TaxTMI 
TaxTMI 
2026 (4) TMI 1372
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....sold to M/s Bolton Motors Product Inc., Ontario, Canada, has been imported into India through Chennai Seaport by M/s Orion Enterprises, Mumbai, by altering the seating capacity from 8 (including driver) to 10 seater intentionally to classify the said vehicle under Customs Tariff Heading (in short "CTH") 8702 and paid a lesser customs duty. The importer, having mis-declared the description of the vehicle, the country of origin of the vehicle and value had availed benefit of Notification No.12/2012, Central Excise dated 17/03/2012 by producing documents, such as, letter from M/s Auto Group International Private Limited, informing that the vehicle has been converted by them at Sri Lanka, as per the ADR compliance (ADR Approval No.48091 dated 01/11/2016), It is new vehicle and has not been registered for use in any country prior to its exportation to India and also a fabricated letter of Government of Australia to show ADR Approval. The Custom Department, having found gross violation of the import duty concession under the Custom Act, seized the vehicle on 07.04.2017. Statement of the partner of M/s Orion Enterprises was recorded. He had admitted the conversion of the vehicle increasin....
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....f the Customs Act, 1962. (g)I appropriate an amount of Rs. 57,40,501/- (Rupees Fifty Seven Lakh Forty Thousand Five Hundred and One only) paid by them towards duty of the impugned vehicle. (h) I impose a penalty of Rs. 2,00,000/- ( Rupees Two Lakhs Only) on Shri Mohd Salim Shaikh, Partner, M/s Orion Enterprises, under Section 112(a) of the Customs Act, 1962 for rendering goods liable for confiscation. (i) I impose a fine of Rs. 2,00,000/- (Rupees Two Lakhs Only) under Section 125 of Customs Act, 1962 in lieu of confiscation to redeem the goods for the purpose of re-export within 30 days from the date of receipt of this Order." 5. The importer questioned the order-in-original before the Commissioner of Custom (Appeals-II), Chennai, with regard to the imposition of a penalty of Rs. 64,18,752/- (Rupees Sixty Four Lakh Eighteen Thousand Seven Hundred and Fifty Two Only) under Section 114AA of the Customs Act, 1962; as well as the appropriation of an amount of Rs. 57,40,501/- (Rupees Fifty Seven Lakhs Forty Thousand Five Hundred and One only) paid by them towards duty of the impugned vehicle; the imposition of a penalty of Rs. 2,00,000/- (Rupees Two Lakhs O....
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....nt has committed misdeclaration of country of origin, value of goods and classification of the goods. However for these infractions, the SCN already proposes in paras 17 and 19 (d), confiscation under Section 111(d) and (m) of the Customs Act, 1962 and imposition of penalty under Section 112A of the Customs Act 1962. These proposals have been acted upon by the original authority who has ordered confiscation of the vehicle under Section 111(d) of the Customs Act for the reason that "as country of origin, value of goods along with confiscation of goods has been mis-declared in the Bill of Entry". [para 26 (d) of the order of original authority]. From the facts on record, it is seen that both the lower authorities have found that as there has been misdeclaration of country of origin value of goods and classification of goods in the Bill of Entry provisions of Section 111 (m) of the Act would be applicable. However, nowhere in the discussion and finding portion of the adjudication order (para 24.1 onwards) has the authority discussed or justified the imposition of penalty under Section 114AA ibid in the matter. Even the LAA, while upholding the order of the original authority, has not ....
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....terials? 4.Whether the "Tribunal was justified in ignoring the findings given by the show cause notice followed by Order-in-Original and Order-in-Appeal by deleting the penalty without any cogent reasons? 5.Whether the Tribunal was correct in assuming that the order of re-export on payment of redemption fine would absolve the penal consequences envisaged under the Customs Act, 1962? and 6. Whether the Tribunal was correct in setting aside the payment of admitted customs duty on the import?" 9. The Learned Counsel appearing for the appellant submitted that the order of the Tribunal is not only erroneous, but also apparently perverse, having been passed disregarding the statutory provisions and judicial pronouncements. The Department though clearly established that the importer has mis-declared the goods with the deliberate intention of evading the duty. The conversion of 8 seater in to 10 seaters, misdeclaration of the country of its origin and undervaluation of the goods, have cumulatively exposed and established the intention of the importer to evade duty. While so, the adjudicating authority and the appellate authority, having considered the nature o....
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.... re-exported. Therefore no duty can be levied on goods that were not imported into Indian territory. While so, neither the appropriation of custom duty paid nor the levy of penalty under Section 114AA is sustainable. Having collected fine in lieu of confiscation and permitted re-export, the importer cannot be penalised any further. Therefore, the order of the Tribunal is in consonance with the provisions of the customs Act and the judicial pronouncements. There is no question of law involved in this case more so substantial question of law, Hence, the appeal by the Department is liable to be dismissed. 12. In support of the above submission, the Learned Counsel for the importer/respondent rely on the judgement of this Court in R. Kishore Nagaarur v. Addl. Commr. of Cus (Exports), Chennai reported in [2015 (316) E.L.T. 549 (Mds.). The relevant portion of the said judgment reads as below: "19. From the narration of facts as above, the fact that the appellant was responsible for sourcing the bogus bill for the mis-declared goods from R.B. Trades as 'Industrial Salt' to support the unlawful attempt to export Muriate of Potash is evident from the materials available on recor....
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....tion of the order of the Tribunal upholding the penalty imposed under Section 114(i) of the Customs Act is justified and there is no error. The penalty leviable in respect of each offence will have to be considered on the nature of violation alleged therein in the light of the relevant provision of law. We are not inclined to import the reasoning from one in to the other. We find, in the facts of the present case, all the authorities have considered the material evidences available on record including the statements and have givena clear finding that the appellant was actively involved in the improper and illegal attempt to export goods by way of misdeclaration contrary to prohibition imposed by law and therefore, this Court sees no reason to differ with the findings of the authorities below. The finding on guilt of the appellant on the basis of the material available on record is uniform in all proceedings below. The appellate Court is not inclined to re-appreciate the evidence unless it is shown that the impugned order is perverse, arbitrary and against the well established legal principles. There is no should legal principle that the appellant relies upon to interfere with the i....
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....n such fine as the said officer thinks fit: Provided that where the proceedings are deemed to be concluded under the proviso to sub-section (2) of section 28 or under clause (i) of sub-section (6) of that section in respect of the goods which are not prohibited or restricted, no such fine shall be imposed: Provided further that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. (2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods or the person referred to in sub-section (1), shall, in addition, be liable to any duty and charges payable in respect of such goods. (3) Where the fine imposed under sub-section (1) is not paid within a period of one hundred and twenty days from the date of option given thereunder, such option shall become void, unless an appeal against such order is pending. Explanation.-For removal of doubts, it is hereby declared that in cases where an order under sub-section (1) has been passed before....
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....by the department is an action separate and independent. The levy of fine for misdeclaration is a separate action. One action will not exclude the other action, The importer cannot excuse paying the fine stating that he has already paid the duty or the penalty for improper import. The vice-versa is also not permissible. Likewise, after the importer has opted to avail the opportunity of re-exporting the goods, by redeeming the confiscated goods, he is liable to pay fine under Section 125 of the Customs Act, 1962, for redemption and re-export. Thus, the act of furnishing false documents for improper import leads to levy of penalty and appropriation. The confiscation of the said goods or imposition of fine in lieu of confiscation, the redemption of the confiscated goods for the purpose of re-export are independent to each other and separate action is permissible under law. 21. In M/s Navayuga Engineering Co.Ltd case (cited supra), the Hon'ble Supreme Court of India has considered the distinct between the power to impose penality, appropriation of the duty paid, the levy of fine in lieu of confiscation and levy of fine to redeem the confiscated goods for the purpose of re-exported. ....