2017 (11) TMI 1190 - AT - Customs

Penalty u/s 112 (a) of the CA, 1962 - mis-declaration of imported goods - Held that - A careful consideration of the narration recorded in the impugned order clearly brings out the role of each one of the appellant in the mis-declaration and improper import of the impugned goods in the name of M/s Bharat Medical Devices Pvt. Ltd. who upon investigation were established to be not connected to the import at all - Section 112 (a) states that any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abets the doing or omission of such an act shall be liable to penalty of specified quantum mentioned therein. In the present case, the evidences analyzed in the impugned order clearly bring out the role of each one of the appellant in the importation of impugned consignments which is rightly held to be liable for confiscation - While the appellants roles in the case were established, considering the fact that there is no evidence that they have gained substantially through these impugned acts/omissions, we find it fit and proper to reduce the penalty to ₹ 5 lakhs each on the appellants. Appeal allowed in part.

Summary

Issues:
Penalties imposed under Section 112(a) of the Customs Act, 1962 on appellants for their role in the import of mis-declared goods.

Analysis:
1. Role of Mr. Vikas Yadav:
- Found actively associated with filing of mis-declared Bill of Entry.
- Facilitated unlawful acts of cheating and evasion of customs duty.
- Actively involved in all clearances on fraudulently forged documents.
- Found to have committed offenses under Customs Act, 1962.
- Active involvement proved, hence liable for penal action under Section 114A.

2. Role of Mr. Ravinder Singh:
- Qualified person with experience in Customs Clearance work.
- Knowingly indulged in fraudulent work of filing Bill of Entry.
- Extended help without conducting necessary verification.
- Assisted in submission of false documents for clearance of mis-declared goods.
- Found to have committed offenses under Section 112(a) of the Customs Act, 1962.

3. Role of Mr. Anil Chand:
- Owner of CHA found to have contravened Customs Brokers Licensing Regulations, 2013.
- Admitted mistake of not verifying KYC and attempting clearance without following procedures.
- Liable for penal action under Section 112(a) of the Customs Act, 1962 and other regulations.

4. Grounds of Appeals by Appellants:
- Appellants claimed no prior knowledge of mis-declaration.
- Argued that penalties under Section 112(a) should not apply to their case.
- Submission that penalties imposed were excessive and not commensurate with any offense.

5. Arguments by AR and Original Authority:
- Appellants' role in fraudulent import clearly established through investigation.
- Failure to act with due diligence in verifying documents and authorization.
- Evidence showed active involvement in abetting improper import.

6. Judgment and Decision:
- Appellants' roles in mis-declaration and improper import established.
- Penalties imposed under Section 112(a) upheld, but reduced to &8377; 5 lakhs each.
- No evidence of substantial gain by appellants through the acts/omissions.
- Appeals dismissed except for the penalty reduction.

This judgment highlights the active involvement of the appellants in the fraudulent import of mis-declared goods, leading to penalties under Section 112(a) of the Customs Act, 1962. The detailed analysis of each appellant's role, admissions, and lack of due diligence in verification and authorization supports the decision to uphold the penalties. The reduction in penalties due to lack of evidence of substantial gain by the appellants showcases a balanced approach to enforcement in such cases.