2006 (11) TMI 386 - AT - Customs

Summary

Issues:
Imposition of personal penalty under Section 112(a) of the Customs Act on an employee for forging signatures on export documents without financial gain and under the direction of the employer.

Analysis:
The appeal challenged the imposition of a personal penalty of Rs. 10 lakhs on the appellant, an employee of a company, for forging signatures on export documents. The impugned order detailed the false claims in export documents, the use of forged Bills of Lading, and the creation of fictitious evidence of exports. The appellant admitted to forging signatures but claimed to have done so under the direction of the employer, without financial gain and without handling the goods. The appellant argued that the penalty under Section 112(a) was unjustified as he did not physically handle the goods and should be penalized under Section 117, which provides for a maximum penalty of Rs. 10,000. The Revenue supported the penalty imposition based on the appellant's admission of forging signatures.

The Tribunal noted that the employer was primarily responsible for the fraudulent activities involving forged export documents. While the appellant was used to forge signatures, there was no evidence of financial benefit to him. However, the act of forgery rendered the appellant liable for a personal penalty under Section 112(a) of the Customs Act. The Tribunal clarified that physical handling of goods was not a requirement under Section 112(a) for imposing a penalty. By knowingly participating in the forgery that led to misdeclaration, the appellant abetted the wrongdoing and rendered himself liable for the penalty. Despite reducing the penalty from Rs. 10 lakhs to Rs. 50,000 considering the circumstances, the appeal was rejected.

In conclusion, the Tribunal upheld the imposition of a personal penalty on the appellant under Section 112(a) of the Customs Act for forging signatures on export documents, even though the appellant did not handle the goods and did not derive financial gain from the forgery. The reduction in the penalty amount to Rs. 50,000 was the only modification made, with the appeal being rejected in all other aspects.