2018 (1) TMI 833 - AT - Customs

Smuggling - mis-declaration of imported goods - the department is of the view that Shri Sandeep Rikhi was actively involved in clearance of impugned consignment and that the statement of various witnesses corroborated one another to sustain the chain of events - Held that - it appears that M/s. Naresh Hand Work, a proprietary concern of Shri Naresh Kumar had imported the bags in which cosmetics, readymade garments, mobile phone housing etc. were stored. The present case, undoubtedly is a case of smuggling / mis-declaration, which was committed by Shri Naresh Kumar, proprietor of firm, who had imported the goods. In this attempt, all five persons have played their own vital role - From the whole episode, it appears that none of the appellant has tried to know what is the real content in the impugned consignment, they just passed on the documents and money from one hand to another hand without knowing its contents. It shows their carelessness and casual attitude on their part, for which they are entitled for punishment. the main culprit is Shri Naresh Kumar, proprietor of M/s. Naresh Hand Work, who was having the full knowledge. The present appellants have just facilitated in a mechanical way the attempt of smuggling the goods - penalty, being on higher side, is reduced. Appeal allowed in part.

Summary

Issues Involved:
1. Involvement of appellants in the mis-declaration and smuggling of goods.
2. Validity of the penalties imposed under Section 112(a) and Section 114AA of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Involvement of appellants in the mis-declaration and smuggling of goods:

The case revolves around the import of goods by M/s. Naresh Hand Work, which were mis-declared as multi-utility bags but contained cosmetics, readymade garments, and mobile phone housings. The customs duty was evaded through this mis-declaration. The appellants were penalized for their roles in facilitating this smuggling.

- Shri Kshitiz Sharma: His counsel argued that he merely provided documents to Shri Nikhil Dhingra and Shri Manish Khanna and had no financial dealings with M/s. Naresh Hand Works. The department, however, asserted that Sharma was an employee of the shipper and played a significant role in the transaction.

- Shri Rajinder Dhingra and Shri Nikhil Dhingra: Shri Rajinder Dhingra, a former CHA, handed over documents to his nephew, Shri Nikhil Dhingra, who then processed the customs clearance. Both claimed innocence, stating their involvement was limited to passing documents and money for customs duties. The department maintained their involvement in the smuggling process.

- Shri Manish Khanna: He denied ownership of the goods and any involvement in the smuggling. The department argued that he, along with Shri Kshitiz Sharma, orchestrated the smuggling, using the IEC number of M/s. Naresh Hand Works.

- Shri Sandeep Rikhi: He was involved in forwarding documents and money for customs clearance. His counsel argued that Rikhi acted on instructions from Nikhil Dhingra and had no knowledge of the mis-declaration. The department contended that Rikhi was actively involved in the clearance process.

2. Validity of the penalties imposed under Section 112(a) and Section 114AA of the Customs Act, 1962:

The tribunal acknowledged that while the appellants played roles in the chain of events leading to the smuggling, they did so without verifying the contents of the consignment, reflecting carelessness and a casual attitude.

- The penalties initially imposed were deemed excessive given the appellants' roles as facilitators rather than masterminds. The tribunal noted that the primary culprit was Shri Naresh Kumar, the proprietor of M/s. Naresh Hand Work, who had full knowledge of the smuggling.

- To address the appellants' casual approach and to meet the ends of justice, the tribunal modified the penalties. Each appellant was ordered to pay a reduced penalty of ?1,00,000 under Section 112(a) and ?1,00,000 under Section 114AA, totaling ?2,00,000 each.

Conclusion:

The tribunal partially allowed the appeals by reducing the penalties, recognizing the appellants' roles as part of the smuggling chain but not as the main culprits. The modified order imposed a total penalty of ?2,00,000 on each appellant, reflecting a balanced approach to their involvement and the need for a just punishment.