2015 (9) TMI 972 - AT - Customs

Improper importation of goods Confiscation of goods and Imposition of penalties Appellants made import of second hand printing machinery under fictitious names as actual user and same were sold in violation of EXIM Policy in open market Imported goods were confiscated and personal penalties were imposed under under Section 112(a) of Customs Act for contravention of FTP Policy and Customs Act Held that - Commissioner in first imposed penalty on individual persons Adjudicating authority has dealt issue in detail and modus operandi of floating fictitious firms and imported second hand machinery violating actual user condition which was investigated by D.R.I. Therefore court hold that appellants are liable for penalty under Section 112 (a) Appellants contravened provisions of Customs Act and EXIM Policy by fraud, collusion, abetting thereby imported goods became liable for confiscation under Section 110 of Customs Act which is clearly established in present case Accordingly, appellants are liable for penalty however penalties imposed on respective importer-appellants are reduced Impugned order modified Appeals partly allowed Decided partly in favour of Appellants.

Summary

Issues:
Confiscation of imported goods for contravention of FTP Policy and Customs Act; Imposition of personal penalties under Section 112(a) of the Customs Act.

Confiscation of Imported Goods:
The case involved the import of second-hand printing machinery under fictitious names, which were subsequently sold in violation of the EXIM Policy. The Commissioner of Customs initially confiscated 74 machines and held 354 machines liable for confiscation. Upon remand by the Tribunal, a de novo order was issued confiscating a total of 370 machines valued at Rs. 2,57,50,865. The Commissioner imposed penalties on all 11 importers, leading to appeals filed against the imposition of personal penalties under Section 112(a) of the Customs Act.

Imposition of Personal Penalties:
The Tribunal noted that out of the 11 importers, only 10 filed appeals, with the remaining importer failing to appear. Despite multiple hearing dates, the appellants did not respond, leading to an ex-parte decision based on available records. The Revenue argued that penalties were rightly imposed, emphasizing the violation of the EXIM Policy and Customs Act by importing and selling machinery in contravention of regulations. The Tribunal referenced previous decisions and upheld the penalties under Section 112(a), considering the deliberate violations and fraudulent activities of the appellants.

Legal Precedents and Decision:
The Tribunal cited the case of South India Traders Vs. CC Tuticorin and a High Court judgment regarding the import of second-hand machinery to support the imposition of penalties. The Tribunal reduced the penalties imposed on the appellants based on the overall circumstances of the case and penalties initially set in the first order. The decision highlighted the appellants' contravention of Customs Act and EXIM Policy through fraud and collusion, leading to the liability for penalties under Section 112(a). The judgment modified the impugned order, reducing penalties for each appellant and partially allowing the appeals. The decision was dictated and pronounced in open court by the Tribunal.