2018 (3) TMI 366 - AT - Customs

Penalty u/s 112 of CA 1962 - penalty imposed on the appellant for having enabled the exporter to stake claim for credit by enabling them to evidence the cost of production - Held that - it is an erroneous conclusion that acceptance of declared value was facilitated by these certificates. The penal provision in section 114 is liable to be invoked for any act of omission or commission in relation to the goods that are held liable for confiscation. No evidence has been brought on record to establish that mis-declaration of value was enabled by the certified cost of production or that the proper officer was, thereby, led to accept the declared value - penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues: Penalty under section 112 of Customs Act, 1962 for issuing certificates related to export goods; Invocation of penalty under section 114 of Customs Act, 1962; Contradiction in findings leading to imposition of penalty under section 112; Lack of evidence linking mis-declaration of value to certified cost of production.

In this case, the appellant, a Chartered Accountant, sought relief from the penalty imposed under section 112 of the Customs Act, 1962 for issuing certificates related to export goods. The appellant had provided certificates at the request of an exporter involved in alleged over-invoicing of goods subject to confiscation. The penalty was imposed based on the belief that the appellant's certificates facilitated the over-valuation of goods. The appellant argued that penalty under section 112 could not be invoked as the main proceedings pertained to export goods, and there was no direct connection between the appellant and the export goods in question.

The Tribunal noted that while the penalty was imposed under section 112, the findings against the appellant invoked section 114 of the Customs Act, 1962. The penalty was based on the belief that the appellant's certificates enabled the exporter to claim credit by evidencing the cost of production. However, the Tribunal found that there was no evidence linking the mis-declaration of value to the certified cost of production provided by the appellant. The certificates were issued after the export of goods, and there was no indication that they influenced the declared value in the shipping bills. As a result, the Tribunal concluded that the penalty under section 112 was incorrectly imposed, and the appeal was allowed, setting aside the penalty.

The Tribunal emphasized that for penalty under section 114 to be invoked, there must be a clear link between the act of omission or commission and the goods subject to confiscation. In this case, the certificates issued by the appellant did not establish any connection to the mis-declaration of value. Therefore, the Tribunal ruled in favor of the appellant, highlighting the lack of evidence supporting the imposition of the penalty under section 112 and the absence of a direct link between the appellant's actions and the alleged offense.