2018 (2) TMI 244 - AT - Customs

Goods found short in the duty free shop - demand of duty - Charge of clearing of duty free goods and unaccounted goods from duty free stores of this appellant - Held that - the 1st Appellate Authority has correctly held against the appellant and findings are very relevant and in detail - it was held that the evidence on record in the form of oral evidence of the employees which have been elaborately discussed in the earlier Order-in-Original dated 25.04.2012 as well as the impugned order clearly show that there was concerted manipulation of accounts, stock-registers etc., which resulted in excess and/or shortage of goods which were detected by DRI. Such commission of offence cannot but be punished appropriately under law as provided in Section 112 of the Customs Act, 1962. In the facts of the case, it has to be held that the employer has been irresponsible for ensuring proper conduct by employees and employer has been irresponsible for ensuring proper conduct by employees and cannot absolve himself of the liability - the factual findings of the 1st Appellate are not controverted in any manner. Appeal dismissed - decided against appellant.

Summary

Issues:
Consideration of clearing duty-free and unaccounted goods from duty-free stores.

Analysis:
The appellant operated a Private Bonded Warehouse at an airport, where discrepancies were found in liquor bottles and electrical items. A Show Cause Notice was issued demanding duty and penalties for illicitly removing bonded goods. The 1st Appellate Authority upheld the Order-in-Original, leading to this appeal.

The appellant argued that they couldn't exit bonding operations without reconciliation and payment of pending dues. They claimed that duty demand without verifying circumstances violated natural justice. They also contended that since the goods were under bonded warehouse, interest shouldn't be levied as there was no revenue loss. The appellant challenged the imposition of penalty, citing double penalty for the same violation and employee responsibility for illicit clearance.

The appellate authority found that the appellant failed to provide evidence of duty payment on goods found short during verification. The authority demanded duty under Customs Act Section 72(e) along with interest and other charges on goods clandestinely removed. The authority confirmed the penalty for the offense committed by the appellant's employees, holding the appellant responsible for failing to maintain proper accounts, resulting in excess or shortage of goods.

The appellate authority upheld the original authority's decision on demanding duty, interest, and penalty, stating that the appellant had colluded in the offense. The authority found the penalty justified and not harsh, as the offense was established through detailed evidence. The penalty was imposed under Section 112 of the Customs Act, considering the value of goods and circumstances involved.

In conclusion, the appellate authority found the impugned order correct and legal, dismissing the appeal for lacking merit. The factual findings of the 1st Appellate Authority were not contested, and the order did not require interference. The judgment was pronounced in court after completion of the hearing.