2014 (6) TMI 266 - AT - Customs

Penalty u/s 114 on Superintendent and Inspector - examination and physical stuffing of consignments - Held that - Only a statement of the co-accused cannot be said to have established that Shri Khem Singh Lalas was present during the examination and stuffing of the cargo in the containers which were subsequently found to contain red sander logs. It is relevant to note that the evidences available on record were also not considered sufficient for framing charges against Shri Khem Singh Lalas by the jurisdictional Special Judge CBI in Special Criminal No.12/2011. In view of these observations, no penalty can be imposed upon this appellant under Section 114(i) of Customs Act, 1962 and the order passed by the adjudicating authority to that extent is required to be set aside. In the absence of any other corroborative evidences, no penalty can be imposed upon this appellant under Section 114 of Customs Act, 1962 in view of the case laws relied upon by the appellant. For negligence in discharging duties, this appellant has been served with a separate charge-sheet by the Department for which the law can take its course. Accordingly, it is held that no penalty is imposable upon Shri Mukhalesh Jain and the appeal filed by him is required to be allowed.e - Decided in favour of assessees.

Summary

Issues Involved:
1. Imposition of penalty on Shri Khem Singh Lalas under Section 114(i) of the Customs Act, 1962.
2. Imposition of penalty on Shri Mukhalesh Jain under Section 114(i) of the Customs Act, 1962.

Issue-wise Analysis:

1. Imposition of penalty on Shri Khem Singh Lalas:

The appellant, Shri Khem Singh Lalas, was penalized Rs.1 lakh under Section 114(i) of the Customs Act, 1962 by CC Kandla. The appellant contended that he was not present during the supervision of stuffing and sealing of the containers. He referred to the CBEC Circular F.No.224/37/2005-CX-6, dated 24.12.2008, which allows a Superintendent to depute an officer for examination and sealing of export consignments. The appellant argued that there were no signatures on the invoice indicating his presence during the stuffing, examination, and sealing. Additionally, the jurisdictional CBI Court's order dated 19.10.2013 did not frame charges against him, further supporting his claim. The Tribunal observed that only the statement of the co-accused was not sufficient to establish his presence during the examination and stuffing of the cargo. Consequently, the Tribunal set aside the penalty imposed on Shri Khem Singh Lalas.

2. Imposition of penalty on Shri Mukhalesh Jain:

The appellant, Shri Mukhalesh Jain, was penalized Rs.5 lakhs under Section 114(i) of the Customs Act, 1962. He argued that he performed his duties as per the instructions and found the goods to be furniture as declared. He highlighted that no incriminating evidence other than the intact departmental Bottle Seal was available with the DRI. He also mentioned instances where goods were substituted after sealing without tampering with the seal, suggesting the possibility of misuse of duplicate seals. The Tribunal noted that no statements of the exporter or the transporter were recorded, which could have clarified whether substitution occurred during transportation. The Tribunal also observed that the adjudicating authority did not provide findings on the factual submissions made by the appellant and noted that the element of conspiracy or abetment was not established. In the absence of any corroborative evidence, the Tribunal held that no penalty could be imposed on Shri Mukhalesh Jain under Section 114 of the Customs Act, 1962. The Tribunal allowed the appeal filed by Shri Mukhalesh Jain.

Conclusion:

Based on the above observations, the Tribunal allowed both appeals filed by the appellants, setting aside the penalties imposed on Shri Khem Singh Lalas and Shri Mukhalesh Jain. The judgment emphasized the lack of sufficient evidence and the procedural lapses in establishing the appellants' involvement in the alleged offense.