2017 (7) TMI 115 - AT - Customs

DEPB benefit - unjust enrichment - Held that - penalties were imposable under law on these respondents has been based on the evidence on record - Considering that the propositions and submissions of Revenue carry weight we hold that there is basis for consideration of imposition of penalty. Accordingly learned adjudicating authority is directed to issue notice to the respondents for appearance and to lead defence if any against imposition of penalty - appeal allowed by way of remand.

Summary

Issues:
1. Dismissal of appeal for non-compliance with pre-deposit order.
2. Allegations of fraud against multiple respondents for claiming DEPB fraudulently.
3. Imposition of penalty under Section 114 of the Customs Act, 1962.

Issue 1: Dismissal of appeal for non-compliance with pre-deposit order:
The appeal of Alpha Exports was dismissed for non-compliance with the pre-deposit order passed by the Tribunal. The Revenue contended that the entire demand against Alpha Exports was realizable due to this dismissal, which was supported by the record. The Tribunal agreed with this proposition, leading to the confirmation of the adjudication against Alpha Exports.

Issue 2: Allegations of fraud against multiple respondents for claiming DEPB fraudulently:
The Revenue alleged that four respondents were involved in committing fraud against the Customs department by fraudulently claiming DEPB benefits. The respondents were accused of deliberately misdeclaring the weight and value of goods in shipping bills, rendering the goods liable for confiscation under the Customs Act, 1962. The Revenue argued that all appeals related to these respondents should be heard together due to a common cause and adjudication order.

Issue 3: Imposition of penalty under Section 114 of the Customs Act, 1962:
The adjudicating authority found that three respondents, namely Vishnu Kumar Gupta, Vishwas Anant Satam, and Manoj Arora, were liable for penalty under Section 114 for their role in fraudulent exports. Despite the show cause notice proposing penalties, the authority did not impose penalties on these respondents. The Tribunal, after considering the gravity of the matter and evidence on record, directed the adjudicating authority to issue notices to the respondents for their defense against the imposition of penalties. The Tribunal emphasized the importance of imposing penalties to deter further fraudulent activities against Customs.

In conclusion, the appeal of Revenue was remanded to the adjudicating authority concerning the imposition of penalties on the three respondents involved in the fraudulent activities. The Tribunal stressed the need for strict penalties to prevent future fraudulent acts against Customs and directed the authority to consider the investigation results and adjudication findings for the imposition of appropriate penalties.