2013 (4) TMI 33 - AT - Customs

Tribunal grants full waiver for duty & penalty in goods diversion case, citing specific documentation importance

M GNANASEKARAN Versus COMMISSIONER OF CUSTOMS, TUTICORIN

The Tribunal granted 100% waiver of the duty demand and penalty imposed on the applicant for alleged involvement in the diversion of goods. The decision ... Waiver of Pre-deposit - high sea sale - diversion - The applicant imported polyester fabrics and sold the goods to broker of other Company and the bill of entry for the same is filed by the other company, and then goods are diverted to other states. Held that:- applicant sold the goods on high-sea sale basis and the Bills of Entry had been filed by M/s. Suman Designs. When the Bill of Entry has not been filed in the name of the applicant, therefore, they are not liable to pay duty. - stay granted. Issues: Duty demand and penalty imposition on the applicant for alleged involvement in diversion of goods.Analysis:The judgment pertains to a case where duty demand of Rs. 39,19,472/- and a penalty of Rs. 25,00,000/- were imposed on the applicant for their alleged involvement in the diversion of goods. The applicant had imported polyester fabrics in the name of a different entity, which were later sold on high-sea sale basis to another party. The goods were initially imported through one port but were later diverted to different locations. The central issue revolved around whether the applicant was liable to pay duty jointly and severally for the alleged diversion of goods.Upon hearing both sides and examining the records, the Tribunal noted that the Bills of Entry for the imported goods were filed by the party to whom the goods were sold, not in the name of the applicant. The Tribunal cited precedents to support the conclusion that when the Bill of Entry is not filed in the name of the applicant, they cannot be held liable to pay duty. The Tribunal specifically distinguished the present case from previous cases where joint filing of Bills of Entry had resulted in shared liability. Notably, the Tribunal referred to a previous stay application in the applicant's own case where unconditional waiver of pre-deposit was granted. Relying on this precedent, the Tribunal granted 100% waiver of the pre-deposit of the amount demanded in the impugned order. As a result, the requirement of pre-deposit of duty and penalty was waived, and recovery thereof was stayed during the pendency of the appeal.This judgment underscores the importance of specific documentation and legal precedents in determining liability for duty payment in cases involving the import and sale of goods. The Tribunal's decision to grant waiver of pre-deposit and stay recovery reflects a consistent application of legal principles and precedents to ensure fairness and justice in matters of duty demand and penalty imposition.