Order Date: 8 September 2022

Facts-

• The Appellant, Oceanic Enterprises Private Ltd., is a Customs Broker filed Bill of Entry on behalf of the importer namely Collection Garden for clearance of imported goods declared as “metal Frame, building material accessories, building material gutter, screw etc.” in 717 carton. The supplier was shown as HK Easytrade Trading Co. Ltd. China and the declared value was Rs.4,87,682/-. The duty payable was Rs.1,38,644/-. 
• Based on specific intelligence, SIIB examined the goods and found that the declared goods like metal gutters and tiles were contained only in 25 cartons. Though the importer had declared 717 cartons, there were 775 cartons and also undeclared goods. 
• The representatives of other IPR holders joined the proceedings and confirmed that the imported goods of their respective brands were counterfeit goods. They requested for destruction under IPR (Imported Goods) Enforcement Rules, 2007 as the goods were undeclared and infringed IPR of the above owners. 
• A Show Cause Notice dated 12.7.2018 was issued to the importer as well as proposing inter alia to redetermine the value of the goods, confiscate the goods and also for imposing penalties under sec. 112(a) and 114AA of the Act ibid which was further upheld by authorities.

Issue-

• Whether the penalty is rightly imposed on the appellant?

Order-

• The Tribunal observed that more than 90% of the goods were undeclared items. Further, most of the undeclared goods bear the brand of reputed companies and they were found to be counterfeit products. Thus, there is infringement of IPR laws also. Though it can be seen that the appellant who is a Customs Broker has filed the Bill of Entry on the basis of the documents handed over to him by a person representing the importer, in the present case, it has to be seen that the importer is not traceable as the company’s address and GST registration shown in the documents are fake. The importer did not care to appear or attend the proceedings. He has not come forward to claim the goods.
• The main argument put forward by the learned counsel for appellant is that the allegations would only be a violation of CBLR, 2018 and that the Customs Broker cannot be held responsible under sec. 112(a) of the Customs Act, 1962. Tribunal observed that though it may be true that the Customs Broker acts as per the instructions of the importer, in the present case, as the importer himself is not traceable and the address as well as GST registration reflected in the documents are found to be fake, the act of the Customs Broker in filing the Bill of Entry acquires deep introspection. The trust embedded in the Customs Broker who has been issued a licence cannot be used in a negligent manner so as to permit undeclared / prohibited goods in large quantities.
• The Tribunal held that there are no grounds to set aside the penalty imposed under sec. 112(a) of the Customs Act, 1962 on the appellant. The penalty of Rs. 5,00,000 is high and requires to be reduced and the Appeal is allowed in part.