IEC lending and import in another's name does not, by itself, justify Customs penalty absent misdeclaration.

Imports filed in the name of IEC holders did not, by itself, attract penalty under the Customs Act where there was no finding of misdeclaration, misrepresentation, or undervaluation. The Tribunal noted that goods were imported and bills of entry were filed in the name of IEC holders, and the appellant produced those IEC holders before the Revenue authorities. It held that the Customs Act contains no bar on importing goods in the name of an IEC holder, and that mere lending of an IEC does not, by itself, constitute an offence under that Act. Penalty was therefore held not imposable and the impugned order was set aside.

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Issues: Whether penalty under Section 112 of the Customs Act, 1962 was sustainable where goods were imported in the name of IEC holders and the IEC was allegedly lent to the appellant.

Analysis: The imports and bills of entry were filed in the name of IEC holders, and the appellant produced the IEC holders before the Revenue authorities. There was no finding of misdeclaration, misrepresentation, or undervaluation. The Tribunal held that there is no bar under the Customs Act to import goods in the name of an IEC holder and that lending of IEC by itself does not constitute an offence under the Customs Act. On that basis, penalty for an alleged violation of Section 7 of the Foreign Trade (Development and Regulation) Act, 1992 could not be imposed under the Customs Act.

Conclusion: Penalty was held to be not imposable and the impugned order was set aside.

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