2023 (8) TMI 951 - AT - Customs

Levy of penalties - clandestine clearance of high value electronic goods - smuggling gold jewellery - intent to abet the offence or not - HELD THAT - The statement recorded from Sri Naveen Kumar under Section 108 of the Customs Act, 1962 has revealed that Sri Kannan used to inform the airway bill details of the arriving consignment over phone or in person. Sri NaveenKumar was responsible for the customs clearance. Sri NaveenKumar used to download the import manifest of M/s.UPS authorized courier from the server and then would remove the particular airwaybills from the manifest. He would then take the altered manifest to the courier terminal for submission before the custodian. Apart from the goods covered by the two airway bills seized by D.R.I as per the statement, Sri Naveen Kumar has cleared earlier goods covered by 85 airway bills for Kannan. It is also admitted by Sri Naveen Kumar that he followed the same modus operandi for clearing the above airway bills. Thus, it can be seen that Sri Naveen Kumar and Sri Kannan were fully involved and acted together in the illegal activity of importing the undeclared goods. The narration of facts itself bring out the mens rea and overt act of Sri Naveen Kumar, and Sri I.C. Kannan. The goods which have crossed the barrier of the country without declaration and without payment of duty are liable for confiscation under Section 111 (d) of the Customs Act, 1962. Thereby the act of the appellants attracts imposition of penalty under section 112 (a) of the Customs Act, 1962. However, it is found that penalty of Rs.10 lakhs imposed under Section 112 (a) of the Act is on the higher side and requires to be reduced. The penalty imposed under Section 112 (a) on each of the appellant is reduced to Rs.5,00,000/-. Further, in the present case, the whereabouts of the consignee were not traceable. On investigations, it was revealed that there is no such person in the given address. These are nothing but paper transactions. The imports were made only for the benefit of appellants and their allies. A person who causes to be made, signed or used any declaration or document is also liable under Section 114AA. Sri I.C. Kannan had caused Sri Naveen Kumar to make the false documents. It is Sri I.C. Kannan who had informed Sri Naveen Kumar the details of airway bills so as to manipulate the import manifest. So both appellants are guilty and liable for penalty liable under Section 114AA. On appreciation of facts, it is found that penalty of Rs.25 lakhs under Section 114AA is on the higher side and requires to be reduced. The penalty imposed under this section is reduced to Rs.10,00,000/- (Rupees Ten lakhs only) on each of the appellants. Appeal allowed in part.

Summary

Issues Involved:

1. Involvement in smuggling activities.
2. Validity of penalties under Section 112(a) of the Customs Act, 1962.
3. Validity of penalties under Section 114AA of the Customs Act, 1962.

Summary:

1. Involvement in smuggling activities:
The Directorate of Revenue Intelligence (DRI), Chennai Unit, upon receiving intelligence about smuggling activities, conducted surveillance and intercepted courier parcels from Singapore. The parcels, booked through M/s. UPS Jet Air Express Pvt. Ltd., contained undeclared high-value electronic goods and gold jewelry. The investigation revealed that the appellants, Mr. Naveen Kumar and Mr. I.C. Kannan, were involved in the clandestine clearance of these goods. Statements recorded under Section 108 of the Customs Act, 1962, indicated that Mr. Naveen Kumar altered import manifests to facilitate the clearance of undeclared goods, while Mr. Kannan coordinated the details of the consignments.

2. Validity of penalties under Section 112(a) of the Customs Act, 1962:
The original authority imposed penalties of Rs. 10 lakhs each on Mr. Naveen Kumar and Mr. I.C. Kannan under Section 112(a) for their involvement in the illegal importation of undeclared goods. The Tribunal found that the appellants were fully involved in the illegal activity and acted together, making them liable for penalties under Section 112(a). However, the Tribunal deemed the penalty amount of Rs. 10 lakhs to be on the higher side and reduced it to Rs. 5 lakhs each.

3. Validity of penalties under Section 114AA of the Customs Act, 1962:
The original authority also imposed penalties of Rs. 25 lakhs each on the appellants under Section 114AA for using false and incorrect material in the importation process. The Tribunal confirmed that Mr. Naveen Kumar knowingly presented false documents to customs authorities, and Mr. I.C. Kannan caused these false documents to be made. Despite this, the Tribunal found the penalty amount of Rs. 25 lakhs to be excessive and reduced it to Rs. 10 lakhs each.

Conclusion:
The Tribunal modified the impugned order by reducing the penalties under Section 112(a) from Rs. 10 lakhs to Rs. 5 lakhs each and under Section 114AA from Rs. 25 lakhs to Rs. 10 lakhs each. The appeals were partly allowed in these terms.