2021 (9) TMI 1132 - AT - Customs

Customs Act penalties upheld for mis-declaration and improper importation, emphasizing compliance and penalties for non-compliance.

RK SHARMA and SANTOSH KUMAR GUPTA Versus COMMISSIONER OF CUSTOMS (APPEALS), Indore

The tribunal upheld penalties under the Customs Act, 1962 for mis-declaration and improper importation of goods, finding no issues with penalties imposed ... Levy of penalty u/s 112 and 117 of CA on CHA and G card holder - mis-classification and mis-declaration of goods - branded car tyres imported under the guise of multi brand and ‘multi size stock let off’ the road tyre - HELD THAT:- Bill of Entry as were filed for importing the tyres declared goods as “multi brand and multi size stock let off the road tyre”, which on physical verification, were found to be of “multi brand multi size new radial car tyres ” that too without mandatory BIS markings. Not only this, the tyres were found excess in quantity. Thus apparently, present is the case of mis declaration of quantity of tyres as well as of mis-description of imported goods being imported by M/s. Sai Enterprises for M/s. Auto Mart India Ltd., proprietor Shri Navin Kumar. It is observed from the statement of Shri Suryajeet Singh iself, that he has called all the import documents from Shri Navin Kumar and had handed over the same to Shri Santosh Kumar Gupta, G Card holder of CHA to get the clearance of the goods. Statement of said Shri Santosh Kumar Gupta as was recorded on 1.04.2019 reflects that he has acknowledged about never receiving the detailed packing list; that he has not denied the receiving of importing documents from the importing firm. He stated that he never received the detailed packing list from the importer. The negligence of both the appellants herein is definitely the violation of their incumbent duty. This penalty has rightly been imposed upon them. There are no reason to differ therefrom. Though only challenge of the appellant is that penalty cannot be imposed under the provisions of Customs Act on account of noticed violation of CBLR, the said argument does not support the appellant’s case. The penalties on Shri Santosh Kumar Gupta, CHA and G Card holder have been imposed under section 112(b)(i) of the Customs Act, 1962 and upon Shri R K Sharma, under section 117 of the Customs Act, 1962. The penalty under section 112 is for improper importation of goods and apparently the facts of the present appeals reflect the improper importation of goods that too the prohibited goods. Hence, there are no infirmity when penalty under section 112 (b)(i) has been imposed instead of it being imposed under CBLR. Similarly, penalty has been imposed upon under section 117 which is for such contravention as are not expressly mentioned under the Customs Act, 1962. There is notional fraud being committed while importing prohibited goods under mis-declaration of description as well as of quantum, there are no infirmity in the order under challenge not even with respect to the reasoning for reducing of penalty on CHA and his G Card holder, the appellant herein - appeal dismissed. Issues: Mis-declaration of imported goods, Violation of Customs Act, Imposition of penalty under Customs Act, Compliance with Customs Broker Licence Regulations (CBLR)Mis-declaration of imported goods:The case involved the import of car tyres by M/s. Sai Enterprises under the guise of multi-brand and multi-size stock, which were found to be new radial car tyres without mandatory BIS markings and in excess quantity upon physical verification. The mis-declaration of quantity and description of the imported goods indicated deception in import, with the real beneficiaries being identified as the proprietor of M/s. Sai Enterprises and another individual. The mis-declaration and undervaluation of the consignment were highlighted as key issues in the judgment.Violation of Customs Act:The judgment addressed the violation of the Customs Act, 1962 in the context of improper importation of goods. The penalty was imposed under sections 112(b)(i) and 117 of the Customs Act, 1962 on the individuals involved in the import process. The penalty under section 112(b)(i) was justified due to the improper importation of prohibited goods, emphasizing the importance of adhering to legal import procedures and regulations.Imposition of penalty under Customs Act:The imposition of penalties under sections 112(b)(i) and 117 of the Customs Act, 1962 was a significant aspect of the judgment. The penalties were upheld by the tribunal based on the findings of mis-declaration, improper importation, and violation of regulatory obligations. The penalties were deemed appropriate given the nature of the offenses committed during the import process, including the failure to comply with legal requirements and the misrepresentation of imported goods.Compliance with Customs Broker Licence Regulations (CBLR):The judgment analyzed the compliance of the individuals, particularly the Customs House Agents (CHAs), with the Customs Broker Licence Regulations. The CHAs were found to have neglected their duties by failing to verify imported products, request detailed packing lists, and prevent the importation of prohibited goods through mis-declaration. The tribunal emphasized the obligations of CHAs under the CBLR and cited relevant legal precedents to support the imposition of penalties for non-compliance.In conclusion, the judgment upheld the penalties imposed under the Customs Act, 1962 for the mis-declaration and improper importation of goods. The tribunal found no infirmity in the penalties imposed on the individuals involved in the import process, including the CHAs, based on their failure to fulfill their regulatory obligations and prevent the importation of prohibited goods through deceptive practices. The decision underscored the importance of compliance with legal requirements and regulations in the importation of goods to maintain the integrity of customs procedures.