Import of Memory cards by post parcels - Order of Commissioner does not elaborate as to how goods were prohibited - SCN has not brought out any discrepancy in declared quantity - confiscation does not sustain: CESTAT
By TIOL News Service
MUMBAI, JUNE 21, 2015: ON the basis of intelligence, officers of Air Intelligence Unit intercepted two post parcels which had arrived from Hong Kong by flight on 16.6.2009. The parcels were found to contain memory cards sent by M/s. King Reach International, Hong Kong and the consignee was M/s K. J. Import Export, Ahmedabad. Invoices were also found in the parcels. The goods were valued at Rs.1,17,60,480 (CIF value).
The goods were seized on the belief that they were smuggled into India and the quantity and value of the goods was mis-declared. The proprietor of M/s K J Import Export, Kamlesh Soni, in his statement on 09.07.09 stated that the was doing everything on the instructions of one Deepu alias Deepak Ghanshyam. In the past also, consignments of memory cards were cleared on bills of entry at Ahmedabad through one Custom House Agent, Sundar Balan who is also an employee of Leelaram Asudani. In his letter dated 09.07.09, Soni informed ADC Customs that the parcels did not belong to him, he has relinquished the title of the goods and requested the Department to dispose the goods as deemed fit and that he would not claim the goods at any stage in future.
The proceedings culminated in the impugned order in which the Commissioner confiscated the goods absolutely under Section 111(d) & 111(m) of the Customs Act, and imposed penalties of Rs.2,00,000/- each on Kamlesh J. Soni, proprietor of M/s. K. J. Import Export and Lilaram Arjandas Asudani under Section 112 (a) of the Customs Act.
Before the CESTAT the appellant submitted that vide subsequent letters written by Kamlesh Soni on 6 th March 2010, 15 th March 2010 and 5 th April 2010 it was requested that the goods should not be auctioned and he claimed ownership of the goods but these were ignored by the adjudicating authority. Further, in their reply to the show cause notice dt. 10.12.2009, Kamlesh Soni had stated that he is ready to pay the duty and penalty in respect of the seized goods.
It is further submitted that invocation of Sections 111(d) and 111(m) of the Customs Act, 1962 for confiscating the goods is improper as there is no violation of these Sections inasmuch as the importer had a valid IEC Code;that only those goods which are intended for personal use are classifiable under heading 98.04, but since the goods were being imported for trading they would be classifiable under heading 8523; that import through post parcels is governed by Section 82; that as per Section 2(16) the declaration accompanying the goods is to be considered for the purpose of discharging Customs duty;that adjudicating authority has held that there is no mis-declaration of quantity, therefore Section 111(m) does not get violated. Reliance is placed on the decision in Kuresh Laila - 2005-TIOL-1085-CESTAT-MAD.
The AR supported the order of the Commissioner.
The Bench reproduced the sections 111(d) and 111(m) of the Customs Act, 1962 and observed thus -
++ Section 111(d) makes those goods liable for confiscation which are imported contrary to any prohibition imposed under the Customs Act or under any other law. I find that the importer in this case had a valid IEC Code. The consignment had not even reached him at Ahmedabad before it was intercepted by Customs at Mumbai. The order of the Commissioner does not elaborate as to how the goods were prohibited.
++ Counsel is right in saying that Chapter heading 9804 covers only those goods which are intended for personal use. The present goods are commercial in quantity therefore they have to be classified under the appropriate heading which appears to be heading 8523 in the present case. In this view of the matter, I fail to see how the provisions of Foreign Trade (Development and Regulation) Act, 1992 are violated.
++ Counsel has shown a copy of the IEC Code which is issued on 3.6.2009 i.e. before the date of show cause notice which was issued on 10.12.2009. The IEC code is also authenticated by Superintendent Customs, Ahmedabad. Revenue did not challenge the authenticity of this certificate. Neither have they done so at the time of hearing. It is also not shown that goods in commercial quantity cannot be imported by post parcel. …Therefore, the goods not being covered under Chapter Heading 98.04, there is no violation on their part. Therefore, there appears to be no contravention of any law and violation of Section 111(d).
++ As regards the alleged violation of Section 111(m) of the Customs Act, I find that the Commissioner in his order has clearly stated that the show cause notice has not brought out any discrepancy in the declared quantity of the goods. Neither from the records it is evident that there was any misdeclaration of value or in respect of any other entry made under the Customs Act. …Therefore there is no violation of Section 111(m). In this view of the matter, confiscation of the goods does not sustain and is set aside. Accordingly, penalties also get set aside.
The Appeals were allowed.
(See 2015-TIOL-1203-CESTAT-MUM)
