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Case Law Details

Case Name : Bird Retail Pvt. Ltd. Vs Commissioner of Customs (Import) (CESTAT Delhi)
Appeal Number : Customs Miscellaneous Application No. 50487 of 2019in Customs Appeal No. 51007 of 2019
Date of Judgement/Order : 24/02/2020
Related Assessment Year :
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Bird Retail Pvt. Ltd. Vs Commissioner of Customs (Import) (CESTAT Delhi)

Conclusion: Adjudicating Authority was right in in imposing a penalty under the provision of Section 114A and Section 114AA of the Customs Act, 1962 as  both the appellants were fully aware that M/s B Pvt. Ltd. was importing complete Segway electrically operated product in CKD condition by mis-declaring the same as CKD parts of components such as Power unit, transmission kit, etc. for evading customs duty by wrongly availing the benefit of the Notification No. 12/2012-Cus. dated 17/03/2012.

Held: Assessee was appointed a distributor of “Segways” manufactured and patented by M/s Segways Inc., U.S.A. for Indian territory. As per the agreements, assessee were required to sale the Segway products/Segway personal transport products purchased from M/s Segway Inc., U.S.A. Assessee had been importing Segway‟ product in CKD condition in the form of very assemblies such as power assembly, transmission assembly, wheel assembly etc. as well as Air Cargo Complex, New Delhi wherein they had filed bills of entry for assessment and clearance of the imported consignment declaring the product as “CKD Parts of electrically operated two wheeler/personal transport/lithium ION battery for captive use”. The product had been classified under Customs Tariff Heading 87149990/87144011 etc. They had also claimed benefit of Notification No. 21/2002- Cus. dated 01/03/2002 (Sl. No. 345) and Notification No. 12/2012-Cus. dated 17/03/2012 (Sl. No. 443 and 444). The department working on an intelligence had initiated investigations against assessee for mis-declaration of the product at the time of import and had entertained a view that the importer/appellant had imported a complete units of the Segway personal transport self-balancing vehicle in CKD condition. However, at the time of the import, they had  mis-declared the same as “CKD parts of personal transport/electrically operated two wheelers for captive use and had mis-classified the same under Customs Tariff Heading 87149990 and thereby had evaded huge amounts of customs duty. The goods were seized and the penalty was imposed on these people against which the appeal was filed. It was held the appellants were fully aware that M/s B Pvt. Ltd. was importing complete Segway electrically operated product in CKD condition by mis-declaring the same as CKD parts of components such as Power unit, transmission kit, etc. Both the appellants were aware that the components which had been imported just indeed screw drive technology to make the same as functional Segway product. The sales manager was looking after the work pertaining to import, preparation of import documents and liaisoning with the customs clearing agent and subsequent sale of Segway products in a complete functional form. The other appeallant was controlling the activity of the imports as he was financing the same and gave financial approval for various activities of the import of the Segway product. Both of them were instrumental and devising a modus-operandi to evade customs duty by wrongly availing the benefit of the Notification No. 12/2012-Cus. dated 17/03/2012. Considering the involvement of both the appellants in entire activity, the Adjudicating Authority was right in imposing a penalty upon them under the provision of Section 114A and Section 114AA of the Customs Act, 1962.

FULL TEXT OF THE CESTAT JUDGEMENT

The brief facts of the matter are that the appellant No. I was appointed a distributor of “Segways” manufactured and patented by M/s Segways Inc., U.S.A. for Indian territory on 01/02/2010. The agreement authorized the appellant No. I as the distributor for Segway and thereafter have been revalidated on 01/11/2012 and 19/03/2015. As per the agreements, the appellant are required to sale the Segway products/Segway personal transport products purchased from M/s Segway Inc., U.S.A. The appellant have been importing Segway‟ product in CKD condition in the form of very assemblies such as power assembly, transmission assembly, wheel assembly etc. as well as Air Cargo Complex, New Delhi wherein they have filed bills of entry for assessment and clearance of the imported consignment declaring the product as “CKD Parts of electrically operated two wheeler/personal transport/lithium ION battery for captive use”. The product has been classified under Customs Tariff Heading 87149990/87144011 etc. They have also claimed benefit of Notification No. 21/2002- Cus. dated 01/02/2002 (Sl. No. 345) and Notification No. 12/2012-Cus. dated 17/03/2012 (Sl. No. 443 and 444). The department working on an intelligence has initiated investigations against the appellant for mis-declaration of the product at the time of import and have entertained a view that the importer/appellant have imported a complete units of the Segway personal transport self-balancing vehicle in CKD condition. However, at the time of the import, they have mis-declared the same as “CKD parts of personal transport/electrically operated two wheelers for captive use and have mis-classified the same under Customs Tariff Heading 87149990 and thereby has evaded huge amounts of customs duty. It‟s a matter of record that during the course of investigation, the Departmental officer have visited the business premises of the appellant and the appellant was asked to produce the sample of the imported consignments. Shri Rony Abraham (appellant No. II) was present at the time of the visit of the DRI officers at their business premises. On the request of the DRI officers, Shri Rony Abraham presented sample of the imported vehicle/item before one Shri Vinod Soorma, Chartered Engineer which was appointed by the Department for examining the sample of the imported consignment. Shri Vinod Soorma, Chartered Engineer after examination of the goods and submitted his report on 01/08/2016 saying that :

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