2022 (2) TMI 262 - AT - Customs

Exemption from Customs Duty as per South Asia Free Trade Agreement (SAFTA) by Notification No.40/2017 dated 30.06.2017 - goods imported in excess of what was declared in the Bill of Entry and other documents - confiscation of vehicle - levy of penalty - HELD THAT - A plain reading of Customs Section 111(e) and (l) shows that these apply to such goods only which have been concealed and have not been declared and not the entire quantity of goods. In fact the Section 111(l) is very categorical that it applies to goods found in excess of what has been declared. Therefore, it is found that the excess goods are liable for confiscation and not the entire consignment imported by the Appellant - the confiscation of the remaining goods is not as per the law and accordingly needs to be set aside. The denial of the exemption certificate for the entire quantity of goods when the bulk of the goods are already covered by the SAFTA Certificate is not supported by any legal provision. Therefore the demands need to be set aside. The amount of redemption fine imposed by the impugned order as well as the penalties imposed upon the Appellants need to be proportionately reduced. Appeal of Shri Dilip Sarkar is partly upheld by upholding the confiscation of the excess quantity of goods found in the consignment over and above what was declared and duty on such quantity of pieces, remaining part of the demand and the confiscation of the remaining goods is set aside. Consequently the redemption fine as well as penalty upon the said Appellant needs to be reduced in proportion to the value of the excess goods to the total value of goods. Imposition of penalty on the Authorized Representative of the Customs Broker - HELD THAT - There is no evidence on record that the Customs Broker was aware of the alleged irregularity. As there is no material available on record against him, the imposition of penalty on Shri Biswajit Mirdha is not justified and accordingly the same is set aside. Vehicle being confiscated and penalty imposed upon the owner Shri Uttam Biswas - HELD THAT - It is an admitted fact that the seized vehicle had been utilized for the purpose of importation of the mis-declared goods and it is amply clear that the loading of the goods has been done in presence of the transporter, although the owner of the vehicle was not present. The owner had simply let out his vehicle to M/s. New Transport Agency, as reflected in his statement, however, no investigation has been caused with regard to the involvement of the said transporter or the driver of the vehicle. From the statement of the owner of the vehicle, it is abundantly clear that although his vehicle has been used for carrying of mis-declared goods, however, he had no personal knowledge in regard to loading of the goods. Accordingly, the penalty imposed upon the owner of the vehicle under Section 112(b) is set aside. The redemption fine of ₹ 4.00 Lakhs imposed for redemption of the vehicle is reduced to ₹ 1.50 Lakhs. Appeal allowed in part.

Summary

Issues:
1. Confiscation of goods imported in excess of declared quantity under Customs Act, 1962.
2. Imposition of penalties on importer, customs broker, and vehicle owner.
3. Application of South Asia Free Trade Agreement (SAFTA) exemption on imported goods.
4. Justification of confiscation and penalties based on misdeclaration and excess quantity.
5. Legal provisions under Sections 111(e) and 111(l) of the Customs Act, 1962.

Analysis:

1. The Appellant imported goods in excess of the declared quantity, leading to confiscation under Sections 111(e) and 111(l) of the Customs Act, 1962. The Adjudicating authority imposed penalties and demanded customs duty on the entire consignment, disregarding the SAFTA Certificate exemption. The Appellant argued for action only on the excess goods, maintaining that the declared goods covered by SAFTA should be exempt from confiscation and penalties.

2. The Adjudicating authority confiscated the goods and imposed penalties on the importer, customs broker, and vehicle owner. The Appellant contested the penalties, stating that the misdeclaration was not intentional, and the customs broker and vehicle owner were not fully aware of the excess quantity loaded in the consignment.

3. The SAFTA Certificate exemption was crucial in determining the applicability of duty on the imported goods. The Adjudicating authority denied the exemption for the entire consignment, despite the majority of goods being covered by the SAFTA Certificate. The Appellant argued for setting aside the demands and penalties for the goods correctly declared and covered by the SAFTA Certificate.

4. Legal provisions under Sections 111(e) and 111(l) of the Customs Act, 1962 were analyzed to determine the confiscation of goods. The Tribunal found that only the excess goods, not the entire consignment, were liable for confiscation. The Adjudicating authority's decision to deny the exemption certificate for the entire consignment was deemed unsupported by legal provisions, leading to a reduction in demands and penalties.

5. The Tribunal partially allowed the Appeal, upholding the confiscation of excess goods, while setting aside the confiscation and penalties for the correctly declared goods covered by the SAFTA Certificate. Penalties imposed on the customs broker and vehicle owner were also set aside, emphasizing the lack of evidence against them and the owner's lack of personal knowledge regarding the misdeclaration.

This detailed analysis of the judgment addresses the issues involved, the arguments presented by the parties, and the legal reasoning behind the Tribunal's decision.