2019 (2) TMI 608 - AT - Customs

Penalty u/s 112(a) and 114AA of the Customs Act, 1962 - mis-declaration of imported goods - rejection of declared value - Held that - There is no clear cut evidence of abetment or instigation on the part of the appellant to undervalue the goods declared by the importers. In fact the appellant has only acted as a Clearing and Forwarding Agent and there is no independent corroborative evidence to come to the conclusion that he has helped the importer in evading the payment of customs duty. In fact there is no legally sustainable evidence of connivance against the appellant. More over it has been accepted by the Revenue that the importer has paid the differential duty along with interest and penalty and the same has been appropriated in the Order-in-original. The case of the appellant is covered by Section 28(6) - the proceedings against him also stands concluded once the importer has accepted the undervaluation and paid the differential duty along with interest and penalty - appeal allowed - decided in favor of appellant.

Summary

Issues:
Impugned order upholding penalty under Customs Act, 1962 Sections 112(a) and 114AA. Lack of evidence of abetment or instigation by Clearing and Forwarding Agent. Applicability of Section 28(6) of Customs Act, 1962.

Analysis:
The case involved an appeal against an order imposing penalties under Sections 112(a) and 114AA of the Customs Act, 1962. The appellant was accused of aiding in the undervaluation of imported goods. The investigation revealed that the goods were misdeclared to evade customs duties. The original authority rejected the declared values, confiscated the goods, and imposed penalties on the Clearing and Forwarding Agent. The Commissioner(Appeals) upheld these penalties, leading to the present appeal.

During the hearing, the appellant argued that the orders were based on presumptions and lacked concrete evidence. It was contended that the appellant did not guide the importer in undervaluing goods and that the findings were unsupported by evidence. Importers had admitted undervaluation, paid the differential duty, interest, and penalty, which were appropriated in the Order-in-Original. The appellant invoked Section 28(6) of the Customs Act, 1962, stating that proceedings should be deemed conclusive once duty, interest, and penalty were paid in full.

The Appellate Tribunal considered the submissions and evidence. It noted the absence of clear evidence implicating the appellant in abetting undervaluation. The appellant's role as a Clearing and Forwarding Agent was emphasized, with no proof of connivance. Importantly, it was acknowledged that importers had paid the required amounts, as per the Order-in-Original. The Tribunal referenced Section 28(6) of the Customs Act, which deems proceedings conclusive upon full payment of duty, interest, and penalty. Consequently, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal.

In conclusion, the judgment highlighted the importance of substantial evidence in imposing penalties under the Customs Act, 1962. It emphasized the statutory provision of Section 28(6) to determine the conclusiveness of proceedings post-payment. The decision underscored the necessity of concrete proof of involvement in customs duty evasion before penalizing individuals, ensuring fair adjudication in customs matters.