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2023 (10) TMI 1123 - AT - CustomsConfiscation - redemption fine - penalty - import of Brass Scrap Pallu - mis-declaration of Country of Origin - Customs officials alleged that the goods originated from Pakistan instead of UAE - cancellation of bill of entry under Section 149 of the Customs Act, 1962 Country of Origin - HELD THAT - On physical examination of the goods some worn and torn PP bags filled with brass scrap were found on which the words Karachi, Pakistan, Government of Punjab, Korangi Industrial Area etc. were found printed. Coupled with this, the tracking details also revealed the actual arrival date of the said container, i. e. the B/L from Karachi to JEBEL ALI was issued on 18.11.2021 at Karachi and B/L from JEBEL ALI to Nhava Sheva was issued on 28.11.2021 and the container was found to be intact with the same seal throughout from Pakistan to India. This only reflects that there could not have been any inspection at Sharjah, UAE as per the PSIC Certificate dated 13.11.2021 issued by PSIA and therefore the necessary corollary is that the PSIC was fake and forged. This also points to the fact that the container in question originated from Pakistan. The department having found that the goods originated from Pakistan was not wrong in re-classifying the goods under CTH 98060000 as per Notification No. 5 /2019-Cus dated 16.2.2019. Nothing further was required to be done at the end of the department as pleaded by the importer company. The justification or non-justification of procuring the goods i. e., Brass scrap Pallu from Pakistan was on the importer company which they failed to substantiate by any valid supporting evidence. The burden was exclusively on the importer company and not on the revenue to place on record positive evidence in support of their submissions. Responsibility of the Importer Company - HELD THAT - Declaring the Country of Origin is an essential part of the Bill of Entry and the assessment, inter alia, depends on the Country of Origin. Duty could be exempted or increased (as in this case) depending on the Country of Origin. Restrictions on imports and exports could also depend on the Country of Origin. The Country of Origin Certificate also has to be obtained from the authorized agency of that country. Pre-shipment inspection certificates have to be obtained from the agency, which is authorized to issue such certificate in the country, where they are exported from. Thus, it is impossible that any importer would not know both the Country of Origin and the Country of Export of every single consignment - The appellant has attributed the burden of mis-declaration of the country of origin as UAE on the supplier or the indenter, however the same is not believable as the appellant is a regular importer of these goods and during the investigation of the live consignment the past imports were also unearthed which were also routed in similar fashion - the authorities below have rightly observed that in terms of Para 2.32 of FTP 2015-2020 read with para 2.54 of Handbook of Procedures, such PSI Certificate is not valid and no reliance can be placed thereon. Confiscation of goods - HELD THAT - The issue needs to be examined in the light of the provisions of section 46 under which the appellant had filed the bill of entry for home consumption as the provisions thereof makes it obligatory on the part of the importer to make a declaration as to the truth of the contents of such bill of entry and shall in support of the same produce to the proper officer the invoice relating to the goods under import. The appellant has submitted commercial invoices along with bill of lading etc showing the country of origin of the goods as UAE, country of origin of the goods herein is Pakistan. In that view, the goods are liable for confiscation under section 111 (m) of the Act, which categorically provides any goods which do not correspond in respect of value or in any other particular with the entry made under this Act. Thus the order of confiscation passed by the authorities is held to be in accordance with law. Penalty under Section 112 (a)(ii) and 114AA of Customs Act - HELD THAT - The quantum of penalty imposed by the impugned order is justifiable. Section 112 (a)(ii) provides for duty related penalty, i.e., penalty not exceeding ten percent of the duty sought to be evaded. Thus the outer limit or the maximum amount of penalty that could be levied could not be more than ten percent of the duty. Similarly, the penalty under section 114AA is value related, i.e., penalty not exceeding five times the value of goods - Here also the Commissioner has proportionally increased the penalty and we find no reason to interfere with the same. Normally, the principle in levying penalty by way of punishment has to commensurate in terms of the provisions providing the penalty. As against the penalty imposed by the adjudicating authority, the appellate authority has considerably increased the penalty amount on all counts both against the importer company and also its director which is not only sufficient to penalise them but would also act as a deterrent in future. Hence no interference is called here. Re-export Redemption Fine with Penalty - HELD THAT - The exercise of discretion both by the adjudicating authority as well as by the appellate authority in not ordering absolute confiscation and allowing the importer to redeem the goods on payment of redemption fine and penalty with permission to re-export the goods is in consonance with the object and purpose with which the notification was issued, i.e. to dissuade commercial transactions with Pakistan byimposing extremely high penalty of 200%. Notification No 05/ 2019 dated 16.2.2019 in simple words provides that the goods imported having country of origin as Islamic Republic of Pakistan shall be classified under the new entry CTH 9806 0000 and BCD @200% shall be applicable on them. It nowhere says that such goods shall not be allowed to be re-exported. It is a settled principle of law that the words of the notification has to be read as they are and the contents thereof cannot be added or expanded by way of implication. Since there is no express bar for re-export of such goods in the notification, we uphold the impugned order allowing the appellant to re-export the goods. The country of origin of the containers in question is Pakistan and therefore, the same are classifiable under the Notification No.5/2019 as per CTH 980060000. Since the goods have been imported on the basis of fake PSIC, they are liable to be confiscated in terms of Section 111(m). - In the event of confiscation, the redemption fine under Section 125 has been rightly levied. As the importer company and its director are responsible for the import having been made in violation of the statutory provisions and FTP 2015-2020, they are liable to penalty both under Section 112 (a)(ii) and also under 114 AA. There are no reason to interfere with the impugned order - appeal dismissed.
Issues Involved:
1. Country of Origin of the Goods 2. Responsibility of the Importer Company 3. Confiscation of Goods 4. Penalty under Section 112(a)(ii) and 114AA of the Customs Act 5. Re-export and Redemption Fine with Penalty Summary: Country of Origin: The primary issue was whether the imported brass scrap originated from Pakistan or UAE. The container tracking on the Pakistani International Container Terminal (PICT) revealed that the container originated from Pakistan, contradicting the Pre-Shipment Inspection Certificate (PSIC) which indicated UAE as the origin. Physical examination of the goods also found markings indicating Pakistan as the origin. The Tribunal concluded that the goods originated from Pakistan, making the PSIC certificate fake and the goods subject to reclassification under CTH 98060000 as per Notification No. 05/2019-Cus dated 16.02.2019. Responsibility of the Importer Company: The importer company claimed ignorance about the country of origin, stating they relied on intermediaries. However, the Tribunal held that the importer, being a reputed company and a regular importer, is responsible for ensuring the accuracy of the country of origin and cannot plead ignorance. The importer and exporter are jointly responsible for the material imported as per the Handbook of Procedures 2015-2020. Confiscation of Goods: The Tribunal upheld the confiscation of goods under Section 111(m) of the Customs Act, 1962, as the goods were mis-declared in terms of their country of origin. The import violated the Foreign Trade Policy and lacked a valid PSIC. The goods were liable for confiscation as they did not correspond with the entry made under the Customs Act. Penalty under Section 112(a)(ii) and 114AA of the Customs Act: The Tribunal affirmed the penalties imposed on the importer company and its director under Sections 112(a)(ii) and 114AA of the Customs Act. The penalties were justified as the importer knowingly mis-declared the country of origin. The quantum of penalty was also deemed appropriate, aligning with the statutory provisions. Re-export and Redemption Fine with Penalty: The Tribunal allowed the re-export of the confiscated goods on payment of redemption fine and enhanced penalties. The decision was in line with the objective of Notification No. 05/2019, which aimed to impose a high duty on goods originating from Pakistan. The Tribunal referenced various judicial precedents to support the decision that re-export is permissible and that both redemption fine and penalties are applicable even when goods are allowed to be re-exported. Conclusion: The Tribunal dismissed all appeals filed by the importer company, its director, and the Department, affirming the confiscation of goods, imposition of penalties, and the allowance for re-export on payment of redemption fine and penalties. The decision upheld the legal provisions and objectives of the Customs Act and related notifications.
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