2023 (5) TMI 1267 - AT - Customs

Penalty u/s 114(i) and 114(AA) of CA - Smuggling - fraudulent export of red sander under the guise of sanitary ware - Appellant submits that in the main offence of fraudulent export of prohibited red sanders the appellant had no knowledge his job was to only arrange the container - HELD THAT - It is found that the appellant was absolutely unaware about the concealment of prohibited goods in the container for export. His job is to provide the empty container to the exporter. Therefore as admitted by the Learned Commissioner (Appeals) he had no ulterior motive or knowledge for any act of commission or omission therefore merely because he did not inform after knowing about the concealment penalty cannot be imposed for the reason that he came to know about the illegal export of red sander before the custom has already intercepted the containers at the port of export and the containers were put on the check packages. In this fact there is no question or need to inform the authorities as neither he was aware of the offence nor he was involved therein. From the finding the Learned Commissioner appeal has clearly held that the appellant had no knowledge about any of the act which make the goods liable to confiscation. Despite his clear finding he upheld the reduced penalty. There are no reason or role of the appellant to attract penalties under Section 114 (i) and Section 114 (AA) - penalties set aside - appeal allowed.

Summary

Issues involved:
Fraudulent export of red sanders under the guise of sanitary ware, imposition of penalties under Section 114(i) and 114(AA) of the Customs Act, 1962, reduction of penalties by the Commissioner (Appeals), appeal filed by the appellant challenging the penalties.

Summary:

Issue 1: Fraudulent export of red sanders and imposition of penalties
The appellant was involved in providing containers to exporters for stuffing and export of washbasins. The containers were initially loaded with washbasins, but red sanders were replaced enroute. The appellant was penalized under Section 114(i) and 114(AA) for his alleged involvement in the fraudulent export. The Commissioner (Appeals) reduced the penalties, citing lack of knowledge or involvement on the part of the appellant in the illegal activity.

Issue 2: Appeal against the penalties
The appellant's representative argued that the appellant had no knowledge of the fraudulent export of red sanders and his role was limited to arranging containers. It was contended that the penalties were imposed based on the appellant's failure to inform authorities about the illegal activity, despite the appellant's lack of awareness. The Commissioner (Appeals) acknowledged the appellant's lack of ulterior motive or knowledge, yet upheld the reduced penalties.

Key Findings:
Upon careful consideration, the tribunal found that the appellant was completely unaware of the concealment of prohibited goods in the container. The appellant's role was limited to providing empty containers, and he had no involvement in the illegal export activity. The tribunal agreed with the Commissioner (Appeals) that the penalties under Section 114(i) and 114(AA) should be reduced to meet the ends of justice. Ultimately, the penalties were set aside, and the appeal was allowed.

Conclusion:
The tribunal ruled in favor of the appellant, emphasizing his lack of knowledge or involvement in the fraudulent export scheme. The penalties imposed under Section 114(i) and 114(AA) were deemed unwarranted, leading to their reversal.