2017 (2) TMI 935 - AT - Central Excise

Smuggling - Red Sanders - penalty - Held that - it can be seen that while the charges (i) of show-cause notice is not established, in so far as the appellant was not aware of the content of the containers, the charges (iii) that he took delivery of the container containing Red Sanders also cannot be held against him as his knowledge about the identity of the containers has not been established. So far the charges (ii) and (iv) are concerned, it is seen that he has admitted that he was aware that there was some mis-declaration happening and he had assisted in the process by giving false identity. Penalty of ₹ 5 lakhs imposed upon the appellant is excessive - penalty of ₹ 5 lakhs is reduced to ₹ 2 lakhs - appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
Illegal export of Red Sanders, imposition of penalty, appellant's knowledge of the content of the export container.

Analysis:
The appeal before the Tribunal was filed by Shri Subhash Dhuriya regarding a case of illegal export of Red Sanders. The Directorate of Revenue Intelligence (DRI) had booked the case, issuing notices to various individuals, including the appellant. A penalty of ?5 lakhs was imposed on the appellant in the Order-in-Original, which was upheld by the Commissioner (Appeals), leading the appellant to approach the Tribunal challenging the decision.

The appellant's counsel argued that the appellant was unaware of the presence of Red Sanders in the export container, as he was only responsible for arranging the container and had no knowledge of its contents. The counsel emphasized that none of the appellant's statements indicated awareness of the Red Sanders. The only identification of the appellant's involvement came from the driver, who stated that the appellant received a loaded container at the docks. The argument was centered on the lack of evidence proving the appellant's knowledge of the container's contents.

On the other hand, the Assistant Commissioner (AR) relied on the impugned order, contending that the appellant had admitted to being aware of irregularities in the export consignment, even if he did not admit to knowing the container's content. It was highlighted that the appellant received higher-than-normal payment for his services, indicating his involvement in the illegal activity.

Upon reviewing the contentions, the Tribunal found that the appellant's statements did not establish his awareness of the Red Sanders in the container. While the appellant admitted to being aware of mis-declaration and receiving higher payment due to the associated risks, his knowledge of the container's contents was not proven. Consequently, the Tribunal concluded that the penalty of ?5 lakhs was excessive and reduced it to ?2 lakhs, partially allowing the appeal.

In summary, the Tribunal's decision focused on the lack of evidence establishing the appellant's knowledge of the illegal contents of the export container, leading to a reduction in the penalty imposed on the appellant due to the excessive nature of the initial penalty amount.