2017 (11) TMI 1792 - AT - Customs

Illegal export to Nepal - evasion of tax - confiscation - redemption fine - penalties - Held that - The fact of illegal export of the Indian made goods, stands established from the records and in fact is not being denied. The only explanation coming forward is that the said illegal route was adopted by the appellants so as to avoid Nepal tax. Though there is no tax applicable in India sought to be evaded by such illegal export, but the fact remains that the Indian clothes were being exported through an illegal route, thus, justifying their confiscation - confiscation upheld - redemption fine reduced from ₹ 8.00 lakhs to ₹ 4.00 lakhs on the ground that there was no evasion of Customs Duty. Seizure of vehicle - Held that - There is no evidence on record to show that the owner or driver of the said vehicle, knew the mala fide design of the exporter, but the vehicle having found to be carrying goods, which were actually exported through an illegal route, is liable to confiscation - redemption fine reduced. Penalty on Shri Dhanush Shah - Held that - He was carrier of the goods on behalf of various persons of Nepal and admittedly was involved in illegal export of the goods, thus, justifying imposition of penalty upon him - Keeping in view that he himself was not exporter, penalty reduced from ₹ 1.00 lakh to ₹ 50,000/-. Penalties imposed upon the other persons - Held that - They are either driver/owner of the vehicle or the proprietor of the shops from whom the goods stands purchased by Shri Dhanush Shah, there is no evidence on record to show that the said persons were in any way connected with the illegal export or knew that the goods purchased from their shops is going to be illegally exported - the imposition of penalty on either of them, is neither justified nor warranted - penalty set aside. Appeal disposed off.

Summary

Issues: Illegal export of goods to Nepal, Confiscation of goods and vehicle, Redemption fine, Imposition of penalty

In the judgment delivered by the Appellate Tribunal CESTAT KOLKATA, the case involved the interception of a vehicle carrying Indian clothes for illegal export to Nepal through an unauthorized route. The investigation revealed that the goods were being exported to evade duty levied by the Nepal Government. The consignment was confiscated, and redemption fines were imposed on the goods and the vehicle. Penalties were also imposed on individuals involved in the illegal export.

The Tribunal found that the illegal export of Indian clothes to Nepal was established and not denied by the appellants. While acknowledging that there was no Customs duty evasion in India, the Tribunal upheld the confiscation of the goods but reduced the redemption fine from ?8.00 lakhs to ?4.00 lakhs.

Regarding the seizure of the vehicle, the Tribunal noted the lack of evidence showing the owner or driver's knowledge of the illegal export. Despite this, the vehicle was liable for confiscation due to its involvement in the illegal export. Considering the illiteracy of the owner or driver, the redemption fine was reduced from ?1.25 lakhs to ?25,000.

In the case of the carrier, Shri Dhanush Shah, who admitted involvement in the illegal export, a penalty was imposed. However, considering that he was not the exporter himself, the penalty was reduced from ?1.00 lakh to ?50,000.

For other individuals, such as the driver/owner of the vehicle and the shop proprietors, no evidence connected them to the illegal export. Therefore, the penalties imposed on them were set aside as there was no justification for their imposition.

Ultimately, the Tribunal disposed of all the appeals by confirming the confiscation of goods with reduced fines, reducing the vehicle's redemption fine, and lowering the penalty imposed on the carrier while setting aside penalties on other individuals not connected to the illegal export.