2018 (2) TMI 1687 - AT - Customs

Penalties u/s 112 of CA, 1962 - case of Revenue is that the appellants were involved in sale of liquor to the domestic passengers, the conditions of licence have been violated - Held that - Since the department has not specifically brought on any evidence against the appellants for improper importation of the goods or violation of the conditions of licence issued to M/s. Alpha, the penalties imposed against them u/s 112 of the Act cannot be sustained for judicial scrutiny - penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Penalties imposed under Section 112 of the Customs Act, 1962 on the appellants for alleged violations in the Duty Free Shops at IGI Airport, New Delhi.

Analysis:

1. Violation of Licence Conditions:
The case involved penalties imposed on the appellants for alleged violations in the Duty Free Shops at IGI Airport. The appellants were accused of selling liquor to domestic passengers, which was deemed a violation of the conditions of the licence issued to M/s. Alpha. The Department contended that the involvement of the appellants in such sales justified the penalties imposed. However, the advocate for the appellants argued that they were management trainees with no direct involvement in the irregularities. The Tribunal noted that the Department failed to provide direct or indirect evidence linking the appellants to the breaches, and no specific allegations of contraventions were made against them. Ultimately, the Tribunal found that the penalties imposed could not be sustained without concrete evidence of the appellants' involvement in the violations.

2. Lack of Evidence and Allegations:
Upon reviewing the statements and evidence presented, the Tribunal observed that one appellant had merely communicated to another that liquor could not be sold to domestic passengers. Notably, the Department had not recorded a statement from the other appellant. The Tribunal highlighted the absence of specific allegations or evidence demonstrating the appellants' active participation in acts that would render the goods liable for confiscation. It emphasized that without concrete proof of improper importation or breach of licence conditions by the appellants, the penalties under Section 112 of the Customs Act could not be justified. The Tribunal concluded that the penalties imposed on the appellants lacked merit and subsequently allowed the appeals in favor of the appellants.

In conclusion, the Tribunal set aside the penalties imposed on the appellants, emphasizing the lack of evidence linking them to the alleged violations at the Duty Free Shops. The judgment underscored the necessity of concrete proof and specific allegations to justify penalties under the Customs Act, ultimately ruling in favor of the appellants due to the absence of substantiated claims against them.