2010 (7) TMI 753 - CGOVT - Customs

Revision Application - Penalty - Hon ble Supreme Court in case of Surgeet Singh Chhabra has observed that statement made before the Customs Officer though re-tracted within six-days is an admission and binding since Customs Officers are not police officers under section 108 of the Customs Act and FEMA. Further it is a settled law that statutory obligations as provided by the statute and classified by the concerned department are not mere formalities but these are to be strictly adhered to, Government therefore is of the conclusive opinion herein that the Applicant as having been filed, processed and got the impugned Shipping bills (goods) cleared, through its employees is very much responsible and concerned with these established fraud cases involving contraventions of Customs Act, 1962 and as such has rightly been held liable to penalty under Section 114(iii) of the Act ibid, Government, therefore, is in conformity with the views of Commissioner (Appeals) and the impugned order-in-appeal is thus upheld for being legal and proper, Government do not find any merits in these Revision Applications and the same are here by rejected.

Summary

Issues:
- Revision of Order-in-Appeal No. 113/2007 Misc. ACC (Dbk) dated 23-11-2007
- Allegations of fraudulent export under drawback scheme
- Denial of involvement in contravention of Customs Act
- Violation of principles of natural justice
- Involvement of Customs House Agent (CHA)
- Imposition of penalty under Section 114(iii) of the Customs Act

Analysis:
1. The Revision Applications were filed against Order-in-Appeal No. 113/2007 Misc. ACC (Dbk) dated 23-11-2007. The cases involved seized goods declared as 'Gear Cutting Tools of Cobalt Bearing High Speed Gear Cutters' exported under the drawback scheme to fraudulently claim drawback. Investigations revealed multiple consignments exported with similar descriptions, leading to penalty proceedings against the CHA and individuals involved.

2. The Appellant contested the allegations on various grounds. They argued that the seized goods were different from those exported, emphasizing the lack of conclusive evidence regarding the goods' commercial value. They also challenged the reliance on employee statements without independent corroboration and raised concerns about the violation of natural justice principles.

3. The Government noted the fraudulent nature of the exports and the fictitious nature of the exporters after thorough investigations. Despite the Appellant's denial of involvement, the Government held them responsible as a CHA under the Customs Act. The Government emphasized the importance of statutory duties and adherence to regulations, rejecting the Appellant's claims of innocence.

4. Citing legal precedent, the Government highlighted the binding nature of statements made before Customs officers and the significance of statutory obligations. The Government concluded that the Appellant, having processed and cleared the shipping bills, was liable for penalties under Section 114(iii) of the Customs Act.

5. Ultimately, the Government upheld the Order-in-Appeal, rejecting the Revision Applications due to the Appellant's involvement in the established fraud cases. The decision was based on the findings of the Commissioner (Appeals) and deemed legal and proper, leading to the rejection of the Revision Applications.

6. In conclusion, the Government found no merit in the challenges raised by the Appellant and upheld the penalty imposed under the Customs Act. The rejection of the Revision Applications was ordered, affirming the decision of the Order-in-Appeal and concluding the legal proceedings in the matter.