2017 (4) TMI 781 - AT - Customs

Imposition of penalties u/s 114(iii) of the CA, 1962 - valuation - T-Shirts and ladies night gowns - Revenue s case is that there was surreptitious clearance for exports and the three individuals, who are respondents in this appeal, were responsible officers of the customs department and they have allowed the consignments to be cleared without conducting proper checking - Held that - There is nothing in the statements which indicates that these officers were asked questions about various shipping bills No.5227082, 5227084 and 5227085. It is noticed from the SCN dated 10th June 2003 that the said SCN did not seek any reply from these officers nor they were charged for imposition of penalties u/s 114 of the CA, 1962. If the officers who are respondents herein had not examined the cargo are not associated with the said shipping bills no. 5227082, 5227084 and 5227085, the adjudicating authority was correct in her conclusion that no penalty can be imposed on them u/s 114(iii) CA, 1962 - appeal rejected - decided against Revenue.

Summary

Issues:
Non-imposition of penalties on three individuals for aiding and abetting in surreptitious clearance of export goods.

Analysis:
The appeal was filed by the Revenue against an Order-in-Original passed by the Commissioner of Customs, Mumbai, regarding the non-imposition of penalties on three individuals who were officers of the Customs department. The show cause notice alleged that a company had overvalued goods in shipping bills for export. The individuals were directed to show cause why penalties should not be imposed on them for aiding in the clearance of goods covered under specific shipping bills. The adjudicating authority confirmed the allegations against the company but dropped the proceedings against the three individuals.

The Revenue contended that the three individuals should be penalized for their involvement. The Authorized Representative highlighted that the original show cause notice and subsequent addendum clearly implicated the officers for allowing the consignments to be cleared without proper checking. However, upon reviewing the records and submissions, the Tribunal found discrepancies in the show cause notice. The notice did not seek any explanation from the officers regarding the specific shipping bills in question, and they were not charged for penalties under the Customs Act.

The addendum issued later specifically called upon the officers to explain their conduct regarding the mentioned shipping bills. The adjudicating authority noted that the officers had not examined the goods covered under those bills, leading to the conclusion that no penalty could be imposed on them for non-examination. The Tribunal upheld this decision, stating that if the officers were not associated with the specific shipping bills in question, they could not be penalized under the Customs Act. The Revenue did not challenge these findings, and the Tribunal deemed the impugned order as correct and legally sound.

In conclusion, the appeal was rejected based on the factual findings and legal analysis presented in the case.