2026-VIL-553-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Importer status under Section 2(26) of Customs Act, Misuse of the DEEC scheme – Whether the appellants are importers when they neither filed the Bills of Entry nor took delivery of the goods and their role was confined to furnishing advance licences, end-use bonds and bank guarantees - HELD - Section 2(26) of the Customs Act defines “importer” as any owner or person holding himself out to be the importer at any time between importation and clearance for home consumption – The statutory framework of Sections 46 and 47, the person who files the Bill of Entry, subscribes to the declaration as to the truth of its contents, and seeks out-of-charge clearance is legally treated as importer for the purposes of assessment and recovery of duty - The appellants cannot be treated as "importers" within the meaning of Section 2(26) as they did not file the Bills of Entry or subscribe to the declarations. Therefore, the duty demand under Section 28 against them cannot be sustained - However, the appellants' role in facilitating the clearance by providing non-transferable licences and irregular bank guarantees, which enabled the misuse of the DEEC scheme, warrants imposition of penalty under Section 112(a) for their contributory and fraudulent conduct, even though misdeclaration is not established against them. Accordingly, the duty demand, interest, confiscation and redemption fine are set aside, but the penalty of Rs.10,00,000/- each under Section 112(a) is sustained - the appeals are partly allowed - Misdeclaration under Section 111(m) - The investigation revealed misdeclaration of goods, but the evidence does not establish that the appellants instructed or knowingly participated in the misdescription – HELD - Misdeclaration under Section 111(m) is not established against the appellants, as the act of filing the Bills of Entry and subscribing to the declarations was done by the other entities, and there is no evidence to show the appellants' involvement in the misdescription - Confiscation and Redemption Fine - The goods are not physically available for confiscation, and the confiscability of the goods is not legally sustainable against the appellants - HELD - In the absence of sustainable confiscation under Sections 111(d), (m) or (o), the very foundation for imposition of redemption fine fails. Consequently, the redemption fine imposed under Section 125 of the Customs Act is unsustainable and is set aside.
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