2013 (3) TMI 348 - AT - Customs

Non authorization to act as an agent of the ten consignees - all the addresses of the purported consignees given by the respondent were found incomplete/fake - benefit of Notification No. 171/93-Cus., dt. 16-9-1993 availed on the imported goods declared as gifts exceeding the value of Rs. 10,000/- - SCN issued that as the goods in question could not be classified as gift and were actually dutiable proposing to confiscate the imported goods with demand the duty confirmed along with interest and penalty - FAA sett aside the demand raised against the courier company and also the penalties imposed - Held that - The respondent s action of filing the courier Bill of Entry with the other available material would itself indicate that the respondent had been functioning as a courier. It is clear from the facts on record that the respondent did not import consignment and is not liable to pay the Customs duty as per the provisions of Customs Act, 1962, as he has filed courier Bill of Entry in proper prescribed format. This fact being undisputed, the penalty imposed by the adjudicating authority under Section 114A of Customs Act, 1962 was unwarranted and was correctly set aside by the first appellate authority. As regards penalty under Section 112 of Customs Act, 1962 imposed on the proprietor of the courier firm can be invocable as it is undisputed that he has filed a courier Bill of Entry and the consignment which was sought to be cleared under courier regulations, is confiscated by the lower authorities. The respondent courier firm or its proprietor is not in appeal against absolute confiscation of the cigarettes by the first appellate authority. In such a situation, the provisions of Section 112(a) of Customs Act, 1962 can be invoked against the firm or its proprietor, as the proprietor and the firm are not different entities. As the proprietor of the courier firm was not in India when the consignment was received and travelling abroad, ends of justice would meet if the penalty imposed on the said proprietor is reduced to Rs. 25,000/-. Accordingly, I modify the order of the first appellate authority to the extent that Shri Sujal Patel, Proprietor of M/s. ACX International is liable to be imposed by a penalty of Rs. 25,000/- (Rupees Twenty Five Thousands only) under Section 112(a) of Customs Act, 1962.

Summary

Issues Involved:
1. Confiscation of imported goods.
2. Demand of customs duty and interest.
3. Imposition of penalties under Sections 114A and 112 of the Customs Act, 1962.
4. Compliance with Courier Imports & Exports (Clearance) Regulations, 1998.

Issue-wise Detailed Analysis:

1. Confiscation of Imported Goods:
The first appellate authority confirmed the confiscation of the imported goods, which were found to contain 2,00,000 cigarettes instead of the declared "Gift items, garments and chocolates." The goods were seized under the reasonable belief of being liable for confiscation under Section 111 of the Customs Act, 1962. The appellate authority modified the order by setting aside the option for redemption fine and ordered absolute confiscation of the goods valued at Rs. 7,00,000/-. The Revenue did not appeal against this absolute confiscation.

2. Demand of Customs Duty and Interest:
The Show Cause Notice demanded duty amounting to Rs. 5,22,488/- under Section 28 of the Customs Act, 1962 along with interest under Section 28AA/28AB. The first appellate authority set aside this demand on the grounds that with the absolute confiscation of the goods, no duty arises as the goods do not clear from the Customs area. This decision was upheld, noting that the duty demand does not apply once the goods are absolutely confiscated.

3. Imposition of Penalties under Sections 114A and 112 of the Customs Act, 1962:
The first appellate authority set aside the penalties imposed under Section 114A and Section 112 on the firm and its proprietor. The appellate authority reasoned that the authorized courier is merely an agent and not liable for mis-declaration unless complicity is proven. The penalty under Section 114A was deemed unwarranted as the courier company filed the Bill of Entry in the prescribed format and was not liable for duty. However, the penalty under Section 112 was reconsidered, and it was decided that the proprietor of the firm should be penalized, but the amount was reduced to Rs. 25,000/- due to the proprietor's absence from India at the time of the consignment's receipt.

4. Compliance with Courier Imports & Exports (Clearance) Regulations, 1998:
The Revenue argued that the courier company violated several regulations, including failing to obtain authorization from consignees and mis-declaring the goods. The appellate authority found that the respondent acted as a courier and filed the Bill of Entry as required. The possibility of discrepancies was anticipated, and the regulations did not specify actions against couriers for discrepancies unless complicity was proven. The appellate authority concluded that the courier company followed the prescribed procedure, and there was no evidence of their involvement in the mis-declaration.

Conclusion:
The appeals were disposed of with the following outcomes:
- Absolute confiscation of the goods was upheld.
- The demand for customs duty and interest was set aside.
- The penalty under Section 114A was set aside, while the penalty under Section 112 was reduced to Rs. 25,000/- for the proprietor of the courier firm.
- The compliance with the Courier Imports & Exports (Clearance) Regulations, 1998 was deemed satisfactory, with no evidence of the courier's complicity in the mis-declaration.