2016 (9) TMI 73 - AT - Customs

Imposition of penalty lenient consideration on the quantum of penalty IE code mis-declared imports rejection of declared value Held that - racket of smugglers abused the IE code granted by DGFT and also mis-declared the goods and upon detection of the mis-declaration they have vanished. When statements were recorded from different importers, the authority also found that benami transactions were made and some name lenders operated the action. The ill-gots were parked to the total detriment of the customs no grant of relief appeal rejected decided against appellant.

Summary

Issues: Appeal for leniency on penalty imposed by adjudicating Commissioner

The judgment delivered by the Appellate Tribunal CESTAT CHENNAI involved the issue of considering leniency on the quantum of penalty imposed by the adjudicating Commissioner. The appellant sought relief regarding the penalty, while the Revenue argued against granting any leniency based on the appellant's involvement in mis-declared imports causing significant damage to Revenue.

Analysis:

The Revenue contended that the appellant played a crucial role in lending his Importer-Exporter Code (IE Code) for mis-declared imports, leading to the rejection of declared values, confiscation of goods, and disappearance of importers. Importers did not cooperate with the authorities or come forward for clearance of the goods, creating a situation where leniency to the appellant would benefit the bogus importers wanted by the Directorate of Revenue Intelligence (DRI).

The learned Additional Commissioner (AR) presented verifiable evidence, starting from the investigation process conducted by the DRI. The order highlighted the smuggling racket's modus operandi, involving abuse of IE codes granted by the Directorate General of Foreign Trade (DGFT), misdeclaration of goods, and subsequent disappearance upon detection. Statements from various importers revealed benami transactions and the operation of name lenders, resulting in significant losses to customs revenue. Considering these material evidences, the Tribunal concluded that granting relief to the appellant was not desirable, leading to the rejection of both appeals.

In the final order, the Tribunal emphasized the detailed examination of the smuggling operation, the involvement of the appellant in lending his IE Code for mis-declared imports, and the detrimental impact on customs revenue due to the illicit activities of the smuggling racket. The judgment underscored the importance of upholding the integrity of customs procedures and penalizing those involved in fraudulent practices, ultimately denying the appellant's appeal for leniency on the penalty imposed by the adjudicating Commissioner.