2009 (4) TMI 520 - HC - Customs

Duty drawback - respondent is a cargo routing agent - carried shipment sent by100% EOU - Some irregularities were found in the duty drawback claimed by them, case was registered against 100% EOU, SCN also issued to respondent as abettors in the offence - 100% EOU was absolved of all charges against them under the Customs Act Held that - when the prime offender had been exonerated of its charges, the abettor cannot be held liable. The question of law is answered against the revenue and the civil miscellaneous appeal is dismissed. No costs

Summary

Issues:
1. Duty drawback irregularities by a cargo routing agent.
2. Abettor liability of the cargo routing agent.
3. Tribunal's decision on penalty under Section 114 of the Customs Act.
4. Finality of the Tribunal's order in a related case involving the main offender.

Analysis:
1. The case involved duty drawback irregularities by a cargo routing agent, who carried shipments for a company manufacturing ready-made garments on a 100% Export Oriented Unit (EOU) basis. The cargo routing agent was accused of abetting the main offender, the manufacturing company, in the offence.

2. The Tribunal held that since the main offender had been absolved of all charges in a related case, the abettor, the cargo routing agent, should also be absolved of liability. The Tribunal set aside the penalty imposed on the cargo routing agent under Section 114 of the Customs Act.

3. The High Court admitted the appeal and framed a substantial question of law regarding the correctness of the Tribunal's decision in setting aside the penalty. The Court considered the fact that a reference application was pending in the Karnataka High Court against the Tribunal's order in the related case involving the main offender.

4. The High Court referred to previous judgments, including one where the Tribunal held that job work by itself would not amount to an attempt to export, leading to the exoneration of the main offender. The Court upheld the Tribunal's decision that when the main offender was exonerated, the abettor could not be held liable. Consequently, the Court dismissed the appeal against the Tribunal's decision, ruling against the revenue authority.

In conclusion, the High Court upheld the Tribunal's decision to absolve the cargo routing agent of liability based on the exoneration of the main offender in a related case, emphasizing the principle that the abettor cannot be held liable when the main offender is exonerated.