2023 (5) TMI 990 - AT - Customs

Levy of penalty under Sections 112 (a) and 112 (b) of the Customs Act, 1962 - allegation of importing consignments from Hongkong and China grossly mis-declaring the description and value of the consignments using the IEC registered in the name of other person and shell companies - burden to prove the allegations on appellant, cannot be fulfilled - no corroborative statements recorded - HELD THAT - During the course of investigation, it is found that on 25.08.2017, the appellant visited the DRI Office along with one Shri Sameer Sharma, on whose persuasion, the appellant came to the DRI Office to facilitate the clearance of the impugned consignment, but it is very strange, that when Shri Sameer Sharma has also visited DRI Office along with the appellant, why the statement of Shri Sameer Sharma, who is alleged to be tout in the import of the impugned goods, was not recorded? It is found from the record that it has been alleged that the appellant has abeted to mis-declare and under-value the impugned goods, but in fact, the impugned consignment were already intercepted by DRI and found mis-declared and under-valued. In that circumstances, how the appellant was involved in abetment of the impugned consignment, which were already found mis-declared and under-valued. This said issue has come up before this Tribunal in the case of Smt.Sushma 2021 (7) TMI 578 - CESTAT NEW DELHI , wherein the Tribunal has held There is no mention of any involvement of the appellant either in the form of instigation or conspiracy to aid the impugned fraudulent export. Though said statement got retracted vide his letter dated 26.08.2011 to Director General, DRI. But said retraction stands rebutted from letter No.50 D/25/2011 dated 02.09.2011 (RUD-II) and also from his own subsequent letter dated 11.11.2011 (RUD-12) where he informed Director General, DRI, about him to be the authorized person of all the companies in Table-I. All the documents collected statements recorded by the department are absolutely silent about any alleged role of the appellant. Further in the case of Shri Ram Another 1974 (11) TMI 100 - SUPREME COURT , the Hon ble Apex Court has examined that in order to constitute abetment, the abettor must be shown to have intentionally aided the commission of the crime. Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough to comply with the requirements of abetment. The Court cannot heap one assumption to give an another conduct of the appellant meaning which, it does not naturally bear at the best. In that circumstances of the case, the appellant wanted to help the clearance of the consignment, which does not conclude that the appellant has abeted in committing the crime. Thus, it is clear that the appellant came to the DRI Office with one Shri Sameer Sharma, whose statement was not recorded at all. The revenue has failed to prove that the appellant was involved in mis - declaration and under-valuation of the import consignments (which were already seized) without any cogent evidence - penalty on the appellant under Section 112 (a) 112 (b) is not imposable - appeal allowed.

Summary

Issues Involved:
1. Imposition of Penalty under Sections 112 (a) and 112 (b) of the Customs Act, 1962.
2. Alleged Abetment in Mis-declaration and Under-valuation of Imported Goods.
3. Violation of Principles of Natural Justice.

Summary:

1. Imposition of Penalty under Sections 112 (a) and 112 (b) of the Customs Act, 1962:
The appellant, a Superintendent of GST, appealed against the order imposing a penalty of Rs. 20,00,000/- under Sections 112 (a) and 112 (b) of the Customs Act, 1962. The intelligence gathered by the Kolkata Zonal Unit of DRI revealed that certain operators were importing consignments from Hong Kong and China with gross mis-declaration and undervaluation using IEC registered in the name of other persons and shell companies. The investigation found that M/s A.S.S. Tradcom imported six consignments, out of which two were cleared, and four were seized due to mis-declaration and undervaluation. The appellant allegedly visited the DRI Office to facilitate the clearance of these consignments.

2. Alleged Abetment in Mis-declaration and Under-valuation of Imported Goods:
The appellant was accused of abetting the import of mis-declared and undervalued goods. However, the appellant contended that he mistakenly went to the DRI Office to meet someone for a personal reason and not to facilitate the clearance of the consignments. The appellant argued that no evidence was presented to prove his connection with the importer or his involvement in the abetment. The Tribunal noted that the statement of Shri Sameer Sharma, who accompanied the appellant, was not recorded, and there was no evidence to show the appellant's intentional involvement in the mis-declaration and undervaluation of the consignments.

3. Violation of Principles of Natural Justice:
The appellant claimed that he was not provided with the relied-upon documents and was not given a reasonable opportunity to file a reply to the show-cause notice, thus violating the principles of natural justice. The Tribunal observed that the investigation did not prove the appellant's involvement in the abetment of mis-declaration and undervaluation. The Tribunal referenced previous cases, including Smt. Sushma Vs. Commissioner of Customs and Shri Ram & Another Vs. The State of Uttar Pradesh, to establish that mere presence or casual involvement does not constitute abetment without intentional aid or conspiracy.

Conclusion:
The Tribunal found that the revenue failed to provide cogent evidence of the appellant's involvement in the mis-declaration and undervaluation of the import consignments. Consequently, the penalty imposed under Sections 112 (a) and 112 (b) of the Customs Act, 1962, was deemed not imposable. The impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.