2018 (6) TMI 204 - AT - Customs

Mis-declaration - evasion of duties of customs on the imports - Penalty u/s 112 of CA - value was mis-declared and that the contents were described as ship stores to suppress the link to the offshore project - principles of natural justice denied - case of appellant is that they were not heard before they were visited with detriment and that various documents which were necessary for defending themselves had not been provided to them. Held that - Appellant s absence at the hearing on the scheduled date, is attributed in the grounds of appeal to non-furnishing of relevant documents. The appellants had one reason or other for not being presented at the hearing on the scheduled date - considering that plea for documents had been made to the lower authority and that the principles of natural justice had been deviated from in denying them an opportunity heard compounded by the absence of any finding against each of the appellants separately, the impugned order is in jeopardy. Imposition of penalty, especially on customs brokers, should be in proportion to the gravity of the involvement. In view of the specific plea for hearing and furnishing of documents having been denied, it would be appropriate to set aside the penalties imposed on the three appellants and to remand the matter back to the adjudicating authority for fresh determination - appeal allowed by way of remand.

Summary

Issues:
1. Challenge against imposition of penalty under section 112 of Customs Act, 1962.
2. Allegations of mis-declaration leading to evasion of customs duties.
3. Violation of natural justice and denial of opportunity to be heard.
4. Absence of appellants during hearings and requests for relevant documents.
5. Appropriate imposition of penalties on customs brokers.
6. Setting aside penalties and remanding the matter for fresh determination.

Analysis:
1. The judgment involves an appeal against the imposition of penalties on three individuals under section 112 of the Customs Act, 1962. The penalties were challenged based on allegations of mis-declaration that resulted in the evasion of customs duties on imports meant for offshore drilling projects. The appellants were accused of transferring consignments under false pretenses to avoid proper customs procedures.

2. The primary contention raised in the appeal was the violation of natural justice as the appellants were not given an opportunity to be heard before penalties were imposed. The appellants claimed that they were not provided with necessary documents to defend themselves adequately. The adjudicating authority had detailed discussions on the mis-declaration of value and the nature of the goods involved in the case.

3. It was noted that the appellants were absent during the hearings, and requests for relevant documents were either made or not responded to. Despite the High Court's direction to decide the case within a specified timeframe, the appellants failed to utilize the opportunities for a personal hearing. The absence of the appellants was attributed to the non-furnishing of relevant documents, raising concerns about the deviation from the principles of natural justice.

4. The judgment highlighted the importance of imposing penalties on customs brokers proportionate to their level of involvement. In this case, due to the absence of specific findings against each appellant and the denial of opportunities for a fair hearing, it was deemed appropriate to set aside the penalties imposed on the appellants. The matter was remanded back to the adjudicating authority for a fresh determination of their roles within the legal framework.

5. The responsibility was placed on the adjudicating authority to provide relevant documents and grant a reasonable time for the appellants to respond to the show cause notice during a personal hearing. The entire process was directed to be completed within six months from the date of receipt of the order by the adjudicating authority. Ultimately, the appeals were allowed by way of remand, setting the terms for the fresh determination of the case.