Whether genuine importer can be penalised for inferior goods supplied by supplier of goods?

PJ/Case Laws/2012-13/1225

Case:- Veena Mishra V/s Commissioner of Cus. (CSI Airport), Mumbai

Citation:-2012 (282) E. L. T. 431 (Tri. - Mumbai)

Issue:- Whether genuine importer can be penalised for inferior goods supplied by supplier of goods?

Brief Facts:- The main importer M/s Tangerine Informatique Pvt. Ltd. had imported certain consignments of ICs and filed bill of entry and declared description of goods as mentioned in the invoice raised by the foreign supplier. As the main appellant was a private bonded warehouse, the goods were transferred to warehouse. On examination of the goods, it was found that the some of the ICs are obsolete and some are dummies. Therefore, a case has been made out against the main importer as well as against the applicants. A show-cause notice was issued. The matter was adjudicated and the imported goods were absolutely confiscated and the penalty on the applicant under Section 112(a) of the Customs Act has been imposed.
Appellant’s Contention: - The Id. Counsel for the applicant submits that in this case it is an admitted fact that the importer had declared the goods as per the invoice raised by the foreign supplier and on examination it was found that the goods were not as per the description in the invoice/bill of entry. In that context, they made an inquiry with the foreign supplier and alleged that the foreign supplier has cheated them by not supplying the goods as required by them. He further submits that their foreign supplier by letter dated 18-6-1997 had agreed that he has supplied some other goods to the importer therefore, requested the importer to send back the goods and they were ready to compensate for the difficulties faced by the importer. Therefore, he prayed that the charge of mis-declaration is not sustainable. He further submits that there was another charge of siphoning of money to foreign country by Shri Om Hemrajani (the applicant). On this charge, the proceedings under FERA also took place wherein the applicant was exonerated; therefore, penalties on both the applicants are not imposable.
Respondent’s Contention: - Respondent submits that although the proceedings under FERA has been dropped against the applicant but admittedly they have misdeclared the goods as the same were not found as declared at the time of inspection. He further submits that the applicant has not produced the purchase order or any other documents to conclude that they have declared the goods correctly at the time of importation of the goods. Therefore, the adjudicating authority has rightly imposed the penalty under Section 112 on both the applicants.
Reasoning of Judgement: - As the charges of siphoning of money to foreign country was dropped by the FERA against the applicants, therefore, the charge of siphoning of money is not sustainable. With regard to the mis-declaration, Tribunal found that at the time of import of goods, the importer has declared the goods as per the invoice in the bill of entry and the goods were cleared. Later on, on examination the goods were found as obsolete and dummy I.C. as per the test report of the ITT. Thereafter, the applicants preceded the matter with foreign supplier, who admitted the fault that the some other goods had been supplied wrongly to the importer. Therefore, prima facie, the charge of misdeclaration of goods is also not sustainable against the applicants.

Accordingly, the applicants have made out a case for 100% waiver of pre-deposit of penalty. Therefore, Tribunal waive the requirement of pre-deposit of penalty and recovery thereof stayed during the pendency of the appeal.

Decision: - Stay granted.

Comment:- This is very good decision wherein the geneuine importer has not made guilty for the improper goods supplied by the supplier. This decision will come as a great relief for the importers who on one side are cheated by supplier by supplying substandard goods and on other side the department books a case against them for misdeclaration of goods.

Comments

PJ/Case Laws/2012-13/1225

Post a Comment

Query