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2019 (9) TMI 30 - AT - CustomsLevy of penalty - filing of the shipping bill fraudulently in the name of appellants - appellants before us are neither the exporters/ owners of the goods - Export of Red Sanders Wood Logs - absolute confiscation - imposition of Section 114 117 of the Customs Act, 1962 - HELD THAT - From plain reading of Section 114, it is evident that the said section is applicable only in respect of a person who has in relation to any goods omitted to do any act, the omission of which would have rendered the goods liable for confiscation under Section 113 of the Customs Act, 1962 - Since in the present case, we do not find anything ascribed to any of appellant as an act of commission or omission which would have rendered the goods liable for confiscation under section 113 of the Customs Act, 1962 - The show cause notice and the order in original have proceeded to impose penalties on the appellants not for abetting or for any act of omission or commission leading to confiscation of goods as per section 113 of the Customs Act, 1962. Penalties u/s 114 of CA - HELD THAT - Not even investigations reveal that the appellants have not acted in manner expected of them in normal course of business to facilitate the fraud being perpetuated by the fraudsters - In absence of any such charge or finding in the impugned order, that any of appellant has deliberately knowingly or unknowingly assisted in commission of fraud by the fraudsters, we are not in position to uphold the penalties imposed under Section 114 of the Customs Act, 1962 - Penalty set aside. Penalties u/s 117 of Customs Act, 1962 - HELD THAT - Penalty under Section 117, could have been imposed only in cases where the Custom Act, do not prescribe for imposition of penalty under any other provision. Once we have set aside the penalties under Section 114, we proceed to examine the penalties imposed under Section 117. In fact the Commissioner in his order have observed that appellants on whom the penalties under section 117 have been imposed were negligent in some manner in fulfilling the statutory responsibilities in the manner in they should have been done - the penalties imposed under is necessary to deter appellants and signal to them to be more careful while conducting their business in relation to imports and exports of goods - Penalty upheld but quantum reduced. Appeal allowed in part.
Issues Involved:
1. Absolute confiscation of "Red Sanders Wood Logs" under sections 113(d) and 113(i) of the Customs Act, 1962. 2. Imposition of penalties under Section 114(i) of the Customs Act, 1962. 3. Imposition of penalties under Section 117 of the Customs Act, 1962. Detailed Analysis: 1. Absolute Confiscation of "Red Sanders Wood Logs": The Commissioner of Customs (Export) Nhava Sheva ordered the absolute confiscation of 25.260 Metric Tons of "Red Sanders Wood Logs" valued at ?2,02,08,000/-. These goods were mis-declared on the shipping bill as "Synthetic Filament Yarn other than Sewing Thread Polyester Texturized Yarn" with a declared value of ?8,94,919/-. The confiscation was ordered under sections 113(d) and 113(i) of the Customs Act, 1962, read with Section 3 of the Foreign Trade (Development and Regulation) Act, 1992. The Tribunal noted that the actual owners/exporters of the goods were not before the court, and hence, no pronouncement was made regarding this part of the order. 2. Imposition of Penalties under Section 114(i) of the Customs Act, 1962: Section 114(i) pertains to penalties for attempting to export goods improperly. The Tribunal found that the appellants were neither the exporters nor the owners of the confiscated goods. The modus operandi involved fake invoices, forged signatures, and rubber stamps of Central Excise Authorities, and the use of vehicles with false number plates. The Tribunal observed that there was no evidence to show that the appellants had any knowledge or involvement in the fraudulent activities. The penalties under Section 114(i) were imposed without any substantial evidence of the appellants' direct or indirect involvement in the fraud. Citing various precedents, the Tribunal concluded that the penalties under Section 114(i) could not be upheld as there was no act of commission or omission by the appellants that would render the goods liable for confiscation under Section 113 of the Customs Act, 1962. 3. Imposition of Penalties under Section 117 of the Customs Act, 1962: Section 117 deals with penalties for contraventions not expressly mentioned elsewhere in the Act. The Commissioner imposed penalties on some appellants under Section 117 for negligence in fulfilling their statutory responsibilities. The Tribunal noted that penalties under Sections 114 and 117 could not be imposed simultaneously. Since the penalties under Section 114 were set aside, the Tribunal examined the penalties under Section 117. It was observed that the appellants could have been more careful in their business dealings to prevent such frauds. The Tribunal decided to reduce the penalties under Section 117 from ?1,00,000/- to ?20,000/- to ensure that the appellants are deterred and more vigilant in the future. Conclusion: i. Appeals (C/85460, 86164 & 86316/2013) where only penalties under Section 114(i) were imposed, are allowed. ii. Appeals (C/85475, 85476, 85477, 85659, 85660, 85661, 85944, 85945, 85948, 86260, 86261 & 86378/2013) where penalties under both Sections 114(i) and 117 were imposed, are allowed to the extent that penalties under Section 114(i) are set aside, and penalties under Section 117 are reduced to ?20,000/-. iii. Cross objection (C/Cross/91063/2013) in Appeal No C/86164/2013 is disposed of accordingly. Order Pronounced in Open Court on 29.08.2019.
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