Placing Orders with Importers does not amount to Import: CESTAT quashes vague SCN and sets aside Penalty [Read Order]

The Principal Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT )has recently held that placing order with importers does not constitute import and quashed the Show Cause Notice (SCN) and penalty imposed. 

As per the allegations in the SCN, Customs duty of Twenty Four Lakhs and Fifty Thousand Rupees was to be recovered from the appellant along with penal charges and interest. They found Mr Atul Dhawan Proprietor of M/s. Atul Traders the appellant, to be a ‘beneficial importer’. 

According to their investigation, he wilfully suppressed the actual import value with intent to evade duty and as such, the duty is recoverable under Section 28 of the Customs Act, 1962 by invoking the extended period of limitation. Against this order the appellant preferred the appeal before the CESTAT.

Ishwar Charan, for appellant contented that he was not an importer but only a trader. He only purchased the goods from the importer hence the person who imported the goods was the importer according to the Customs Act.

Furthermore the appellant contented that  he is not an importer as he purchased the goods from the open market therefore the order of confiscation under Section 111(m) of the Customs Act cannot be invoked in case of the appellant.

G.K. Sarkar, Shri Prashant Srivastava & Shri Deepak Mahajan submitted for revenue that “The goods in the instant case have been imported by means of suppression of facts and mis-declaration of value with an intent to evade payment of customs duty by appellant and therefore, the customs duty amounting to Rupees Twenty Four Lakhs Fifty Thousand Four Hundred Sixteen is liable to be demanded and recovered from the assessee under Section 28(4) of the Customs Act 1962”.

The single bench of the Anil Choudhary, Judicial Member allowed the appeal filed by the assessee and held that the seizure is bad under Section 110 of the Customs Act which deals with “Seizure of goods, documents and things” and also found that the show cause notice given by the department is vague because it did not specify particular clauses under which confiscation is proposed in accordance with the Section 111 of the customs act. 

To Read the full text of the Order CLICK HERE

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