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Issues involved: Penalty imposed under u/s 114(iii) of the Customs Act, 1962 for connivance in over-invoicing and fraudulent exports.
Summary: The case involved Shri R.K. Goyal, Smt. Geeta Goyal, Directors of M/s. Bronze Logistics Ltd. & M/s. Bronze Logistics Pvt. Ltd., who were penalized under u/s 114(iii) of the Customs Act, 1962 for their alleged involvement in over-invoicing and fraudulent exports conducted by M/s. S.S. Enterprises and other firms. The appellants challenged the penalty, claiming they did not have any transactions with the implicated firms. The Revenue relied on bank statements showing financial transactions between the appellants and M/s. S.S. Enterprises as evidence of their involvement. However, the appellants denied any role in the fraudulent transactions, and no direct evidence implicated them. The Tribunal found the presumption against the appellants to be unsubstantiated, granting them a waiver from pre-deposit of penalties and stay on recovery during the appeal process. In the detailed analysis, the appellants argued that their statements under Section 108 did not acknowledge any involvement with M/s. S.S. Enterprises and other firms, contrary to the bank statements' indications. The Revenue failed to provide corroborative evidence linking the appellants to the fraudulent exports, solely relying on financial transactions as proof of complicity. The Tribunal noted the absence of direct accusations from the exporters or any admission of guilt by the appellants, leading to the conclusion that the penalty imposition lacked a solid foundation. Consequently, the Tribunal granted the appellants unconditional waiver from pre-deposit of penalties and stayed the recovery process pending the appeal's resolution.
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