2018 (1) TMI 1098 - AT - Customs

Mis-declaration of imported goods - fire crackers - restricted item - Absolute confiscation - penalty - Held that - The fact is not under dispute that the imported goods, in this case, were not only mis-declared but also under-valued by the importer Shri Roshan Singh, Proprietor of M/s. Roshan Singh and Company. Since the import of fire crackers is restricted in terms of the EXIM Policy, confiscation of the same by the Department under Section 111 of the Customs Act is proper and justified. However, since the goods were absolutely confiscated and were not released to the appellant Shri Roshan Singh, Proprietor of M/s. Roshan Singh and Co. for his use or sale in the market and the value of the offending goods, penalties imposed u/s 112 (a) and 114 AA can be reduced in the interest of justice - quantum of penalty reduced. Penalty on Shri Narinder Kumar - Held that - it is a fact on record that he is not the importer of the subject goods and did not file any Bill of Entry or made any declaration or statement before the authorities, regarding the importation of such goods. Therefore, penalty u/s 114 AA of the Act cannot be levied against him - However, considering the fact that he abetted the importation of the prohibited goods, resulting in their confiscation u/s 111 of the Act, imposition of penalty u/s 112 (a) of the Act is justified - quantum of penalty reduced. Appeal allowed in part.

Summary

Issues:
1. Penalty imposition under Section 112(a) and 114 AA of the Customs Act, 1962 on appellants for mis-declaration and import of restricted goods.

Detailed Analysis:
The appeals were filed against the orders passed by the Commissioner of Customs (Appeals), New Delhi, regarding the confiscation of goods imported from China, which were declared as "E Glass off SPEC Chopped Strand Mat (B Grade)" but were found to contain firecrackers instead. The Department seized the goods due to the restricted import of firecrackers. Show cause proceedings were initiated against the appellants for confiscation of the seized goods and imposition of penalties. The penalties were imposed under Section 112(a) and 114 AA of the Customs Act, 1962. The appellants contended that since the goods were confiscated and not released to them, penalties should not be imposed. Additionally, it was argued that one of the appellants, not being the importer, should not be penalized under Section 114 AA.

The Tribunal acknowledged that the goods were mis-declared and undervalued, justifying their confiscation under Section 111 of the Customs Act. However, considering that the goods were not released to the appellant for use or sale, the penalties under Section 112(a) and 114 AA were reduced in the interest of justice for the appellant who imported the goods. The penalty amounts were reduced from ?10.00 Lakh to ?5.00 Lakh and from ?20.00 Lakh to ?10.00 Lakh, respectively.

Regarding the penalty imposed on the other appellant who was not the importer but abetted the importation of prohibited goods, the Tribunal held that penalty under Section 114 AA could not be levied. However, since he abetted the importation leading to confiscation under Section 111, a penalty under Section 112(a) was justified. The penalty amount of ?15.00 Lakh was reduced to ?10.00 Lakh due to the appellant not benefiting from the confiscated goods.

In conclusion, the Tribunal disposed of both appeals by modifying the penalties imposed on the appellants, considering the circumstances of the case and the interest of justice.