2016 (4) TMI 100 - AT - Customs

Plea of innocence - Mis-declaration of goods imported and defrauded customs - Chassis number, engine number and year of manufacture were tampered and fabricated to impress the customs that the year of manufacture was much earlier and used before import and therefore, the imported car was second hand one. Also appellant was the facilitator of import and paid the duty for Maqsood Ali at the time of clearance of the car and was also discharged the loan of ₹ 33 lakhs taken from ICICI Bank by Maqsood Ali Marbhoobali to purchase the vehicle for import - Held that - Appellant was conduit in the entire import process and illicit deal of loan repayment. He was actively involved in the import as well as subsequent transfer of the title over the car. Fabrication of the engine number, chassis number and year of the manufacture defrauded customs demonstrating that the import car was second hand and was in use abroad prior to import. But investigation result discarded that. Appellate finding is that the appellant is a defacto importer and also was a financier and was conduit in the entire process mis-declaration of import consciously and deliberately. The repayment of the loan by the appellant along with Jilani Khasim Sahikh proved their mutual interest and organised bid to defraud Customs. They were all beneficiary of the ill gain from the import investing in the offending vehicle. Maqsood Ali Marbhoobali hided his identity and disappeared form investigation to hide the racket and money trail. Material facts on record proved the pre-meditated design of the appellant. He was abettor of misdeclaration and defrauding customs. Mis-declaration resulted in evasion of duty. Therefore, differential duty of ₹ 11,48,670/- was realized. That was paid by the appellant. For the involvement of the appellant in the racket, he suffered penalty of ₹ 11,48,670/-. Therefore, appellant s deliberate, conscious active involvement as well as collusion, cannot be ruled out and proved to be non-innocent. - decided against the appellant

Summary

Issues: Allegations of deliberate misdeclaration in import, involvement in fraudulent activities, evasion of duty, penalty imposition, and dismissal of appeal.

Analysis:
1. Allegations of Deliberate Misdeclaration in Import:
The appellate authority found deliberate misdeclaration of particulars related to the usage, year of manufacture, chassis number, and engine number in the import of a Toyota Land Cruiser car. The appellant was identified as a facilitator in the import process, paying duty on behalf of the actual importer, who disappeared during the investigation. The investigation revealed tampering of the car's details to portray it as second-hand, leading to a loss of duty.

2. Involvement in Fraudulent Activities:
The Revenue submitted that the appellant was the mastermind behind the fraudulent import scheme, colluding with others to deceive customs authorities. The appellant's active participation in the import process, including loan repayment and transfer of ownership, demonstrated his integral role in the fraud. The investigation highlighted the appellant's involvement in misdeclaration and defrauding customs, resulting in the evasion of duty.

3. Evasion of Duty and Penalty Imposition:
The appellate tribunal confirmed the findings that the appellant was a de facto importer and financier, actively participating in the misdeclaration of the imported car. The deliberate actions of the appellant and his associates led to the evasion of duty, necessitating the realization of a differential duty amounting to Rs. 11,48,670. Additionally, the appellant was penalized for his involvement in the fraudulent activities, being imposed with a penalty of the same amount.

4. Dismissal of Appeal:
After considering the uncontroverted investigation results and adjudication findings, the tribunal concluded that the appellant's deliberate and conscious involvement in the fraudulent import scheme could not be denied. Despite claiming innocence, the appellant's active role in the misdeclaration and collusion with others to defraud customs authorities led to the dismissal of his appeal. The tribunal emphasized the importance of punishing such activities to uphold public confidence in the law and deter potential smugglers.

In conclusion, the judgment upheld the allegations of deliberate misdeclaration, involvement in fraudulent activities, evasion of duty, and penalty imposition against the appellant, ultimately resulting in the dismissal of the appeal due to the appellant's active participation in the fraudulent import scheme.