2018 (8) TMI 1122 - AT - Customs

100% EOU - appellant was unable to produce any document evidencing payment of legitimate Customs Duty on the said Granite Slabs, tiles, strips in order to establish the legal sale transaction - Held that - The officers of the Preventive visited the premises of the appellant on 24.10.2005 and found 40 Granite Slabs of different size and the appellant could not produce any bill showing that he has purchased the same from M/s. Alpha Rich Granites (P) Ltd., a 100% EOU - the Commissioner (Appeals) has considered all the evidences of the appellant, and came to the conclusion that Mr. Sreedhar has failed to comply with the obligations cast on him and thus has rendered the goods liable for confiscation and himself to penal action - demand of duty upheld. Penalty - Held that - The Department has not been able to establish aiding and abetting on the part of the appellant so as to justify the imposition of penalty of ₹ 10,000/- on the appellant - Penalty set aside. Appeal allowed in part.

Summary

Issues Involved:
- Appeal against rejection by Commissioner (Appeals) of appellant's appeal challenging Customs duty payment on seized goods
- Legal purchase proof submission by appellant
- Consideration of appellant's role in illegal possession of seized goods
- Imposition of penalty on the appellant

Analysis:

Issue 1: Appeal against rejection by Commissioner (Appeals) of appellant's appeal challenging Customs duty payment on seized goods

The appeal was directed against the order passed by the Commissioner (Appeals) rejecting the appellant's appeal. The appellant, a manufacturer of Granite Slabs licensed as a 100% EOU, had goods seized by officers of the Preventive Unit. The appellant claimed to have purchased the goods from another company but failed to produce any document proving payment of legitimate Customs Duty. The Joint Commissioner directed the appellant to pay Customs duty, redeem the confiscated goods on payment of a fine, and imposed a personal penalty. The appellant filed an appeal before the Commissioner (Appeals) who upheld the order, leading to the present appeal.

Issue 2: Legal purchase proof submission by appellant

The appellant submitted written submissions challenging the legality of the impugned order, claiming that a sale document provided as proof of legal purchase was ignored. The appellant argued that certain provisions did not apply to them and that the Department failed to establish prior knowledge of aiding and abetting. The appellant contended that the impugned order was not sustainable as it did not properly appreciate the evidence and the law.

Issue 3: Consideration of appellant's role in illegal possession of seized goods

The Tribunal considered the role of the appellant in the illegal possession of the seized goods. The Commissioner (Appeals) discussed the appellant's involvement in detail, stating that the appellant failed to verify the genuineness of the transaction and ensure duty payment on the goods purchased. The Commissioner found the appellant liable for confiscation of the goods and penal action due to non-compliance with obligations.

Issue 4: Imposition of penalty on the appellant

After hearing arguments and reviewing the evidence, the Tribunal found no infirmity in confirming the duty demand against the appellant. However, regarding the imposition of a penalty, the Tribunal held that the Department failed to establish aiding and abetting on the part of the appellant. Consequently, the penalty was dropped, but the duty demand was confirmed, partially allowing the appeal.

In conclusion, the Tribunal upheld the duty demand but dropped the penalty imposed on the appellant due to the lack of evidence establishing aiding and abetting. The judgment highlighted the importance of verifying transactions, ensuring duty payment, and complying with legal obligations in such cases.