2008 (3) TMI 226 - AT - Customs

Penalty appellant lend his name to some persons for importing of goods - Smuggling of Vitamin C in the garb of Slack Wax done by those persons who are using the appellant s name - appellants submits that he were not aware that smuggling is taking place held that appellant should have verified the antecedents of such person before lending the name hence penalty is justified but reduced penalty on CHA is correct but reduced as he was not aware of smuggling

Summary

Issues:
1. Imposition of penalties under the Customs Act, 1962 for smuggling Vitamin 'C' in the garb of Slack Wax.
2. Appeal against penalties imposed on the appellant company and an individual involved in the smuggling racket.

Analysis:
1. The case involved the smuggling of Vitamin 'C' in the guise of Slack Wax by the appellant company. The Customs Authorities issued a show cause notice for penalties under various sections of the Customs Act, 1962. The adjudicating authority ordered the confiscation of the smuggled goods and imposed penalties on individuals involved in the smuggling racket. The penalties were based on the roles played by each person in the illegal activity, with specific amounts levied on each individual. The appellant company and an individual were appealing against the penalties imposed on them.

2. The appellant company, M/s. Om Enterprises, claimed they were not aware of the smuggling activities and that the planning and execution were done by other individuals. The individual, Shri Sunil Jadhav, who was a Customs House Agent (CHA), also denied knowledge of the smuggling operation. The appellant's counsel argued that there was no specific evidence proving their awareness of the illegal imports. On the other hand, the Joint Commissioner of Customs contended that the complicity of the appellants in the smuggling was established beyond doubt.

3. Upon considering the submissions and reviewing the records, the Tribunal found that M/s. Om Enterprises was set up by individuals involved in illegal activities, and the appellant company's proprietor was related to the individual appealing against the penalties. The company received remuneration for lending its name for importing goods, indicating a lack of due diligence. However, it was noted that the company was unaware of the smuggling operation. Consequently, the penalty imposed on M/s. Om Enterprises was reduced due to excessive imposition.

4. Regarding the penalty on the CHA, Shri Sunil Jadhav, the Tribunal held that as a Customs clearance handler, he should have verified the antecedents of those involved in importing goods. Failing to do so and assisting in clearing the consignments made him responsible. Despite not being aware of the illegal imports, the penalty on Shri Sunil Jadhav was reduced in the interest of justice. The Tribunal upheld the modified penalties on both the appellant company and the individual involved, disposing of the appeals accordingly.