2017 (9) TMI 683 - AT - Customs

Penalty u/s 114 (i) of the CA, 1962 - smuggling - red sanders - prohibited goods - absolute confiscation - Held that - the appellant, a Merchant Exporter, had entered into a contract with a stranger Shri P.K. Tiwari, and therefore, the penal responsibility would be shifted on the appellant as the stranger is absconding - It is noted that the appellant attempted to export the goods upon dealing with a stranger, Shri P.K. Tiwari without verifying the antecedents and the penal consequence thereon would be upon the appellant. The submission of the Ld. Counsel that the appellant had informed the Customs authorities is an incidental nature and could not establish the innocence of the appellant. Therefore, the imposition of penalty on the appellant is justified - the imposition of penalty upon the appellant is upheld subject to the amount of the penalty is reduced to ₹ 15,00,000/- - decided partly in favor of appellant.

Issues involved:
1. Confiscation of seized goods and imposition of penalty under the Customs Act, 1962.
2. Appellant's defense against penalty imposition based on informing Customs authorities about missing container.
3. Allegations of fraudulent involvement in illicit export against the appellant.
4. Justification of penalty imposition on the appellant despite informing authorities about missing container.
5. Consideration of penalty amount and final decision on the appeal.

Analysis:

1. The case involved the confiscation of seized Red Sanders and imposition of penalties under the Customs Act, 1962. The Commissioner of Customs (Prev), Kolkata confiscated the goods and imposed a penalty of ?25,00,000 on the appellant under Section 114 (i) of the Customs Act, 1962. The appellant challenged this penalty through an appeal.

2. The appellant's defense against the penalty was based on the argument that they had taken all reasonable steps to inform the Customs authorities about the missing container. The appellant claimed that they had engaged a CHA and a freight forwarder for the shipment, but the container and vehicle became untraceable, leading them to lodge a complaint with the police and inform the Customs authorities promptly.

3. The Adjudicating Authority found the appellant to be fraudulently involved in an attempted illicit export scheme. The authority highlighted that the appellant had engaged in a transaction with a stranger, Shri P.K. Tiwari, without verifying his antecedents, leading to penal consequences. The authority held the appellant guilty of commission and omission in the illegal export attempt, making them liable for penalty under Section 114 (i) of the Customs Act, 1962.

4. Despite the appellant's argument of informing the authorities about the missing container, the Commissioner of Customs (Prev) upheld the penalty imposition. The Commissioner noted the appellant's dealings with a stranger in the export transaction and held the appellant responsible for the penal consequences, emphasizing that the appellant's actions did not establish innocence. The penalty imposition was deemed justified, although the amount of penalty was considered excessive.

5. The final decision on the appeal upheld the imposition of penalty on the appellant but reduced the penalty amount to ?15,00,000. The appeal was disposed of with this revised penalty amount, indicating that while the penalty was justified, the initial amount was deemed excessive in light of the circumstances.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by the appellant, the findings of the Adjudicating Authority, the Commissioner's decision, and the final outcome of the appeal with a reduced penalty amount.

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