CESTAT Imposes Penalty on DLF Southern Towns under Customs Act & Foreign Trade (Development & Regulation) Act for Violating Import Policy

CESTAT Imposes Penalty on DLF Southern Towns under Customs Act & Foreign Trade (Development & Regulation) Act for Violating Import Policy

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore found that DLF Southern Towns Pvt. Ltd. (appellant) had violated the conditions of the Import Policy and failed to comply with the conditions of Notification No.29/2010. As a result, the imported goods were deemed liable for confiscation and the appellant was held liable for penalty.

The bench comprising of P. A. Augustian (Judicial Member) and R. Bhagya Devi (Technical Member) ordered confiscation under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade Policy (Development & Regulation) Act, 1992 and imposed penalty under Section 112(a) of the Customs Act, 1962.

In the present case, the appellant-importer had filed Bills of Entry for the clearance of ordinary Portland Cement from Pakistan, claiming the benefit of four per cent Special Additional Duty (SAD) exemption provided under Notification No.29/2010. This exemption was applicable to prepackaged bags intended for retail sale.

However, during the verification process, it was discovered that the details of the importer were not available on the packages. The appellant later admitted that the goods were purchased on a high sea sale agreement and only upon examination did they realize that the cement bags did not bear the importer's name.

Further, the Custom House Agent (CHA), who had appeared on behalf of the importer, had declared that the imports were for their own consumption and the goods were not meant for retail sale.

Based on these findings, the Commissioner concluded that the import violated policy provisions, making the goods liable for confiscation under Section 111(d) of the Customs Act, and Section 3(3) of the Foreign Trade (Development & Regulation) Act. The importer was also held liable for a penalty under Section 112(a) of the Customs Act.

The bench referred to the case of Creative Enterprise vs. Commissioner of Customs (Import), Nhava Sheva (2019), wherein it was observed that the appellant had not provided any evidence to demonstrate that the imported goods were intended for retail sale, thereby disqualifying them from the exemption.

In view of the findings of the Commissioner and the decision passed by the Tribunal in Creative Enterprise(supra), the bench upheld the impugned order and dismissed the appeal.