2017 (9) TMI 682 - AT - Customs

Mis-declaration of export goods - fraudulent Drawback - case of appellant is that they never carried out any such activity and their IEC Code was used without authorization by other persons for filing the export related documents - Penalty - Held that - In the documents, the export goods were declared to be leather jacket, waist coat, shoes, skirt, pant etc., but, on examination of the goods, it was found to be old and used items of negligible or no commercial value. The goods were further found not to match with the documents - mis-declaration on the part of the Appellants with a view to claim huge amount of drawback fraudulently stands established. If the DRI authorities have not intercepted the goods prior to export, the fraudulent drawback amounts would have been received in the account of M/s Krish Exports. The investigations undertaken by DRI have established that Shri Manish Singh of M/s Tara India was the kingpin in the export fraud - The penalties imposed on M/s Krish Exports under Section 114 as well as 114AA of the Customs Act, 1962 are justified. Appeal dismissed - decided against appellant.

Summary

Issues:
Challenging levy of redemption fine and penalties for fraudulent exports.

Analysis:
The appeal was filed against the Order-in-Original passed by the Commissioner of Customs regarding fraudulent export containers. The Directorate of Revenue Intelligence (DRI) found evidence of mis-declaration in shipping bills filed by the Appellants and another entity. The goods declared for export were old and of negligible value, indicating fraudulent activity to claim drawback. The impugned order confiscated the export goods, imposed a redemption fine, denied duty drawback, and levied penalties under Sections 114 and 114AA of the Customs Act, 1962. The appeal contested the redemption fine and penalties.

The Appellants argued that their IEC Code was misused without their knowledge for filing export documents, making them victims of fraud. The Revenue justified the penal action based on DRI's investigation establishing the Appellants' involvement in mis-declaration for fraudulent drawback claims. The Tribunal examined the evidence and found that six shipping bills filed by the Appellants contained mis-declared goods, justifying confiscation and redemption fine under Section 125.

The Appellants disassociated themselves from the fraudulent export, claiming their IEC Code was misused by others. However, investigations revealed that the Proprietor of M/s Krish Exports admitted providing IEC details for monetary gain to facilitate fraudulent exports. The investigations identified a key individual orchestrating the export fraud. Consequently, the penalties imposed under Sections 114 and 114AA of the Customs Act on M/s Krish Exports were deemed justified by the Tribunal.

Ultimately, the Tribunal upheld the impugned order against M/s Krish Exports, dismissing the appeal filed by the Appellants. The decision was based on the established involvement of M/s Krish Exports in the fraudulent export activities, despite attempts to disassociate themselves from the wrongdoing.