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2018 (12) TMI 880 - AT - CustomsPenalty u/s 114(iii) and Section 114 AA of the Customs Act, 1962 - export incentive/Duty Entitlement Pass Book Scheme - Draw Back - mis-declaration of goods as of Indian Origin in the export documents - Held that - The appellant company exported FeSi during the period from 2008-09 and 2011-12 in various consignments and availed export incentive in the form of Duty Entitled Pass Book (DEPB)/Duty Draw Back (DBK). It has also availed, in some cases, incentive under Focus Marketing Scheme (FMS) in addition to DEPB/DBK against the export consignment. It was found that the exported FeSi, against which DEPB and FMS was availed, was procured from Traders/Suppliers from the local market. Taking into consideration of the fact that the DGFT authorities had already imposed penalty upon the appellant, the penalty imposed on the appellant company is not warranted - Regarding imposition of penalty on the appellant no.2, Director of the appellant company the adjudicating authority observed that Shri Chetan Aggarwala was aware of the fact that no export incentive was availed on FeSi of Bhutanese origin and returned the entire amount of the incentive therefore imposition of penalty is not warranted. The impugned order is modified to the extent and the penalty imposed under Section 114(iii) on the appellant company and appellant no.2, Director of the appellant company are set aside - The penalties imposed under Section 114AA on appellant no.2 are also set aside. Appeal disposed off.
Issues:
1. Misdeclaration of country of origin in export documents. 2. Availing export incentives incorrectly. 3. Imposition of duty, interest, and penalties under Customs Act, 1962. 4. Jurisdiction of Customs authorities in DEPB cases. 5. Double jeopardy in penalty imposition. 6. Knowledge of the Director regarding export incentives. 7. Applicability of penalties on the appellant company and the Director. 8. Authority of DGFT in cases of irregularity in DEPB availment. Analysis: 1. The case involved allegations of misdeclaration of the country of origin in export documents by a Merchant Exporter dealing with Ferro Silicon (FeSi). The Directorate of Revenue Intelligence initiated an investigation regarding the incorrect availing of export incentives during 2008-09 to 2011-2012. 2. The appellant company had availed export incentives like Duty Entitlement Pass Book Scheme and Draw Back against the exported FeSi. The appellant argued that the notice was based on statements of domestic traders/suppliers, and no specific correlation was made between the goods exported and the stock ledger entries. The appellant also mentioned that DEPB/FMS scrips were not canceled, and the department had not challenged the assessment orders. 3. The Commissioner of Customs imposed duty, interest, and penalties on the appellant company and the Director under various sections of the Customs Act, 1962. The appellant contended that penalties imposed by DGFT already covered the offense, invoking the principle of double jeopardy. 4. The appellant raised the issue of jurisdiction, arguing that the proper authority to address irregularities in DEPB cases is the DGFT, not the Customs authorities. They cited relevant case laws to support their argument that Customs authorities lack jurisdiction in DEPB cases. 5. The Tribunal considered the lack of evidence to establish mens rea on the part of the appellant and the absence of a clear motive behind the alleged actions. The Tribunal also noted discrepancies in the statements recorded from suppliers and the lack of conclusive evidence regarding the nature of goods exported. 6. Ultimately, the Tribunal modified the impugned order, setting aside the penalties imposed under Section 114(iii) on the appellant company and the Director. The penalties imposed under Section 114AA on the Director were also set aside, considering the penalties already imposed by the DGFT. 7. The Tribunal's decision highlighted the importance of avoiding double jeopardy and ensuring that penalties are proportionate and justified based on the facts and circumstances of the case. The judgment emphasized the need for clarity in jurisdictional matters and the appropriate authority to address specific issues in cases involving export incentives and irregularities in DEPB cases.
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