2018 (9) TMI 677 - HC - Customs

Quantum of penalty - whether the penalty imposed under Section 114AA of the Customs Act is excessive? - Held that - The appellant s role was of greater involvement; the CESTAT noted that he was closely associated with Sunny Jain, the mastermind of evasive operation as proprietor of M/s. Dex Logistics - the exercise of jurisdiction by the CESTAT in not reducing the penalty amount further in the appellant s case is neither unreasonable nor erroneous - appeal dismissed.

Summary

Issues:
Whether the penalty imposed under Section 114AA of the Customs Act is excessive.

Analysis:
The appellant argued that the penalty of ?50,000 was excessive and unjustified, especially when other noticees involved in a similar act were let off. The appellant contended that the finding of complicity in customs duty evasion was unreasonable. Importers had approached the Settlement Commission, resulting in a graded penalty. The CIT(A) reduced penalties for both Kuldeep Singh and the appellant. However, CESTAT differentiated between their roles, noting the appellant's closer association with the mastermind of the operation, Sunny Jain, as the proprietor of M/s. Dex Logistics.

The CESTAT found that while Kuldeep Singh only filled the Bill of Entries based on available documents, the appellant had a more significant role in the evasion scheme. Consequently, CESTAT upheld the penalty imposed on the appellant. The court held that CESTAT's decision was neither unreasonable nor erroneous, given the appellant's heightened involvement in the evasion operation. Therefore, the appeal was dismissed, affirming the penalty under Section 114AA of the Customs Act as justified.