2016 (7) TMI 413 - AT - Customs

Levy of penalty for abetment - Provisions of Section 112(a) of Customs Act 1962 - import of goods without payment of duty - Held that - It is only Shri Charley who gave the statement to the effect that the appellant Shri Sunny was knowing about the imports and has received non-duty paid goods. Admittedly, such statement of Shri Charley being the statement of co-accused cannot be admitted for evidence without any corroboration to that effect. This law is well settled and does not require support of any precedent decision. There being no other evidence on record to show that the non-duty paid clearances from the port area by Shri Charley were with the active knowledge, aiding and abetting of offence by Shri C.K. Sunny, imposition of penalty in terms of Section 112(a) on the finding that he did not make any efforts to obtain the bills of entry in respect of imported consignment cannot be upheld. - No penalty - Decided in favor of the appellant.

Summary

Issues: Penalty under Section 112(a) of Customs Act 1962 imposed on the appellant for purchasing and selling CFLs without payment of duty.

Analysis:
1. Imposition of Penalty: The appellant, Shri C.K. Sunny, was penalized &8377; 50,000 under Section 112(a) of the Customs Act 1962 for his involvement in purchasing and selling CFLs without payment of duty. The impugned order highlighted that the appellant admitted to purchasing CFLs clandestinely removed from the Port without duty payment, subsequently selling them to footpath vendors without proper documentation. The tribunal noted that the dealings were done with the intention of evading duty and maximizing profits, rendering the goods liable for confiscation as per Section 112(a).

2. Lack of Evidence: Despite the appellant's association with the importer, Shri K.T. Charley, who cleared the goods without duty payment, the tribunal found a lack of concrete evidence implicating the appellant in the illegal imports. While the appellant had placed an order for the CFLs, statements from Charley alleging the appellant's knowledge and receipt of non-duty paid goods were considered insufficient without corroborating evidence. The tribunal emphasized the legal principle that statements of co-accused require corroboration and highlighted the absence of any other evidence linking the appellant to the illegal activities.

3. Benefit of Doubt: The tribunal, after careful consideration, concluded that there was no substantial evidence to prove the appellant's active involvement in the duty evasion scheme. The absence of a legal requirement for the purchaser to obtain bills of entry before purchasing goods further supported the tribunal's decision to extend the benefit of doubt to the appellant. Consequently, the tribunal set aside the penalty imposed on the appellant, emphasizing the lack of justifiable reasons to uphold the penalty under Section 112(a) of the Customs Act 1962.

In conclusion, the appellate tribunal, comprising Smt. Archana Wadhwa and Shri Ashok K. Arya, overturned the penalty imposed on the appellant, Shri C.K. Sunny, for his alleged role in purchasing and selling CFLs without payment of duty. The tribunal's decision was based on the insufficiency of evidence linking the appellant to the illegal imports, the legal principle regarding statements of co-accused, and the absence of a legal obligation for the purchaser to obtain bills of entry before transactions. The tribunal's ruling exemplified a meticulous analysis of the facts and legal provisions, ultimately leading to the appellant's successful appeal against the penalty.