2022 (11) TMI 1160 - AT - Customs

Confiscation of goods - Levy of penalty - Mis-declared/un-declared imported goods - goods which were declared as Adhesive Tapes but on examination, the goods appeared to be PTFE Tapes - wilful suppression of actual import value with intent to evade duty and as such - recovery of duty under Section 28 of the Act by invoking the extended period of limitation. HELD THAT - Admittedly, it is a case of town seizure. The goods found or available in the open market are presumed to be duty paid unless otherwise proved by the Department. Admittedly, in the facts of the instant case, Revenue have not brought any material on record that the goods seized from the shop/godown premises of the appellant, were not duty paid. Admittedly, the appellant have neither placed purchase orders with the foreign suppliers nor have made any payment to such foreign suppliers. Admittedly, the appellant have procured the goods from the importer(s) located in India after such importers brought the goods to the open market post out of charge granted by the Customs Department. All the suppliers, whose bills the appellants have produced in support of the goods lying in his godown, have confirmed supply of goods against those invoices, although there are minor distortion in the statements. In view of the documentary evidence, oral evidence have got less weight and documentary evidence being more reliable cannot be ignored. As the appellant admittedly is not the importer, as defined under the provisions of the Customs Act, the impugned order confiscating the goods and demanding duty is bad in law and on facts. The impugned order is also bad for violation of the provisions of Section 138 B of the Act, which requires that the Adjudicating Authority is required to examine and offer for cross examination of the witnesses of the Revenue, which have not been done by the court below. There is no evidence that this appellant has financed the imports made by other importers/traders - the show cause notice is vague, as valuation of the goods has been done by the Revenue without any relied upon documents (copy of any retrieved documents from mobile /CPU of the appellant). Evidently, no panchnama was drawn by Revenue for retrieval of data or documents from the CPU/mobile of the appellant - reliance placed by Revenue on the statement of Mr. Vivek Kumar Bansal, Proprietor of M/s. Dee Vee Posters is bad on facts as the statements are self-contradictory. The seizure is bad under the provisions of Section 110 of the Act. It is found that the show cause notice is vague as it does not specify the particular clause of Section 111, under which the goods are liable for confiscation. Further, in the facts and circumstances, the imposition of penalty under Section 112 and 114 AA is bad. Appeal allowed.

Summary

Issues Involved:
1. Whether the appellant is the importer.
2. Whether the duty and penalty have been rightly demanded from the appellant.

Issue-Wise Detailed Analysis:

1. Whether the appellant is the importer:
The appellant argued that he is not the importer but a trader who procures goods from the local market and other importers. He neither filed the bill of entry nor placed any order with foreign suppliers. The Customs Act defines an importer as someone who files a bill of entry for the import of goods. The appellant did not meet this criterion as he procured goods from importers in India post-clearance by Customs. The Tribunal found that the goods were procured from local importers and not directly imported by the appellant. Statements from suppliers confirmed the supply of goods to the appellant, indicating that he was not the importer. The Tribunal concluded that the appellant cannot be considered an importer under the Customs Act.

2. Whether the duty and penalty have been rightly demanded from the appellant:
The show cause notice alleged that the appellant procured goods without proper documentation and undervalued them to evade customs duty. The Tribunal found that the goods in the market are presumed to be duty-paid unless proven otherwise by the Revenue. The Revenue failed to provide evidence that the goods were not duty-paid. The Tribunal noted that the appellant did not place orders or make payments to foreign suppliers, further supporting that he was not the importer. The Tribunal also found procedural lapses in the investigation, such as the lack of a panchnama for data retrieval and non-compliance with Section 138 B of the Customs Act, which requires examination and cross-examination of witnesses. The re-valuation of goods based on statements without supporting documents was deemed incorrect. Consequently, the Tribunal ruled that the confiscation of goods and the demand for duty and penalties were not justified.

Conclusion:
The Tribunal allowed the appeal, setting aside the impugned order and ruling that the appellant is not the importer and that the duty and penalties demanded were not justified. The appellant is entitled to consequential benefits as per the law.