2009 (10) TMI 239 - AT - Customs

Penalty- Appellant was a clearing clerk with the concerned CHA involved in non-payment of the customs duty in respect of the impugned consignments and other allegations such as substitution of the goods in the warehouse and filing of warehouse bond with forged signature etc. the appellant submits that he was not dealing with the air customs cargo he cannot be penalized for these cases which relate to air cargo. Held that- we do not find any evidence of direct involvement by the importer brought out in the impugned order and we gather from the learned DR s submission that the entire matter is under investigation by the CBI and the whole truth of the matter would come to light only when the investigation is complete. Determining penal liability against the appellants and others would therefore necessarily have to await the conclusion of the investigation. Accordingly, we set aside the impugned order and remand the same to the original authority for fresh decision

Issues:
1. Whether the appellant, who was a clearing clerk with the concerned Customs House Agent (CHA), can be penalized for non-payment of customs duty in cases related to air cargo when he was handling only Bills of Entries for sea customs.
2. Whether the penalties imposed on the appellant, who was a driver for the proprietor CHA, are justified considering his involvement in the fraud scheme to evade customs duty.
3. Whether the duty liability on the importers can be established in cases where the CHA failed to pay the customs duty, and the imported goods were substituted with locally procured materials like limestone powder.

Issue 1 Analysis:
The appeals filed by the appellant, a clearing clerk with the CHA, involved allegations of non-payment of customs duty and substitution of goods in the warehouse. The appellant argued that since he handled only sea customs Bills of Entries, he should not be penalized for air cargo cases. The Tribunal found that this specific issue was not adequately addressed in the impugned order. Consequently, the Tribunal set aside the orders related to the appellant and remanded the matter to the adjudicating Commissioner for fresh consideration, emphasizing the need for a fair hearing.

Issue 2 Analysis:
In the case of the appellant who worked as a driver for the CHA, it was argued that he acted under instructions from his employer and should not be penalized for the duty evasion scheme. However, after considering the evidence, including the appellant's confession and involvement in the fraudulent activities, the Tribunal concluded that the penalties imposed were excessive considering his low position and reduced the penalties to a total of Rs.50,000 across all cases, partially allowing the appeals.

Issue 3 Analysis:
Regarding the duty liability of importers in cases where the CHA failed to pay customs duty and substituted imported goods with locally procured materials, the Tribunal noted ongoing CBI investigations into the matter. The Tribunal found that the exact roles of all parties involved, including importers, needed further examination. As a result, the Tribunal set aside the impugned order and remanded it to the original authority for a fresh decision, directing a thorough investigation into the payment methods, tracing of bank drafts, and verification of import details. The Tribunal emphasized that determining penal liability would depend on the outcome of the investigations and instructed the adjudicating authority to hear both sides before making a fresh decision.

In conclusion, the Tribunal allowed the appeals by way of remand in all three cases, highlighting the importance of fair hearings, thorough investigations, and appropriate considerations of individual roles and liabilities in customs duty evasion schemes.

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