2013 (11) TMI 596 - AT - Customs

Penalty u/s 114 - Confiscation of red sanders wood logs - Held that - Appellant has failed to make out a strong case against the penalty. At the same time, we have not found sufficient grounds for a hefty penalty of Rs. 8,00,000/- on the appellant. From the statements given by the appellant, it would appear that he was aware of the fact that some contravention of the provisions of the Customs Act was involved in the exportation - Prima facie case not in favour of assessee - Stay granted partly.

Summary

Issues: Penalty under Section 114 of the Customs Act for illegal export of red sanders wood logs, involvement of the appellant in the substitution of cargo, waiver and stay against the penalty, amount to be predeposited by the appellant.

The judgment by the Appellate Tribunal CESTAT BANGALORE pertains to an application filed by the appellant seeking waiver and stay against a penalty of Rs. 8,00,000/- imposed on him under Section 114 of the Customs Act. The penalty was associated with the absolute confiscation of a large quantity of red sanders wood logs substituted for polished granite tiles in export cargo covered by a shipping bill filed by the appellant. The department alleged that the appellant colluded with others for the illegal export, rendering the goods liable to confiscation, leading to the penalty. The appellant, however, claimed innocence, stating that the shipping bill was duly processed, and he had no involvement in the subsequent events concerning the cargo. The Addl. Commissioner argued that the appellant's conduct, as per his statement under Section 108 of the Act, indicated his knowledge and involvement in the substitution of the cargo with red sanders.

Upon evaluating the submissions, the Tribunal found that while the appellant failed to establish a strong defense against the penalty, the grounds for imposing a hefty penalty of Rs. 8,00,000/- were not sufficient. The Tribunal noted that the appellant seemed aware of the contravention of Customs Act provisions during the exportation, but the extent of his direct involvement in the substitution needed further examination at the final hearing stage. As an interim measure, the Tribunal directed the appellant to predeposit an amount of Rs. 50,000/- within six weeks and report compliance to the Dy. Registrar by a specified date. Upon satisfactory compliance, there would be a waiver and stay in respect of the balance amount of the penalty, providing a temporary relief to the appellant pending further investigation and hearing.

In conclusion, the judgment highlights the complex legal considerations surrounding penalties under the Customs Act, the burden of proof on the appellant to establish innocence, and the Tribunal's approach to balancing interim measures with the need for a thorough examination of the case during the final hearing stage.