2006 (5) TMI 318 - AT - Central Excise

Summary

Issues:
1. Allegations of conspiracy to fraudulently export goods with inflated value.
2. Liability of Customs House Agents (CHA) and their authorized signatory for penalty under Customs Act, 1962.
3. Misuse of CHA stamp and signature on Shipping Bills.
4. Finding of abetment in fraudulent export and penalty imposition under relevant regulations.

Analysis:
1. The judgment involved two appeals against the order of the Commissioner of Customs alleging a conspiracy to export cheap vests as expensive T-shirts for undue drawback. The goods were detained, and investigations revealed involvement of specific individuals and the CHA firm. The partners involved were penalized, and the export goods were confiscated.

2. The show cause notice alleged that the CHA and its authorized signatory prepared Shipping Bills with wrong descriptions and inflated values, leading to potential penalty under Section 114 of the Customs Act, 1962. The CHA denied involvement, claiming they had informed Customs about their premises' relocation and had no connection to the offense.

3. The CHA contended that the stamp and signature on the Shipping Bills were misused without their authorization. However, contradictory statements regarding their business operations and failure to report the closure of their Coimbatore branch raised doubts about their claims. The misuse of their CHA license resulted in attempted over-valuation for export incentives.

4. The appellate judge found insufficient evidence to establish the CHA's complicity in the fraudulent export. Lack of direct involvement in preparing Shipping Bills or arranging exports, absence of signatures on Bills, and no proof of stamp usage undermined the allegations of abetment. The penalties imposed under relevant regulations were deemed unjustified, and the appeals were allowed, setting aside the penalties with consequential relief.