2013 (2) TMI 547 - AT - Customs

Waiver of Penalties for IEC Misuse Upheld

The Tribunal granted 100% waiver of pre-deposit of penalties confirmed under Sections 112 and 114AA of the Customs Act, 1962 to the applicants, including ... Penalties u/s 112 and 114AA - import of consignments by misusing the IEC of M/s Samarth Corporation - Held that:- As decided in Atul D. Sonpal vs. Commissioner of Customs (ACC & Import), Mumbai (2011 (4) TMI 1141 - CESTAT, MUMBAI) relying on the decision of Hamid Fahim Ansari (2009 (5) TMI 84 - BOMBAY HIGH COURT) that use of IEC is not an offence under Customs Law. Thus the applicant has made out a case for 100% waiver of pre-deposit of the penalties confirmed against them and stay recovery thereof during the pendency of the appeals. Issues:Waiver of pre-deposit of impugned demands under Sections 112 and 114AA of the Customs Act, 1962.Analysis:The judgment involves the applicants, including the actual importer and the Customs House Agent (CHA), seeking waiver of pre-deposit of the penalties confirmed under Sections 112 and 114AA of the Customs Act, 1962. The penalties were imposed due to the importer misusing the Importer Exporter Code (IEC) of another entity. The original adjudicating authority held that the goods imported under the IEC of a different entity are liable for confiscation with an option to redeem them upon payment of a redemption fine and various penalties on all the applicants.The Tribunal referred to the case of Atul D. Sonpal vs. Commissioner of Customs, Mumbai, and the decision of the Hon'ble High Court of Bombay in the case of Hamid Fahim Ansari. It was noted that the use of IEC is not considered an offence under Customs Law. Relying on these precedents, the Tribunal found that the applicants had made a case for 100% waiver of pre-deposit. Consequently, the requirement of pre-deposit of the confirmed penalties under various sections of the Customs Act, 1962 was waived, and the recovery of penalties was stayed during the pendency of the appeals.The judgment also directed the Registry to list the appeals for final hearing on a specific date, indicating the progression of the case towards final resolution. The decision by the Tribunal to waive the pre-deposit requirement and stay the recovery of penalties showcases the application of legal principles and precedents to determine the appropriate course of action in the given situation, ensuring fair treatment of the applicants during the appeal process.