2022 (10) TMI 708 - AT - Customs

Levy of penalty u/s 114 of the Customs Act, 1962 - Smuggling - alleged act of omission / commission - Red Sander Logs - appellant is aggrieved by the direction of the Commissioner (Appeals) remanding the matter to the adjudicating authority to reconsider the non-imposition of penalty on the appellant under sec. 114 of the Customs Act, 1962 - HELD THAT - From the facts narrated, it can be seen that the adjudicating authority had absolved the appellant from imposing penalty. On perusal of the impugned order, it is seen that after appreciating the facts, the Commissioner (Appeals) has noted that one consignment was already cleared and this was the second consignment that was intercepted by the DRI. She has taken a view that it is obvious that the appellant has abetted Shri Sabarivasan and his aides in misusing the IEC of M/s. Polyhose India (Rubber) Pvt. Ltd. and therefore is liable for penalty under sec. 114 of the Customs Act, 1962. In the present case, the role of the appellant as brought out from the evidence is in arranging the container. The said goods namely container has not been confiscated. Further, the learned counsel for the appellant has raised argument on the basis of the recent Notification No. 56/2015-2020 dated 18.2.2019. Therefore, whether the items namely red sanders was restricted item (license needed for export) during the relevant time has to be examined, it is opined that as the Commissioner (Appeals) has only remanded the matter to relook into the non-imposition of penalty. The appellant would be getting sufficient chance to put forward documents and arguments to establish their innocence. Appeal dismissed.

Summary

Issues:
1. Imposition of penalty under sec. 114 of the Customs Act, 1962 on the appellant.

Analysis:
The case involved the smuggling of red sander logs in an export consignment declared as 'wire braided rubber hydraulic hose'. The original authority ordered the confiscation of the red sander logs but refrained from confiscating the container or imposing a penalty on the appellant. The department appealed for the imposition of a penalty on the appellant for abetting smuggling. The Commissioner (Appeals) remanded the matter to reconsider the penalty imposition. The appellant argued that they were not involved in the smuggling attempt and had only provided freight forwarding services. They highlighted the lack of proceedings against the actual parties involved in the smuggling. The adjudicating authority absolved the appellant from penalty imposition, stating their limited role in arranging the container.

The Commissioner (Appeals) remanded the case based on the appellant's alleged abetment of smuggling by misusing the IEC of another company. The appellant's involvement in arranging the container was considered as aiding the smuggling attempt. The Commissioner set aside the non-imposition of penalty and directed the adjudicating authority to reconsider the penalty within 30 days. The appellant's argument regarding a recent notification relaxing export policies for red sanders was also considered.

The judgment highlighted discrepancies in the documentation and actions of the parties involved in the smuggling attempt. The appellant's role in arranging the container without evidence of direct involvement in the smuggling plan was a crucial point of contention. The Commissioner's decision to remand the case for penalty reconsideration was upheld, ensuring the appellant's right to a fair hearing and the opportunity to present additional evidence. Ultimately, the appeal was dismissed, affirming the Commissioner's decision.

This detailed analysis covers the issues related to the imposition of a penalty under sec. 114 of the Customs Act, 1962 on the appellant in the context of the smuggling of red sander logs in an export consignment. The judgment provides a comprehensive overview of the case, including arguments from both sides and the reasoning behind the decisions made by the original authority and the Commissioner (Appeals).