2016 (9) TMI 219 - AT - Customs

Demand of amount availed as drawback - Fraudulent claim of drawback mis-delaration of goods goods shipped to non-existent consignees Held that - Under the drawback provision it is not provided that the demand of drawback can be made jointly from various persons. Therefore in our view it is necessary for the adjudicating authority to decide who is actually liable for return of drawback availed. If at all the drawback is recoverable from various persons in such case the adjudicating authority must specify the amount of drawback to be recovered from each individual matter remanded back to original authority for fresh adjudication of person responsible and the amount of drawback appeal disposed off decide in favor of appellant.

Summary

Issues:
1. Alleged fraudulent availment of drawback by non-existent and fictitious firms.
2. Joint imposition of penalty on multiple persons and firms without specifying individual liability.

Issue 1: Alleged fraudulent availment of drawback by non-existent and fictitious firms:
The case involves appeals arising from an order passed by the Commissioner of Central Excise (Adjudication) regarding the mis-declaration of quantity and export of goods by non-existent firms, M/s. Unique Impex and M/s. Global Art. These firms exported goods to non-existent consignees, did not receive export proceeds in India, and fraudulently claimed drawbacks. The adjudicating authority held the exported goods liable for confiscation under the Customs Act, 1962, and imposed penalties and fines on various individuals and firms involved in the fraudulent activities. The appellants argued that the demand for drawback was jointly made from multiple persons and firms, making the order unsustainable. They emphasized the need for specific demands and individual liabilities. The Tribunal observed that the issue primarily focused on the fraudulent availment of drawback. However, it noted that the adjudicating authority failed to specify the amount of drawback recoverable from each individual, leading to ambiguity regarding individual liabilities. Therefore, the matter was remanded for a fresh adjudication order to determine the specific liability of each person involved in the fraudulent activities.

Issue 2: Joint imposition of penalty on multiple persons and firms without specifying individual liability:
The order passed by the adjudicating authority imposed penalties and fines on various individuals and firms collectively, without specifying the amount recoverable from each individual. The Tribunal highlighted that under drawback provisions, demands should be specific and individual liabilities must be determined. The lack of clarity in the order regarding individual liabilities necessitated a remand to the adjudicating authority for a fresh de novo adjudication order. The Tribunal emphasized the importance of specifying the amount of drawback recoverable from each person involved in the fraudulent activities to ensure a fair and accurate assessment of liabilities. Additionally, the Tribunal disposed of the appeals by remanding them to the original adjudicating authority for a fresh determination of individual liabilities, except for an appeal that stood abated due to the demise of the appellant.

In conclusion, the judgment addressed the issues of alleged fraudulent availment of drawback by non-existent firms and the joint imposition of penalties without specifying individual liabilities. The Tribunal emphasized the need for clarity in determining individual liabilities and remanded the case for a fresh adjudication order to ensure a fair assessment of liabilities in accordance with the Customs Act, 1962.