2015 (10) TMI 2388 - AT - Customs

Penalty under Section 112 of Customs Act, 1962 - Polyester yarn imported - Goods seized under Section 123 - Appellant contends that goods were purchased from open market and believed to be duty paid and since he is neither a Central Excise assessee nor a registered dealer, he did not maintain prescribed documents - Revenue contends that goods were imported availing the duty benefit under Export Promotion Scheme thus escaped customs duty - Goods purchased without invoices thus penalty imposed is warranted - Held That - Role of appellant is limited to buying the seized goods from Shri Jitendra Shah, Broker without invoices, taking a lenient view penalty imposed upon appellant reduced from ₹ One lakh to ₹ 25,000/- - Decided in favour of appellant.

Summary

Issues:
Penalty imposition under Section 112 of the Customs Act, 1962 on the Director of a company for purchasing goods without valid documents and invoices leading to duty evasion.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad involves the imposition of a penalty under Section 112 of the Customs Act, 1962 on the Director of a company who purchased goods without valid documents and invoices, resulting in duty evasion. The Original Adjudicating Authority had imposed a penalty of Rs. 2 Lakh on the Director, which was later reduced to Rs. 1 Lakh by the Commissioner (Appeals). The Director appealed against this decision, leading to the current hearing before the Tribunal.

During the hearing, the appellant's counsel argued that the goods purchased were not specified under Section 123 of the Act and that the appellant believed the goods were duty paid, thus had no intention to evade duty. The appellant was not a Central Excise assessee or a registered dealer, and therefore, not required to maintain specific documents. The counsel cited precedents to support the appellant's case.

On the other hand, the Revenue's representative contended that the goods were purchased from a broker who facilitated duty evasion under the Export Promotion Scheme. The broker accepted the wrongdoing and paid the duty and penalty. The appellant's involvement in purchasing goods without proper documentation and payment in cash was highlighted, justifying the penalty imposition. Precedents were cited to strengthen the Revenue's argument.

After considering both sides' submissions and reviewing the records, the Tribunal found that while the appellant did not actively connive in evading customs duty, their readiness to buy goods without proper documents facilitated illegal activities by the broker. The appellant's involvement led to the confiscation of goods and penalties imposed on the broker. Consequently, the Tribunal held the appellant liable for penal action under Section 112 of the Customs Act, 1962.

However, considering the circumstances and the appellant's role, the Tribunal decided to reduce the penalty from Rs. 1 Lakh to Rs. 25,000. The judgment emphasizes the appellant's liability due to dealing with confiscated goods and acknowledges the mitigating factors in reducing the penalty amount. The appeal was disposed of with the revised penalty amount specified in the order.