2021 (9) TMI 815 - AT - Customs

Levy of penalty - Section 114 of the Customs Act, 1962 - mismatch as regards the consignment in the shipping bill - HELD THAT - The Show Cause Notice contains the modus operandi as to how the appellants were involved and nowhere is it seen that the appellants have offered any rebuttal nor have they negatived such allegations. Further, it is well known that it is the CHA or its staff, who alone can enter into the examination area, where the alleged overwriting on the packages had occurred, which also has not been rebutted by the CHA. The Show Cause Notice also contains that the ultimate beneficiary would be the exporter and the correction/overwriting of bundle numbers could not have been done by the CHA staff without any benefit/instruction, which throws sufficient suspicion as to the collusion of the CHA with the exporter. Penalty under Section 114 of the Customs Act is levied for attempt to export goods improperly, etc., by any person who, in relation to any goods, does or omits to do any act or abets the doing or omission of such an act - the facts and follow-up investigation has clearly revealed that the appellants being CHA, had involved itself in trying to abet improper exportation of 26 bundles of semi-finished leather, with misleading declaration, which would have caused huge Revenue loss, which had rendered itself for confiscation. Hence, it is a case where the provision of Section 114(ii) ibid. is clearly attracted. The penalty has rightly been levied. Appeal dismissed.

Summary

Issues:
Levy of penalty under Section 114 of the Customs Act, 1962 on the appellants.

Analysis:
The appeals revolve around the imposition of penalties under Section 114 of the Customs Act, 1962 on the first and second appellants. The Show Cause Notice highlighted discrepancies in the consignment details, including overwritten package numbers and conflicting statements regarding the receipt of the cargo. Allegations suggested misdeclaration to evade Export Duty and claim undue benefits. The Adjudicating Authority imposed penalties of &8377; 50,000/- and &8377; 1,00,000/- on the first and second appellants, respectively, along with confiscation of the attempted export of 31 bundles of leather.

The appellants argued that the penalties were unjustified, claiming lack of evidence and involvement in the alleged activities. However, the Departmental Representative supported the lower authorities' findings. The Show Cause Notice outlined the modus operandi implicating the appellants, emphasizing their failure to rebut the allegations. Suspicion arose due to the involvement of the CHA staff in overwriting package numbers without denial from the appellants. The appellants' admission of staff involvement in overwriting further fueled suspicion, leading to the conclusion of attempted improper exportation.

The penalty under Section 114 of the Customs Act is applicable when there is an attempt to export goods improperly. The investigation revealed the appellants' involvement in trying to abet the improper exportation of semi-finished leather, causing potential Revenue loss. The provision of Section 114(ii) was deemed applicable, justifying the penalties imposed. The Tribunal dismissed the appeals, upholding the penalties levied on the appellants.

In conclusion, the judgment affirmed the penalties under Section 114 of the Customs Act, 1962 on the appellants for their involvement in attempting improper exportation. The decision was based on the evidence presented, including the modus operandi outlined in the Show Cause Notice and the appellants' actions, leading to the dismissal of the appeals.