2025 (2) TMI 810 - HC - Customs

Levy of penalties u/s 114 and 114AA of the Customs Act 1962 - Cheating Customs Department in respect of duty drawback evasion - deliberate suppression of transaction and misdeclaration by the appellants to avail duty drawback fraudulently - HELD THAT - The appellate Tribunal having found gravity of the offence granted leave to prefer appeal on condition to make a pre-deposit as stated above and there is no infirmity or excessive jurisdiction in the order impugned. The Commissioner of Customs having found that there was an evasion of duty drawback has imposed penalty as stated above. If at all there is any ground to challenge the said Order-in-Original statue provides right of appeal on condition to make a pre-deposit of drawback and penalty deemed fit by the Tribunal. The decision of the Tribunal is now put to challenge in these appeals. Though there is a change in law as alleged by the learned counsel for the appellants this Court is very conscious of the fact that the taxation regime as prevailing in the year 2019 to be applied in the case in hand. Any change of law shall not give retrospective application when the issue relates to the revenue of the State. It is to be noted that the appellants had at privileged by keeping these appeals pending for more than 8 years without pursing the appeals and without paying pre-deposit fixed by the Tribunal. The said concession itself is more than what the law provides for a tax evader. Hence these Civil Miscellaneous Appeals are dismissed as devoid of merits. The amount of pre-deposit mentioned in the impugned order to be deposited within a period of six weeks from the date of receipt of a copy of this order if the appellants are really interested in pursing the appeals. Failing which the Department is at liberty to proceed against them in accordance with law. Conclusion - i) The penalties imposed on the appellants were upheld. ii) The joint and several liability was deemed valid. iii) The pre-deposit requirement for appealing was found reasonable. Petition disposed off.

Summary

The Madras High Court rendered a judgment in a case involving multiple appellants found guilty of cheating the Customs Department in relation to duty drawback evasion. The Court imposed various penalties on the appellants under the Customs Act, 1962. Two appellants, Vijay Anand and Kalandar Seeni Ahmed, challenged the Order-in-Original and the conditional order issued by the appellate Tribunal in separate appeals.Issues Presented and Considered:1. Whether the penalties imposed on the appellants were justified under the Customs Act, 1962.2. Whether the joint and several liability imposed on all 14 persons was legally sound.3. Whether the pre-deposit requirement for appealing was excessive and contrary to the law.Issue-Wise Detailed Analysis:Relevant Legal Framework and Precedents:The penalties were imposed under Sections 114(iii) and 114AA of the Customs Act, 1962, for duty drawback evasion. The Commissioner of Customs determined that the appellants had misdeclared goods to fraudulently avail duty drawback.Court's Interpretation and Reasoning:The Court considered the gravity of the offense and the findings of deliberate suppression and misdeclaration by the appellants. The appellate Tribunal had granted leave to appeal subject to a pre-deposit requirement, which the appellants failed to comply with for over 8 years.Key Evidence and Findings:The Directorate of Revenue Intelligence found misdeclaration of goods leading to duty drawback evasion. Statements by the appellants incriminated themselves and others in fraudulent transactions.Application of Law to Facts:The penalties were imposed based on the misdeclaration of goods and evasion of duty drawback. The Court upheld the Tribunal's decision to require a pre-deposit for appealing.Treatment of Competing Arguments:The appellants argued against the joint and several liability and excessive pre-deposit requirement. The respondents defended the penalties based on the findings of misdeclaration and evasion.Significant Holdings:The Court dismissed the appeals as devoid of merits, emphasizing the appellants' delay in pursuing the appeals and paying the pre-deposit. The Court upheld the penalties imposed by the Commissioner of Customs and the appellate Tribunal.Core Principles Established:- Penalties under the Customs Act, 1962, can be imposed for duty drawback evasion.- Failure to comply with pre-deposit requirements can lead to dismissal of appeals.- Taxation laws prevailing at the time of the offense apply, not retrospective changes.Final Determinations on Each Issue:- The penalties imposed on the appellants were upheld.- The joint and several liability was deemed valid.- The pre-deposit requirement for appealing was found reasonable.In conclusion, the Madras High Court affirmed the penalties imposed on the appellants for duty drawback evasion, emphasizing the importance of complying with legal procedures, including pre-deposit requirements for appealing.