2007 (11) TMI 120 - AT - Customs

Respondent has procured the goods of foreign origin with out bills from open market - the question of demanding duty u/s 28 from him treating him as importer and imposition of penalty under Section 114A does not arise, which is applicable only in respect of person who is liable to pay the duty - Section 12 is charging section it cannot be invoked in such case - order of the Commissioner (Appeals), is therefore legal and proper.

Summary

Issues:
Appeal against Commissioner (Appeals) order - Demand of duty under Section 28 and penalty under Section 114A - Confiscation of goods - Reduction of penalty.

Analysis:
The case involves an appeal against the order of the Commissioner (Appeals) regarding the demand of duty under Section 28 and penalty under Section 114A, confiscation of goods, and reduction of penalty. The facts reveal that imported goods were found without duty paying documents, and the respondent had procured them without bills from the open market. The original authority confiscated the goods, demanded duty, and imposed a penalty. The Commissioner (Appeals) considered that the respondent was not the importer but had illicitly procured the goods, leading to the conclusion that duty could not be demanded under Section 28 and no penalty could be imposed under Section 114A. The confiscation was upheld, but the penalty was reduced.

The department appealed the Commissioner (Appeals) decision, arguing that the show cause notice invoked both Section 28 and Section 12 of the Customs Act for demanding duty. However, the tribunal noted that invoking Section 12, a charging section, did not support the department's case. The tribunal analyzed the circumstances where the respondent procured foreign goods without bills and concluded that demanding duty under Section 28 as an importer and imposing a penalty under Section 114A, applicable to those liable to pay duty, was not justified. Therefore, the tribunal found the Commissioner (Appeals) order legal and proper, with no valid grounds to interfere.

In conclusion, the tribunal rejected the department's appeal, affirming the legality of the Commissioner (Appeals) decision regarding the demand of duty under Section 28, penalty under Section 114A, confiscation of goods, and reduction of penalty. The judgment clarifies the application of relevant sections of the Customs Act in cases involving the procurement of foreign goods without proper documentation and the liability for duty and penalties in such situations.