2023 (5) TMI 1086 - AT - Customs

Levy of penalty u/s 112(a) of Customs Act, 1962, and u/s 114AA of Customs Act, 1962 - mis-declaration of imported goods - allegation that import export code (EC) had been procured illicitly - HELD THAT - It is on record that bill of entry had not been filed under section 46 of Customs Act, 1962 for imported of the said goods. Accordingly, scope for invoking of section 111(m) of Customs Act, 1962 for confiscation of goods arising from misdeclaration and, in the absence of documents available on record, the ingredients for invoking of section 114AA of Customs Act, 1962 did not exist. All documents available till then are limited to those mandated by section 30 of Customs Act, 1962 upon carrier of goods. Penalties are not imposable on the presumption that goods are likely to be misdeclared or to be attempted to be cleared against false declaration and incorrect material. Confiscation under section 111(d) appears to have been invoked in a routine manner inasmuch as the impugned goods are not prohibited for import. Until bill of entry is filed, the identity of the importer, and lack of import-export code (IEC) will not be known. Though adjudicating authority has invoked the provisions of Prohibition of Benami Property Transactions Act, 1988 without any empowerment to do so, and ostensibly to bring the appellant within the scope of Customs Act, 1962 in circumstances initiating proceedings even before bill of entry was filed, that law, intended to be invoked for prosecution as a consequence of holding property in benami as well as for interdiction of such property, exists as an independent statute not amenable for concatenation with Customs Act, 1962 by any enabling provision. The impugned order, failing to sustain under law, is set aside and appeal allowed.

Summary

Issues Involved:
The issues involved in this case are the imposition of penalty under sections 112(a) and 114AA of the Customs Act, 1962, confiscation of goods, misdeclaration of imported goods, procurement of import-export code illicitly, and the legality of invoking the Prohibition of Benami Property Transactions Act, 1988.

Imposition of Penalty under Sections 112(a) and 114AA of Customs Act, 1962:
The appellant appealed against the penalty imposed under sections 112(a) and 114AA of the Customs Act, 1962. The Commissioner of Customs (Appeals) upheld the penalty, citing misdeclaration of imported goods under sections 111(d) and 111(m) of the Customs Act, 1962. The appellant argued that the goods were not yet entered for import when seized and were consigned to another entity, M/s Petals Traders. Reference was made to previous tribunal decisions and a High Court ruling to support the contention that penalties should not apply unless goods were entered for import.

Confiscation of Goods and Misdeclaration:
The customs authorities confiscated the goods due to misdeclaration under section 111(d) of the Customs Act, 1962. The Authorized Representative stated that the appellant admitted to the illicit procurement of the import-export code and ownership of the goods. The imports were deemed to contravene the Foreign Trade (Development & Regulations) Act, 1992, justifying confiscation under section 111(d) of the Customs Act, 1962.

Legality of Invoking Prohibition of Benami Property Transactions Act, 1988:
The appellant challenged the invocation of the Prohibition of Benami Property Transactions Act, 1988, alongside the Customs Act, 1962, for charging consequences that typically apply to importers. It was argued that this Act should not be concatenated with the Customs Act, 1962, as it serves a distinct purpose related to benami property transactions. The impugned order was set aside due to the failure to sustain under the law, and the appeal was allowed.