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2019 (8) TMI 687 - AT - CustomsLevy of penalty - misdeclaration of goods - Equipment Type Approval (ETA) certificates have been found to be fake - Re-export of seized goods was allowed - import of wireless fitness watch/ wireless fitness tracker having declared as Fitbit Alta - HELD THAT - It is an admitted fact that ETAs produced by the importer were found to be fake on verification. Once the ETAs is found fake, the argument put forth by the learned Counsel of the appellants that country of manufacture was not relevant and not required to be mentioned on ETA holds no ground - Here country of manufacture is not in the dispute but there is a violation of relevant notification issued by the Ministry of Telecommunication No. GSR 45(E) dated 28/01/2005 which requires the importer to produce a valid ETA issued by the Ministry of Telecommunication. Once it is on record that the ETA was not issued by the Ministry of Telecommunication and was fake, all other arguments that country of origin was not required on ETA etc. become meaningless. Requirement of elements of mens rea - argument advanced by the learned Counsel is that they were not personally involved in the forgery of the ETAs and it was the third party who had given them fake ETAs and thus no mens-rea was involved on their part - HELD THAT - In view of the fact that the Hon ble Apex Court has held in a number of cases that mens-rea is not necessary for contravention of a civil act - The Hon ble High Court of Madras in the case of Commissioner of Customs (Export), Chennai-I versus Bansal Industries 2006 (9) TMI 58 - HIGH COURT, MADRAS has upheld an imposition of penalty under Section 112 of the Customs Act without involving any mens-rea. Rectification of mistake or not - corrigendum issued for imposition of penalty - HELD THAT - The corrigendum issued for imposing of penalty under Section 114AA of the Customs Act, 1962 which had no reference in the original order is not sustainable as it amounts to review of the original order. There is no reference that the original order had considered imposition of any penalty u/s 114AA of the Customs Act - once the order is passed by the Adjudicating Authority, he becomes a functus officio and he cannot reopen the case. Only clerical mistakes, which are apparent on record can be rectified by a corrigendum - Penalty u/s 114AA set aside. Thus, the appellant are liable to penalty u/s 112 (a) (ii) of the Customs Act, 1962 and thus there is no infirmity in the order-in-original on this count, however, considering all the facts and circumstances of the matter the quantum of penalty u/s 112 (a) is reduced to ₹ 10,00,000/- - appeal allowed in part.
Issues:
- Validity of ETA certificates for wireless fitness devices - Requirement of country of manufacture on ETA - Liability for fake/invalid ETA - Imposition of penalties under Sections 112(a) and 114AA of the Customs Act, 1962 Analysis: 1. Validity of ETA certificates for wireless fitness devices: The appellant imported wireless fitness devices and submitted ETA certificates for clearance. The certificates were found to be fake as they were issued for goods manufactured in the USA, while the imported goods were from China. The Tribunal held that the ETA certificates were crucial for goods operating in specific frequency bands and that the certificates produced were invalid, leading to the initiation of investigations. 2. Requirement of country of manufacture on ETA: The appellant argued that the country of manufacture was irrelevant for ETA validity as long as the technical specifications were met. However, the Tribunal emphasized that the ETA's authenticity was essential, and the failure to produce a valid ETA from the Ministry of Telecommunication led to the confiscation of goods under Section 111(d) of the Customs Act. 3. Liability for fake/invalid ETA: The appellant contended that they were not directly involved in obtaining fake ETAs, shifting blame to a third-party consultant. Despite this, the Tribunal held that the importer is responsible for ensuring compliance with statutory requirements, making them liable for penalties under Section 112(a) of the Customs Act. 4. Imposition of penalties under Sections 112(a) and 114AA: The Commissioner imposed penalties under Sections 112(a) and 114AA, which the Tribunal reviewed. While upholding the penalty under Section 112(a) due to the importer's responsibility, the Tribunal set aside the penalty under Section 114AA. It was reasoned that mens-rea is necessary for penalties under Section 114AA, and the appellant's lack of intent in using false documents warranted the penalty's removal. In conclusion, the Tribunal partially allowed the appeal, reducing the penalty under Section 112(a) but setting aside the penalty under Section 114AA, emphasizing the importer's responsibility for compliance with statutory requirements and the consequences of submitting fake documents for customs clearance.
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