2009 (7) TMI 344 - AT - Customs

Imposition of penalty - neither there is any allegation in the show cause notice nor any finding in the impugned order regarding appellant-company s role in the substitution of red sanders logs in place of processed saw dust - that there is no allegation in the show cause notice regarding the involvement of the company in removing the declared goods enroute by stuffing red sanders by way of concealment company is not liable to penalty under Section 114(i) of the Customs Act, 1962

Summary

Issues:
1. Confiscation of Red Sanders Logs mis-declared as processed sawdust.
2. Confiscation of processed sawdust used for concealing Red Sanders Logs.
3. Imposition of penalties on individuals and M/s. Kavia Carbons.
4. Appeal against penalty imposition by M/s. Kavia Carbons.

Analysis:
1. The judgment addresses the issue of the confiscation of Red Sanders Logs that were smuggled out of India by mis-declaration as processed sawdust. The logs were confiscated, and processed sawdust, used as a cover cargo for concealing the logs, was also confiscated with an option for redemption upon payment of a fine of Rs. 10,000. Penalties were imposed on various individuals and M/s. Kavia Carbons for their involvement in the case.

2. The judgment further delves into the confiscation of processed sawdust used for concealing the Red Sanders Logs. It mentions that penalties were imposed on M/s. Kavia Carbons and several individuals, including the Director of the Company. The appeal by M/s. Kavia Carbons specifically contests the penalty imposition, arguing that there was no allegation or finding regarding the company's role in the substitution of logs.

3. In terms of the penalties imposed, the judgment highlights that there was no proposal in the show cause notice for penal action against the Managing Director of M/s. Kavia Carbons. It notes that penalties can be imposed on a private limited company and its director if the company is found guilty of any omission or commission leading to the goods being liable to confiscation. The judgment scrutinizes the records and concludes that there was no allegation in the show cause notice implicating the company in the removal of declared goods enroute, leading to the company being held liable for penalties under the Customs Act, 1962.

4. The final part of the judgment resolves the appeal against the penalty imposition by M/s. Kavia Carbons. It sets aside the penalty imposed on the company after finding that there was no evidence or allegation in the show cause notice implicating the company in the actions that would render it liable for penalties under the Customs Act, 1962. The appeal is allowed, and the penalty on M/s. Kavia Carbons is overturned.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the rationale behind the decision delivered by the Appellate Tribunal CESTAT, CHENNAI.