2014 (12) TMI 1051 - HC - Customs

Penalty u/s 114(i) - Confiscation of goods - Misdeclaration of goods - export of fertilizer grade Potassium Chloride (Muriate of Potash - MOP) by declaring it as industrial salt, chemical grade (sodium chloride) - Whether the Tribunal was right in coming to the conclusion that the appellant is liable for penalty in terms of Section 114 (i) of the Customs Act in the absence of any tangible evidence against the appellant - Held that - the fact that the appellant was responsible for sourcing the bogus bill for the mis-declared goods from R.B. Trades as Industrial Salt to support the unlawful attempt to export Muriate of Potash is evident from the materials available on record. The further fact that payments were made by the consignee, who is none other than the sister of the appellant, is also confirmed by the statement of Rajagopal, the father of the appellant and the consignee, Ms.Aruna Murugesh the sister of the appellant. The above fact clearly shows the active involvement of the appellant in the transaction. That the appellant is responsible for the attempt to illegally export by way of mis-declaration, contrary to prohibition in law is further evident from the statement of L.Subash Proprietor of Sharmi Exim Co., whose statement is to the effect that he consented to the said improper export only for the purpose of individual gain of ₹ 5,000/- per container. The complicity of the appellant further gets confirmed by the statement of the Custom House Agent, who stated that the false/bogus invoice of R.B. Trades were handed over to him by the appellant and that he proceeded to file the shipping bills on the instructions of the appellant. - In view of the clear and categorical evidence available on record, there appears to be no error in the order passed by the Tribunal confirming the findings of the original authority as well as the Commissioner (Appeals) on levy of penalty under Section 114 (i) of the Customs Act. Involvement of the appellant in the attempted export by way of mis-declaration contrary to prohibition imposed by law - Held that - all the authorities have considered the material evidences available on record, including the statements and have given a clear finding that the appellant was actively involved in the improper and illegal attempt to export goods by way of mis-declaration contrary to prohibition imposed by law and, therefore, this Court sees no reason to differ with the findings of the authorities below. The finding on guilt of the appellant on the basis of the materials available on record is uniform in all proceedings below. The appellate court is not inclined to reappreciate the evidence unless it is shown that the impugned order is perverse, arbitrary and against the well established legal principles. There is no sound legal principle that appellant relies upon to interfere with the impugned order. The issues raised by the appellant in the present appeal are purely questions of fact and this Court finds no question of law, much less substantial questions of law, arising for consideration in this appeal. - Decided against assesse.

Summary

Issues Involved:
1. Whether the Tribunal was right in concluding that the appellant is liable for penalty under Section 114(i) of the Customs Act in the absence of any tangible evidence.
2. Whether the Tribunal was justified in confirming the penalty under Section 114(i) of the Customs Act while dropping the penalty under Section 114-AA of the Customs Act.

Issue-wise Detailed Analysis:

1. Liability for Penalty under Section 114(i) of the Customs Act:
The appellant challenged the Tribunal's decision confirming the penalty under Section 114(i) of the Customs Act. The case involved Sharmi Exim Co., which filed a shipping bill for exporting 'Industrial Salt Chemical Grade (Sodium Chloride)'. However, upon investigation by the Docks Intelligence Unit (DIU), it was found that the goods were actually Muriate of Potash, a restricted item. Statements from various individuals, including the appellant, were recorded, revealing that the appellant was involved in the misdeclaration and attempted illegal export. The adjudicating authority concluded that the appellant was the mastermind behind the attempted illegal export, leading to the imposition of penalties. The Commissioner (Appeals) and the Tribunal upheld this decision, confirming the appellant's active involvement and liability under Section 114(i) of the Customs Act.

2. Justification for Confirming Penalty under Section 114(i) while Dropping Penalty under Section 114-AA:
The appellant argued that the Tribunal's decision to drop the penalty under Section 114-AA of the Customs Act while confirming the penalty under Section 114(i) was contradictory. Section 114(i) deals with penalties for attempts to export goods improperly, while Section 114-AA addresses penalties for using false and incorrect materials. The Tribunal upheld the penalty under Section 114(i) based on substantial evidence, including statements from various individuals and the appellant's involvement in sourcing bogus invoices and facilitating the illegal export. The Tribunal's decision to set aside the penalty under Section 114-AA was not challenged by the Revenue, and the focus remained on the appellant's liability under Section 114(i). The court found no error in the Tribunal's decision, concluding that the appellant's complicity in the attempted illegal export was clearly established.

Conclusion:
The court dismissed the appeal, affirming the Tribunal's decision to uphold the penalty under Section 114(i) of the Customs Act. The appellant's involvement in the attempted illegal export was substantiated by clear and categorical evidence, and the court found no substantial questions of law arising for consideration. The appeal was dismissed with no order as to costs.