2009 (10) TMI 370 - AT - Customs

Tribunal Upholds Rs.5.00 Lakh Penalty for Goods Misdeclaration

IRMA IMPEX Versus COMMISSIONER OF CUSTOMS (PORT), KOLKATA

The Tribunal upheld a penalty of Rs.5.00 lakhs on the Importing Firm for misdeclaration of goods under the Customs Act. Penalties on individual appellants ... Penalty- Appellant imported certain goods including cosmetics which were found to be misdeclared in regard to quantity as well as in respect of value in violation of the provisions of Customs Act read with the provisions of Drugs and Cosmetics Act and Rules, the Trade Marks Act, TRIPS, Foreign Trade Regulation and Rules as also Standards of Weights and Measures (Packaged Commodities) Rules. The Adjudicating Authority confiscated the goods and ordered for destruction of certain goods on the ground that the said goods were found to be counterfeit/spurious/misbranded. In this appeal the appellants are only challenging the penalties imposed on the appellants under the Customs Act. Held that- we find that the penalty of Rs.5.00 lakhs imposed on the Importing Firm, M/s. Irma Impex, does not re quire any reduction. We find the penalty on the CHA is not sustainable and the same is set aside. The appeals are disposed off, as indicated above. Issues:Challenging penalties imposed under the Customs Act.Analysis:The case involved four appellants challenging penalties imposed under the Customs Act for misdeclaration of goods, including cosmetics, in terms of quantity and value, violating various acts and rules. The goods were either confiscated or ordered for destruction due to being counterfeit, spurious, or misbranded. The Revenue alleged that the import was made by a Proprietory Concern in the name of the wife of one appellant, who was conducting the business. A penalty was also imposed on a CHA Firm. The appellants contended that wrong consignments were sent by the exporter, producing evidence to support their claim and seeking leniency in penalties due to the destruction of a majority of the goods.The appellants argued that the CHA Firm had no involvement in misdeclaration and should not be penalized. They stated that the CHA Firm filed bills of entry as per instructions and documents provided by the importer. The Revenue, however, maintained that the goods were misdeclared and spurious, justifying the penalties imposed on the appellants.The Tribunal upheld the penalty of Rs.5.00 lakhs on the Importing Firm, finding them liable for misdeclaration. Regarding the penalties on individual appellants, it was noted that one was the husband of the Importing Firm's proprietor and was involved in day-to-day affairs, while the other worked on behalf of the importer. Their penalties were reduced to match the Importing Firm's penalty. In the case of the CHA Firm, the Tribunal found no evidence of connivance with the importer to evade duty payment. As there was no proof of violation of customs provisions, the penalty on the CHA Firm was set aside. The appeals were disposed of accordingly.