2018 (9) TMI 510 - AT - Customs

Penalty u/s 112 (a) and 114 (AA) of the Customs Act, 1962 - import of the mis-declared goods - under-valuation - illegal import - Whether the appellant was actively involved in the import so as to be liable to be imposed penalty on him? Held that - On going through the details of phone calls between the appellants and co-noticee, namely Shri Deepak Kumar Rishi and Shri NK Singh reveals that these phone calls were made during the period 29.09.2011 till 10.10.2011 whereas in this case, the import has been done on 27.10.2011 - Moreover, as per the statement of Shri Deepak Kumar Rishi, he made a phone call to the appellant on 31.10.2011 stating about the examination of the said goods and the details of the branded goods. There is no record of the phone call made by Shri Deepak Kumar Rishi on record for 31.10.2011. The case record for the period 29.09.2011 to 10.10.2011 cannot be the basis to impute the appellant in illegal import - Merely on the basis that the appellant is a CHA whose license has been suspended in some other case cannot be the basis to implicate the appellant in the case in hand. In these circumstances, in the absence of any evidence against the appellant, no penalty can be imposed under Section 112 (a) and Section 114 (AA) of the Act. Penalty set aside - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Penalty imposed under Section 112 (a) and Section 114 (AA) of the Customs Act, 1962.

Analysis:

1. Facts of the Case:
- M/s Pico Trading Company filed a bill of entry for clearance of unbranded glassware, later found to be branded goods.
- Allegations of mis-declaration and undervaluation of goods leading to seizure and inquiry.
- Involvement of various individuals including the appellant in filing fraudulent papers for illegal import.

2. Appellant's Defense:
- Appellant denied involvement in importation, citing lack of role as per his statement during investigation.
- Argued that phone calls were made from the office landline accessible to all staff, making it inconclusive evidence.
- Relied on a Tribunal decision to support the contention.

3. Revenue's Argument:
- Claimed that the appellant was actively involved in illegal import based on a statement by another individual.
- Asserted that the appellant was informed about the investigation and details of the goods, indicating his involvement.

4. Court's Examination:
- Examined the appellant's statement during investigation and phone call records between the appellant and other individuals.
- Noted discrepancies in the timeline of phone calls and import dates, undermining the link to illegal import.
- Found lack of concrete evidence implicating the appellant in the illegal import scheme.

5. Decision:
- Set aside the penalty imposed on the appellant under Section 112 (a) and Section 114 (AA) of the Customs Act, 1962.
- Ruled in favor of the appellant due to insufficient evidence linking him to the illegal import activities.
- Allowed the appeal with consequential relief, if any.

6. Conclusion:
- The Tribunal found the evidence insufficient to establish the appellant's involvement in the illegal import, leading to the overturning of the imposed penalty.
- Emphasized the importance of concrete evidence and a clear link to the alleged activities to impose penalties under the Customs Act.

The judgment highlights the critical role of evidence and timelines in establishing liability under the Customs Act, emphasizing the need for substantial proof to penalize individuals involved in illegal import activities.