2017 (11) TMI 1254 - AT - Customs

Mis-declaration of goods - goods are neither detained nor seized by the customs authorities - Held that - there is no legal support to confiscate the goods, which were neither detained nor seized and thereafter released with a conditional bond. As such, the question of confiscating the goods, which are neither in custody nor bound to be presented as per the bond, is not legally sustainable - confiscation set aside. Applicability of Section 28 (5) as per the new amendment carried out in Finance Act, 2015 - compliance of payment of 15% within 30 days of enactment of the Finance Bill 2015 - Held that - Admittedly, in the port of import now under consideration the customs operations are not available on 13.06.2015 being second Saturday. As such, the possibility of getting endorsement and paying the penalty of 15% on 13.06.2015 was not available to the appellant - Considering such factual position and applying the provisions of Section 9 & 10 of General Clauses Act, 1897, we find that the compliance is to be taken as in time. Accordingly, in terms of Sub-Section (6) of Section 28 the proceedings against all the parties involved in the case shall conclude on payment of full differential duty with applicable interest along-with 15% of penalty. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of goods without detention or seizure
2. Application of Section 28 (5) of Finance Act, 2015
3. Imposition of penalty on the partner of the importing firm

Analysis:
1. The appellants contested the Order of the Commissioner (Appeals) regarding the confiscation of goods valued at ?1.02 Crores, alleging mis-declaration and wrongful exemption claim. The original authority ordered confiscation, redemption on payment of fines, and imposition of penalties. The appellants argued that confiscation without detention or seizure is legally untenable. The Tribunal agreed, ruling that confiscation of goods already cleared without conditions is not legally sustainable, setting aside the order.

2. The dispute over the application of Section 28 (5) of the Finance Act, 2015 was examined. The appellants claimed to have paid the required penalty within the stipulated 30-day period, albeit on 15.06.2015, two days after the official deadline of 13.06.2015 due to operational constraints at the port. The Tribunal considered the General Clauses Act, 1897, and held that compliance should be deemed timely. Consequently, the proceedings were concluded upon the payment of full differential duty, interest, and 15% penalty, overturning the lower authority's decision.

3. The imposition of a separate penalty on the partner of the importing firm was challenged. The Tribunal noted that the penalty was already imposed on the firm and found no justification for an additional penalty on the partner. Thus, the Tribunal set aside the order imposing penalties on the partner, concluding that the impugned order was unsustainable in upholding the confiscation of goods and the non-closure of the case under Section 28 (6) of the Customs Act, 1962. Ultimately, the appeals were allowed, and the impugned order was overturned.