2019 (11) TMI 453 - AT - Customs

Imposition of penalty u/s 112(a) of the Customs Act, 1962 - aiding and abetting the importer to undervalue the imported furniture - appellant engaged in the business of hotel management consultancy - reliance placed upon the statement of the appellant as well as the statement given by the main importer Shri HR Ravichandra - HELD THAT - Commissioner has wrongly observed in the impugned order that the appellant has admitted that he has helped the importer Gardenia Comforts in undervaluation of the furniture. Commissioner has misread the evidence on record and has come to the conclusion on the basis of the involvement of the appellant in other cases wherein the appellant has confessed his guilty and has also approached the Settlement Commission along with other importers and paid the penalty of ₹ 10,000/- imposed by the Settlement Commission . but as far as, this case is concerned, there is no evidence on record to establish that the appellant has helped the importer in undervaluation of the furniture imported by them. Therefore, the Revenue has failed to establish the charge against the appellant on merits. The role of appellant has not been established in aiding and abetting the importer to undervalue the imported furniture. Therefore, in the facts and circumstances and the evidence on record, imposition of penalty on the appellant is not tenable in law and therefore, the penalty imposed is set aside by allowing the appeal of the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Imposition of penalty under Section 112(a) of the Customs Act, 1962 on the appellant for alleged abetment in undervaluation of imported goods.

Analysis:
The appellant, engaged in hotel management consultancy, was accused of aiding undervaluation of imported goods by a show-cause notice. The Commissioner of Customs imposed a penalty under Section 112(a) of the Customs Act, 1962. The appellant contested, arguing non-involvement and lack of evidence against him. The Settlement Commission had granted immunity to the main importer and imposed penalties on others involved. The appellant's defense highlighted lack of direct evidence, contrary to the Commissioner's findings.

The appellant's counsel argued that the penalty was unjust as the appellant was not involved in undervaluation, citing settlements in other cases involving the appellant. The appellant's role as a consultant for the importer was disputed by the Assistant Commissioner, emphasizing the need for independent examination. Legal precedents were referenced by both sides to support their arguments.

The judgment analyzed the evidence, finding no direct proof of the appellant's involvement in undervaluation. The Commissioner's conclusion based on the appellant's involvement in other cases was deemed erroneous. The judgment differentiated between settled cases and the current one, emphasizing the lack of evidence against the appellant. The Tribunal's decision in similar cases was referenced to support the finding that the penalty on the appellant was not legally sustainable. Consequently, the penalty was set aside, and the appellant's appeal was allowed.

In conclusion, the judgment focused on the lack of evidence linking the appellant to the alleged abetment in undervaluation, leading to the decision to overturn the penalty imposed under Section 112(a) of the Customs Act, 1962. The analysis highlighted the importance of establishing direct involvement and the need for independent examination of each party's role in such cases.