1987 (7) TMI 320 - AT - Customs

Summary

Issues Involved:
1. Misdeclaration of imported goods.
2. Validity of import licenses.
3. Imposition of penalties under Section 112 of the Customs Act.
4. Role of Shri M.C. Desai in the importation and misdeclaration.
5. Liability of M/s. K. Hargovinddas & Co.

Detailed Analysis:

1. Misdeclaration of Imported Goods:
The core issue revolves around the misdeclaration of imported goods. The goods were declared as seconds and fents of fabrics and Velveteens, Mohair, and art silk mixed velveteen, but upon examination, they were found to be other varieties of synthetic fabrics in running lengths. The Customs House investigation revealed that the goods did not conform to the declared description in the Bills of Entry (B/Es). This misdeclaration led to the confiscation of the consignments under Section 111(d)(1)(m) of the Customs Act.

2. Validity of Import Licenses:
The import licenses used for these consignments were issued in the name of M/s. K. Hargovinddas & Co. The Customs House investigation suggested that these licenses were purchased by M/s. T.V. Patel from M/s. K. Hargovinddas & Co. for a premium. The Additional Collector of Customs held that the importation was made using licenses that were not valid to cover the imports, leading to the confiscation of the consignments and the imposition of penalties.

3. Imposition of Penalties under Section 112 of the Customs Act:
The Additional Collector imposed a penalty of Rs. 1 lakh on Shri M.C. Desai under Section 112 of the Customs Act. The Board confirmed this penalty and additionally imposed a penalty of Rs. 2 lakhs on M/s. T.V. Patel. The Tribunal upheld the penalty on Shri M.C. Desai, noting his active role in the importation and misdeclaration of the goods. The penalty on M/s. T.V. Patel was later set aside by the Government of India.

4. Role of Shri M.C. Desai in the Importation and Misdeclaration:
Shri M.C. Desai, the power of attorney holder for M/s. K. Hargovinddas & Co., played a significant role in the importation process. He was involved in opening the Letter of Credit, retiring import documents, filing B/Es, and arranging for the examination and clearance of the goods. Despite his contention that the licenses were sold to M/s. T.V. Patel, the Tribunal found that Shri Desai was deeply involved in the importation and misdeclaration, justifying the penalty imposed on him.

5. Liability of M/s. K. Hargovinddas & Co.:
M/s. K. Hargovinddas & Co. contended that they were not concerned with the goods as they had sold the licenses to M/s. T.V. Patel. The Additional Collector and the Board did not impose any penalty on M/s. K. Hargovinddas & Co. However, the Tribunal noted that M/s. K. Hargovinddas & Co. had no reason to approach the Government of India by way of a Revision petition as they had disowned the goods and no penalty was imposed on them.

Conclusion:
The Tribunal upheld the penalties imposed on Shri M.C. Desai, confirming his active role in the importation and misdeclaration of the goods. The appeals filed by M/s. K. Hargovinddas & Co. were dismissed as they were not aggrieved parties, having disowned the goods and faced no penalties. The judgment emphasized the importance of accurate declarations in import documentation and the consequences of misdeclaration under the Customs Act.