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2022 (5) TMI 1124 - AT - CustomsLevy of parallel penalties on Customs Broker and employees - allegation of abetting the importers - concealment and mis-declaration of goods - main contention raised by the appellant is that there is no allegation in the Show Cause Notice attracting ingredient of Section 112(a) and that the allegation would fall within the purview of the CBLR, 2018 (2013) for which penalty has already been imposed - HELD THAT - The allegation is in the nature of violations falling under the Customs Brokers Licensing Regulations - it is held that the Department has failed to establish the ingredients under Section 112(a) of the Customs Act, 1962 against the appellant. The penalty imposed under Section 112(a) on the appellant, is not justified and requires to be set aside. Levy of penalty u/s Section 112(a) - appellant falsely introduced himself as the representative of the importer - HELD THAT - It is brought out from facts that Shri Solomon is the person who had acted as an intermediary for handing over the documents to the Customs Broker. His case is that some Vishal has given him the documents. He has not taken any steps to establish this. He could have cited Vishal as a witness on his side and requested to issue summons for examination of such person - steps for filing the Bill-of-Entry would not have taken place unless the documents were handed over by the appellant herein. The goods are counterfeit and have been confiscated. It is also alleged that he has taken back the documents from the Customs Broker. The findings of the authorities below, that the appellant has acted in relation to improper importation of goods, does not call for interference. However, in the present case, he had no liability to pay duty. The penalty of Rs.7,00,000/- imposed on Shri C. Solomon Selvaraj is on the higher side and requires to be reduced. Appeal allowed in part.
Issues Involved:
1. Mis-declaration and concealment of imported goods. 2. Infringement of Intellectual Property Rights (IPR). 3. Violation of Customs Brokers Licensing Regulations (CBLR). 4. Imposition of penalties under Section 112(a) of the Customs Act, 1962. Detailed Analysis: 1. Mis-declaration and Concealment of Imported Goods: The case involved M/s. Amar Exports filing a Bill of Entry for "3B Glass Top Gas Stove (Unbranded)" with a declared weight of 10160 kgs. Upon examination, the consignment contained undeclared branded shoes (Nike, Adidas, Reebok, Puma) and gas stoves. The undeclared items were found to be counterfeit, leading to an investigation. 2. Infringement of Intellectual Property Rights (IPR): The imported shoes were verified and confirmed as counterfeit by the IPR holders. The import of such counterfeit goods infringes trademarks and is prohibited under Section 11 of the Customs Act, 1962, along with relevant sections of the Trade Marks Act, 1999. Consequently, the goods were confiscated. 3. Violation of Customs Brokers Licensing Regulations (CBLR): The Customs Broker, M/s. Sun Sea Shipping Agency, was alleged to have violated Regulation 10(n) of the CBLR, 2018, by failing to verify the identity and functioning of their client. The Show Cause Notice did not specify any direct abetment in the mis-declaration of goods. The Adjudicating Authority had previously imposed a penalty under CBLR, 2018, but did not revoke the license, citing the lack of evidence of sharing benefits from fraudulent imports. 4. Imposition of Penalties under Section 112(a) of the Customs Act, 1962: - Customs Broker (M/s. Sun Sea Shipping Agency): The penalty under Section 112(a) was contested on the grounds that the allegations pertained to CBLR violations, for which a penalty had already been imposed. The Tribunal found no evidence of abetment in the mis-declaration and set aside the penalty. - Shri C. Solomon Selvaraj: The appellant acted as an intermediary and handed over documents to the Customs Broker. The Tribunal noted that the appellant did not establish the involvement of Vishal, who allegedly provided the documents. The penalty of Rs. 7,00,000/- was deemed excessive and reduced to Rs. 1,00,000/-. Judgment: - Customs Appeal No. 40356/2021: Allowed with consequential reliefs, setting aside the penalty imposed on M/s. Sun Sea Shipping Agency. - Customs Appeal No. 40855/2021: Partly allowed by reducing the penalty on Shri C. Solomon Selvaraj from Rs. 7,00,000/- to Rs. 1,00,000/-. (Order pronounced in the open court on 19.05.2022)
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