2018 (8) TMI 1302 - AT - Customs

Penalty u/s 112 (a) (b) and u/s 114 A of the Customs Act - illegal imports - import of prohibited/restricted item, under concealment alongwith declared goods, iron scrap - Held that - Praveen Kumar Jain had unknowingly got involved, without understanding that R- 22 gas is a restricted item. Further it appears that he was interested in learning the process of import export business. Had he known that R- 22 gas is a restricted item, and not freely importable, he would not have been present at the time of inspection by the customs. Accordingly the penalties imposed on Praveen Kumar Jain are set aside giving the benefit of doubt. So far National Steel and its proprietor Shri Shreyansh Jain is concerned, from the appreciation of facts on record, it appears that they were not knowing that their IEC code was being used for import of restricted goods. However they have violated the law by allowing the use of their IEC code by others scrupulous persons. Accordingly the penalty imposed is reduced to ₹ 5 Lacs. So far Praveen Bansal is concerned, he is the kingpin in the whole illicit import of R-22 gas. For making super profit, he has practically arranged all the things required. However under the facts and circumstances, the penalty of ₹ 10 lakhs under Section 112 (a) (b) and further penalty under Section 114AA of the Act are reduced to ₹ 3 lakhs each, under each section. Appeal allowed in part.

Summary

Issues:
1. Imposition of penalty under Section 112 (a) & (b) and under Section 114 A of the Customs Act.
2. Mis-declaration of quantity of metal scrap and concealment of prohibited goods.
3. Involvement of various individuals in illegal import of restricted goods.
4. Confiscation of goods and imposition of penalties.

Detailed Analysis:
1. The appeals were against penalties imposed under Section 112 (a) & (b) and Section 114 A of the Customs Act. The penalties related to the same transaction involving mis-declaration of metal scrap quantity and concealment of prohibited goods, leading to the confiscation of the goods.

2. The case involved the mis-declaration of metal scrap quantity and concealment of 1350 gas cylinders of refrigerating gas, a prohibited item. The goods were seized for being liable for confiscation due to the mis-declaration and concealment of restricted goods.

3. Various individuals were found involved in the illegal import scheme. It started with a conspiracy between relatives to import restricted goods. One individual facilitated the use of his IEC code and pollution certificate for a monetary consideration. Others were involved in arranging documents, making payments, and facilitating the illegal import of the prohibited goods.

4. The judgment adjudicated on the confiscation of the prohibited goods and the mis-declared metal scrap, along with imposing penalties on the involved parties. The penalties were reduced for some individuals based on their level of involvement and knowledge of the illegal activities, with considerations given for the confiscation of goods and other circumstances.

This detailed analysis covers the issues of penalty imposition, mis-declaration and concealment of goods, involvement of individuals in illegal activities, and the final decision on confiscation and penalties as per the legal judgment delivered by the Appellate Tribunal CESTAT ALLAHABAD.