2024 (5) TMI 1351 - AT - Customs

Non imposition of Penalty u/s 114 on the Respondents - Smuggling - confiscation of the cigarettes - undeclared cigarettes found concealed behind gypsum plaster powder bags and also as the quantity of gypsum plaster was mis-declared - Import of Gypsum Plaster in Powder Form - Penalty imposed on Shri Anil Gupta - adjudicating authority imposed penalty on Shri. Yuvaraj Singh and on Shri D. Vignesh u/s 112 (a) of Customs Act. HELD THAT - The main person who was entrusted to import the goods is Shri Jaffer of Malaysia. The said person had contacted Shri Vignesh to file the bill of entry under the IEC code of M/s. Ganga Enterprises. However, Shri Jaffer was not traceable. The adjudicating authority has dropped the entire proceedings against Shri Jaffer. The department has not able to establish that these Respondents made any document which is false or incorrect in any material particular. The exact nature of the document alleged to be fabricated by these Respondents is not brought out in the grounds of appeals filed by the department. In the absence of ingredients to attract Section 114 AA the penalty under the said Section cannot be imposed. The Tribunal in the case of M/s. Artisan Welfare Society 2023 (7) TMI 841 - CESTAT CHENNAI had occasion to consider a similar situation. The facts in the said case was attempt to export red sanders. The Tribunal observed that as the investigation could not prove that the exporter therein knowingly or intentionally made any false declaration or statement could not be punished by penalty u/s 114 AA. Thus, we find that the order passed by the adjudicating authority in not imposing the penalty u/s 114 AA does not require any interference. The appeal filed by the department is devoid of merits. The appeals are dismissed.

Summary

Issues Involved:
1. Whether the adjudicating authority erred in not imposing penalties u/s 114 AA of the Customs Act 1962 on the Respondents.
2. Examination of the role of various individuals and entities involved in the alleged smuggling attempt.

Summary:

1. Facts and Allegations:
M/s. K.B.S. Manian and Brothers Pvt. Ltd., Chennai filed a bill of entry dated 17.09.2012 on behalf of M/s. Ganga Enterprises, New Delhi for importing 25 metric tons of "Gypsum Plaster in Powder Form." Upon examination by DRI officers, it was found that the container also contained undeclared cigarettes valued at Rs.1,22,85,440/-, concealed behind the gypsum plaster bags. Show Cause Notices were issued, and the original authority ordered confiscation of the smuggled cigarettes, imposed a redemption fine, and penalties under Section 112 (a) of the Customs Act. However, no penalties were imposed u/s 114 AA on the Respondents.

2. Department's Appeal:
The department, represented by Shri R. Rajaraman, argued that the adjudicating authority failed to impose penalties u/s 114 AA despite evidence showing the Respondents' involvement in smuggling. The department contended that the Respondents acted in concurrence to smuggle cigarettes into the country.

3. Respondents' Defense:
The Respondents did not appear despite repeated notices. Ms. Vishnu Priya, appointed as Amicus Curie, argued that there were no grounds to impose penalties u/s 114 AA. The adjudicating authority had found no material evidence that the Respondents made any false or incorrect declarations.

4. Adjudicating Authority's Findings:
The adjudicating authority refrained from imposing penalties u/s 114 AA, citing a lack of evidence that the Respondents knowingly or intentionally made false declarations. The authority discussed the roles of various individuals and concluded that there was no indictment in the Show Cause Notice that warranted penalties u/s 114 AA.

5. Tribunal's Decision:
The Tribunal upheld the adjudicating authority's decision, stating that the department failed to establish that the Respondents made any false or incorrect documents. The Tribunal referenced similar cases, including M/s. Artisan Welfare Society and M/s. Cochin Air Cargo Clearing House, where penalties u/s 114 AA were not imposed due to insufficient evidence. The Tribunal dismissed the department's appeal, finding it devoid of merits.

6. Appreciation:
The Bench appreciated the efforts of Ms. Vishnu Priya in assisting the Tribunal.

Conclusion:
The appeals filed by the department were dismissed, and the order passed by the adjudicating authority in not imposing penalties u/s 114 AA was upheld.