2008 (2) TMI 164 - AT - Customs

Allegation of non-inclusion of value of design, drawings and technical information in the assessable value of the imported goods (moulds) - since all relevant facts were disclosed to dept. prior to imports demand is barred by limitation however duty liability was conceded at investigation, penalty is justified CHA acted in a bona fide manner in terms of the instructions of the client so he can t be penalized on the ground of abetment of any offence of the client - penalty on CHA unjustified

Summary

Issues involved:
1. Time-barred demand of duty
2. Allegation of suppression of facts by the assessee
3. Imposition of penalty under Section 112 of the Customs Act
4. Applicability of penalty on the Customs House Agent (CHA)

Time-barred demand of duty:
The appellants argued that the demand of duty was time-barred as the show-cause notice was issued after more than five years from the period of imports. The plea of limitation was not raised before the adjudicating authority, but it was contended that limitation is a legal plea that can be raised at the appellate stage. The period of imports for certain items exceeded five years preceding the notice date. The appellants claimed that there was no suppression of facts, citing a statement from 1993 disclosing relevant information. The tribunal agreed that the facts were disclosed to the customs authorities promptly after the imports, and there was no intent to evade duty. Therefore, the extended period of limitation was not applicable to imports within five years preceding the notice.

Allegation of suppression of facts by the assessee:
The department alleged that the assessee deliberately segregated the value of design, drawings, and technical information to evade duty payment. However, the tribunal found that the relevant facts were disclosed to the department soon after the imports through a statement by the Deputy Manager of the assessee. It was concluded that there was no suppression of facts with intent to evade duty, as the pertinent information had been provided to the authorities in a timely manner.

Imposition of penalty under Section 112 of the Customs Act:
The penalty was imposed on the assessee under Section 112 for rendering the goods liable to confiscation by misdeclaring their value. The duty liability was admitted during the investigations, leading to the imposition of the penalty. The tribunal acknowledged that the penalty was justified but deemed the original amount of Rs.10.00 lakhs as harsh. The penalty was reduced to Rs.5,00,000/- considering the circumstances of the case.

Applicability of penalty on the Customs House Agent (CHA):
The CHA was penalized for allegedly abetting the offense of the importer, making the goods liable to confiscation. However, statements from the CHA and the Deputy Manager of the assessee indicated that the CHA acted based on the instructions of the assessee and was not aware of certain details. The tribunal found that penalizing the CHA based on speculative findings was unwarranted. The penalty imposed on the CHA was not sustained, and the appeal in this regard was allowed.

In conclusion, the tribunal disposed of the appeal by reducing the penalty on the assessee to Rs.5,00,000/- and allowing the remaining appeal. The judgment emphasized the importance of timely disclosure of facts, the justification for penalties under the Customs Act, and the need for a fair assessment of penalties on involved parties.