2024 (2) TMI 209 - AT - Customs

Levy of penalty u/s 112(a) of the Customs Act, 1962 on an employee of the Customs Broker - classification of imported goods - cut tobacco classifiable under Customs Tariff Item 2403 9970 or Roll Your Own Tobacco packed in retail pouches of 50 grams each? - necessary declaration in terms of Legal Metrology Act and the Rules made thereunder have not been mentioned in the packages - HELD THAT - From the plain reading of Section 46 of Customs Act, it transpires that in order to determine the appropriate duties of customs payable on any imported goods, an importer is required to file a Bill of Entry (B/E) giving all required particulars of such imported goods for assessment to duty. It is also to be noted that in terms of definition of the term assessment provided under Section 2(2) ibid, determination of duty liability of imported goods has to be determined in accordance with the tariff classification of such goods in terms of Customs Tariff Act, 1975. Thus mentioning of the description in detail and tariff classification of the imported goods is one of the important requirement in the declaration to be made under section 46 ibid. From the facts of the case, and the findings recorded by the learned Commissioner of Customs in paragraph 31.5 of impugned order, it clearly emerges that Shri Aakash Thakkar, had stated that the customs tariff heading declared in the bill of entry was decided by the importer and he followed the importers instructions. Further, in the impugned B/E, the CB and importer had sought for examination of the goods on First Check basis , which indicates that the goods are required to be firstly examined by customs authorities before assessment of the customs duty and for compliance with other requirements applicable thereon - responsibility for proper declaration of the goods lies with the importer and having sought for examination of the goods before assessment, there was no element of mis-declaration on the part of customs broker and the employee Shri Aakash Thakkar attracting imposition of penalty under Section 112(a) ibid. Further, it is found that there is apparent contradiction in the stand taken by the learned Commissioner of Customs at paragraphs 32.1.1 and 31.4 of the impugned order. In para 32.1.1 he stated that the importer did not disclose the end-use of the imported goods at the time of its importation and cleared the goods under CTH 2403 9970 attracting lower rate of GST compensation cess, which proved that the importer wilfully mis-declared the classification of goods as well as suppressed the facts from the Department with an intent to evade payment of legitimate customs duty. There are no merits in the impugned order passed by the learned Commissioner of Customs (Imports), ACC, Mumbai in imposition of penalty under Section 112(a) ibid on Shri Aakash Thakkar, employee of CB, and the findings in the impugned order to this extent is contrary to the facts on record. The impugned order is set aside - appeal allowed.

Summary

Issues Involved:
1. Classification of Imported Goods
2. Imposition of Penalty on Customs Broker's Employee
3. Responsibility for Mis-declaration and Duty Evasion

Summary:

1. Classification of Imported Goods:
The appellant, an employee of a Customs Broker, filed a Bill of Entry for imported goods declared as 'cut-tobacco' under Customs Tariff Item 2403 9970. Upon examination, customs authorities found the goods to be 'Roll Your Own Tobacco' in retail pouches. The authorities disputed the classification and noted the absence of necessary declarations under the Legal Metrology Act. The goods were seized, and a show cause notice was issued.

2. Imposition of Penalty on Customs Broker's Employee:
The Commissioner of Customs imposed a penalty of Rs.10,000/- under Section 112(a) of the Customs Act, 1962, on the appellant for the current consignment and Rs.50,000/- for past consignments involving 16 Bills of Entry. The Commissioner found that the appellant, as an employee of the Customs Broker, should have been aware of the proper classification and advised the importer accordingly.

3. Responsibility for Mis-declaration and Duty Evasion:
The Tribunal found that the responsibility for proper declaration lies with the importer, especially since the goods were to be examined by customs authorities before assessment. The Commissioner's findings were contradictory, as he did not impose a penalty on the importer due to a lack of evidence of intentional mis-declaration but penalized the Customs Broker's employee for not advising the importer correctly.

Conclusion:
The Tribunal concluded that there was no basis for imposing a penalty on the appellant under Section 112(a) of the Customs Act, 1962, as the responsibility for the declaration lies with the importer, and the goods were subject to first check examination. The appeal was allowed, and the impugned order was set aside to the extent of the penalty imposed on the appellant.