2018 (3) TMI 121 - AT - Customs

CHA - Penalties u/s 112(a) and 114AA of CA, 1962 - illegal import of goods - Held that - since the penalty u/s 114AA is dropped against the main importer and there is no material evidence against the present appellant Shri Ajith P to impose penalty u/s 114AA, I also drop the penalty against him. There should be a clear evidence to come to the conclusion that the appellants by their specific act or omission or any act abetted the illegal importation of offending goods. Therefore I find that in the impugned order, no such cogent evidence has been recorded. Further for penalty under the Customs Act, 1962, it is apparent that mere filing of Bill of Entry without the knowledge or a role in the importation of cargo is not sufficient. The penalty imposed under Section 112(a) on the three appellants as well as penalty under Section 114AA imposed on Shri Ajith P, Chartered Engineer is not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Penalties under Section 112(a) and Section 114AA of the Customs Act, 1962 imposed on multiple appellants for irregularities in import activities.

Analysis:

1. Penalties Imposed: The judgment involves appeals against penalties imposed under Section 112(a) and Section 114AA of the Customs Act, 1962 on various appellants for irregularities in import activities conducted by the main importers. The penalties were imposed by the Commissioner of Customs for violations committed by the main importer and other related parties.

2. Background: The main issue revolved around the penalties imposed on the appellants, including a Chartered Engineer, a Custom broker, and a local representative of the importer, for their roles in facilitating the import of goods through Cochin Port. The Commissioner found the appellants guilty of illegal import activities and imposed penalties under the specified sections of the Customs Act.

3. Appellants' Arguments: The appellants challenged the Commissioner's order, arguing that the penalties were unjustified as they were not directly involved in any illegal activities related to the importation of goods. They highlighted a previous Tribunal decision that set aside penalties under Section 114AA for the main importer due to lack of evidence of false documents. The appellants contested the findings against them, emphasizing the lack of concrete evidence to support the penalties.

4. Legal Analysis: The Judicial Member analyzed the evidence and legal provisions related to penalties under Section 112(a) and Section 114AA. It was noted that penalties under Section 114AA were dropped against the main importer in a previous Tribunal decision due to insufficient evidence. The Member further examined the requirements for imposing penalties under Section 112(a) and emphasized the need for clear evidence of abetment in illegal import activities.

5. Judgment: After considering the submissions and legal precedents cited by both parties, the Judicial Member found that the penalties imposed on the appellants were not sustainable in law. Citing lack of cogent evidence and reliance on assumptions, the Member set aside the penalties under Section 112(a) and Section 114AA for the appellants. Consequently, all the appeals were allowed, and the penalties were revoked.

In conclusion, the judgment addressed the issues of penalties imposed under the Customs Act on multiple appellants for their alleged involvement in illegal import activities, emphasizing the importance of concrete evidence and legal requirements for such penalties to be upheld.