Customs Appeal Tribunal decisions: Penalties set aside and reduced for customs violations

The Customs Appeal Tribunal allowed Customs Appeal No. 40356/2021, setting aside the penalty imposed on M/s. Sun Sea Shipping Agency for violating Customs Brokers Licensing Regulations. In Customs Appeal No. 40855/2021, the penalty on Shri C. Solomon Selvaraj was reduced from Rs. 7,00,000 to Rs. 1,00,000 for his involvement as an intermediary in the mis-declaration of goods. The judgment was pronounced on 19.05.2022.

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Issues Involved:
1. Mis-declaration and concealment of imported goods.
2. Infringement of Intellectual Property Rights (IPR).
3. Violation of Customs Brokers Licensing Regulations (CBLR).
4. Imposition of penalties under Section 112(a) of the Customs Act, 1962.

Detailed Analysis:

1. Mis-declaration and Concealment of Imported Goods:
The case involved M/s. Amar Exports filing a Bill of Entry for "3B Glass Top Gas Stove (Unbranded)" with a declared weight of 10160 kgs. Upon examination, the consignment contained undeclared branded shoes (Nike, Adidas, Reebok, Puma) and gas stoves. The undeclared items were found to be counterfeit, leading to an investigation.

2. Infringement of Intellectual Property Rights (IPR):
The imported shoes were verified and confirmed as counterfeit by the IPR holders. The import of such counterfeit goods infringes trademarks and is prohibited under Section 11 of the Customs Act, 1962, along with relevant sections of the Trade Marks Act, 1999. Consequently, the goods were confiscated.

3. Violation of Customs Brokers Licensing Regulations (CBLR):
The Customs Broker, M/s. Sun Sea Shipping Agency, was alleged to have violated Regulation 10(n) of the CBLR, 2018, by failing to verify the identity and functioning of their client. The Show Cause Notice did not specify any direct abetment in the mis-declaration of goods. The Adjudicating Authority had previously imposed a penalty under CBLR, 2018, but did not revoke the license, citing the lack of evidence of sharing benefits from fraudulent imports.

4. Imposition of Penalties under Section 112(a) of the Customs Act, 1962:
- Customs Broker (M/s. Sun Sea Shipping Agency): The penalty under Section 112(a) was contested on the grounds that the allegations pertained to CBLR violations, for which a penalty had already been imposed. The Tribunal found no evidence of abetment in the mis-declaration and set aside the penalty.
- Shri C. Solomon Selvaraj: The appellant acted as an intermediary and handed over documents to the Customs Broker. The Tribunal noted that the appellant did not establish the involvement of Vishal, who allegedly provided the documents. The penalty of Rs. 7,00,000/- was deemed excessive and reduced to Rs. 1,00,000/-.

Judgment:
- Customs Appeal No. 40356/2021: Allowed with consequential reliefs, setting aside the penalty imposed on M/s. Sun Sea Shipping Agency.
- Customs Appeal No. 40855/2021: Partly allowed by reducing the penalty on Shri C. Solomon Selvaraj from Rs. 7,00,000/- to Rs. 1,00,000/-.

(Order pronounced in the open court on 19.05.2022)

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