2016 (6) TMI 810 - AT - Customs

Levy of penalty for lending of the IEC - Smuggling of prohibited goods from India - export of incense raw materials - Held that - Seizure of the goods and attempt to export the prohibited goods of the description aforesaid remained unrebutted. Appellant was the registered holder of the IEC and such IEC was used in attempted export was not controverted. Lending of IEC was also an admitted fact and not denied. Appellant was not expected to lend the same or make any abuse thereof. Apart from lending the IEC which was used to defraud customs by the attempted export, appellant gave his rubber stamp as well as letter head to Mohammed and Sabu to prepare export documents. That caused peril to the interest of Revenue. Appellant acted in defiance of law being aware that his IEC may not be free from abuse. Therefore his plea of innocence fails - Levy of penalty confirmed.

Summary

Issues involved:
1. Attempted export of prohibited goods in violation of EXIM Policy 2009-2014.
2. Mis-declaration of goods in shipping bill.
3. Misuse of Importer Exporter Code (IEC) for fraudulent export.
4. Allegations of abetment in smuggling prohibited goods.
5. Imposition of penalty and absolute confiscation of goods.

Analysis:

Issue 1: Attempted export of prohibited goods
The appellant, proprietor of M/s. S.J. International, attempted to export prohibited goods (wooden powder/dust, wooden flakes) in violation of the EXIM Policy 2009-2014. Customs confiscated the goods and imposed a penalty of Rs. One lakh on the appellant for smuggling.

Issue 2: Mis-declaration of goods
The consignment, declared as incense raw materials for export to Singapore, was found to contain prohibited goods upon physical examination. The mis-declaration of goods in the shipping bill led to further investigation by Customs Intelligence Unit.

Issue 3: Misuse of Importer Exporter Code (IEC)
The appellant admitted to lending his IEC to another party for export purposes in exchange for monetary consideration. He claimed ignorance about the contents of the consignment and stated that the export documents were prepared by a Customs House Agent arranged by the party using his IEC.

Issue 4: Allegations of abetment in smuggling
Investigations revealed that the appellant's IEC was misused by another party to export the prohibited goods. The appellant provided his rubber stamp and letterhead for preparing export documents, knowing that his IEC was being used fraudulently. The appellant's plea of innocence was rejected, and he was held accountable as an abettor in the smuggling attempt.

Issue 5: Imposition of penalty and confiscation
The adjudicating authority found the appellant guilty of abetting the export of prohibited goods and ordered the absolute confiscation of the goods along with a penalty of Rs. One lakh. The Tribunal upheld the penalty, considering the value of the confiscated goods, the fraudulent activity, and the appellant's role as an abettor in the smuggling attempt.

In conclusion, the Tribunal dismissed the appeal and confirmed the penalty imposed on the appellant, emphasizing that the appellant's actions were in defiance of the law and caused harm to customs revenue. The decision was based on the evidence of misuse of the IEC, mis-declaration of goods, and the appellant's involvement in facilitating the fraudulent export of prohibited goods.