2013 (8) TMI 690 - AT - Customs

Waiver of pre deposit of penalty u/s 112 appellant in his statement denied allegations made by the authorities as regards diversion of imported textile material - statements of the appellant herein are exculpatory Held that - Application for the waiver of pre-deposit of the amounts involved is allowed and recovery stayed - the appellant has made out a strong prima facie case for the waiver of the pre-deposit - He had denied that he had any role in diversion of the textile of the goods which were imported and sold - It was also seen from the records that the assessee herein was a high seas seller and had accepted the fact that he had sold the goods on high seas sales basis and had received the payments through cheques court relied upon the judgement of ASHWIN S. MEHTA Versus COMMISSIONER OF CUSTOMS, MUMBAI(2005 (9) TMI 462 - CESTAT, MUMBAI) decided in favour of assessee.

Summary

Issues:
1. Waiver of pre-deposit penalty under Section 112 of the Customs Act, 1962.

Analysis:
The case involved a stay petition seeking the waiver of pre-deposit penalty imposed on the appellant under Section 112 of the Customs Act, 1962. The appellant, a high seas seller, denied allegations of diversion of imported textile material. The appellant argued that once the sale was completed, there was no question of any involvement in diversion. The appellant also highlighted that key witnesses implicating him were not produced for cross-examination. Reference was made to previous Tribunal decisions where penalties were not imposed under similar circumstances.

The Departmental Representative contended that evidence existed regarding the diversion of goods and the appellant's involvement in the same. It was emphasized that the director of the company involved in the diversion had stated the appellant's role in the matter. However, upon careful consideration of submissions and records, the Tribunal found the appellant's statements to be exculpatory. The appellant, being a high seas seller, had no attributed role that would render the goods liable for confiscation. Due to the lack of evidence linking the appellant to the diversion and the absence of cross-examination of key witnesses, the Tribunal applied precedent and granted the appellant's request for the waiver of pre-deposit of the amounts involved. The recovery of the penalty was stayed pending the disposal of the appeal.

In conclusion, the Tribunal allowed the appellant's application for the waiver of pre-deposit penalty under Section 112 of the Customs Act, 1962, based on the lack of evidence attributing a role to the appellant in the diversion of imported goods. The decision was influenced by the appellant's exculpatory statements, the nature of the high seas sales, and the absence of cross-examination of key witnesses.