2019 (12) TMI 570 - AT - Customs

Tribunal Overturns Customs Act Penalties, Grants Appeal with Consequential Benefits.

Shri Anil Kapani Versus Commissioner of Customs (Port), Kolkata.

Shri Anil Kapani Versus Commissioner of Customs (Port), Kolkata. - TMI Issues Involved:1. Confiscation of goods under Section 111(d) of the Customs Act.2. Imposition of Redemption Fine.3. Penalty under Sections 112(a)(i) & 112(b)(i) of the Customs Act.4. Penalty under Section 114AA of the Customs Act.5. Alleged violation of Section 7 of the Foreign Trade (Development & Regulation) Act, 1992.6. Alleged use of forged documents to obtain IEC.Issue-wise Detailed Analysis:1. Confiscation of Goods under Section 111(d) of the Customs Act:The Tribunal examined whether the goods were liable for confiscation under Section 111(d). It was acknowledged that there was no case of duty evasion, undervaluation, or incorrect classification of goods. The Bill of Entry was filed by M/s Sky Traders, which had a valid IEC Code. The consignment, including rechargeable batteries, was cleared by Kolkata Port Customs and later intercepted by DRI in Delhi. The rechargeable batteries were found to be of the lead acid variant, requiring registration with the Ministry of Environment and Forests, which was obtained post-import. The Tribunal found that the Appellant was unaware of the specific type of batteries and acted in good faith. The goods should not have been confiscated since the necessary registration was obtained shortly after the interception.2. Imposition of Redemption Fine:The Tribunal noted that the confiscation of goods under Section 111(d) was not justified. Consequently, the imposition of a Redemption Fine of Rs. 4,50,000/- was also deemed unwarranted.3. Penalty under Sections 112(a)(i) & 112(b)(i) of the Customs Act:The Tribunal found that penalties under Sections 112(a)(i) & 112(b)(i) are contingent upon the confiscation of goods under Section 111. Since the confiscation was not sustained, the penalties of Rs. 4,00,000/- imposed by the Commissioner (Appeals) were set aside.4. Penalty under Section 114AA of the Customs Act:The Tribunal held that Section 114AA pertains to the use of false documents or declarations made intentionally. The Appellant did not knowingly use false documents; the error was technical and clerical. The penalty of Rs. 4,50,000/- under Section 114AA was thus set aside, referencing the decision in Suketu Jhaveri vs Commissioner of Customs (Import) Nhava Sheva.5. Alleged Violation of Section 7 of the Foreign Trade (Development & Regulation) Act, 1992:The Tribunal considered the Appellant's argument that the import was made under a valid IEC Code issued to M/s Sky Traders. The Tribunal agreed that the Appellant was covered by Section 2(26) of the Customs Act, which includes any owner or beneficial owner as an importer. Thus, there was no violation of Section 7 of the Foreign Trade (Development & Regulation) Act.6. Alleged Use of Forged Documents to Obtain IEC:The Tribunal found that the conclusion of forgery was based on assumptions since the premises of M/s Sky Traders were closed during the DRI visit. There was no concrete evidence of forgery, and M/s Sky Traders had not alleged any forgery by the Appellant.Conclusion:The Tribunal set aside the confiscation of goods and penalties under Sections 112(a), 112(b), and 114AA of the Customs Act. The appeal filed by the Appellant was allowed with consequential benefits, emphasizing that the Appellant acted in good faith and rectified the error promptly upon discovery. The decision was pronounced in the Open Court on 18th November 2019.