2020 (2) TMI 195 - AT - Customs

Imposition of penalty on sales agent of foreign supplier u/s 112(a) and/ or 112(b) of the Customs Act, 1962 - omission/ commission committed by sales agent of foreign supplier or not who has acted on the direction of Principal - HELD THAT - The matter in the case of Respondent 1 has been settled by the order of Settlement Commission as has been noted by the Commissioner in the impugned order. Even the review order and appeal filed do not urge anything in respect of the dropping of the proceedings against them in view of immunity granted by the Settlement Commission, we do not find any merits in the appeal and dismiss the same as infructuous. The fact that Shri Santosh Nair (sales agent) has issued the Proforma invoice as directed by Vice President (Sales) of the supplier, has not been controverted by the revenue in the appeal filed. Also it is fact on record that the import documents i.e. Bill of Entry was filed on the basis of Commercial Invoice 328 32686 dated 28.12.1998 issued by the supplier M/s Signtech USA. Since the Proforma issued by the Shri Santosh Nair was not even the basis for filing the import documents the relevance of the same in the current proceedings for imposition of penalty is not understood. In fact said Proforma invoice was never the part of the import documentation, though it was part of negotiation documents between the foreign supplier and the Importer in India. Thus, Shri Santosh Nair was acting in course of normal business as sales agent of foreign supplier and had offered the sale price of the machine as directed by the foreign supplier to the Indian importer. There is nothing on record to establish that he had abetted in the evasion of duty by mis-declaring the value, for purpose of imposition of penalty under section 112(a) and/ or 112(b) of the Customs Act, 1962. Appeal dismissed.

Summary

Issues:
1. Immunity granted by Settlement Commission to M/s Big Vision Pvt Ltd and its Managing Director.
2. Dropping of penal action against Shri Santosh Nair by the adjudicating authority.
3. Review of the order by the Board under Section 129D(1) of the Customs Act, 1962.
4. Appeal filed by the revenue against the order of the Commissioner of Customs.
5. Condonation of delay in filing the appeal by the revenue.
6. Dismissal of the appeal against M/s Big Vision Pvt Ltd.
7. Imposition of penalty on Shri Santosh Nair under section 112(a) and/or 112(b) of the Customs Act, 1962.

Analysis:
1. The appeals were filed by the revenue challenging the order of the Commissioner Customs (Adjudication) regarding the settlement applications filed by M/s Big Vision Pvt Ltd and its Managing Director. The Settlement Commission granted immunity from payment of fine, penalty, and interest to them under the Customs Act, 1962. Consequently, the proceedings against M/s Big Vision Pvt Ltd were dropped.

2. The adjudicating authority dropped penal action against Shri Santosh Nair, the Indian agent of the foreign supplier, after considering his role in the evasion of customs duty. Shri Santosh Nair maintained that he did not contribute to the evasion of duty and had not gained anything from the transactions. The Settlement Commission did not make any adverse comments against him, leading to the dropping of penal action.

3. The Board reviewed the order under Section 129D(1) of the Customs Act, directing the filing of an appeal to the tribunal. The grounds for appeal included the alleged involvement of Shri Santosh Nair in the evasion of customs duty and the failure to grant him immunity, leading to the appeal being filed against him.

4. The tribunal heard arguments from both parties and noted that the matter concerning M/s Big Vision Pvt Ltd had been settled by the Settlement Commission. As there were no merits in the appeal against them, it was dismissed as infructuous.

5. Regarding Shri Santosh Nair, the tribunal considered the Proforma Invoice issued by him and the circumstances surrounding it. It was found that Shri Santosh Nair acted as a sales agent following the instructions of the foreign supplier, and there was no evidence to establish his involvement in duty evasion. Therefore, the appeal against him was dismissed on merits, upholding the impugned order.

6. The tribunal dismissed Appeal No C/1084/2004 as infructuous and Appeal No C/303/2005 on merits, maintaining the decision of dropping penal action against Shri Santosh Nair.

This comprehensive analysis covers the issues raised in the legal judgment, detailing the decisions made by the adjudicating authority, Settlement Commission, and the tribunal in each case.