2017 (12) TMI 1514 - AT - Customs

Penalty u/s 112(a) of the Customs Act, 1962 - it was alleged that the appellant helped importer in misdeclaration of value as well as quantity of imported assorted consumer goods - Held that - there is no clear cut evidence of abetment or instigation on the part of the appellant to undervalue the goods declared by the importers. In fact the appellant has only acted as a Clearing and Forwarding Agent and there is no independent corroborative evidence to come to the conclusion that he has helped the importer in evading the payment of customs duty - the appellant s case is squarely covered by the provisions of Section 28(6) of the Customs Act which clearly lays down that once the duty with interest and penalty has been paid in full, then the proceedings in respect of the importer as well as other persons should be deemed conclusive. The appellant is covered by Section 28(6) and therefore the proceedings against him also stands concluded once the importer has accepted the undervaluation and paid the differential duty along with interest and penalty - penalty u/s 112(a) of the CA, 1962 set aside - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Appeals against penalty under Section 112(a) and 114AA of the Customs Act, 1962 upheld by Commissioner(Appeals) - Allegation of undervaluation of imported goods - Appellant's role as a Clearing and Forwarding Agent - Applicability of Section 28(6) of the Customs Act, 1962.

Analysis:
The appellant filed three appeals challenging penalties imposed under Section 112(a) and 114AA of the Customs Act, 1962, which were upheld by the Commissioner(Appeals) in impugned orders. The case revolved around allegations of undervaluation of imported goods by an importer with the assistance of the appellant, who was the owner of a clearing and forwarding firm. The investigation revealed that the importer had mis-declared values in multiple Bill of Entry documents. The original authority imposed penalties on the appellant, which were upheld under Section 112(a) but dropped under Section 114AA by the Commissioner(Appeals). The appellant contended that the orders were based on presumptions and lacked concrete evidence, emphasizing that the importers admitted undervaluation and paid the differential duty, interest, and penalty. The appellant argued that as per Section 28(6) of the Customs Act, once the importers settled the dues, the proceedings should be deemed conclusive.

During the hearing, the appellant's counsel argued against the sustainability of the impugned orders, highlighting the lack of evidence supporting the findings. It was emphasized that the appellant did not guide the importer in undervaluing goods and that the statements relied upon lacked documentary backing. The counsel pointed out that the importers admitted undervaluation, paid the dues, and did not appeal against the penalties. The appellant's role was portrayed as that of a Clearing and Forwarding Agent without clear evidence of connivance or abetment in evading customs duties. On the contrary, the Revenue reiterated the findings of the impugned order.

After evaluating the submissions and evidence, the Judicial Member found no conclusive evidence of the appellant's involvement in abetting undervaluation. It was noted that the appellant acted as a Clearing and Forwarding Agent without substantial proof of aiding in customs duty evasion. The judgment referenced Section 28(6) of the Customs Act, which deems proceedings conclusive once duty, interest, and penalty are paid in full. Consequently, the Judicial Member concluded that the appellant's case fell within the purview of Section 28(6), leading to the dropping of penalties imposed under Section 112(a) of the Customs Act, 1962 in all three appeals.

In light of the statutory provisions and the lack of concrete evidence linking the appellant to undervaluation, the Judicial Member allowed all three appeals and dropped the penalties imposed under Section 112(a) of the Customs Act, 1962. The judgment was pronounced in open court on 27/11/2017, providing relief to the appellant based on the application of relevant legal provisions and the absence of substantial evidence implicating the appellant in the alleged customs duty evasion.