2022 (12) TMI 897 - AT - Customs

Penalty under Section 112(a), 112(b) 114AA of the Customs Act, 1962 - fraudulent import of vehicles declared as brand new vehicles of foreign origin through Kolkata Port on different dates and cleared against Bills of Entry - benefit of Notification No.21/2002-CUS dated 01.03.2002 - importers availed the exemption wrongly with the help of various persons - HELD THAT - It was alleged that the cars were old and used (secondhand) and the importers were not traceable. It is further alleged that the imported cars were not new cars and therefore cars were subsequently seized. The imported cars were old and used (secondhand cars) and therefore the benefit of exemption is denied. The allegation of abetment charged upon on the Appellant are totally false and baseless in nature. The Appellant submits that Section 114AA is not applicable in charging the Appellant for penalty when documents on the basis of which Appellant is charged are not in the manner laid down under Section 138C. The same should be authenticated in the manner which is prescribed under Section 138C. As Section 138C is not proved then the penalty levied under Section 114AA will not be attracted - the authorities below had discussed in detail in respect of imposition of penalty on the Appellant. It is evident from the record that in some of the cases, the Appellant s involvement cannot be denied. It is also observed that the proceeding is hit by the bar of limitation. Availing of benefit of Notification, which the Revenue subsequently formed an opinion was not available, cannot lead to the charge of misdeclaration or mis-statement, etc. and even if an importer has wrongly claimed the benefit of the exemption, it is for the department to find out the correct legal position and to allow or disallow the same - the quantum of penalty is reduced @10% of the penalty imposed in each case. Appeal allowed in part.

Summary

Issues involved: Appeals against imposition of penalty under Section 112(a), 112(b) & 114AA of the Customs Act, 1962.

Analysis:
1. Facts of the Case: Show Cause Notices issued for fraudulent import of vehicles declared as brand new vehicles of foreign origin through Kolkata Port. Importers claimed exemption under Notification No.21/2002-CUS but were found to have availed it wrongly with the help of various persons.

2. Penalties Imposed: The Appellant filed appeals against penalties imposed under different sections of the Customs Act, ranging from Rs.1,00,000 to Rs.5,00,000 in various Appeal numbers.

3. Allegations and Observations: Allegations included that imported cars were old and used, not new as declared, leading to denial of exemption. Observations by the Adjudicating authority and the Ld. Commissioner (Appeals) highlighted active participation in fraudulent imports and aiding in clearance of vehicles.

4. Contentions and Submissions: Appellant contended not being the beneficiary and challenged the common order for all appeals. Denial of involvement in fraudulent imports and abetment charges were raised, arguing that the penalties were excessive.

5. Legal Arguments: Appellant argued against the applicability of Section 114AA due to non-compliance with Section 138C in document authentication. The defense also questioned the basis of penalties relying on statements without proper investigation.

6. Judicial Findings: The Tribunal found some involvement of the Appellant in certain cases but reduced the penalty by 10% overall. It noted the limitation on proceedings due to benefit availed under Notification and emphasized the department's responsibility to determine correct legal positions.

7. Conclusion: All appeals were disposed of with reduced penalties, considering the overall facts and circumstances. The order was pronounced in open court on 19 December 2022.