2016 (12) TMI 1681 - AT - Customs

Penalty u/r 26 of the CER, 2002 read with Section 112 of the CA, 1962 - the appellant has been considered as a mastermind in floating unit viz. Universal Impex (100% EOU) and by utilizing the status of 100% EOU, imported goods which were not used for manufacturing and export of the goods, but were diverted and clearance of finished goods, which were not manufactured out of the imported raw materials - Held that - one of the employees of Universal Impex (100% EOU) in the presence of independent panch witness, categorically stated that he had prepared the invoices and AR-3As on the directions of the appellant and only invoices and AR-3As were to be sent and there was no material movement conducted and has to be handed over to such person sent by the proprietor or the appellant - On the face of such a categorical statement of the employee, which is not controverted by the appellant, impugned order upheld - appeal dismissed.

Summary

Issues: Penalty imposed under Rule 26 of the Central Excise Rules, 2002 read with Section 112 of the Customs Act, 1962.

The judgment pertains to an appeal against the penalty imposed on the appellant under Rule 26 of the Central Excise Rules, 2002 read with Section 112 of the Customs Act, 1962. Despite the absence of the appellant, the appeal was considered for disposal. The issue at hand revolves around the appellant being deemed the mastermind behind the diversion of imported goods meant for a 100% Export Oriented Unit (EOU). The adjudicating authority found the appellant to be the executive officer orchestrating the misuse of EOU status for unauthorized activities. The appellant contested the findings, claiming they did not benefit from the EOU and challenging the legality of the penalty imposed under Section 112 of the Customs Act. However, the authority's clear finding, based on an employee's statement implicating the appellant in directing fraudulent activities, rendered the appellant's arguments inconsequential. Consequently, the tribunal upheld the penalty, deeming the order legally sound and devoid of flaws. The appeal was dismissed on the grounds of lacking merit, with the judgment pronounced on December 8, 2016.