2022 (10) TMI 469 - AT - Customs

Levy of penalty u/s 112(a) of Customs Act, 1962 and Section 114AA of Customs Act, 1962 - absence of Import Export Code (IEC), mandated under the Foreign Trade (Development Regulation) Act, 1992, in the possession of actual buyers - violation of requirements of the Foreign Trade (Development Regulation) Act, 1992 - HELD THAT - It is seen that the proceedings were initiated against the goods before the declaration of entry was made under Section 46 of Customs Act, 1962. The bill of lading, which is the basis of the proceedings, is issued by the shipping company at the instance of overseas suppliers and none of the documents prescribed under Foreign Trade (Development Regulation) Act, 1992, or any other law in force, with which the appellant may, at a stretch, be connected with has been filed under Customs Act, 1962. The link between action leading to confiscation of goods and the appellant, is, therefore, not established. Section 112(a) of Customs Act, 1962 and section 114AA of Customs Act, 1962 are not attracted as far as the appellant is concerned - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Penalties imposed under Section 112(a) and Section 114AA of Customs Act, 1962.
2. Allegation of facilitation of import without Import Export Code (IEC).
3. Connection of the appellant with the import of impugned goods.
4. Confiscation under Section 111(d) of Customs Act, 1962.
5. Link between the appellant and the action leading to confiscation.

Analysis:

1. The appeal challenged penalties imposed under Section 112(a) and Section 114AA of the Customs Act, 1962, based on Order-in-Original No. CAO/22/2012/CAC/CC/BKS. The penalties were Rs. 2,00,000/- and Rs. 1,00,000/- respectively.

2. The proceedings were initiated due to the import of goods without the necessary Import Export Code (IEC) mandated under the Foreign Trade (Development & Regulation) Act, 1992. The appellant was alleged to have facilitated the import, leading to penalties.

3. The appellant, a businessman, claimed no involvement in the import and argued that the confiscation did not result from his actions. Reference was made to a previous case where penalties were set aside by the Tribunal, citing a decision of the Hon'ble High Court of Bombay.

4. The Authorized Representative contended that the attempted import violated the Foreign Trade Act, making the goods liable for confiscation under Section 111(d) of the Customs Act, 1962. The appellant's role in making the import possible by introducing the Import Export Code was highlighted as a basis for penalties.

5. The Tribunal found that the link between the appellant and the confiscation of goods was not established. The bill of lading, the basis of the proceedings, was issued by the shipping company at the overseas suppliers' instance, without any documents connecting the appellant to the import. As a result, Sections 112(a) and 114AA of the Customs Act, 1962 were deemed inapplicable to the appellant, leading to the impugned order being set aside and the appeal being allowed.