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Arstu vs Additionl Commissioner Of Customs on 4 May, 2023

Author: Vibhu Bakhru

Bench: Vibhu Bakhru

                          $~49
                          *    IN THE HIGH COURT OF DELHI AT NEW DELHI

                          +      W.P.(C) 5022/2023 & CM APPL. 19634/2023

                                 ARSTU                             ..... Petitioner
                                              Through: Mr. Ashish Batra, Adv.
                                                    versus
                                 ADDITIONL COMMISSIONER OF
                                 CUSTOMS                           ..... Respondent
                                              Through: Mr. Rajesh Gogna, CGSC for
                                                          R1.
                                 CORAM:
                                 HON'BLE MR. JUSTICE VIBHU BAKHRU
                                 HON'BLE MR. JUSTICE AMIT MAHAJAN
                                              ORDER

% 04.05.2023

1. The present writ petition is filed seeking limited relief that the respondents be directed to allow re-export of mobile phones (Apple brand I-Phones).

Brief facts

2. On 02.06.2021, the respondent seized the mobile phones which were attempted to be imported in violation of the Customs Act, 1962 (hereafter referred as 'the Customs Act').

3. The Show Cause Notice was issued, which was adjudicated by order dated 10.02.2023, declaring that the mobile phones were sought to be imported illegally. The value declared by the petitioner was re- determined at ₹32,64,286/-. The mobile phones were ordered to be confiscated and an option was given to the noticee to redeem the same on a payment of redemption fine of ₹3,26,429/-. The redemption was allowed only for the purpose of re-export. Further, a penalty of ₹63,000/- under Section 112(a)(v) of the Customs Act and ₹1,00,000/-

under Section 114AA of the Customs Act, were imposed on the petitioner. Penalties of similar amount were also imposed on M/s Green Dot Air Express Pvt. Ltd., Shri Hrushikesh Mohanty, Shri Mukesh Rana, and Shri Mahinder Singh.

4. The Order-in-Original dated 10.02.2023 emanates from the Show Cause Notice dated 31.05.2022, which was issued in relation to the consignments, which were imported in the name of 52 different individuals. The details of consignments were mentioned in the Show Cause Notice. The goods in question are mobile phones, play stations, DVR set, CCTV cameras, etc. but were mis-declared as household items.

5. The Show Cause Notice sought to impose penalty against various noticees and proposed confiscation of the goods in question, which also included the goods sought to be imported by the petitioner : 50 mobile phones (Apple brand I-Phones), the aggregate value of which was re-determined at ₹32,64,286/-.

6. In addition to the petitioner, penalties were also imposed on M/s Green Dot Air Express Pvt. Ltd., which is a courier company, and its employees. By the Order-in-Original dated 10.02.2023, directions were issued in relation to the noticees including the petitioner herein. The operative part of the Order-in-Original in respect of the petitioner, reads as under:

"V. In respect of Shri Arstu Noticee No. 5, 8, 9, 10 & 11

(i) I hereby re-classify of Mobile Phones (Apple brand I-

phones) as mentioned in Annexure B-5, under CTSH 85171211 of Customs Tariff Act, 1975 imported by mis- declaring the same as Household goods under CTH 98049000.

(ii) I, hereby, reject the declared value of the said Mobile phones (Apple brand I-phones) recorder as per Rule 12 of Signature Not Verified Digitally Signed By:SHIKHA SEHGAL Signing Date:06.05.2023 18:54:25 W.P.(C)5022/2023 Page 2 of 5 Valuation Rules 2007 and re-determined as per Annexure E-5 of Show Cause Notice read with Section 14 of Customs Act, 1962.

(iii) I, hereby, re-determine the value of Mobile phones (Apple brand I-phones) at Rs.32,64,286/- as per Annexure-B5 enclosed with the Show Cause Notice under Rule 4 and 5 of the Customs Valuation Rule 2007.

(iv) I, hereby, confiscate the Mobile phones (Apple brand I-

phones) having re-determined value of Rs.32,64,286/- alongwith concealing and packaging material pertaining to the said goods under Section 111(d), Section 111(l) and 111(m), Section 118 and 119 of the Customs Act, 1962. However, I offer an option to the Noticee to redeem the offending goods on payment of a Redemption Fine of Rs. 3,26,429/- (Rupees Three lakh twenty Six Thousand four Hundred Twenty Nine only) under Section 125(1) of the Customs Act of 1962. I allow the redemption of goods only for re-export purpose.

(v) I, hereby, impose Penalty of Rs. 63,000/-(Rupees Sixty Three Thousand Only) under Section 112 (a)(v) of the Customs Act, 1962 and Rs. 1,00,000/-(Rupees One lakh only) under Section 114AA of the Customs Act, 1962 upon Shri Arstu s/o Shri Ram Chander. I don't impose any penalty under Section 114A of the Customs Act, 1962 as the penalty has been imposed under Section 112 of the act, ibid.

(vi) I, hereby, impose Penalty of Rs. 63,000/-(Rupees Sixty Three Thousand Only) under Section 112 (a)(v) of the Customs Act, 1962 and Rs. 1,00,000/- (Rupees One lakh only) under Section 114AA of the Customs Act, 1962 upon M/s Green Dot Air Express Pvt. Ltd. I don't impose any penalty under Section 114A of the Customs Act, 1962 as the penalty has been imposed under Section 112 of the act, ibid.

(vii) I, hereby, impose Penalty of Rs. 63,000/- (Rupees Sixty Three Thousand Only) under Section 112 (a)(v) of the Customs Act,1962 and Rs. 1,00,000/- (Rupees One lakh only)under Section 114AA of the Customs Act,1962 upon each of Shri Hrushikesh Mohanty, Sh. Mukesh Rana, and Mahinder Singh. I don't impose any penalty under Section 114A of the Customs Act, 1962 as the penalty has been imposed under Section 112 of the act, ibid.

(viii) I allow the re-export of the goods valued at Rs.32,64,286/-

upon payment of the requisite fine and penalty as above."

7. It is the petitioner's case that pursuant to the Order-in-Original, he has already deposited the redemption fine of ₹3,26,429/- and has also paid the penalty amount of ₹63,000/- and ₹1,00,000/-. He submits that despite the payment of the redemption fine and the penalty amount, the goods have not been released for the purpose of re-export.

8. It is contended by the learned counsel for the respondent that although the petitioner has deposited the redemption fine and has also paid the penalty amount, the other noticees have not deposited their respective penalties imposed upon them; since the entire amount of penalty has not been deposited, re-export cannot be allowed.

9. It is further contended that if the petitioner is dissatisfied with the adjudication order, he should challenge the same by filing the appeal before the Commissioner (Appeals) in terms of Section 128 of the Customs Act.

10. The contention raised by the respondent is unmerited. The petitioner has not challenged the Order-in-Original and has, in fact, deposited the redemption fine and paid the penalty imposed on him. The respondent cannot withhold the benefit of the order for the reason that the other co-noticees have failed to comply with the Order-in- Original and have not deposited the penalty amount.

11. It is not disputed that the respondent is entitled to recover the penalty in terms of the provisions of the Act in case a noticee fails to deposit the same despite the order being passed. However, non- deposit of penalty by one noticee cannot be to the detriment of the Signature Not Verified Digitally Signed By:SHIKHA SEHGAL Signing Date:06.05.2023 18:54:25 W.P.(C)5022/2023 Page 4 of 5 other noticee.

12. It is not disputed that the 50 mobile phones, which are sought to be re-exported after deposit of the redemption fine belong to the petitioner. The other co-noticees on whom the penalties have been imposed are the courier company and its employees. They are admittedly not the employees of the petitioner and he has no control over the actions of those noticees. Since the petitioner has deposited the requisite redemption fine and has deposited the penalty imposed upon him, the respondent is required to release the goods for the purpose of re-export as ordered by the Order-in-Original dated 10.02.2023.

13. In view of the above, the present writ petition is allowed and the respondents are directed to forthwith release the offending goods to the petitioner for the purpose of re-export.

VIBHU BAKHRU, J AMIT MAHAJAN, J MAY 4, 2023 "SS" / KDK Signature Not Verified Digitally Signed By:SHIKHA SEHGAL Signing Date:06.05.2023 18:54:25 W.P.(C)5022/2023 Page 5 of 5