Legal principle

A retracted Section 108 statement, unless substantially corroborated by independent and cogent evidence and not rebutted by the Department, cannot sustain confiscation or penalty, and Section 114AA applies only where a person knowingly or intentionally makes or uses a false declaration.

Court decision

The Tribunal set aside the impugned Order-in-Original and allowed all six appeals with consequential relief: it held the goods were not liable to confiscation, that no penalty under Section 112(a) was imposable on M/s Omega Packwell, that the Section 114AA penalty on Shri Yogesh Gupta was liable to be quashed, and that the penalties on Shri Manoranjan Kumar, Shri Chandan Choudhary, Shri Kush Agrawal and Shri Anil Agrawal could not be sustained and were set aside.

Facts

Omega Packwell Pvt. Ltd., a manufacturer of chopped/cut dry dates, imported 102.9 MT of dry dates from M/s GVO Global FZC, Dubai, under Invoice No.GVO/EXP/078, a bill of lading and Certificate of Origin No.477287/9/19/123007 showing UAE origin, and filed Bill of Entry No.4981646 dated 20.09.2019 at ICD Dadri under Section 46 of the Customs Act, self-assessing duty of Rs.17,51,574 (re-assessed at Rs.22,26,974 after a ~22% value enhancement under Section 17(2)). DRI held the consignment, re-examined it, and seized it on 18.10.2019 on the grounds that the goods were of Pakistan origin mis-declared as UAE to evade the 200% duty levied by Notification No.05/19-Cus dated 16.02.2019, and that the stapled, separable slips on the bags violated the FSSAI (Labelling and Packaging) Regulations, 2011. A show cause notice under Section 124 culminated in Order-in-Original No.11/PR.COMMR./NOIDA-CUS/2022-23 dated 12.07.2022 ordering confiscation under Section 111(m) with a Rs.6,00,000 redemption fine, demanding duty of Rs.1,68,72,486 under Section 125(2), imposing a Rs.2,00,000 penalty under Section 112(a) on the company and Rs.2,00,000 under Section 114AA on director Yogesh Gupta. Five other individuals (Yogesh Gupta, Anil Agarwal, Kush Agarwal, Manoranjan Kumar, Chandan Choudhary) also appealed against penalties in the same OIO.

Key provisions

• Rule 6, Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 — Verification request
• Section 111(m), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 46, Customs Act, 1962 — Entry of goods on importation