2024 (6) TMI 918 - AT - Customs

Misdeclaration and undervaluation of imported goods - modems - automated teller machines - automated teller machine processors - Application filed u/s 129B(2) for being heard afresh - penalty u/s 112 of Customs Act, 1962 - HELD THAT - The appellant was undoubtedly held to be a registered company and one among several within a conglomerate that included the importing entity. It is also on record that the importer was held to be liable for consequences of misdeclaration for having claimed the imported goods to be electrical and control switches instead of modems and it was alleged that the appellant-company had afforded a cover for the supply of purportedly finished modems to the customers. Thus, it would appear that the submission of Learned Counsel that the impugned order is deficient in details from which it could reasonably be concluded that penalty under section 112 was liable to be invoked. It is also correct that the stipulations for imposing penalty under section 112(a) and 112(b) are mutually exclusive requiring a detailed finding on the role of any person on whom penalty was to be imposed. In the absence of such finding, it is not appropriate to determine whether the empowerment to impose penalty has been validly invoked. On the finding that the goods are liable for confiscation, which has since been attained finality, there is need for evaluation of the role of the appellant. Matter remanded back to the original authority to determine whether the conditions specified in section 112(a) of 112(b) of the Customs Act, 1962 are found applicable in the instant case insofar as the appellant herein is concerned. Appeal allowed by way of remand.

Summary

Issues Involved:
1. Appeal against order under Customs Act, 1962 related to import of goods.
2. Application u/s 129B(2) for being heard afresh.
3. Role of appellant in import of goods and imposition of penalty u/s 112 of Customs Act, 1962.

For the first issue, the appellant, M/s Dipali Electronics Pvt Ltd, along with others, filed appeals against orders of 'proper officers' under Customs Act, 1962 related to import of 'modems', 'automated teller machines', and 'automated teller machine processors'. The disposal of all appeals, except the importer's, by the Tribunal was construed by the appellant as including theirs too, leading to a curious turn in the appeal process. The appellant preferred an application u/s 129B(2) for being heard afresh, which was initially rejected but later directed to be restored before the Tribunal by the Hon'ble High Court of Bombay.

Moving on to the second issue, it was established that the confiscation of impugned goods under section 111 of Customs Act, 1962 had finality due to the dismissal of appeals by the Hon'ble Supreme Court. The scope of the present appeal focused on the role of the appellant in the import of goods within the context of authority to impose penalty u/s 112 of Customs Act, 1962. Arguments were presented by Learned Counsel for the appellant and Learned Authorised Representative regarding the specific aspects of the impugned order and the applicability of penalty provisions.

Lastly, for the third issue, it was argued by the Learned Counsel that the impugned order failed to distinguish between the situations necessitating the invocation of section 112(a) and section 112(b) of the Customs Act, 1962. Various legal precedents were cited to support the contention that penalty should not have been imposed on the appellant due to their limited role in the import process. The Tribunal found that a detailed finding on the role of the appellant was necessary before invoking penalty provisions, and thus remanded the matter back to the original authority for further evaluation.

In conclusion, the Tribunal set aside the impugned order and remanded the matter for a detailed determination of the conditions specified in section 112(a) and 112(b) of the Customs Act, 1962 concerning the appellant's role in the import process.