2017 (12) TMI 282 - AT - Central Excise

Absolute confiscation of export goods - soap stone powder - misdeclaration of description of goods - penalty - Held that - Entire investigation result brought out above said material facts and evidence and unerringly established that the Appellant M/s Petroslov India was instrumental to export soap stone powder in the name of SSEPL with the conscious involvement of SSEPL. That remained uncontroverted by appellants without leading any cogent and credible evidence. Considering the role played by the logistics manager Shri Subramaniam Devar and godown keeper Shri Abhimanyu Singh, learned Adjudicating Authority held that entire evidence gathered by investigation were credential and were cogent establishing role of all the three appellants in deception of Customs - decided against appellant. Penalty on Shri Bhaskar.D. Kolakat and Shri Rajshekhar Pillai, Directors of M/S. Sai Shradha Exim Pvt Ltd - Held that - all the appellants were found to be consciously involved to file shipping bills for export of misdeclared goods - Export formalities were completed by M/s Sai Shipping Agency involving all the three appellants. - penalty on all appellants upheld. Confiscation of goods u/r 25 of CEA, 1944 - redemption fine - penalty - Held that - Revenue proved entire malafide design of the appellants who committed fraud against Customs filing false documents, misdeclaring description and value of goods and they could not come out with clean hands to prove their innocence, they are bound to face penal consequences of law - Entire submission of Revenue as above has force and based on evidence. Appellants could not repel the same without leading and cogent and credible evidence to the contrary - matter remanded for impodition of redemption fine and penalty. Decided against appellant and part matter on remand.

Summary

Issues involved:
1. Confiscation of goods under Customs Act, 1962
2. Imposition of penalties under Section 114(i), 114(ii), and 114(iii) of Customs Act, 1962
3. Role of various entities in fraudulent export activities
4. Failure to impose redemption fine and penalty under Rule 26 of Central Excise Rule, 2002

Detailed Analysis:

1. Confiscation of Goods:
The judgment involved the confiscation of 13.5 MT of soap stone powder packed in 540 carbouys, misdeclared as pharmaceutical goods, leading to penalties under the Customs Act, 1962. The investigation revealed the misdeclaration of goods in shipping bills and the subsequent fraudulent export activities, resulting in the confiscation of the goods and penalties imposed on the concerned parties.

2. Imposition of Penalties:
Penalties were imposed under Section 114(i), 114(ii), and 114(iii) of the Customs Act, 1962 on the entities involved in the fraudulent export scheme. The penalties were levied based on the findings of the investigation, which established the conscious involvement of the appellants in deceiving customs authorities and availing benefits unlawfully. The penalties were upheld due to the lack of credible evidence presented by the appellants to refute the charges.

3. Role of Entities in Fraudulent Activities:
The judgment detailed the roles played by different entities in the fraudulent export activities. It highlighted how M/S. Sai Shradha Exim Pvt Ltd misdeclared goods and engaged in substitution of bulk drugs with soap stone powder for export. The involvement of M/s Petrosolv India Company in facilitating the export of substituted goods was also established through evidence gathered during the investigation. Statements from individuals involved corroborated the findings, leading to the dismissal of appeals and confirmation of penalties.

4. Failure to Impose Redemption Fine and Penalty:
The Revenue appealed against the adjudication order for not confiscating goods and imposing redemption fine and penalty under Rule 26 of Central Excise Rule, 2002. The Revenue argued that the goods were liable for confiscation and penalties despite not being available for confiscation. The Adjudicating Authority's decision not to impose penalties on M/s Sai Shradha Exim Pvt Ltd was challenged, citing violations of Central Excise Rule, 2002 and B-1 Bond conditions. The judgment upheld the Revenue's contentions, remanding the matter for the imposition of redemption fine and penalties as argued.

In conclusion, the judgment addressed issues related to confiscation of goods, imposition of penalties under the Customs Act, 1962, the roles of entities in fraudulent export activities, and the failure to impose redemption fine and penalties under Central Excise Rule, 2002. The decision was based on the evidence presented during the investigation, highlighting the need for entities to comply with customs regulations and face penal consequences for fraudulent practices.