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TMI Blog2014 (12) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding misdeclaration of goods, but the investigation reveals that the goods are attempted to be imported contrary to EXIM Policy 2002-2007. Accordingly, on the ground of misdeclaration and improper import contrary to the EXIM Policy, there has been a violation of the Customs Law and, in our considered opinion, show cause notice issued invoking Section 111(d) and 111(f) of the Act is proper. Inasmuch as dutiable goods required to be mentioned under the Import General Manifest have not been mentioned as Tin Sheets and in the shipping documents it has been wrongly stated as Tin Free Sheets, the contention of the department that there was case for confiscation of improperly imported goods is justified. We find that the provisions of Section 111(d) and 111(f) of the Act have been clearly breached by the importer, inasmuch as there has been an attempt to import goods contrary to the prohibition imposed by or under the Act or other law for the time being in force. Since the goods are attempted to be improperly imported and that has been admitted by the importer, the consequence by way of penalty would follow. The Tribunal fell into error by stating that merely because the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r brevity, the Tribunal ). 2.1. The brief facts of the case are as under: On the basis of an information that the first respondent M/s.Baburam Premchand (for brevity, the importer ) imported a consignment declaring the same as secondary/ defective Tin Free Sheets (TFS) vide Bill of Entry No.404351, dated 20.6.2002, whereas the actual goods were Tin Sheets (TS), the Directorate of Revenue Intelligence (DRI) searched the factory premises of the importer and seized coils/sheets weighing 68.4 Mts. The live consignment imported under the Bill of Entry No.404351, dated 20.6.2002 was also examined and found to be containing Tin Sheets and not Tin Free Sheets. 2.2. Based on further information, the Bill of Lading No.SENURTMD84166103, dated 2.6.2002 was taken up for investigation. The further investigation made by the Directorate of Revenue Intelligence revealed that the importer has also imported further consignments of Tin Sheets under the guise of Tin Free Sheets in five containers and they are lying at the port for clearance. For this five containers, no bill of entry was filed. The Bill of Lading and other documents revealed that the goods are Tin Free Sheets and the total weigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is abandoning the consignment. 2.4. M/s.Senator Lines, who had filed the bill of lading with Customs Department, stated that the overseas counterpart at load port Rotterdam had issued correction-advice without notifying them and they have sent a message to the loading port regarding discrepancy in the bill of lading and they had not issued amendment to Customs Department. 2.5. A statement was also recorded from J.Saravanan, Import Executive of M/s.O.S.A.Shipping Private Limited, Chennai, Steamer Agent of M/s.Senator Lines, on 16.8.2002. He stated that they filed import general manifest on behalf of the importer based on the details forwarded by their overseas agent and the relevant bills of lading were (i) SENURTMD84166002 (Container Nos.CATU 2884858, FSCU 3081957, TRLU 3610112; (ii) SENURTMD84166103 (Container Nos.GESU 2020382, INBU 3140330). He further stated that two sets of bills of lading were prepared by their company based on the information from their overseas agent in their computer system and admitted that the description and weight were changed in the second set of bill of lading. However, he stated that he is not aware of the corrections and he did not get prior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Revenue Intelligence is not authorised to issue show cause notice in terms of Section 28 of the Customs Act, 1962 (for brevity, the Act ) 2.10. The Commissioner of Customs, prima facie, held that the notice has been issued by the Directorate of Revenue Intelligence under Section 124 of the Act and not under Section 28 of the Act and thereafter proceeded to consider the matter on merits. 2.11. The Commissioner of Customs, after considering the records, found that the importer had earlier imported several consignments of Tin Sheets under the guise of Tin Free Sheets. He observed that in one case, the importer has filed bill of entry and taking note of the misdeclaration, the goods were seized and action has been taken separately for confiscation and imposition of penalty. Insofar as the present five consignments are concerned, the finding of the Commissioner is that as the earlier consignment was taken up for investigation by the Directorate of Revenue Intelligence and seized, the importer fearing similar seizure of the goods with consequential proceedings has not filed bill of entry and has abandoned the goods. The specific finding of the Commissioner is that the import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y by misdeclaring the subject consignment and to import the same contrary to law. The finding of the Commissioner of Customs in this regard and the operative portion of the order passed by him read as under: 18. In this connection, I would like to take into account the submissions of the importers that as they have abandoned the goods, they have nothing to do with the subject show cause notice and that they need not be apprised about the confiscation or otherwise of the consignment. In this case, I find that the real intention of the importers, as discussed above, is to evade customs duty by mis-declaring the subject consignment. However, as the same was detected by DRI, they had no other option, but to abandon the goods for fear of heavy fine and penalty. As such I hold them responsible for the import of the consignment. I find that the importers had abandoned the goods only after the detection of the goods by DRI. Although they have abandoned the goods, in view of the production of two sets of bills of lading and other documents for a single consignment and the acceptance of the importers that the same had been done under their instruction to evade customs duty and later on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll of entry in respect of the five consignments and the goods have been abandoned and, therefore, no penalty is leviable. The Tribunal, after consider the plea of the importer that statement was obtained from the partner under duress and no actual import has taken place and that they have abandoned the goods and therefore no penalty is leviable as per the decision of the Tribunal in Commissioner of Customs, New Delhi v. Sewa Ram Bros., 2003 (151) ELT 344 (Tri-Del.), held that since the appellant did not file bill of entry and had abandoned the goods, the case of Seva Ram and Bros, referred supra, squarely applies and, therefore, no penalty is imposable under Sections 23(2) and 112 of the Customs Act. 2.16. Aggrieved by the said order, the Department has filed this appeal on the following substantial question of law: Whether the act of the importer in abandoning the goods landed at the harbour for clearance would not attract penalty on such importer as provided for under Sections 23(2) and 112 of the Customs Act? 3. We have heard Mr.P.Mahaadevan, learned Standing Counsel appearing for the appellant and Mr.K.Jayachandran, learned counsel appearing for the first respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods or five thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sought to be evaded on such goods or five thousand rupees, whichever is the greater; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees, whichever is the greater; (iv) in the case of goods falling both under clauses (i)and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest. 5. Here is a case where the importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... triction cannot be considered as a prohibition under Section 111(d) of the Act. While elaborating his argument the learned counsel invited our attention to the fact that while Section 111(d) of the Act uses the word 'prohibition'. Section 3 of the Imports and Exports (Control) Act, 1947, takes in not merely prohibition of imports and exports, it also includes 'restrictions or otherwise controlling' all imports and exports. According to him restrictions cannot be considered as prohibition more particularly under the Imports and Exports (Control) Act, 1947, as that statute deals with 'restrictions or otherwise controlling' separately from prohibitions. We are not impressed with this argument. What clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to 'any prohibition imposed by any law for the time being in force in this country' is liable to be confiscated. 'Any prohibition' referred to in that section applies to every type of 'prohibition'. That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression 'any prohibi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not absolve him of his liability to be proceeded against under the provisions of the Act for any violation which renders the goods improperly imported liable for confiscation. The penalty under Section 112(a) of the Act is in relation to such conduct of improper importation of goods. 11. The plea of the importer that he is not the owner of the goods also appears to be a fallacy. If he is not the owner, as stated by him, there is no question of seeking abandonment under Section 23(2) of the Act, where a right is given to the owner to abandon the goods. At the first instance, as an importer, the first respondent chooses to abandon the goods as owner and thereafter pleads that he is not the owner. In the statement recorded by the Customs authority, he has accepted that he is the owner of the goods and the reason for misdeclaration has also been stated. The statement is not retracted. The complicity of the importer in the improper import is, therefore, evident from the narration of facts as above. 12. Section 112 of the Act stands clearly attracted to the case of improper importation of goods by any person. The key words of Section 112(a) of the Act are that in relation to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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