2015 (9) TMI 971 - AT - Customs

Confiscation of improperly imported goods - Chinese mobile phones Appeal was filed against order of Commissioner(A) upholding order confiscating 3,437 number Chinese mobile phones under Section 111(d) & (i) of Customs Act, 1962 and also imposed penalty upon appellant Held that - All persons whose names were found on boxes seized have either disowned seized goods or were not found Disposal of goods through E-auction by department indicates that restriction imposed was either curable or was not essential and could also have been complied by appellant in case redemption option was allowed As impugned goods have already been disposed off by department, therefore, sale proceeds with respect to 388 pcs. are ordered to be released to appellant after imposing and adjusting suitable redemption fine to be calculated & imposed by Adjudicating Authority after affording opportunity of personal hearing to appellant Sale proceeds pertaining to remaining mobile phones is also ordered to be released to appellant Further Customs duty cannot be demanded from appellant as it is case of town seizure and date/time of inspection is not known to determine rate of duty, exchange rate and value of goods Appellant being transporter cannot be expected to know all and no such statement exists that he was aware of smuggled nature of seized goods In view of observations, penalty imposed is set aside Decided in favour of Assesse.

Summary

Issues Involved:
- Confiscation of Chinese mobile phones under the Customs Act, 1962
- Imposition of penalty on the appellant
- Redemption of seized goods
- Requirement of IMEI number under Notification No. 14/2009-14
- Duty liability in town seizures
- Imposition of penalty under Section 112(b) of the Customs Act, 1962

Confiscation of Chinese Mobile Phones:
The appeal was filed against the Order-in-Appeal upholding the confiscation of 3,437 Chinese mobile phones and imposition of a penalty under Section 111(d) & (i) of the Customs Act, 1962. The appellant argued that the penalty was wrongly imposed as Section 111(i) was not invoked in the show cause notice. The appellant contended that redemption should be allowed under Section 125 of the Customs Act, 1962, even if not the owner. The Tribunal held that the appellant, as a transporter, had the right to seek redemption under Section 125(1) and referred to relevant case laws supporting this view.

Requirement of IMEI Number and Redemption of Seized Goods:
The appellant argued that the requirement of IMEI numbers was not mentioned in the show cause notice, and the authorities exceeded the notice's scope. The Tribunal agreed and set aside the order related to the IMEI number issue. It was noted that the defect in some mobile phones was curable, and the goods were disposed of through E-auction, indicating a possibility of redemption. The Tribunal ordered the release of sale proceeds for non-conforming mobile phones after imposing a suitable redemption fine.

Duty Liability in Town Seizures:
Regarding duty liability in town seizures, the Tribunal referred to a precedent where it was established that in town seizures, the value of confiscated goods includes the duty element, and no additional duty can be demanded. The Tribunal held that Customs duty cannot be demanded from the appellant due to the nature of the seizure and the unavailability of information to determine the duty amount.

Imposition of Penalty under Section 112(b):
The penalty imposed on the appellant under Section 112(b) was set aside as there was no evidence that the appellant knew or had reason to believe the goods were liable to confiscation. The Tribunal noted that as a transporter, the appellant could not be expected to have knowledge of the goods' prohibited nature. Therefore, the penalty under Section 112(b) was revoked.

In conclusion, the appeal was allowed, and the Tribunal provided detailed reasoning for each issue, ultimately setting aside the penalty and ordering the release of sale proceeds for certain mobile phones while addressing the various legal aspects raised during the proceedings.