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2015 (7) TMI 925 - CESTAT NEW DELHI

2015 (7) TMI 925 - CESTAT NEW DELHI - 2015 (330) E.L.T. 651 (Tri. - Del.) - Penalty under Section 112(a) of the Customs Act, 1962 - Evasion of duty - Undervaluation of goods - Held that:- from a plain reading of provisions of sub-section (n) and (o), it is clear that these provisions are not applicable to the case. In fact Section 111(n) deals with transit/transhipment of goods. Section 111(o) deals with a situation where certain claim is claimed subject to some condition and subsequently the sa .....

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f Entry. He cannot be held liable for any misstatement of particulars in Bill of Lading or Import manifest. Hence, as rightly contended by the appellants, the finding of misdeclaration against them is untenable. In this case, the investigating agency (DRI) also ventured into an inquiry as to what should be the assessable value of the goods and as to whether the importer had misdeclared the value of the goods. The importer never filed any Bill of Entry declaring the value and other particulars of .....

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er No. 52082/2015 - Dated:- 2-7-2015 - Hon ble Mr. Ashok Jindal, Member (Judicial) And Hon ble Mr. R.K. Singh, Member (Technical),JJ. For the Appellant : Shri S. Vasudev, Advocate For the Respondent : Shri Amresh Jain, D.R. ORDER Per Ashok Jindal : The appellant is in appeal against the impugned order imposing penalty of ₹ 20 lakhs under Section 112(a) of the Customs Act, 1962. 2. The brief facts of the case are that the appellant is a 100% EOU and on specific information that the appellan .....

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n view of modus operandi in the case of earlier consignments of the appellant. The containers lying in ICD, TKD, New Delhi for which no Bill of Entry was filed by the appellant. 3. The investigation was started by the Customs (SIIB), ICD, TKD, New Delhi and discovered that the appellant had imported 22 containers of the plastic scrap from M/s GDB International INC. USA and not filed any Bill of Entry for clearance of the said containers. However, a legal notice dated 29.3.2007 was received by IC .....

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the document sent to the consignee have returned back unpaid. Accordingly, his client continues to be absolute owner of the said goods and the appellant has also given No objection Certificate that appellant was never the authorised consignee of these containers and the shipper has full authority to recall back to the country of origin. Thereafter, the goods were examined and found as plastic scrap of irregular size and shape and did not conform to the size as stipulated in para 2 of Public Noti .....

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oods contained in those containers under Section 111(d) (m), (n) and (o) of the Customs Act, 1962 and for imposition of penalty under Section 112(a) and 114(a) of the Customs Act, 1962. The matter was adjudicated the goods contained in 22 containers were absolute confiscated and penalty under Section 112(a) of the Customs Act, 1962 was imposed on the appellant to the tune of ₹ 20 lakhs. The appellant is against the said order before us. 5. The ld. Counsel for the appellant submits that in .....

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provisions are not applicable to the facts of this case. Moreover, Section 111(m) of the Act is also not invokable in this case as no Bill of Entry was filed in the said case. Therefore, the goods might have confiscated under Section 111(d) of the Act which provides that the goods can be confiscated if they are attempted or are brought within the Indian custom waters, contrary to any prohibition imposed by the act or any other law time being in force. He further submits that if the goods are li .....

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appellant came to know about these containers first time when they received intimation from their bankers regarding receipt of the shipping documents from the exporter. The appellant immediately informed the bankers that these goods have not been shipped as per their purchase order and they are not concerned with these goods. The bankers returned the document to the exporter, thereafter, the exporter requested to the appellant to issue No Objection Certificate which the appellant did. In the No .....

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dered by the appellant. Therefore, in this sequence of events, the appellant is nowhere concerned with the said goods. Moreover, the department has failed to produce any evidence to show that the impugned gods were ordered by the appellant. Therefore, merely because the shipping documents were sent in the name of the appellant cannot be presumed that the appellant has ordered for the supply of the impugned goods. In the absence of contrary evidence, the appellants were not in any way involved re .....

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khapatnam 2002 (146) ETL 150 (Tri.-Chennai), Nalakath Spices Trading Co. Vs. CC, Cochin 2007 (213) ELT 283 (Tri.-Bang.) and CC, New Delhi Vs. Sewa Ram & Bros. 2003 (151) ELT 344 (Tri.-Del.), to say that once the title of the impugned goods is relinquished, no penalty is imposable. 6. On the other hand, ld. AR argued that on 28.11.2006, as the investigation was conducted in the premises of the appellant wherein it was felt that the appellant is involved in under valuation of imported plastic .....

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llant to show that the appellant is involved in the act of omission and commission to let the goods liable for confiscation, therefore, the penalty on the appellant is rightly imposed. He also submits that case law relied upon by the appellant have no relevance to the facts of this case and Revenue has been able to prove modus operandi of the appellant. Therefore, the penalty is rightly imposed on the appellant. In these circumstances, it is prayed on behalf of the Revenue that penalty is imposa .....

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The case of the Revenue is that when the investigation against the appellant has been started In November, 2006, the appellant disowned the goods. Therefore, the penalty is imposable. But in this case, it is the contention of the appellant that they have not placed any order on the supplier of the goods to supply the said goods. Moreover, Revenue has not made any effort to ascertain truth of this fact that whether the appellant has placed any order on the supplier or not? Moreover, it is the con .....

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ents are) is required to approach to Revenue to say that I am not the owner of the goods. In this case, when appellant is not owner of the said goods, the Revenue is at liberty to deal the goods in any manner by way of absolute confiscation or by confiscation and allow to be redeemed on payment of redemption fine who claimed the owner of the goods or without confiscation of the goods to be released to the person who claimed the owner of the goods. In this case, admittedly the appellant never own .....

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Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; m) [any goods which do not correspond in respect of value or in any other particular] with the entry made under this Act or in the case of baggage with the declaration made under section 77 2[in respect thereof or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) .....

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oods in relation to which any provisions of Chapter IVA or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened.] On analysing the above provisions, we find that from a plain reading of provisions of sub-section (n) and (o), it is clear that these provisions are not applicable to the case. In fact Section 111(n) deals with transit/transhipment of goods. Section 111(o) deals with a situation where certain claim is claimed subject to some condition an .....

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r Section 2(16) of the Act which defines the terms entry which means Bill of Entry. In the present case, it is a fact that the appellant has not filed any Bill of Entry, therefore, the provisions of Section 111(m) are not attracted in this case. The same view was taken by this Tribunal in the case of Kabul Textiles Mills (supra) wherein the Hon ble Bombay High Court has observed that the CESTAT was therefore right in concluding that even in any case where description was changed within in invoic .....

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ibition. We find that in this case, the ld. Counsel has relied on certain cases. 12. We find that in the case of Arya International (supra), this Tribunal has observed that in case the Bill of Entry was not filed declaring description or quantum of the goods and there is no other evidence on record showing the appellant s involvement in loading the goods at the exporters end. Therefore, the penalty was not imposed. The same view taken in Royal Impex (supra), wherein Tribunal has held as under: 4 .....

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gainst them is untenable. In this case, the investigating agency (DRI) also ventured into an inquiry as to what should be the assessable value of the goods and as to whether the importer had misdeclared the value of the goods. The importer never filed any Bill of Entry declaring the value and other particulars of the goods. Hence it is absurd for the DRI to have ventured to such an exercise. Surprisingly, this absurdity was sustained by learned Commissioner in the impugned order. 13. We further .....

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