2023 (9) TMI 531 - AT - Customs

Levy of penalty u/s 114 (iii) of Customs Act on the former Assistant Commissioner of customs - Abetting in export of overvalued goods in order to avail inadmissible benefit under DEPB scheme - rejection of declared FOB value for exported goods and re-determination of the same - denial of cross-examination - HELD THAT - there is no case of connivance made out against this appellant - the allegations of Revenue are unfounded in view of the facts placed by the appellant that full value of shipping bills have been realized by the exporter in due course. In this view of the matter, the penalty against this appellant is not warranted. Accordingly, the impugned order is set aside so far as this appellant is concerned - appeal is allowed.

Summary

Issues:
The case involves an appeal against the imposition of penalty under section 114(iii) of the Act related to overvaluation of exported goods to avail inadmissible benefits under the DEPB scheme.

Adjudication Order:
- The Revenue alleged overvaluation of goods exported by the main appellant under the DEPB scheme, leading to the cancellation of DEPB benefit and demand for customs duty.
- The main appellant contested the order on various grounds, including lack of proper comparison with similar goods, denial of cross-examination, and legal untenability of demanding duty from multiple persons.
- Importers of DEPB scripts also challenged the imposition of duty and penalty, claiming bonafide transactions.

Penalties Imposed:
- Customs officers were penalized for allegedly facilitating overvaluation of exports by the main appellant to obtain ineligible DEPB benefits.
- The Adjudicating Authority imposed penalties under Section 114(iii) of the Act, citing acts of abetment and omission leading to overvaluation and rendering goods liable for confiscation.

Appellant's Appeal:
- The appellant officer challenged the penalties, arguing that allegations were not proven and presenting evidence of full remittances received by the exporter, refuting Revenue's case.
- The appellant highlighted procedural issues, lack of connivance, and the absence of deliberate default or connivance in conducting market inquiries or verifying export values.

Tribunal's Decision:
- The Tribunal found no evidence of connivance by the appellant officer and deemed Revenue's allegations unfounded due to full remittance received by the exporter.
- Consequently, the penalty against the appellant officer was deemed unwarranted, and the impugned order was set aside, allowing the appeal with any consequential benefits.

This judgment highlights the complexities of proving overvaluation in exports, the responsibilities of customs officers, and the importance of thorough investigations and evidence in penalty cases under the Customs Act, 1962.