1997 (3) TMI 310 - AT - Customs

Summary

Issues Involved:
1. Confiscation of dry battery cells under Section 111(d) of the Customs Act.
2. Confiscation of the container under Section 118 of the Customs Act.
3. Imposition of penalty under Section 112(a) of the Customs Act.

Detailed Analysis:

1. Confiscation of Dry Battery Cells under Section 111(d) of the Customs Act:

The Commissioner of Customs, Kandla, ordered the absolute confiscation of 1200 cartons of dry battery cells under Section 111(d) of the Customs Act. The consignment arrived at Kandla Port on 27-2-1995 and was consigned to M/s. Geeta Times, Delhi, and M/s. B.K. Associates, New Delhi. The goods were seized on 28-6-1995 because they were consumer goods requiring a specific import license under the Exim Policy 1992-1997, which was not obtained. The Commissioner concluded that the main person involved in the import was Shri L.D. Khanna, Proprietor of M/s. Geeta Times, who tried to distance himself from the import by claiming the order was canceled. However, the Commissioner found that the import was caused by him, and the disclaimer of goods was made only after the SCN was issued on 14-12-1995.

The Tribunal found that the suppliers had directed the Shipping Company to divert the container to Moscow, but the container was off-loaded at Kandla. The Tribunal held that the question of formal disclaimer of abandonment of the goods before or after their arrival does not materially affect the ownership and consequently the liability to confiscation. Under Section 23(2) of the Customs Act, the owner of imported goods has the right to relinquish his title to the goods before clearance. The Tribunal found that the appellants had not obtained clearance of the goods, and the foreign supplier had sought diversion of goods to a foreign destination.

2. Confiscation of the Container under Section 118 of the Customs Act:

The SCN also called upon the parties to explain why the container should not be confiscated under Section 118 of the Customs Act. However, the detailed judgment does not provide specific findings or conclusions regarding the confiscation of the container itself. The focus remained on the goods within the container and the penalties imposed.

3. Imposition of Penalty under Section 112(a) of the Customs Act:

The Commissioner imposed a penalty of Rs. 2 lakhs on M/s. Geeta Times. The Tribunal agreed that simultaneous penalties on the proprietary concern and its Proprietor are not permissible under law, and thus set aside the penalty imposed on Shri Laxman Dutt Khanna, the Proprietor of M/s. Geeta Times. The Tribunal also noted that placing import orders in anticipation of obtaining a license is not inconceivable, and the exporters had sought diversion of the goods to a foreign destination. Considering these factors, the Tribunal found the penalty of Rs. 2 lakhs to be too harsh and reduced it to Rs. 50,000.

Conclusion:

The appeal was disposed of with the Tribunal setting aside the penalty on the Proprietor and reducing the penalty on M/s. Geeta Times to Rs. 50,000. The order of confiscation of the dry battery cells was upheld, but the Tribunal recognized the right of the foreign supplier to relinquish the title under Section 23(2) of the Customs Act.