2019 (3) TMI 1742 - AT - Customs

Imposition of penalty - Duty Drawback - allegation of mis-declaration in the description as well as quantity of the export items, allegedly for the purpose of claiming undue higher drawback - appellant is co-accused - first appellant is free of any charge - HELD THAT - The first appellant need not have any grievance since there is no demand of either penalty or fine against it. On being pointed out, Ld. Advocate concedes that there is no demand in respect of the first appellant. This being so, the first appellant is not entitled to any relief since it is not aggrieved nor is there any demand against it. Hence, no order is being passed against an imaginary demand which is not there on paper, in respect of Appeal No. C/40145/2019. It is trite law that an abettor cannot be penalized more than the Principal offender. In the present case, admittedly, the first appellant is the Principal offender, neither is there any proposal in the SCN for imposition of penalty as against the said company nor did the Adjudicating Authority passing the Order-in-Original or the de novo Order, impose any penalty on the Principal. Therefore, the company not having been penalized would ipso facto mean that guilt in the first place is not proved beyond reasonable doubt even against the principal offender. In these circumstances, the co-noticees or the co-offenders cannot be worse off than the principal offender and therefore, the penalties imposed against them is unsustainable. In any case, it is an admitted position of law that a co-accused cannot be worse off than the prime accused. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Alleged mis-declaration in export items for higher drawback
- Confiscation and penalty imposition on involved parties
- Appeal against penalty imposition
- Principle of penalty imposition on abettor compared to principal offender

Analysis:
The case involved allegations of mis-declaration in the export items to claim higher drawback, leading to the detention and subsequent seizure of goods by the Dock Intelligence Unit. A Show Cause Notice was issued proposing confiscation and penalty imposition on multiple individuals associated with the exporting company. The original authority confirmed penalties under the Customs Act, but did not pass any order on the seized goods due to re-export permission. The matter was appealed, and the Tribunal remanded it for determining the redemption fine. In the de novo adjudication, the Commissioner of Customs confiscated the goods and imposed fines, reducing penalties for some individuals while upholding them for others.

The Tribunal heard arguments regarding the penalty imposition on the involved individuals. It was noted that the first appellant had no demand against it, and hence, no relief was granted. However, the other appellants were aggrieved by the penalties imposed on them. The legal principle was invoked that an abettor cannot be penalized more than the principal offender. Since the first appellant, considered the principal offender, was not penalized, it indicated a lack of proof of guilt against them. Therefore, penalizing the co-noticees or co-offenders was deemed unsustainable. The Tribunal emphasized that a co-accused cannot be in a worse position than the prime accused. The factual evidence indicated that the goods in question were exported to a different buyer at a lower price, clarifying any doubts regarding the export process.

In conclusion, the Tribunal allowed the appeals against the penalties imposed on the involved individuals, citing the lack of evidence against the principal offender and the unsustainable nature of penalizing the co-noticees. The decision granted consequential benefits to the appellants as per the law.