2020 (4) TMI 607 - AT - Customs

Condonation of delay in filing appeal - Imposition of penalty u/s 114 of CA - Fraudulent availment of Duty Drawback. Condonation of delay in filing appeal - HELD THAT - Without going into the interpretation of Rule 6A and explanation thereto we find that these appeals have been filed by the revenue as directed by the tribunal, to comply with the requirement of explanation (2) to Rule 6A. Since the main appeal was filed within time, these appeals are only technical appeals and the delay in filing these appeals need to be condoned. Penalty - HELD THAT - In the appeal filed by the revenue, nothing has been brought on record to show that the respondents had connived and abetted in the acts of exporter to claim the drawback fraudulently. In absence of any personal knowledge of the respondents or their act of connivance or abetment in the acts of exporters the provisions of Section 114 could not have been invoked against these officers. Commissioner has also not given the clean chit to these officers in respect of their failure to perform the duties assigned to them diligently. He only has extended the benefit of doubt as departmental investigation has failed to show that these officers had knowledge and had connived with the exporter in his act - penalty cannot be imposed. Decided against Revenue.

Summary

Issues:
- Condonation of delay in filing appeals against the order of the Commissioner of Customs
- Confiscation of goods under Customs Act
- Rejection of drawback claim for past exports
- Imposition of penalties under Section 114 of the Customs Act
- Dropping of penal proceedings against certain individuals
- Compliance with Rule 6A of CESTAT Procedure Rules
- Challenge to dropping of penal proceedings against officers
- Lack of evidence for connivance or abetment in fraudulent activities
- Interpretation of penalty provisions under Section 114 of the Customs Act

Condonation of Delay and Compliance with Rule 6A:
The appeals were filed by the revenue against the order of the Commissioner of Customs with a delay of 9 years and 11 months. The tribunal directed the revenue to file separate appeals against other parties mentioned in the order. The delay was sought to be condoned under Rule 6A of CESTAT Procedure Rules, which mandates separate appeals for each aggrieved person. The main appeal was filed on time, making the subsequent appeals technical in nature. The tribunal, therefore, allowed the condonation of delay to comply with the rule.

Confiscation of Goods and Imposition of Penalties:
The Commissioner's order confiscated goods entered for export and rejected drawback claims for past exports under specific shipping bills. Penalties were imposed on various individuals under Section 114 of the Customs Act. However, penal proceedings against certain persons were dropped, indicating a mixed outcome in terms of penalties and confiscation.

Challenge to Dropping of Penal Proceedings:
The revenue challenged the dropping of penal proceedings against officers involved in the case. The appeal highlighted statements made by officers and other individuals regarding the examination of goods and discrepancies observed. The Commissioner extended the benefit of doubt to the officers, citing lack of evidence of connivance or abetment in fraudulent activities. The tribunal referenced previous cases to emphasize the need for concrete evidence to invoke penalty provisions under the Customs Act.

Lack of Evidence for Connivance and Abetment:
The tribunal found no merit in the appeals filed by the revenue, noting the absence of evidence showing the officers' personal involvement or connivance in fraudulent activities. The lack of proof of connivance or abetment led to the dismissal of the appeals, as the provisions of Section 114 could not be invoked without concrete evidence.

Interpretation of Penalty Provisions:
In line with precedent, the tribunal emphasized the need for concrete evidence to impose penalties under Section 114 of the Customs Act. The lack of evidence demonstrating active involvement or omission by the officers in rendering goods liable to confiscation or abetting such actions led to the dismissal of the appeals. The tribunal's decision highlighted the importance of proving connivance or abetment to invoke penalty provisions effectively.