2008 (8) TMI 581 - HC - Customs

Appeal to High court Penalty for abetment in drawback fraud Respondent introduced firm to buyer and helped in getting IEC number Overvaluation of export goods and undue drawback claimed by firm - there is nothing on record to indicate that the benefit of drawback shared by the respondent - no other corroborative evidence against the respondent - no justifiable reason for imposing the penalty on the respondent and set aside - appeal dismissed

Summary

Issues:
Appeal against personal penalty imposed under Section 114(iii) of the Customs Act, 1962.

Analysis:
The respondent appealed against a personal penalty of Rs. 5 lakhs imposed under Section 114(iii) of the Customs Act, 1962. The case involved M/s. Khayati International filing a shipping bill for export under the duty drawback scheme, with an enhanced value of goods to claim more duty drawback. Statements from Mr. Vijay Tanwar implicated the respondent in introducing him to a buyer and assisting in obtaining the IEC code. Despite searches at the respondent's premises yielding nothing incriminating, a penalty was imposed based on these facts.

The Tribunal reviewed the facts and found that even if the respondent helped in obtaining the IEC code or procuring goods for export, there was no evidence to suggest he would benefit from the duty drawback sought by Mr. Vijay Tanwar. The Tribunal held that mere assistance in obtaining an IEC code or purchasing goods for export was insufficient to implicate the respondent without evidence of his involvement in the exporter's offense. Additionally, the Tribunal noted the lack of corroborative evidence beyond Mr. Vijay Tanwar's statement. Consequently, the Tribunal concluded that there was no justification for imposing the penalty and overturned the decision.

Upon hearing the appellant's counsel, the High Court found no reason to interfere with the Tribunal's decision, as it was based on factual findings. The Court highlighted that their role was not to re-evaluate evidence, as permitted under Section 130 of the Customs Act, 1962, which allows appeals only on substantial questions of law. Since no substantial question of law arose in the case, the appeal was dismissed.