2018 (11) TMI 1309 - HC - Customs

100% EOU - Penalty u/s 112(a) and 112(b) of the Customs Act, 1962 - diversion of duty free imported goods into the domestic traffic area - Confiscation - Held that - The appellant himself in his statement made to the Customs on 4th June, 2003 has admitted that he was escorting the duty free imported fabrics into the domestic traffic area. This statement which is not been retracted at any point of time, lead to a conclusion that he was engaged in carrying / dealing with the goods which he knew are liable for confiscation. Undisputed fact that penalty was imposed upon the appellant. The fact that penalty was deleted upon the other co-noticee would not by itself justify deletion of penalty on the appellant - In the case of other three appellants namely; Mr. Govind Khubchandani, Mr. Jairaj Kalyani and Mr. Pawan Lulla, no penalty was imposed as in the case of the above three appellants, a finding of fact was recorded that they have either not dealt with the goods or in case of godown keeper that he had no knowledge that the goods are liable for confiscation. This is not so in the present facts. This concurrent finding of fact both by the adjudicating authority and the Tribunal that the appellant was involved in transporting offending goods with knowledge that they are liable for confiscation under Section 111 of the Act is not shown to be perverse in any manner - the questions as proposed do not give rise to any substantial question of law - appeal not entertained and is dismissed.

Summary

Issues:
Challenge to Customs Tribunal order under Section 130 of the Customs Act, 1962 regarding penalty imposition under Sections 112(a) and 112(b) without contravention of Section 111; Appellant's lack of knowledge and role as an employee in escorting duty-free imported fabrics; Discrepancy in penalty imposition among co-noticees.

Analysis:
1. The appellant contested the Customs Tribunal's order under Section 130 of the Customs Act, 1962, questioning the imposition of penalties under Sections 112(a) and 112(b) without any contravention of Section 111. The appellant argued that penalties were unjustly upheld due to insufficient evidence from telephonic conversations, especially considering the lack of contravention of Section 111 by the appellant compared to co-appellants whose penalties were revoked.

2. The appellant, an employee of a 100% EOU involved in the manufacture and export of garments, was found escorting duty-free imported fabrics for diversion and sale in the local market. Despite being a casual employee following instructions, the appellant was penalized under Section 112 for handling goods liable for confiscation. The Tribunal differentiated the appellant's situation from co-noticees based on their involvement with the offending goods, leading to varied penalty outcomes.

3. The Tribunal upheld the penalty on the appellant, emphasizing his admission of escorting duty-free fabrics without duty payments. The appellant's lack of retraction from this statement and his involvement in transporting goods liable for confiscation under Section 111 supported the penalty imposition. The Tribunal's decision was based on factual findings regarding the appellant's direct role in dealing with the offending goods, distinguishing his case from those of co-noticees.

4. The appellant's plea for reconsideration was dismissed as the Tribunal's decision was deemed factually sound and not arbitrary. The Tribunal's conclusion that the appellant knowingly transported goods liable for confiscation under Section 111 was upheld, indicating no substantial legal questions arose from the case. Consequently, the appeal was rejected, affirming the penalty imposition on the appellant.

In summary, the High Court upheld the Customs Tribunal's decision to penalize the appellant for his involvement in transporting duty-free imported fabrics for diversion and sale in the local market, despite his lack of in-depth knowledge as an employee. The Court found no legal basis to overturn the Tribunal's factual findings, leading to the dismissal of the appeal challenging the penalty imposition under the Customs Act.