2018 (1) TMI 723 - AT - Customs

Illegal import - misdeclaration of goods - enhancement of value - as the goods were not properly declared for contents as well as value and accordingly, apart from proposing confiscation of the goods, enhancement of value, notice also proposed penalties on various noticees Held that - It is a fact that the courier consignment did not contain the necessary statutory details on the pack. The details contained were vague and there was a clear attempt in mis-declaration of high value electronic items to avoid customs duty - Much after interception of cargo, the appellant came forward with invoice and other details claiming ownership of the goods. Even at that time, the appellant could not produce necessary supporting evidence with reference to booking of consignment at Hong Kong and also the reason for invoice dated 15.04.2012 not having full particulars like name etc. of the imported goods. Penalty on custodian - Held that - The custodian had no prior information about any possible attempt of improper importation of goods through courier service. In any case, the impugned order did not bring out the exact violation committed by the custodian with reference to the present cargo, which will attract penalty under the provisions of Customs Act. The custodian did not file any documents containing improper particulars nor abetted any such improper importation or subsequent clearance - impugned order did not bring any act or omission on the part of the custodian in order to attract a penalty under Customs Act, 1962 - penalty set aside. The appeal filed by M/s. Sardana Enterprises dismissed except for reduction of fine and penalty and the appeal by M/s. Express Industry Council of India allowed. Appeal disposed off.

Summary

Issues Involved:
1. Confiscation and mis-declaration of imported goods.
2. Imposition of redemption fine and penalties.
3. Role and liability of the custodian of imported cargo.

Detailed Analysis:

1. Confiscation and Mis-declaration of Imported Goods:
The case involves the interception of a courier shipment from Hong Kong containing 90,000 pieces of Micro SD Cards, connectors, and a printed cylinder. The consignment lacked proper documentation, including the receiver's address and an invoice, leading to its seizure. The investigation revealed attempts to mis-declare the contents and value to evade customs duty. The goods were initially consigned to "Raja Traders," "Mr. Tarun," and "Xtra Image," but later changed to "M/s. Sardana Enterprises" and "M/s. JMS Infotech" after interception. The authorities concluded that there was an attempt to smuggle the goods by mis-declaration and substitution of consignee names.

2. Imposition of Redemption Fine and Penalties:
The first appellant, M/s. Sardana Enterprises, was found liable for the confiscation of 50,000 pieces of Micro SD Memory Cards. The goods were allowed to be redeemed on payment of a fine of ?15 lakhs. The value of the goods was re-determined at ?57,69,008/- with a duty liability of ?5,39,747/-. Penalties of ?2 lakhs under Section 112(a) and ?5,39,747/- under Section 114 AA of the Customs Act were imposed on the proprietor, Shri Gopal Sardana. The appellant argued that the mistake was due to the courier's error in Hong Kong and requested the release of the goods after paying the fine and duty. However, the tribunal found that the consignment lacked statutory details and there was a clear attempt at mis-declaration. The redemption fine was reduced to ?7.5 lakhs, and the penalty under Section 114 AA was reduced to ?1 lakh, considering the total duty involvement.

3. Role and Liability of the Custodian of Imported Cargo:
The second appeal by M/s. Express Industry Council of India challenged the penalty of ?50,000/- under Section 117 of the Customs Act. The custodian was penalized for allowing another person as a sub-contractor to handle cargo, violating Regulation 6 (1)(h) of the Handling of Cargo in Customs Areas Regulations, 2009. The tribunal noted that the custodian had no prior information about the improper importation attempt and did not file any documents with improper particulars. The penalty under Section 117 was deemed inappropriate as the custodian did not commit any act or omission warranting such a penalty. The appeal by M/s. Express Industry Council of India was allowed, and the penalty was set aside.

Conclusion:
The tribunal dismissed the appeal by M/s. Sardana Enterprises except for reducing the redemption fine and penalty under Section 114 AA. The appeal by M/s. Express Industry Council of India was allowed, and the penalty imposed on them was set aside. The judgment highlights the importance of proper documentation and adherence to customs regulations to avoid penalties and confiscation of goods.