2020 (2) TMI 1132 - AT - Customs

Confiscation of import - personal effects/household articles - cosmetic items - Baggage Rules - allegation that the said import was in violation of Rule 133 and Rule 43A of the Drugs and Cosmetic Rules, 1945 - further allegation that as per the Board s Circular No. 8/2010-Cus., dated 26-3-2010, Mangalore Port is not listed for import of the impugned goods into India by sea - HELD THAT - The appellant is an Indian Passport holder and she shifted her household articles into India from Dubai and filed unaccompanied baggage under Section 77 of the Customs Act, 1962. When the goods reached at Mangalore Port, it was examined and it was found that out of 139 packages, 54 packages are personal effect/household articles and remaining 85 packages were cosmetic items which are not permitted to be brought to India through Mangalore Port. Further, the appellant has violated the provisions of Baggage Rules as well as Drugs and Cosmetics Rules and also the Board s Circular which prohibits the import of these goods through Mangalore Port and both the authorities have rightly upheld the absolute confiscation of the said goods. Imposition of penalty u/s 112(a) and 114AA of the Customs Act - HELD THAT - It is on higher side because the appellant has not suppressed any material facts from the Department and she has filed the declaration before the Customs as required under law. Moreover, she was not knowing the Customs Regulations and she was shifting from Dubai where she was running a shop which was closed and all the items brought in her baggage were cosmetic items and she was not aware of the requirement of law that Mangalore Port is not authorized port for import of impugned goods into India through sea - penalty reduced. Appeal allowed in part.

Issues:
1. Confiscation of goods under Customs Act, 1962.
2. Valuation of confiscated goods and imposition of penalties.
3. Violation of Baggage Rules and Drugs and Cosmetics Rules.
4. Appeal against the impugned order of Commissioner (A).

Confiscation of Goods under Customs Act, 1962:
The appellant, an Indian Passport holder, filed an unaccompanied baggage declaration under Section 77 of the Customs Act, 1962 upon returning from Dubai. Upon examination, it was discovered that out of 139 packages, 54 contained personal effects/household articles, while the remaining 85 packages held cosmetic items in commercial quantity. The goods were misdeclared as personal effects to claim benefits under the Baggage Rules, 2016. The authorities found that the appellant violated the provisions of the Baggage Rules and misdeclared the goods, leading to the absolute confiscation of the cosmetic items under Section 111(m) of the Customs Act, 1962.

Valuation of Confiscated Goods and Imposition of Penalties:
The adjudicating authority classified the goods accordingly, with 54 packages valued at ?2,35,250/- eligible for clearance at a 'Nil' rate, while the remaining goods valued at ?29,58,971/- were confiscated. Penalties amounting to ?8,87,691/- and ?4,43,845/- were imposed on the appellant under Sections 112(a) and 114AA of the Customs Act, 1962, respectively. Additionally, a penalty of ?8,87,691/- was imposed on the Customs House Agent (CHA). The appellant contested the valuation, claiming it was without basis and higher than market value, and argued against the penalties imposed under Sections 112(a) and 114AA.

Violation of Baggage Rules and Drugs and Cosmetics Rules:
The appellant's representative stated that the cosmetic items were from a shop in Dubai that had closed, leading to their import into India. The appellant was unaware of the regulations prohibiting the import of such goods through Mangalore Port. The appellant's counsel argued that there was no deliberate violation or suppression of facts, and the penalties imposed were disproportionate and beyond the appellant's capacity to pay. The defense contended that the appellant misdeclared the quantity and description of the goods, leading to their confiscation.

Appeal Against the Impugned Order of Commissioner (A):
The appellant appealed the order of the Commissioner (A), contending that the confiscation was not in accordance with law as no show cause notice was issued, and the valuation of goods lacked a basis. The appellant argued against the penalties imposed, stating there was no willful or malicious intention to violate the law. The Learned AR defended the impugned order, citing the misdeclaration of goods by the appellant and justifying the confiscation and penalties imposed. The appellate authority reduced the penalty on the appellant to ?50,000 under Sections 112(a) and 114AA, considering the circumstances and the appellant's lack of awareness of the regulations. The department was directed to release the 54 packages upon payment of customs duty of ?21,630 as assessed by the original authority and upheld by the Commissioner (A).

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