2019 (9) TMI 77 - AT - Customs

Imposition of penalty u/s 114 and 114 AA of the Customs Act, 1962 - export of restricted/prohibited item - Muriate of Potash (MOP) - mis-declaration of export goods - Confiscation of goods - HELD THAT - Considering the fact that it is a case of the clear cut misdeclaration of goods and in the guise of nut and bolts, the appellant sought to export MOP for which licence is required and it was also found that during the investigation, all the documents were fake - In these circumstances, the goods were rightly held liable for confiscation. Penalty - HELD THAT - Shri Rajnish Kansal is the main person who fabricated the documents and misdeclared the goods - the penalty of Shri Rajnish Kansal is rightly imposed and no leniency is required - however quantum of penalty reduced. Appeal allowed in part.

Summary

Issues:
Reduction of penalty imposed under Section 114 and 114 AA of the Customs Act, 1962 for misdeclaration of goods as nut and bolts when they were actually Muriate of Potash (MOP).

Analysis:

Issue 1: Reduction of Penalty

The appellants appealed against the penalty imposed under Section 114 and 114 AA of the Customs Act, 1962 for misdeclaring goods as nut and bolts when they were actually Muriate of Potash (MOP), a restricted/prohibited item. The appellants sought leniency in the penalty due to the declared value of the consignment being ?30 Lakhs. The Tribunal noted the clear misdeclaration of goods and the use of fake documents in the export process. It held that the goods were rightfully liable for confiscation.

Issue 2: Individual Liability

The Tribunal differentiated between the main person, Shri Rajnish Kansal, who fabricated documents and misdeclared the goods, and Shri Rinku Kansal, an employee not benefiting from Shri Rajnish Kansal's actions. It upheld the penalty imposed on Shri Rajnish Kansal due to his direct involvement in the misdeclaration. However, considering Shri Rinku Kansal's lack of benefit from the act, the Tribunal reduced his penalty from ?1,50,000 to ?50,000 under Section 114 of the Customs Act, 1962.

Conclusion

The Tribunal disposed of the appeals by maintaining the penalty on the main individual involved in the misdeclaration while reducing the penalty for the employee who did not benefit from the wrongful act. This judgment highlights the importance of individual liability in cases of misdeclaration of goods under customs laws and the consideration of leniency based on the level of involvement and benefit derived by each party.