2002 (2) TMI 256 - AT - Customs

Tribunal rules Naval Stores Depot, Kochi as importer, not Siemens Nixdorf in duty exemption case

The Tribunal determined that the Naval Stores Depot, Kochi, should be considered the actual importer of the goods, not M/s. Siemens Nixdorf Information ... Definition of importer - redemption of imported goods - misdeclaration (computer parts vs personal computers) - eligibility for duty exemption under Notification No. 39/96-Cus. - confiscation under Section 111(d) and 111(m) of the Customs Act, 1962 - penalty under Section 112(a) of the Customs Act, 1962 - penalty under Section 112(b) of the Customs Act, 1962 - Special Import Licence / ITC (HS) import restrictionDefinition of importer - redemption of imported goods - The appellants are not the importers of the goods and therefore could not be treated as importers for purposes of assessment or offered redemption of the goods by the Commissioner. - HELD THAT: - The Tribunal accepted that the Bills of Entry and import documents (including airwaybills and supplier invoice) were in the name of the Controller of Materials, Naval Store Depot, Kochi, and that the Bill of Entry so noted is determinative of who is to be treated as importer. Reliance was placed on Tribunal precedent that a party whose name is entered in the Bill of Entry and noted against the IGH is to be treated as importer and that another party cannot be permitted to represent itself as importer in the absence of appropriate amendment or endorsement. The Commissioner's reliance on the appellants being indentors/contractors and on branch office communications did not override the accepted import manifest and Bill of Entry. Consequently the Commissioner had no justification in law to offer redemption of the goods to the appellants who were not shown as importers on the Bill of Entry.Appellants not importers; redemption offered to them by the Commissioner cannot be sustained.Misdeclaration (computer parts vs personal computers) - eligibility for duty exemption under Notification No. 39/96-Cus. - Special Import Licence / ITC (HS) import restriction - confiscation under Section 111(d) and 111(m) of the Customs Act, 1962 - The imported goods were personal computers (not merely parts), were ineligible for exemption under Notification No. 39/96-Cus., and, being restricted imports without required licence, were liable to confiscation under Sections 111(d) and 111(m). - HELD THAT: - The Commissioner's factual findings - that examination revealed personal computers, that the notification grants exemption by specific use and not merely by installation location, and that the ITC (HS) classification restricted import of personal computers below the prescribed CIF value without a Special Import Licence - were accepted as establishing ineligibility for exemption and contravention of import control. Those findings supported the conclusion that the goods were liable to confiscation under the cited provisions. The Tribunal, however, did not decide those measures against the appellants as importers (see separate issue on identity); the confiscation and eligibility conclusions remain as the Commissioner's determinations of the character and admissibility of the goods.Goods are personal computers, not eligible for Notification No. 39/96 exemption, and liable to confiscation under Sections 111(d) and 111(m); import control breach (no Special Import Licence) established.Penalty under Section 112(a) of the Customs Act, 1962 - penalty under Section 112(b) of the Customs Act, 1962 - definition of importer - The penalty imposed on the appellants under Section 112(a) cannot be sustained because they were not established to be importers; if penalty is warranted for their conduct in dealing with imported goods, liability would pertain under Section 112(b) and not Section 112(a). - HELD THAT: - Because the Tribunal concluded that the appellants were not the importers and had not made declarations on the Bill of Entry, the statutory basis for imposing a penalty under Section 112(a) (which applies to importers making wrongful declarations) was absent. The Tribunal observed that, to the extent appellants may have been involved in handling or coordinating clearance, the proper penal provision (if any) would be Section 112(b). Accordingly, the Commissioner's imposition of penalty under Section 112(a) on the appellants was set aside.Penalty under Section 112(a) on appellants is unsustainable; if any penalty is to be considered for their conduct it would be under Section 112(b), not 112(a).Definition of importer - redemption of imported goods - The matter is remitted to the Commissioner for assessment and action treating the Naval Store Depot (the importer as per Bills of Entry) as the importer, and for such further steps as law permits in respect of duty, confiscation and penalties. - HELD THAT: - Having determined that the Bills of Entry and import documentation establish the Naval authorities as importers and that redemption offered to the appellants was without legal foundation, the Tribunal granted the appellants' prayers to the extent of directing the Commissioner to proceed by treating the Naval authorities as importers. The Tribunal therefore allowed the appeal in those terms and directed the Commissioner to take action on the Naval authorities' letter dated 18-4-2001 and to assess the Bill of Entry accordingly. This constitutes a remand for de novo adjudication against the proper importers rather than a final determination exonerating or deciding substantive confiscation/quantification issues as to the Naval authority.Matter remanded to Commissioner to assess the Bill of Entry and take action treating Naval Store Depot as importer; appeal allowed insofar as redemption and penalty against appellants are set aside.Final Conclusion: The Tribunal held that the appellants were not the importers shown on the Bills of Entry and therefore could not be offered redemption or be validly penalised under Section 112(a); the Commissioner's offer of redemption to the appellants and penalty under Section 112(a) were set aside. The Commissioner's factual findings that the goods were personal computers, ineligible for Notification No. 39/96 exemption and liable to confiscation for import control breaches, remain recorded; the matter is remitted to the Commissioner to proceed treating the Naval Store Depot as the importer and to take such action as law permits against the proper importer. Issues Involved:1. Determination of the actual importer.2. Eligibility for duty exemption under Notification No. 39/96-Cus.3. Misdeclaration of goods.4. Liability for duty demand and penalties.5. Confiscation of goods.Issue-wise Detailed Analysis:1. Determination of the Actual Importer:The case revolves around the importation of computers by M/s. Siemens Nixdorf Information Systems Ltd. (appellants) for the Naval Stores Depot, Kochi. The Bills of Entry were filed by the Controller of Materials, Naval Stores Depot, Kochi, but the goods were imported by M/s. Siemens Nixdorf Information Systems Ltd. The Tribunal noted that the Bill of Entry and Airway Bills were in the name of the Naval Stores Depot, Kochi, and no amendments were made to the manifest. Thus, the Tribunal concluded that the Naval Stores Depot, Kochi, should be considered the importer, not M/s. Siemens Nixdorf Information Systems Ltd.2. Eligibility for Duty Exemption under Notification No. 39/96-Cus:The appellants claimed duty exemption under Notification No. 39/96-Cus for computer parts. However, the goods were found to be complete personal computers, which did not fall under the specific use category listed in the notification. The Tribunal upheld the Commissioner's finding that the goods were not eligible for the duty exemption benefit, as the notification was specific to certain categories of goods.3. Misdeclaration of Goods:The goods were declared as computer parts in the Bill of Entry and Airway Bill, but upon examination, they were found to be personal computers. The Tribunal agreed with the Commissioner that this constituted a misdeclaration. The original invoice from M/s. Siemens Nixdorf Information Systems Ltd. did not specify that the goods were personal computers, supporting the charge of misdeclaration.4. Liability for Duty Demand and Penalties:The Commissioner had initially imposed a duty demand of Rs. 7,19,202/-, confiscated the goods, and allowed redemption on payment of a fine of Rs. 25,000/-. A penalty of Rs. 5,000/- was also imposed on the appellants. The Tribunal, however, found that since the Naval Stores Depot, Kochi, was the importer, the duty liability and penalties should not be imposed on M/s. Siemens Nixdorf Information Systems Ltd. The Tribunal set aside the penalty imposed on the appellants under Section 112(a) of the Customs Act, 1962, as they were not the importers.5. Confiscation of Goods:The goods were confiscated under Sections 111(d) and 111(m) of the Customs Act, 1962, for being imported in contravention of ITC regulations and for misdeclaration. The Tribunal upheld the confiscation but directed that the duty and any further action should be assessed considering the Naval Stores Depot, Kochi, as the importer.Conclusion:The Tribunal allowed the appeal, setting aside the penalties and duty demand imposed on M/s. Siemens Nixdorf Information Systems Ltd. It directed the Commissioner to reassess the Bill of Entry considering the Naval Stores Depot, Kochi, as the importer and take appropriate action based on their letter dated 18-4-2001. The Tribunal emphasized the need for clear identification of the importer and proper application of customs law in such cases.