2009 (11) TMI 316 - AT - Customs

Penalty- The issue involved in all these appeals before us is, whether penalties under Section 112A of the Customs Act, 1962 is imposable on the appellants in the facts and circumstances of the case. Held that- The reliance placed by the SDR has no support to him, as in that case the appellants were having knowledge of mis-declaration before clearances of the goods. Whereas, the reliance placed on by the advocate for the appellants support their contention and we are also with agreement that when the appellants were not having any knowledge of bogus/forged licenses during the process of clearances of goods, the appellants are not liable to any penal action. With this observation, we allow all the appeals with consequential relief to the appellants, if any.

Summary

Issues:
Penalties under Section 112A of the Customs Act, 1962 imposable on the appellants in the facts and circumstances of the case.

Analysis:
1. The appeals before the Appellate Tribunal CESTAT, Ahmedabad arose from common orders imposing penalties on various appellants under Section 112A of the Customs Act, 1962. The penalties were imposed due to their alleged involvement in clearances of goods without payment of duty against forged or bogus licenses. The appellants included transporters, employees of a shipping services company, directors of the same company, and Clearing House Agents (CHAs) handling the clearances. The licenses used for clearances were found to be fake, leading to penalties ranging from Rs. 10,000 to Rs. 1,00,000.

2. In another set of appeals, penalties were imposed on appellants for handling clearances of goods without duty payment based on forged post-advance licenses. The penalties were imposed on a forwarding company, individuals, and a CHA. The issue in all these appeals was whether penalties under Section 112A of the Customs Act, 1962 were justified given the circumstances of the case.

3. The advocates for the appellants argued that the appellants had no knowledge of the licenses being forged or bogus. They contended that the appellants had produced the licenses provided by the importers before the Customs Authorities, who allowed the duty-free clearances after examination. The appellants claimed they had no reason to suspect the authenticity of the licenses and relied on previous decisions where penalties were not imposed due to lack of evidence showing knowledge or intention to violate customs laws.

4. On the contrary, the Departmental Representative (DR) argued that the appellants were aware of the forged documents and their actions amounted to aiding and abetting the mis-declaration, leading to confiscation of goods. The DR relied on a previous decision where penalties were upheld based on evidence showing the appellants' knowledge of mis-declaration.

5. After reviewing the submissions, statements of the appellants, and the records, the Tribunal found no corroborative evidence indicating that the appellants had knowledge of the forged licenses during the clearance process. The Customs authorities had also not raised any concerns about the licenses at the time of clearance. The Tribunal concluded that the Revenue failed to establish that the appellants were aware of the forged licenses, and therefore, the penalties were not justified. The Tribunal allowed all the appeals, providing relief to the appellants.

This judgment highlights the importance of proving knowledge or intention in cases involving penalties under customs laws and emphasizes the need for concrete evidence to establish liability for penal actions.