2023 (5) TMI 937 - AT - Customs

Levy of penalty u/s 112 (a) and 112 (b) of the Customs Act, 1962 - import by misdeclaration of description and value of the consignments using the IEC registered in the name of other person and shell companies - HELD THAT - The statement of the appellant recorded during the course of investigation perused. From going through the said statement, it is clear that the importer could not have contacted to seek help of the appellant for clearance of the said consignment and the appellant also visited to Kolkata. Therefore, after meeting with the concerned person and knowing that there is a DRI alert, the appellant informed the importer that he could not do anything and further told that if it was known to him that there is a DRI alert, the appellant could not have come to Kolkata also. This part of the statement has not been denied by the Revenue and no other statement or evidence has come on record that the appellant was involved in the clearance of the above said consignments which were mis-declared and under-valued. The act of action of the appellant is only under bonafide belief. Thus, no penalty is imposable on the appellant. Therefore, the penalty imposed on the appellant is set aside - appeal allowed.

Summary

Issues involved:
The judgment involves the imposition of a penalty under Sections 112 (a) and 112 (b) of the Customs Act, 1962 for mis-declaration and undervaluation of imported consignments, and the appellant's appeal against the penalty.

Detailed Summary:

Issue 1: Mis-declaration and undervaluation of imported consignments
- An intelligence report indicated mis-declaration and undervaluation of consignments imported from Hongkong and China.
- Investigation revealed that a partnership company, M/s A.S.S.Tradcom, imported consignments using the IEC registered in the name of another person.
- Customs broker for the imports, M/s Modern Agency, was involved in clearing the consignments.
- The goods were found to be mis-declared and undervalued, leading to suspicions of suppression and smuggling.
- Statements of involved parties, including partners of the importer and customs broker, revealed a scheme involving mis-declared imports to evade customs duty.
- The appellant, a customs clearing company proprietor, was alleged to have acted as a middleman in the scheme.

Issue 2: Imposition of penalty under Sections 112 (a) and 112 (b) of the Customs Act, 1962
- A show-cause notice was issued to the appellant, holding him responsible for facilitating the mis-declared imports.
- The appellant denied involvement in filing Bills of Entry or import of the consignments, claiming to have been contacted for help in clearance.
- The appellant's statement during investigation indicated that he informed the importer about the DRI alert and his inability to assist in clearance.
- The appellant's actions were deemed to be under a bonafide belief, and no incriminating evidence was found against him.
- The Tribunal held that no penalty was imposable on the appellant and set aside the imposed penalty.

Conclusion:
The Tribunal allowed the appeal, providing consequential relief to the appellant, based on the lack of evidence implicating him in the mis-declaration and undervaluation of imported consignments, ultimately overturning the penalty imposed under Sections 112 (a) and 112 (b) of the Customs Act, 1962.