2017 (11) TMI 554 - AT - Customs

Penalty u/s 114AA - There is no evidence of the appellant carrying precious or semi-precious stones in the past out of country and again bringing it into India in violation of provisions of Customs Act. The impugned order is purely based on presumption and evidence of statement of purchase of these goods in India - Held that - We find that there is no corroborative evidence on these transportation of impugned goods from India and back to India. The evidences which will categorically establish such movement are not available. It would appear that the lower authorities mostly based their finding on the general statement of the appellant about past activities and also on that he travelled many times abroad. To demand and recover customs duty it is necessary to establish the importation of dutiable goods into India. The Revenue apparently made certain presumptions based on certain collected evidence regarding purchase of cut or polished stones in Jaipur by the appellant. Beyond this, there is no evidence of its movement out of country and reimportation into India. Confirmation of duty cannot be made based on presumptions and assumptions - duty and penalty set aside. A perusal of Section 114AA shows that penalty is imposable under the said Section on a person who knowingly or intentionally makes signs or uses in declaration statement or document which is false or incorrect in any material particulars in the transaction of any business for the purpose of this Act. The said person shall be liable to penalty not exceeding five times the value of goods. The lower authorities did not justify with the reason for imposition of penalty separately u/s 114AA when equal amount of penalty has already been imposed under Section 114A. In fact, what type of false or incorrect materials were submitted by the appellant was not discussed - penalty set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Duty demand and penalty imposition on past activities of the appellant.
2. Confiscation of goods and penalty under Customs Act.
3. Justification of penalties under Sections 114A and 114AA.

Analysis:

Issue 1: Duty demand and penalty imposition on past activities of the appellant
The appellant contested the duty demand and penalty imposed on past activities, arguing lack of evidence supporting the allegations. The lower authorities relied on the appellant's statement and passport entries to conclude undeclared movements of precious stones in and out of India. However, the tribunal found no corroborative evidence establishing such movements. It was noted that the authorities based their findings on general statements and travel history, lacking concrete proof of importation into India. The tribunal emphasized the necessity of establishing the importation of dutiable goods to demand and recover customs duty. Consequently, the duty demand and penal action related to the purported past activities of the appellant were set aside.

Issue 2: Confiscation of goods and penalty under Customs Act
The appellant did not contest the confiscation of goods seized during interception at the airport but challenged the duty demand and penalties imposed. The tribunal upheld the confiscation and redemption fine, stating that the appellant attempted to clear undeclared high-value goods through customs, justifying the lower authorities' actions. The valuation of the goods was done by an expert committee, and the appellant failed to provide substantial evidence to contest the valuation. Therefore, the confiscation and penalties imposed were deemed in accordance with the legal position.

Issue 3: Justification of penalties under Sections 114A and 114AA
The tribunal examined the penalties imposed under Sections 114A and 114AA of the Customs Act. While upholding the penalty under Section 114A, which corresponds to the duty amount, the tribunal found the imposition of an additional penalty under Section 114AA unjustified. Section 114AA pertains to penalties for false or incorrect declarations, but the tribunal noted a lack of justification for imposing this penalty separately when an equivalent penalty was already imposed under Section 114A. As the reasons for the imposition of the penalty under Section 114AA were not adequately discussed, the tribunal set aside this penalty.

In conclusion, the appeal was dismissed, except for setting aside the duty demand and penal action related to the appellant's purported past activities and the penalty under Section 114AA. The tribunal's decision was pronounced on 06.10.2017.