1991 (1) TMI 297 - AT - Customs

Summary

Issues Involved:
1. Imposition of penalties on appellants regarding the import of a consignment declared as "electronic spares for VCRs."
2. Legality of the subject import and consequent liability to penalty.
3. Validity of the import license and the claim for OGL (Open General License).
4. Clubbing of consignments for assessing penal liability.
5. Quantum of penalties imposed.

Issue-wise Detailed Analysis:

1. Imposition of Penalties on Appellants Regarding the Import of Consignment Declared as "Electronic Spares for VCRs":

The appeals concern penalties imposed on appellants for importing a consignment declared as "electronic spares for VCRs" consigned to M/s. Borivli Hosiery Mills. The goods were found to be 325 pieces of National NV-G-10 VCRs in SKD condition, minus the PCBs, which were imported separately. The goods were ordered absolute confiscation, and penalties were imposed on the appellants for their involvement in the import.

2. Legality of the Subject Import and Consequent Liability to Penalty:

The consignment was imported at Kandla Port, and no Bill of Entry was filed for its clearance. The goods were examined and found to be VCRs in disassembled condition, minus the PCBs. The import was alleged to be a camouflage for importing prohibited consumer items. The Collector of Customs & Central Excise, Rajkot, ordered the absolute confiscation of the goods and imposed penalties on the appellants. The appellants argued that the import was made at the behest of M/s. Jolly Enterprises and that they were not aware of any illegal designs. They contended that the penalties imposed were unduly harsh and that separate penalties on the firm and partner were unfair.

3. Validity of the Import License and the Claim for OGL:

The appellants claimed that the import was made under a valid license and that the goods were OGL items. However, no Bill of Entry or valid license was produced before the original authority. The Tribunal noted that the import documents were recovered from M/s. Borivli Hosiery Mills, and the goods were consigned in their name. The Tribunal held that the goods were liable to confiscation under Sec. 111(d) of the Customs Act due to the lack of a valid license or OGL claim.

4. Clubbing of Consignments for Assessing Penal Liability:

The appellants argued that the consignment imported at Kandla should not be clubbed with the PCBs imported at Ahmedabad. The Tribunal agreed, stating that the legality of the subject import should be examined independently. The Tribunal concluded that the import of 325 sets of VCR components minus PCBs, along with original packing cartons and operating manuals, indicated an intention to market them as complete VCRs after assembly.

5. Quantum of Penalties Imposed:

The Tribunal noted that the penalties imposed were somewhat on the higher side, considering the absolute confiscation of the goods. The penalties were reduced as follows:

- M/s. Borivli Hosiery Mills: Reduced from Rs. 2.00 lacs to Rs. 80,000/-
- Shri Jamnadas G. Merchant: Reduced from Rs. 1.00 lac to Rs. 50,000/-
- Shri Nilesh V. Shah: Reduced from Rs. 1.00 lac to Rs. 80,000/-
- Shri Suresh V. Shah: Reduced from Rs. 1.00 lac to Rs. 40,000/-

Conclusion:

The Tribunal upheld the penalties on the appellants but reduced the quantum. The appeals were otherwise rejected, with the modification of penalties. The Tribunal concluded that the import was unauthorized and that the appellants were liable for penalties under Sec. 112(a)(i) of the Customs Act. The decision was based on undisputed facts and documents, without relying on retracted statements. The Tribunal emphasized the complicity among the parties and the futility of their attempts to evade responsibility.