2007 (1) TMI 626 - AT - Customs

Summary

Issues Involved:
1. Jurisdiction for filing appeals against certain respondents.
2. Imposition of penalty under Section 112 of the Customs Act, 1962.
3. Allegations of manipulation and abetment in obtaining advance licenses.
4. Procedural violations and principles of natural justice.
5. Evidentiary support for allegations of manipulation.
6. Remand for fresh adjudication and consideration of new evidence.

Detailed Analysis:

1. Jurisdiction for Filing Appeals Against Certain Respondents:
The Tribunal addressed the jurisdictional issue regarding appeals filed against Respondents 2 and 3. It was argued that the Commissioner lacked specific directions from the Member, CBEC, to file appeals against these respondents. The Tribunal found that treating them as "others" without specific directions was impermissible, rendering the appeals against them without jurisdiction and hence not maintainable.

2. Imposition of Penalty Under Section 112 of the Customs Act, 1962:
The Tribunal examined the Revenue's appeal confined to imposing a penalty under Section 112. It was noted that the review ordered by the Board related only to the charges in notices covered by Groups III and IV, involving imports against transferable advance licenses. The allegations and charges in Groups I and II, which related to export document manipulation, were no longer in dispute.

3. Allegations of Manipulation and Abetment in Obtaining Advance Licenses:
The Tribunal considered the charge against Respondent 1 of conspiring with exporters to fraudulently obtain advance licenses using manipulated Export Promotion (EP) copies of shipping bills. The Commissioner had dropped the conspiracy charge, and the Board's review did not challenge this but sought to invoke a charge of abetment under Section 112. The Tribunal found that since abetment was not initially charged in the show cause notice, it could not be sustained in the review order.

4. Procedural Violations and Principles of Natural Justice:
The Tribunal highlighted procedural lapses, including the absence of personal hearings and the denial of opportunities to inspect original records. It was argued that these violations contravened the principles of natural justice, necessitating a remand for fresh adjudication.

5. Evidentiary Support for Allegations of Manipulation:
The Tribunal scrutinized the evidence, including statements and hotel records, to determine the involvement of the respondents in the alleged manipulation. The Commissioner found no direct evidence implicating the CHA or its employees in tampering with the EP copies of shipping bills. The Tribunal noted that the Revenue failed to rebut these findings with credible evidence, affirming the Commissioner's decision to extend the benefit of doubt and drop penal proceedings.

6. Remand for Fresh Adjudication and Consideration of New Evidence:
The Tribunal observed that both the appellants and the department presented new facts and figures not previously considered by the lower authorities. Given the extensive new evidence and the need for a fresh examination of the issues, the Tribunal remanded the appeals of certain appellants (M/s. P.A. International, M/s. Sharan Exports, Shri Rajkumar Hasija, and Shri Ashok B. Rajani) to the Commissioner for fresh adjudication. The appeals filed by the Revenue seeking enhancement of penalties and imposition of penalties on CHAs were dismissed.

Separate Judgments:
A divergence in opinions between Member (Judicial) and Member (Technical) led to a reference to a third member. The third member concurred with the Member (Judicial), resulting in the dismissal of the Revenue's appeals and the remand of specific appellants' cases for fresh adjudication.

Majority Order:
The appeals of M/s. P.A. International, Ashok Rajani, Blend Syntec, Rajkumar Hasija, M/s. Sharan Exports, and M/s. Santosh Textile were allowed, and the appeals filed by the Revenue were dismissed.