2015 (3) TMI 904 - HC - Customs

Penalty u/s 114 - Non-disclosure of the attempted export of sandalwood by others to the Department - Whether Appellate Tribunal correct in setting aside the penalty imposed by the Commissioner of Customs when admittedly the respondent has omitted to do an act or at least abetted in such omission under Section 114 of the Customs Act and as such liable to pay penalty under Section 114 - Held that - evidence on record and the statements of various persons clearly goes to show the complicity of the respondent in the act, which render the goods liable for confiscation under Section 113 of the Customs Act. He also abetted in doing such acts, which render the goods liable for confiscation. That finding of the Commissioner is not in dispute. The Tribunal on an erroneous interpretation of Section113 read with 114 of the Customs Act has come to hold that no penalty is leviable. - where the findings of the Commissioner, on fact, supported by documents and the statement of individuals, clearly established the act of the respondent, which render the goods liable for confiscation under Section 113. The respondent is one among the culprits, who attempted to export sandalwood in the guise of roofing tiles. Since the respondent had knowledge about the sandalwood being part of the consignment of roofing tiles, but did not intimate the same to the customs Authorities, he is liable for penalty. - Tribunal has come to the erroneous conclusion that the act of the respondent in not disclosing the information is not liable for confiscation. - Decided in favour of Revenue.

Summary

Issues Involved:
1. Appeal against the order of the Customs, Excise and Service Tax Appellate Tribunal regarding penalty imposition under Section 114 of the Customs Act.

Detailed Analysis:
1. The case involved an appeal filed by the Revenue against the Tribunal's decision setting aside a penalty imposed by the Commissioner of Customs under Section 114 of the Customs Act. The substantial question of law was whether the respondent, who was involved in attempting to export prohibited goods, was liable for penalty under Section 114.

2. The facts revealed that the respondent was part of a scheme to export sandalwood in the guise of roofing tiles, which was prohibited under various laws. The Commissioner of Customs had ordered confiscation of the sandalwood and roofing tiles and imposed penalties on several individuals, including the respondent.

3. The Commissioner found that the respondent had knowledge of the sandalwood being part of the consignment but did not disclose this information to the Customs authorities. The Commissioner held that the respondent's omission to act as required under the Customs Act indicated involvement in smuggling, justifying the penalty under Section 114.

4. However, the Tribunal overturned the Commissioner's decision, stating that the respondent's omission did not render the goods liable for confiscation under Section 113 of the Customs Act. The Tribunal analyzed the provisions of Section 114 and concluded that the essential requirement for imposing a penalty was not fulfilled in the respondent's case.

5. The High Court, upon review, disagreed with the Tribunal's interpretation. It noted that the evidence and statements clearly established the respondent's complicity in attempting to export prohibited goods, making him liable for penalty under Section 114. The High Court found that the Tribunal's conclusion was erroneous and reinstated the Commissioner's order, allowing the Revenue's appeal.

6. Ultimately, the High Court held that the respondent's failure to disclose critical information about the attempted export of sandalwood, despite being aware of it, justified the penalty under Section 114. The Court set aside the Tribunal's decision, ruling in favor of the Revenue and restoring the Commissioner's adjudication order. The Civil Miscellaneous Appeal was allowed with no costs incurred.