
1. Confiscation of goods under Section 111(j) of Customs Act, 1962.
2. Duty demand for imported goods without proper documentation.
3. Imposition of penalties under Sections 112(a) and 112(b) of Customs Act, 1962.

Confiscation of Goods under Section 111(j) of Customs Act, 1962:
The case involved imported Polyester Filament Yarns found in excess at the factory premises without proper documentation. The officers seized the goods under the belief of liability for confiscation under the Customs Law. The appellant admitted to purchasing the goods without duty paying documents. The Tribunal upheld the confiscation under Section 111(j) of the Customs Act, 1962, despite the section not being specifically mentioned in the show cause notice. The Tribunal referred to a Supreme Court decision supporting the view that the absence of specific section mention does not invalidate the proceedings. The failure of the broker and Director to prove legal importation of the goods, as required under Section 123 of the Customs Act, led to the confirmation of confiscation.

Duty Demand for Imported Goods without Proper Documentation:
The appellant argued against duty demand citing a Tribunal decision stating that goods procured from the foreign market without proper documentation do not make the appellant an importer for duty purposes under Section 28 of the Customs Act, 1962. The Tribunal agreed with this argument, setting aside the demand for duty and interest. The lack of evidence regarding legal importation of the goods played a crucial role in this decision.

Imposition of Penalties under Sections 112(a) and 112(b) of Customs Act, 1962:
Penalties were imposed on the company and the Director under Sections 112(a) and 112(b) of the Customs Act, 1962 due to their involvement with goods liable for confiscation. The Tribunal upheld the imposition of penalties, stating that dealing with goods subject to confiscation justified the penalties. However, considering the total value of the goods, the penalties were reduced to Rs. 50,000 for the company and Rs. 25,000 for the Director. The Tribunal referred to relevant case law to support the imposition and subsequent reduction of penalties.

In conclusion, the Tribunal upheld the confiscation of goods, set aside the duty demand, and reduced the penalties imposed on the company and the Director based on the circumstances and legal provisions involved in the case.