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2024 (6) TMI 779 - AT - CustomsIssues Involved: 1. Rejection of declared value of imported goods. 2. Re-determination of the value of imported goods u/s 14 of the Customs Act, 1962. 3. Demand of differential duty u/s 28(4) along with interest u/s 28AA. 4. Confiscation of seized goods u/s 111(m) and provisional release on redemption fine u/s 110A. 5. Imposition of penalties on various importers and co-noticees u/s 112(a), 114A, 114AA. 6. Imposition of penalty on the appellant u/s 114AA. Summary: Issue 1: Rejection of Declared Value of Imported Goods The impugned order rejected the declared value of imported goods and re-determined the value u/s 14 of the Customs Act, 1962 read with Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Issue 2: Re-determination of Value of Imported Goods The value of imported goods was re-determined u/s 14 of the Customs Act, 1962, leading to the demand of differential duty u/s 28(4) along with interest u/s 28AA. Issue 3: Demand of Differential Duty The impugned order demanded differential duty u/s 28(4) of the Customs Act, 1962 along with interest u/s 28AA. Issue 4: Confiscation of Seized Goods The seized goods were confiscated u/s 111(m) and offered for provisional release on redemption fine u/s 110A. Issue 5: Imposition of Penalties on Various Importers and Co-noticees Penalties were imposed on various importers and co-noticees u/s 112(a), 114A, and 114AA of the Customs Act, 1962. Issue 6: Imposition of Penalty on the Appellant u/s 114AA The short point for determination was the imposition of penalty on the appellant u/s 114AA. The appellant was penalized for allegedly conniving with importers for undervaluation of imported goods to evade customs duty. The ADG (Adjudication) found that the appellant was aware of the misuse of IEC and was instrumental in submitting mis-declared Bills of Entry, thus liable to penalty u/s 114AA. Legal Analysis: The Tribunal examined the legal provisions of Section 114AA, which penalizes the use of false or incorrect material in customs transactions. The Tribunal noted that Section 114AA is applicable in situations involving false declarations sans goods, primarily targeting fraudulent exports on paper without actual goods crossing borders. The Tribunal referred to various judgments, including those of the Hon'ble Supreme Court and High Courts, which emphasized the necessity of mens rea or conscious knowledge for imposing penalties under Sections 112(b) and 114AA. Conclusion: The Tribunal concluded that the provisions of Section 114AA do not apply to the appellant, a Partner in a Customs Broker firm, as the case involved undervaluation of imported goods rather than fraudulent exports. The Tribunal set aside the penalty of Rs. 5,00,000/- imposed on the appellant u/s 114AA, allowing the appeal in favor of the appellant. Order: The impugned order dated 03.04.2020 was modified to set aside the penalty of Rs. 5,00,000/- imposed on the appellant u/s 114AA of the Customs Act, 1962. The appeal was allowed in favor of the appellant.
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