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Penalty under Section 112(a) of the Customs Act, 1962 for relinquishing title to goods before import. Analysis: The Reference Application challenged a Final Order imposing a penalty of Rs. 50,000 under Section 112(a) of the Customs Act, 1962. The applicants questioned if Section 112(a) could be invoked when an importer relinquished title to goods before import. The facts revealed that the applicants ordered dry battery cells, but due to licensing issues, canceled the order before import. The goods arrived at an Indian port and were seized. The Tribunal, citing legal precedents, held the applicants liable for the penalty. The applicants argued that they had taken steps to divert the goods to another buyer after canceling the order, thus avoiding liability under Section 112(a. The opposing argument contended that under Section 111(d), goods imported contrary to customs laws are liable for confiscation and the importer for penalty. The Tribunal, referencing Supreme Court decisions, emphasized that the importer is deemed the owner of goods from import till customs clearance. The Tribunal differentiated previous cases where ownership claims were made by foreign suppliers or consignees. It upheld the penalty based on the legal fiction created by the Import (Control) Order, holding the importer responsible for the goods during the import process. Upon review, the Tribunal found that the legal precedents cited supported holding the importer accountable for the goods under Section 112(a). It clarified that the legal fiction created by the Import (Control) Order aimed to ensure proper implementation of import regulations. The Tribunal noted that the caution by the Supreme Court regarding extinguishing the exporter's title without payment did not apply in this case. Therefore, the Tribunal rejected the Reference Application, affirming the penalty under Section 112(a) against the applicants. In conclusion, the Tribunal's decision highlighted the importer's responsibility for goods under the Customs Act, supported by legal interpretations and precedents. The legal fiction created by the Import (Control) Order established the importer's ownership of goods during the import process, justifying the penalty imposed under Section 112(a). The Reference Application challenging the penalty was dismissed, emphasizing the importer's liability for goods even if title relinquishment occurred before import.
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