2013 (12) TMI 179 - AT - Customs

Imposition of penalty - Export consignment found to partly contain red sanders in addition to declared goods - Held that - Consignment was found to have red sanders which were prohibited for export. The earlier consignment also contained red sanders. The conduct of the appellant-firm appears to be not bona fide and, therefore, penalty is, prima facie, warranted. However, there is no justification for separate penalty on the proprietor when there is a penalty on the proprietary-firm - Prima facie case not in favour of assessee - Stay granted partly.

Summary

Issues:
1. Consignment containing prohibited goods
2. Liability of the appellant firm and the proprietor
3. Penalty on the Manager

Analysis:

1. The case involved a consignment attempted to be exported by the appellant firm, which was found to contain red sanders, a prohibited item, in addition to declared goods. The appellant claimed that the consignment was booked through intermediaries, and they were unaware of the antecedents of the intermediaries. It was also revealed that a previous consignment admitted to containing red sanders was substituted after being cleared from the factory premises.

2. The consultant for the appellants argued that the substitution was orchestrated by certain individuals, absolving the appellants of responsibility and contended that penalties should not be imposed on them. The Deputy Commissioner argued that the appellants were aware of the buyer abroad and had sent consignments on a credit basis, not through an LC, with a previous consignment also containing red sanders.

3. The Tribunal found that the presence of red sanders in the consignment was undisputed, indicating a lack of bona fide conduct by the appellant firm, warranting a penalty. However, the Tribunal ruled that imposing separate penalties on the proprietor in addition to the firm was unjustified. Regarding the Manager, Shri Ananth Sachdeva, it was noted that the Commissioner found him to have been negligent, leading to a decision that no penalty on him was warranted.

4. In the final disposition, the Tribunal directed the appellant firm to deposit a sum of Rs.3 lakhs within six weeks and granted a waiver of the balance of the penalty with a stay on recovery pending the appeal's disposal. Additionally, the separate penalty on the proprietor was waived, and recovery stayed. Similarly, the penalty on Shri Ananth Sachdeva was waived, and recovery stayed until the appeal's final disposal.