Legal principle

Where imported goods are found on official testing to be mis-declared restricted items, they are liable to confiscation under Section 111 of the Customs Act, with redemption only under Section 125 on payment of a fine, and personal penalties under Sections 112(a) and 114AA validly follow for the importer, its directors and the customs broker, concurrent findings to that effect standing absent infirmity.

Court decision

The Tribunal found 'no infirmity in the impugned order' and dismissed the appeals of all five appellants, thereby affirming the confiscation under Section 111(d)/(f)/(m) with the Section 125 redemption option (Rs. 5 lakh fine, re-export within 30 days) and the penalties under Sections 112(a)(i) and 114AA on the company, its directors and the customs broker — the revenue succeeded.

Facts

Acting on intelligence that M/s Gold Ripe International Pvt Ltd had imported 'Ethephon', a restricted pesticide requiring registration from the Central Insecticide Board and Registration Committee (CIB & RC), by mis-declaring it as 'ethylene ripener' under CTH 38249990, DRI officers searched the importer's Meerut premises on 24.06.2021 and detained goods including 23,000 kg imported under Bill of Entry No. 4477470 dated 28.06.2021 and 30,576.16 kg found at the premises. On examination the goods were found to be Ethephon declared as 'Ethylene Ripener 20%', and testing by CRCL and the Central Insecticide Laboratory showed them to be mis-classified and mis-declared restricted items, leading to seizure. A show cause notice dated 21.12.2021 by the Joint Director, DRI proposed confiscation under Sections 111(d), 111(f) and 111(m) and penalties under Sections 112(a), 112(b) and 114AA against the company, its three directors and its customs broker (CHA). By Order-in-Original dated 19.04.2024 the Additional Commissioner ordered confiscation with an option to redeem on payment of Rs. 5 lakh redemption fine and re-export, and imposed penalties on all five noticees; the Commissioner (Appeals) upheld this order on 30.10.2024, prompting these further appeals.

Key provisions

• Section 114AA, Customs Act, 1962 — Penalty for use of false and incorrect material
• Section 112(a), Customs Act, 1962 — Penalty for improper importation of goods
• Section 3, The Foreign Trade (Development and Regulation) Act, 1992 — Powers to make provisions relating to imports and exports.
• Section 125, Customs Act, 1962 — Option to pay fine in lieu of confiscation
• Section 111(d), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 11, Customs Act, 1962 — Power to prohibit importation or exportation of goods
• Section 2(33), Customs Act, 1962 — Definitions
• Section 9A, The Foreign Trade (Development and Regulation) Act, 1992 — Power of Central Government to impose quantitative restrictions.
• Section 16(5), The Food Safety and Standards Act, 2006 — Duties and functions of Food Authority.
• Section 18A, The Foreign Trade (Development and Regulation) Act, 1992 — Application of other laws not barred.
• Section 5, The Foreign Trade (Development and Regulation) Act, 1992 — Foreign Trade Policy.
• Section 11(2), The Foreign Trade (Development and Regulation) Act, 1992 — Contravention of provisions of this Act, rules, orders and foreign trade policy.