2015 (11) TMI 942 - AT - Customs

Imposition of penalty on bank branch manager - Issue of bank guarantee without following proper procedure of law - violation under banking regulations - import of Mulberry Raw Silk in the guise of Duppion Silk and also misuse of DEEC scheme by the importers. - Held that - Departmetn have enforced the bank guarantee and the bank has issued two Demand Drafts - The same was deposited in the Customs with challans. Therefore, it is not the case of forgery of bank guarantee or any fraudulent issue of Bank Guarantee - there is no evidence brought out by the department for abetment or collusion or commission or omission in relation to import of goods to establish contravention of provisions of Customs Act. Section 112(b) relates to dealing of contraband goods and the appellant is only a branch manager issued bank guarantee. If at all any violation under banking regulations it is for the bank to initiation action and the Bank suspended him and subsequently removed from service in the year 1997. - Decided in favour of Appellant.

Summary

Issues:
Appeal against imposition of penalty under Customs Act for misuse of DEEC scheme and import of goods in guise of different category.

Analysis:
The appellant, a Branch Manager at a bank, appealed against penalties imposed for involvement in the import of goods under DEEC scheme and misuse of bank guarantees. The adjudicating authority confirmed the penalties under Sections 112(a) and 112(b) of the Customs Act. The appellant argued that he only issued bank guarantees and did not contravene Customs Act provisions. The department alleged collusion and abetment without clear evidence. The appellant's suspension and removal from the bank were highlighted. The appellant cited various legal precedents to support his case.

The Revenue argued that bank guarantees facilitated illegal imports and diversion of goods under DEEC. They accused the appellant of introducing license brokers to importers, abetting in illegal activities. The department claimed some bank guarantees were forged. However, it was confirmed that the bank enforced the guarantees, indicating no forgery. The allegations against the appellant were vague, lacking specific evidence of contravention.

The Tribunal analyzed the allegations and legal precedents cited. It noted the lack of clear evidence linking the appellant to contraventions of the Customs Act. The Tribunal emphasized the need for intentional abetment to establish liability. It highlighted discrepancies between the proposed penalties under Section 112(a) in the show cause notice and the penalties imposed under Section 112(b) in the adjudication order. The Tribunal referenced legal judgments emphasizing the need for each show cause notice to be limited to the case therein. Ultimately, the Tribunal found no merit in the penalties imposed on the appellant and set aside the impugned orders, allowing the appeals.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the penalties imposed under Sections 112(a) and 112(b) of the Customs Act due to lack of concrete evidence and discrepancies in the allegations. The judgment highlighted the importance of clear evidence and adherence to legal procedures in imposing penalties under the Customs Act.