Conscious diversion of duty-free imports outside authorisation conditions justified penalty on the customs broker under customs law.

Penalty under Section 112(b) of the Customs Act, 1962 was sustained against a customs broker for conscious facilitation of diversion of duty-free imported goods to premises not covered by the advance authorisation conditions. The import scheme under Notification No. 18/2015-Customs, the Foreign Trade Policy 2015-2020 and the Handbook of Procedures required use of the goods only at the specified factory premises, but the record showed diversion to other premises, arrangement of transport by the appellant, use of sales tax delivery documents, and admission of awareness of the authorisation conditions. These facts established participation in the prohibited movement, rendering the goods liable to confiscation and attracting penal liability.

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Issues: Whether penalty under Section 112(b) of the Customs Act, 1962 was sustainable against a customs broker for facilitating diversion of duty-free imported goods to premises other than those covered by the advance authorisation conditions.

Analysis: The duty-free import was governed by Notification No. 18/2015-Customs dated 01.04.2015, the Foreign Trade Policy, 2015-2020, and the Handbook of Procedures 2015-2020, which required utilisation of the imported goods only in accordance with the authorisation conditions and at the specified factory premises. The record showed that the goods were diverted to other premises, that the appellant arranged transportation, that sales tax delivery documents were used for such movement, and that the appellant's representative admitted awareness of the authorisation conditions and of the diversion. These facts established conscious involvement in the movement of goods in violation of the licence conditions, rendering the goods liable to confiscation and attracting penal liability.

Conclusion: The penalty under Section 112(b) of the Customs Act, 1962 was rightly imposed on the appellant.

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