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Issues involved: Imposition of penalty under Section 114 of Customs Act, 1962 based on the appellant acting as a middleman between a manufacturing company and a merchant-exporter.
Summary: The Appellate Tribunal CESTAT, Ahmedabad, addressed the challenge in the appeal concerning the penalty of Rs. 3 lakhs imposed on the appellant under Section 114 of the Customs Act, 1962. The penalty was imposed due to the appellant's alleged role as a middleman between the manufacturing company M/s Ratan Lila & Co. and the merchant-exporter M/s. Convest Overseas. The Revenue contended that the goods exported were not actually manufactured by M/s. Ratan Lila & Co. and were different from those claimed for drawback. The Revenue relied on a statement by Shri C.P. Gupta, Director of the manufacturing unit, indicating that the appellant introduced him to the exporting firm and managed affairs, supported by a cheque book signed by the appellant. However, apart from Gupta's statement, no other evidence implicated the appellant in the manufacturing or exporting process. Notably, a representative of the exporting firm did not mention the appellant's involvement. The Revenue did not record a statement from the appellant, and the alleged cheque book was not produced. The Tribunal emphasized that an uncorroborated statement of a co-accused cannot solely justify imposing a penalty on another accused. Therefore, the Tribunal set aside the penalty imposed on the appellant and allowed the appeal.
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