2006 (11) TMI 103 - AT - Customs

Appellant knowingly made, signed and used the forged Bank Realization Certificates for obtaining DEPB license Goods liable to confiscation and hence penalty imposable

Summary

Issues:
- Challenge to penalty imposed under Section 114 of the Customs Act, 1962 for fraudulently obtaining DEPB scrips.
- Liability of the sole proprietor for penalties imposed on the concern.
- Contravention of provisions of Foreign Exchange Regulation Act, 1973.
- Validity of penalties imposed on the exporter and the sole proprietor.

Analysis:
The appeal before the Appellate Tribunal challenged penalties imposed under Section 114 of the Customs Act, 1962 for fraudulently obtaining DEPB scrips. The appellant, a sole proprietor, admitted to fraudulently obtaining DEPB scrips amounting to Rs. 17,11,609 based on forged Bank Realization Certificates. It was established that the exporter violated provisions of the Foreign Exchange Regulation Act, 1973 by submitting forged certificates and availing DEPB scrips. The Tribunal found the exporter liable for penal action due to contravention of regulations. The sole proprietor, who was the managing partner at the time of the offense, was held responsible for the penalties imposed on the concern.

The evidence on record confirmed that the exporter had exported goods in violation of regulations, leading to penalties under the Customs Act. The Tribunal upheld the penalties imposed on the exporter, now a sole proprietorship, while setting aside the separate penalty on the sole proprietor. It was determined that the sole proprietor, as the former partner of the exporter firm, was liable to pay the penalty imposed on the concern. The Tribunal concluded that the penalties were justified based on the fraudulent practices employed to obtain DEPB scrips.

In summary, the judgment upheld penalties imposed on the exporter for contravention of regulations under the Foreign Exchange Regulation Act, 1973. The sole proprietor, who admitted to fraudulent activities, was held liable for the penalties imposed on the concern. The Tribunal differentiated between the penalties imposed on the exporter and the sole proprietor, ultimately confirming the penalty on the concern while setting aside the separate penalty on the sole proprietor. The appeal was disposed of accordingly.