2018 (10) TMI 767 - AT - Customs

Penalty u/s 112(a) and 114AA of CA - import of High end cars / Sports Utility Vehicles - under-valuation and mis-declaration - rejection of declared value - Shri Qureshi, the importer herein, in his statement recorded under Section 108 of the Customs Act, 1962 had admitted that the actual cost of vehicle was ₹ 27 lakhs - Held that - The statement of the appellant was recorded by the officers of the Customs on 24.12.2008 under Section 108 of the Act, wherein he had inter alia, stated that Shri Qureshi, importer of the vehicle agreed to pay ₹ 4 lakhs for customs clearance of the imported vehicle and that the value of the imported goods had been mis-declared - further, the truth and the averments made therein cannot be altered at the appellate stage - penalty u/s 112(a) of the Act upheld. Penalty under Section 114AA of the Act - Held that - The appellant did not make, sign or used any declaration / statement in respect of importation of the vehicle. Thus, penal provisions contained in Section 114AA of the Act cannot attracted for imposition of penalty on the appellant. Appeal allowed in part.

Summary

Issues:
Fraudulent import of high-end cars, under-valuation, mis-declaration of particulars, evasion of customs duty, applicability of Sections 112(a) and 114AA of the Customs Act, 1962, penalty imposition on the appellant.

Analysis:
The case involved fraudulent import activities related to high-end cars by under-valuation and mis-declaration to evade customs duty. The investigation revealed that the importer had declared a lower value for a vehicle compared to its actual cost. The Customs Officers rejected the declared value and re-determined it based on information from the OEM. Show cause proceedings were initiated against various individuals, including the appellant. Penalties were imposed under Sections 112(a) and 114AA of the Customs Act, 1962.

The appellant argued that Section 112(a) was not applicable as the assistance provided was a post-importation activity, and Section 114AA did not apply as the appellant was not involved in signing documents for clearance. The Revenue contended that since the importer agreed to pay the appellant for customs clearance and the value was mis-declared, penalties under both sections were justified.

The Tribunal noted that the appellant's statement confirmed the agreement for payment and knowledge of mis-declaration. The appellant's advice against under-valuation was also considered. The Tribunal found Section 112(a) applicable based on the recorded statements. However, Section 114AA was deemed inapplicable as the appellant did not make or sign any declaration related to the importation.

Consequently, the appeal was partly allowed, setting aside the penalty under Section 114AA but upholding the penalty under Section 112(a). The decision was based on the appellant's involvement in the customs clearance process and knowledge of the mis-declaration, leading to the imposition of penalties under the relevant statutory provisions.