2022 (3) TMI 1116 - AT - Customs

Levy of penalty u/s 117 of Customs Act - mis-declaration of quantity and description of goods in the Bills of lading - branded shoes - counterfeit goods or not - violation of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 - HELD THAT - Admittedly the Appellant had not filed any Bill of Entry and thus he is not the importer, as defined in Section 2 (26) of the Customs Act. Thus, the Appellant cannot be said to have violated any provision of Section 111 of the Customs Act, and thus not reliable to any penalty under the provisions of Section 112, as he has not done or committed any act which would render the goods reliable to confiscation. The conduct of the Appellant is also dubious, and not clean. In spite of having knowledge that the goods dispatched by the Shipper vide aforementioned Bill of Lading, being not as per order and containing counterfeit goods, being a regular importer it was his duty to cooperate with Customs and inform suo moto regarding the nature of the goods dispatched by the Shipper, and also of his intention of having abandoned the same goods. The goods were lying in the port after unloading by the shipping line for about three months, and neither the Appellant had filed any Bill of Entry nor had given any intimation of his decision to abandon the goods. It was only when physical examination was taken by opening the seal of container on 05.08.2014, the Customs department found regarding the misdeclaration, both as regards quantity and description. The penalty under Section 117 of the Act is upheld - the quantum of penalty is reduced from ₹ 50,000/- to ₹ 20,000/- - appeal allowed in part.

Summary

Issues Involved:
Penalty under Section 112 and Section 117 imposed on the importer.

Analysis:

Penalty under Section 112:
The case involved the imposition of a penalty of ?2,00,000 under Section 112 and ?50,000 under Section 117 on the importer. The appellant's container was examined, revealing discrepancies in the declared quantity and the actual quantity of shoes, including branded ones. The appellant admitted to receiving branded shoes without ordering them and not making payments. The branded shoes were confirmed as counterfeit goods by the brand holders. The Commissioner (Appeals) upheld the penalties, citing the appellant's failure to file a Bill of Entry, involvement in misdeclaration, and lack of cooperation with investigations.

Grounds of Appeal:
The appellant challenged the penalties, arguing that the goods were wrongly supplied, penalties were excessive, and the appellant was not the importer as per the Customs Act's definition. The appellant claimed to have ordered unbranded shoes, not the branded ones received. The appellant contended that non-filing of a Bill of Entry did not make them liable for penalties and cited a tribunal ruling supporting this argument.

Tribunal Decision:
The tribunal considered the appellant's failure to file a Bill of Entry and the dubious conduct in not informing customs about the misdeclaration. While the appellant was not considered the importer under the Customs Act, the tribunal upheld the penalty under Section 117 due to the lack of cooperation and failure to inform customs about the abandoned goods. The penalty under Section 117 was reduced to ?20,000. The tribunal modified the impugned order, allowing the appeal in part.

In conclusion, the tribunal upheld the penalty under Section 117 but reduced the amount, considering the appellant's conduct and failure to cooperate with customs. The appellant's argument regarding non-liability for penalties due to not being the importer was accepted, leading to a partial allowance of the appeal.