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2021 (12) TMI 252 - AT - CustomsImposition of consolidated penalty levied u/s 112(a) read with Section 114A and 114AA of Customs Act - Appellant engaged for clearance of goods on commission basis - goods declared as men s casual shoes unbranded - It appeared to Revenue that the goods were undervalued with intent to evade payment of appropriate customs duty - HELD THAT - As per the facts on record, Shri Rajesh Kumar Gupta is the actual importer who has been importing goods in the name of proprietorship firm M/s Maa Shati of Shri Makhan Kant Sharma, which was having IEC number. Admittedly, appellant has introduced both the persons. The appellant was being paid nominal/nominal remuneration for facilitating the clearance of the goods, being imported by the said Shri Rajesh Kumar Gupta. There is no allegation in the show cause notice that this appellant was a partner or sharing in the profits being made in the business by Shri Rajesh Kumar Gupta, save and except, the normal remuneration/ commission, as a person handling clearances; It has not been established that the appellant has any role in arranging either the import of the goods or disposal of the same. He stated that he also came to know about the alleged mis-declaration only after inspection of the container in January/ February, 2010 by the Customs. During the course of adjudication, admittedly, non-RUDs were not provided; appellant s prayer for one adjournment or re-fixation of the date for receiving of the documents, was not accepted by the Adjudicating authority. To that extent we find that the order is bad as the appellant has not been provided proper opportunity to defend himself. It is further found that there is nothing against the appellant wherein it can be deduced that he was doing any of the act of omission /commission with regard to the goods under import, so as to render the same liable for confiscation - Neither Shri Makhan Kant Sharma nor this appellant was aware that Shri Rajesh Kumar Gupta was importing goods by resorting to mis-declaration and suppression, which amounted to smuggling. Revenue places reliance on some documents which have been allegedly taken from the pen drive, alleged to have been given to appellant by Shri Rajesh Kumar Gupta. However, there are no proper procedures for recovering the pen drive or taking extracts from pen drive have beed followed. In fact, even a Panchnama was not drawn. Under the circumstances, reliance placed on such documents, loses evidentiary value. The impugned order heavily depends on statements rather than the statements supported by concrete evidence. It is alleged that the appellant has given inculpatory statement. However, the appellant submits that the statement has been recorded under undue coercion and duress. It is apparent on the face of record that the recording of the statement started on 29.03.2010 and continued again on 30.03.2010 after which he was arrested - the learned Adjudicating authority has not followed the provisions of Section 138B of the Customs Act, 1962, while placing reliance on the statements. There is no provision in the law for such an imposition of penalty. The impugned order, is bad in law and is liable to be set aside on this ground alone. The appellant has been imposed penalty under Section 114A Customs Act, 1962. It is not established that the appellant has forged or falsified any of the documents which were filed before the Customs. The allegation against the appellant that he prepared and signed documents in the name of anonymous foreign seller is not substantiated as no such documents containing signature of the appellant has been brought on record. We find for these reasons, penalty under Section 114AA is not attracted. No charge of abetment is also evidenced against the appellant. It is not the case of the department that he was sharing the profit in the acts of duty evasion etc resorted to by the importers. It is not established that the appellant had knowledge of the illegal trade indulged in by Shri Rajesh Kumar Gupta - the penalty under Section 112(a) is also not attracted. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Imposition of consolidated penalty under Sections 112(a), 114A, and 114AA of the Customs Act. 2. Alleged evasion of customs duty through mis-declaration and concealment of goods. 3. Jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue the show cause notice. 4. Reliability of statements and documents retrieved from the appellant. 5. Differential treatment of the appellant and customs officers involved. Issue-wise Detailed Analysis: 1. Imposition of Consolidated Penalty: The appellant contested the imposition of a consolidated penalty of ?3 crore under Sections 112(a), 114A, and 114AA of the Customs Act. The Tribunal found that the impugned order imposed a consolidated penalty without specifying the exact penal provision, which is unsustainable in law. The Tribunal noted that Section 114A is applicable only to persons liable to pay duty or interest, which was not the case for the appellant. Additionally, the Tribunal found no evidence of the appellant forging or falsifying documents, thus negating the applicability of Section 114AA. The Tribunal concluded that the penalty under Section 112(a) was also not attracted as there was no evidence of the appellant's knowledge of the illegal trade or any act of omission or commission rendering the goods liable for confiscation. 2. Alleged Evasion of Customs Duty: The Tribunal observed that the appellant was a consultant and not directly involved in the import or disposal of the goods. The appellant's role was limited to facilitating the clearance of goods for a nominal remuneration. The Tribunal found that the appellant was not aware of the mis-declaration or concealment of goods until the customs inspection. The investigation did not effectively controvert the appellant's claim that the amounts received were for disbursement of customs duty and other clearing expenses. The Tribunal noted that no unexplained assets or cash were found in the appellant's possession during the investigation. 3. Jurisdiction of DRI: The appellant challenged the jurisdiction of the DRI to issue the show cause notice based on the Supreme Court's judgment in Canon India Private Limited v. Commissioner of Customs, which held that DRI has no jurisdiction to issue such notices. The Tribunal left this question open, focusing instead on the merits of the case. 4. Reliability of Statements and Documents: The Tribunal found that the statements of the appellant and other co-noticees were recorded under coercion and duress, making them unreliable. The Tribunal emphasized that statements alone, without corroborative evidence, cannot be the basis for penalties. The Tribunal also noted that the documents retrieved from the appellant's pen drive were not recovered following proper procedures, such as drawing a Panchnama, which rendered them inadmissible as evidence. 5. Differential Treatment of Appellant and Customs Officers: The Tribunal observed that the adjudicating authority applied different standards to the appellant and the customs officers involved. While the statements of customs officers were discarded as unreliable, the appellant's statements were treated as gospel truth. The Tribunal found this approach inconsistent and noted that the appellant's statements were recorded under coercion, further undermining their reliability. Conclusion: The Tribunal allowed the appeal, setting aside the impugned order and the consolidated penalty imposed on the appellant. The Tribunal emphasized the lack of concrete evidence against the appellant and the procedural lapses in the investigation. The question of DRI's jurisdiction to issue the show cause notice was left open. The appeal was allowed with consequential benefits to the appellant.
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