2009 (5) TMI 523 - AT - Customs

Penalty - to director, Company Secretary, Non-working Director, Custom House Agent - Held that - evidence on record not bring out any commission or omission on any persons part rendering the impugned goods liable to confiscation. Penalty set aside on all persons.

Summary

Issues:
- Allegations of overvalued imports to park funds abroad.
- Non-clearance of imported goods from Customs despite payments.
- Involvement of multiple companies and individuals in importing non-functional software and hardware.
- Confiscation of goods under Sections 111(d) & (m) of the Customs Act.
- Imposition of penalties on various entities and individuals.
- Appeal against penalties imposed by the Commissioner of Customs.

Analysis:
1. Overvalued Imports and Non-Clearance of Goods:
The case involved allegations of overvalued imports by certain companies from related entities in Singapore to park funds abroad. It was found that despite payments, goods were not cleared from Customs. The companies were importing non-functional software and hardware, with some consignments having declared values as high as 25 crores. Statements of key individuals and partners were recorded, revealing the nature of imports and the intended use of the imported goods.

2. Confiscation and Penalties:
Show cause notices were issued proposing confiscation of goods, levy of appropriate duty, and penal action under relevant sections of the Customs Act. The Commissioner of Customs upheld the charges, confiscated goods, and imposed significant penalties on the companies, directors, and a cargo agency involved in the imports. The penalties ranged from 5,00,000 to 30,00,000 rupees based on the level of involvement and responsibility of the entities and individuals.

3. Appeals and Tribunal Decision:
Appeals were filed before the Tribunal challenging the penalties imposed. The Tribunal heard both sides and analyzed the roles and responsibilities of the individuals involved. The Tribunal found that some penalties were not justified based on the evidence presented. Penalties imposed on certain individuals were set aside as there was no evidence of their involvement in activities that rendered the imported goods liable to confiscation under the Customs Act.

4. Individual Analysis of Penalties:
- Shri B.B. Gupta: The penalty imposed on him was set aside as there was no evidence to implicate him in undervaluation of imported goods.
- Shri V.P. Gupta: The penalty on him was revoked as there was no material to establish his involvement in activities rendering goods liable to confiscation.
- Shri Madan Agarwal: The penalty on him was overturned as evidence showed that another individual was primarily responsible for the irregularities.
- Cargo Agency (CHA): The penalty on the CHA was set aside as there was no evidence of their knowledge or involvement in overvaluing imports.

5. Conclusion:
The Tribunal set aside the penalties imposed on the appellants, citing lack of evidence to support their involvement in activities that would render the imported goods liable to confiscation. The appeals were allowed, and the penalties imposed by the Commissioner of Customs were overturned.

This detailed analysis of the judgment highlights the complex nature of the case involving overvalued imports, non-clearance of goods, confiscation, and penalties, ultimately leading to the Tribunal's decision to set aside certain penalties based on the evidence presented.