2018 (10) TMI 41 - AT - Customs

Permission to re-export the impugned vehicle on nominal fine and penalty - import of 10 seated SUV vehicle from Sri Lanka - It appeared to the investigating agency that the vehicle was imported by mis-declaring the description, value, country of origin - Confiscation alongwith redemption fine and penalty. Held that - True, there are allegations in the SCN that appellant has committed misdeclaration of country of origin, value of goods and classification of the goods. However for these infractions, the SCN already proposes in paras 17 & 19 (d), confiscation under Section 111 (d) and (m) of the Customs Act, 1962 and imposition of penalty under Section 112A of the Customs Act, 1962. These proposals have been acted upon by the original authority who has ordered confiscation of the vehicle under Section 111 (d) of the Customs Act for the reason that as country of origin, value of goods along with confiscation of goods has been misdeclared in the Bill of Entry . While appropriation towards duty amount has been made, the provisions of Customs Act under which such appropriation has been made has not been indicated by any of the lower authorities. In any case, when the importer is accepting the option to re-export the imported vehicle, and the said are not cleared for home consumption into the DTA area, the question of imposition of import duties of Customs will not arise. When the permission for re-export has been made, sufficient justification has not been given by any of the lower authorities for imposition of penalty under Section 114AA of the Act and also for appropriation for the amount paid by the appellant towards duty amount. Penalty imposed under Section 114AA of the Customs Act, 1962 and also the appropriation of an amount of ₹ 57,40,501/- paid by the appellant during investigation towards duty , cannot then be sustained and will require to be set aside. Appeal allowed in part.

Summary

Issues:
1. Imposition of penalty under Section 114AA of the Customs Act, 1962.
2. Appropriation of amount paid by the appellant towards duty.
3. Permission for re-export of the impugned vehicle.

Analysis:

1. Imposition of Penalty under Section 114AA:
The case involved the misdeclaration of country of origin, value of goods, and classification of goods in the Bill of Entry. The original authority imposed a penalty under Sections 111 (d) and (m) of the Customs Act, 1962, along with a penalty of &8377; 64,18,752 under Section 114AA and &8377; 2 lakhs under Section 112 (a). The appellate authority upheld this decision. However, upon review, the Tribunal found that while misdeclaration occurred, there was no specific evidence of intentional falsification of documents by the appellant. The Tribunal noted that the lower authorities did not justify the imposition of penalty under Section 114AA. As the vehicle was allowed for re-export and the misdeclarations were addressed through other penalties, the Tribunal set aside the penalty of &8377; 64,18,752 imposed under Section 114AA.

2. Appropriation of Amount Paid Towards Duty:
The original authority appropriated an amount of &8377; 57,40,501 paid by the appellant towards duty of the impugned vehicle. However, the Tribunal observed that no clear justification was provided for this appropriation, especially considering the re-export option granted to the appellant. As the vehicle was not cleared for home consumption and the appellant opted for re-export, the Tribunal found that the imposition of import duties would not be justified. Therefore, the Tribunal set aside the appropriation of the duty amount paid by the appellant.

3. Permission for Re-export of the Impugned Vehicle:
The appeal was primarily focused on requesting permission for re-export of the vehicle on nominal fine and penalty terms. The lower appellate authority had already allowed re-export on certain terms. The Tribunal, after considering the arguments from both sides, decided to partially allow the appeal by setting aside the penalty imposed under Section 114AA and the appropriation of duty amount, while not interfering with any other part of the impugned order. The Tribunal dismissed one appeal while partially allowing the other based on the above terms.

In conclusion, the Tribunal's decision highlighted the importance of justifying penalties imposed under specific sections of the Customs Act and ensuring that appropriateness of penalties align with the circumstances of the case, especially when re-export options are considered. The judgment emphasized the need for clear reasoning behind penalty imposition and appropriation actions in customs cases.