2007 (12) TMI 112 - AT - Customs

Tribunal upholds decision on penalty for undervaluation & missing import docs

The Tribunal upheld the Commissioner's decision to set aside the penalty imposed on the CHA/Respondents for undervaluation and failure to produce ... Penalty on CHA - Director of the importer had specifically stated that higher value of the sea lions(imported for circus) was not communicated to CHA - CHA was totally unaware of correct value of goods & he had prepared the documents on basis of information given by importer - DGFT licence has not yet been issued was within the knowledge of the Dept & therefore, the failure on part of CHA to convey the same information to the department could not make any difference – penalty not sustainable Issues:1. Penalty imposed on CHA/Respondents for undervaluation and failure to produce necessary import documents.2. Allegation of lack of communication by CHA to Customs Department regarding import license application.Analysis:1. The appeal concerns a penalty of Rs. 50,000 imposed on the CHA/Respondents for undervaluation and failure to produce import documents for the import of live animals and circus equipment. The importer failed to provide an import license for four sea lions from DGFT and a no objection certificate from the Animal Quarantine Department. The lower Appellate Authority found that the CHA was unaware of the correct value of the goods and prepared documents based on information from the importer's agent. The CHA's actions did not result in a revenue loss as the importer had executed a bond for re-export, ensuring duty refund upon re-export. The Director of the importer confirmed that the CHA was not informed of the higher value of the sea lions, indicating the CHA's lack of knowledge regarding undervaluation.2. The Revenue alleged that the CHA did not inform the Customs Department about the importer's failure to apply for an import license from DGFT. However, it was revealed that the importer had directly informed the Dy. Commissioner of Customs about the application for permission to import live animals from DGFT. As the Customs Department was already aware of the pending license issuance based on the importer's letter, any failure by the CHA to convey this information did not impact the situation. Consequently, the Tribunal upheld the Commissioner's decision to set aside the penalty on the CHA, as there was no valid ground for interference. The judgment emphasizes the importance of considering the circumstances and knowledge available to all parties involved in customs matters.