2018 (3) TMI 1140 - AT - Customs

Penalty u/s 114(iii) of Customs Act, 1962 - fraud of illegal DEPB and rebate - Held that - it is established that the appellant have not obtained the authorization from the exporters and also not verified the signatures of the Authorised persons of the documents and submitted the shipping bills intentionally to facilitate exports of the consignments. Therefore, there is omission on the part of the appellant which led to the fraud of illegal DEPB and rebate - the appellant was rightly liable for penalty u/s 114 (iii) of the CA, 1962 - appeal allowed in part.

Summary

Issues:
Penalty imposed under Section 114(iii) of Customs Act, 1962 for fraudulent exports of goods.

Analysis:
The appeal challenged a penalty of ? 5 lakhs imposed by the Commissioner of Customs (EP), Mumbai under Section 114(iii) of the Customs Act, 1962. The appellant, a Director of a CHA firm, was involved in handling export goods of low quality and cheap quality, benefiting from fraudulent DEPB and rebate schemes through over-invoicing and misrepresentation of procurement prices. The Commissioner's findings highlighted the appellant's failure to obtain proper authorization from exporters, not verifying signatures on documents, and intentionally submitting shipping bills to facilitate illegal exports. The Commissioner acknowledged the appellant's responsibility but deemed the original penalty amount too harsh, reducing it to ? 2 lakhs. The Tribunal, comprising Shri Ramesh Nair and Shri C J Mathew, partly allowed the appeal on 28/02/2018.

Judgment Highlights:
- The appellant's involvement in fraudulent exports of low-quality goods.
- Failure to obtain proper authorization and verify documents.
- Reduction of penalty from ? 5 lakhs to ? 2 lakhs due to overall responsibility of the appellant.
- Decision pronounced by the Tribunal on 28/02/2018.