By TIOL News Service

NEW DELHI, SEPT 04, 2017: A container with imported goods was brought by shipping line M/s ADL under the cover of Bill of Lading which was in the name of the appellant as consignee.

Based on certain intelligence that the said container contains undeclared items and also counterfeit items, the customs authorities conducted physical examination.

SCN was issued and in adjudication the original authority held that undeclared items valued at Rs.1,45,54,515/- are liable for confiscation (with an option for redemption); ordered absolute confiscation of counterfeit goods valued at Rs.82,24,850/-; a penalty of Rs.50 lakhs was imposed on the appellant u/s 112(a) of the Customs Act.

In appeal before the CESTAT, the appellant submits that -

(a) They are neither owners of the goods nor held themselves out to be the importer. They have denied having imported such consignment.

(b) No bill of entry has been filed by the appellant. Hence, there is no question of mis-declaration or violation of any provisions of Customs Act, 1962.

(c) The impugned order held the appellant as importer only on the ground that a Bill of Lading was received in the name of the appellant and the same was presented by the CHA to the shipping line to take delivery order. They have not placed any order for import of impugned goods and communications with the shipper will indicate that the whole shipment is a mistake and they cannot be penalized for consignment which was not imported by them. They did not get any invoice/packing list for the impugned consignment and they did not make any payment for such goods.

(d) They are not connected to the imported goods either as a owner or as a representative of owner and hence cannot be imposed with penalty.

The AR submitted that the appellant being the person behind the import can be brought under the category of "Importer" in terms of Section 2(26) of the Act and, therefore, the order is justified.

The Bench extracted the definition of ‘importer' and inter alia observed –

++ We note that the term "importer" is clearly defined in the Act. It includes any owner or any person holding himself out to be importer. These are to be established by factual enquiry. When the appellant did not …hold himself to be the importer of such goods, then it is for the Revenue to categorically establish that the appellant was indeed the owner of the goods .

++ Except for the Bill of Lading which itself is being disputed as a mistaken transaction by the shipper, there is no other evidence on record to hold the appellant as the importer or person behind the importation of such goods. Admittedly, there is no evidence that the appellant received invoice, packing list or remitted any money towards impugning goods. In fact, there are correspondences to show that the appellants protested with the supplier on the receipt of consignment in his name. Without commenting on the genuineness of these correspondences, it can still be concluded that the appellants do not fall within the statutory scope of "importer" under Section 2(26).

++ Admittedly in the present case, there has been no bill of entry filed by any person. We note that the original authority concluded that description of goods in the Bill of Lading would have led to mis-declaration in the bill of entry. We note that such presumptive reasoning by the original authority is not supported by the legal provisions.

++ It is clear that the question of mis-declaration will arise based on the statutory document filed by the importer before the customs authorities. Such document in respect of import, is bill of entry under Section 46. The Bill of Lading is not a document of declaration of contents of imported items statutorily filed by the importer with the customs authorities for clearance of goods. In other words, the Bill of Lading is not an assesssing document for custom authorities. It cannot substitute a bill of entry.

++ Any description in the invoice or the Bill of Lading or import manifest is not sufficient to call for confiscation liability of the goods under Section 111(m) of the Act. [ Northern Plastic Limited = 2002-TIOL-1889-SC-CUS, Kabul Textiles = 2005-TIOL-191-HC-GOA-CUS relied upon.]

++ There is no legal basis to hold the appellant as a "importer" in terms of Section 2(26) of the Act in the facts and circumstances of the case. As such, no duty demand or penal consequences applicable with reference to the impugned goods can be confirmed against the appellant.

++ The appellant did not file bill of entry or did not commit any act or omission which will render the goods liable for confiscation. They were contesting their connection/ownership of the impugned goods. As already noted, the appellant did not make any attempt to clear the goods or abet any other person in clearing the goods. We find the evidences are not sufficient to bring in penal consequences under Section 112 on the appellant.

The impugned order insofar as it relates to duty liability and penalty as confirmed against the appellant was set aside and the appeal was allowed.

(See 2017-TIOL-3194-CESTAT-DEL)