2012 (10) TMI 309 - AT - Customs

Penalty - misdeclaration in respect of description and value - Commissioner while imposing the penalty on the partner ARM Faiyaz has imposed 114A and 112 of the Customs Act, 1962 Held that - Under Section 114A of the Customs Act, penalty can be imposed only on the person who is liable to pay duty and penalty under Section 114A can be imposed, no penalty shall be imposed under Section 112 or 114 of the Customs Act - no penalty can be imposed on the partner

Summary

Issues:
1. Imposition of penalties under the Customs Act, 1962 on the appellant CHA firm and its partner for facilitating imports of cordless telephones.
2. Allegations of misdescription and undervaluation of imported goods against the appellant.
3. Validity of penalties imposed on the partner under Sections 114A and 112 of the Customs Act, 1962.

Analysis:
1. The appellant, a CHA firm and its partner, filed appeals against penalties imposed under the Customs Act, 1962 for facilitating imports of cordless telephones. The penalties were based on the charge that they did not act as clearing house agents but facilitated imports with misdeclared goods due to a close relationship with the supplier. The appellant argued that the allegations were based on an uncorroborated statement and proceedings initiated against them were dropped. Additionally, the penalty imposed on the partner under Sections 114A and 112 was deemed improper as he was not liable to pay duty, resulting in the penalty being dropped.

2. The Tribunal found evidence of misdescription and undervaluation of imported goods against the appellant based on a statement alleging their involvement in these acts. However, the lack of corroborative evidence apart from a single confessional statement raised doubts. Considering statements from co-noticees casting doubt on the CHA's actions, a token penalty of Rs.25,000 was imposed on the appellant firm, with no impact on other proceedings. The penalty imposed under Sections 114A and 112 on the partner was deemed improper as he was not duty liable, leading to the penalty being dropped.

3. In conclusion, the Tribunal confirmed a token penalty on the appellant firm for misdescription and undervaluation of goods, while dropping the penalty imposed on the partner under Sections 114A and 112 due to his lack of duty liability. The appeals were disposed of accordingly, with no penalty upheld against the partner.