2008 (5) TMI 173 - AT - Customs

Penalty imposed on appellant on basis of statement of co-noticee that appellant has mis-declared the description of imported machinery - no other technical opinion with regard to the fact that the machinery imported were not capable of manufacturing energy saving lamps moreover, investigation has not found out how the appellant himself had gained by mis-declaration in the B/E - in the absence of the technical opinion with regard to the machinery, penalty is not sustainable

Summary

Issues:
Mis-declaration in Bills of Entry leading to penalty imposition under Section 112(a) of the Customs Act.

Analysis:
The appeal was filed against the Order-in-Original passed by the Commissioner of Customs, Bangalore, regarding the import of machinery by a 100% E.O.U. for manufacturing energy-saving florescent tubes. The appellant was penalized Rs. 50 lakhs for mis-declaration in the Bills of Entry, stating the machinery was manufactured in 1990 when they were actually from 1965. The Commissioner found the appellant actively participated in the illegal import, leading to the penalty imposition. The appellant contested these findings.

The Adjudication order extensively discussed the involvement of the appellant, Mr. Vinay Chandra, in the mis-declaration of machinery. The Commissioner relied on the statement of another individual, Mr. N.P. Choubey, who confirmed the machinery's incapability to manufacture energy-saving lamps. However, the appellant argued that his role was limited to signing the Bills of Entry and had no knowledge of the machinery's technical aspects. He highlighted his educational background and lack of industrial experience, emphasizing that he was not associated with the unit during the machinery's removal.

Upon thorough consideration, the Tribunal found insufficient evidence linking the appellant to the mis-declaration of machinery. The investigation lacked technical opinions on the machinery's capabilities and failed to establish how the appellant benefited from mis-declaration. The Tribunal noted the Commissioner's reliance on Mr. Choubey's statement, who was a co-noticee facing penalties himself. The Tribunal concluded that the penalty imposition of Rs. 50 lakhs on the appellant was unjustified and set it aside, allowing the appeal.

In summary, the judgment revolved around the mis-declaration in Bills of Entry by the appellant, leading to a penalty under the Customs Act. The Tribunal scrutinized the evidence, emphasizing the lack of proof connecting the appellant to the mis-declaration and the absence of technical opinions on the machinery's capabilities. Ultimately, the Tribunal overturned the penalty imposition, ruling in favor of the appellant due to insufficient evidence of his involvement in the mis-declaration.