2018 (6) TMI 1018 - AT - Customs

Demand of duty from the Supplier of the foreign company - Whether in the present case, the supplier can be construed as importer or not? - demand u/s 28 of CA - penalty u/s 114A - Held that - The appellant is not the importer as firstly, he has not imported the car. Secondly, he has not filed any Bill of Entry. The Bill of Entry was filed by Shri Cyril Anand Fernandez. In this fact, the demand under Section 28 cannot be confirmed against the appellant irrespective of whatever role he has played in the import of the car. It is also a fact on record that the goods have been released to Shri Murli Manohar Pandey who was the owner of the car at the relevant time, on payment of customs duty and redemption fine - the demand cannot be made from the appellant when admittedly the demand was recovered from Shri Murli Manohar Pandey - demand do not sustain. Penalty u/s 114A - Held that - Since the duty itself is not sustainable under Section 28 upon the appellant, the penalty under Section 114A which is consequent to the confirmation of demand under Section 28, shall not sustain. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Duty demand and penalty imposed under Section 114A of the Customs Act on the appellant.

Analysis:
The appellant, based in Dubai, arranged the supply of a car in India, which was cleared by Shri Cyril Anand Fernandez. The car was later sold to Shri Murli Manohar Pandey, who had the car seized and confiscated. Shri Murli Manohar Pandey paid the customs duty and redemption fine under Section 125(2) of the Customs Act to release the car.

The appellant's counsel argued that the appellant, although involved in planning the operation, should not be held responsible for duty payment as he was not the importer and did not file the Bill of Entry. Referring to legal precedents, the counsel contended that duty should be collected under Section 125(2) when confiscated goods are released, and not under Section 28.

The Assistant Commissioner representing the Revenue supported the findings of the impugned order, which demanded duty and imposed a penalty on the appellant.

Upon review, the Member (Judicial) found that the appellant was not the importer and did not file the Bill of Entry. As the goods were released to Shri Murli Manohar Pandey after payment of duty and fine, the demand under Section 28 could not be upheld against the appellant. Citing the Supreme Court's ruling in a similar case, it was concluded that the demand should have been recovered under Section 125(2), not Section 28. Therefore, the demand and penalty against the appellant were set aside, and the appeal was allowed.