2011 (3) TMI 169 - AT - Customs

Tribunal upholds Customs Act penalties for importing goods using front entities

M/s. Achiever International Versus CCE, New Delhi

M/s. Achiever International Versus CCE, New Delhi - 2011 (268) E.L.T. 94 (Tri. - Del.) Issues:- Confiscation of imported goods and imposition of penalty under Customs Act, 1962.- Challenge against the order of confiscation and penalty imposition.- Interpretation of import regulations and provisions related to penalties.Confiscation and Penalty Imposition:The case involves an appeal against an order confiscating goods imported by a partner of a firm and imposing penalties under the Customs Act, 1962. The goods were imported in the name of various entities managed by the appellant, with investigations confirming his ownership of the imported goods. The Commissioner ordered the confiscation of the goods and imposed penalties on the appellant and the proprietor of one of the entities. The appellant challenged the confiscation and penalties, arguing that the import of the goods was permissible and that using different IEC codes should not be treated as importing prohibited goods. The appellant sought an option for redemption of the goods instead of absolute confiscation, emphasizing the fast depreciation of electronic goods. The respondent contended that the use of a fictitious party's IEC code constituted fraudulent behavior, warranting the confiscation and penalties.Judgment and Analysis:Upon careful consideration, the Tribunal found that the appellant had imported goods using front entities despite having a partnership firm with an IEC code, raising suspicions about the purpose behind such actions. The statements of involved parties and the show cause notice indicated the appellant's ownership of the imported goods. While the import was not of prohibited goods, the use of another importer's IEC code justified confiscation. However, the Tribunal granted an option for redemption by paying a fine of Rs.40 lakhs within three months due to the non-prohibition of the goods. Regarding the penalties, the Tribunal acknowledged the dubious nature of the appellant's actions but found no justification for separate penalties under different sections. As a result, the penalty under section 112(a) was set aside, and the penalty under section 114AA was reduced from Rs.30 lakhs to Rs.10 lakhs, considering the circumstances of the case.This comprehensive analysis of the judgment highlights the key issues, arguments presented by both parties, and the Tribunal's reasoning leading to the final decision on confiscation and penalty imposition under the Customs Act, 1962.