2023 (4) TMI 453 - AT - Customs

Levy of penalty u/s 114AA of the Customs Act, 1962 - fraudulent obtaining DEPB certificates - creation of forged Bank Realisation Certificates against exports and submitted them to DGFT and obtained DEPB licences and sold them - HELD THAT - It is undisputed that the appellant had sold these DEPB licences to M/s. Whirlpool India and these licences were obtained from DGFT by submitting forged documents. In his statement dated 7.1.2013, the appellant admitted to having sold these DEPB licences but said that he was not aware that they were obtained based on forged Bank Realisation Certificates. He also said that he kept no record of the licences which he sold and received commission in cash. In the subsequent statement dated 10.4.2014, he agreed that he had prepared/created forged Bank Realisation Certificates against exports and submitted them to DGFT and obtained DEPB licences and sold them. Evidently, the appellant has, by his role discussed above, caused fraudulently obtained DEPB certificates to be used in the Bills of Entry filed by the importer which, in our considered view, falls squarely within the scope of Section 114AA - The judgment of the Hon ble High Court of Gujarat in COMMISSIONER OF CUSTOMS VERSUS SANJAY AGARWAL 2010 (4) TMI 781 - GUJARAT HIGH COURT relied upon by the appellant was in the context of penalty under section 112 and not under section 114AA. At the time the SCN was issued in that case (on 24.9.2001), section 114AA did not even exist. Section 114AA was introduced with effect from 13.7.2006. Therefore, this case law does not carry the case of the appellant any further. On examination by DRI, it was found that the containers had Red Sanders whose export is prohibited. An SCN was issued and after adjudication, penalty was imposed under Section 114AA on the Customs broker. The Tribunal found that the appellant had filed the Shipping Bills in good faith based on the documents provided to it and in such circumstances, set aside the penalty. In this case, the DEPB certificates obtained based on forged bank realization certificates were sold by the appellant to the importer and thereby caused the importer to make incorrect declarations in the Bills of Entry. Impugned order upheld - Appeal dismissed.

Summary

Issues involved:
The issues in this case involve the imposition of penalties under section 114AA of the Customs Act, 1962 on the appellant for his involvement in a Customs fraud scheme related to the sale of Duty Entitlement Passbook (DEPB) licenses obtained through forged documents.

Summary:

Issue 1: Lack of Appearance by Appellant
The appellant, Shri Gurmeet Singh Kohli, filed an appeal challenging the Order-in-Appeal dated 14.6.2019 passed by the Commissioner (Appeals). However, the appellant did not appear during the hearings, leading to the matter being decided on merits based on the records.

Issue 2: Allegations of Customs Fraud
The appellant, a trader of automobile parts, was involved in trading DEPB licenses obtained through fabricated documents. An investigation revealed that the DEPB licenses sold by the appellant were based on forged documents showing export to Bangladesh, which were then sold to M/s. Whirlpool India for import purposes.

Issue 3: Imposition of Penalties
The Order in Original dated 30.12.2016 imposed penalties on the appellant under section 114AA of the Customs Act, 1962, amounting to Rs. 3,00,000 for his role in the Customs fraud scheme. The Commissioner (Appeals) upheld this penalty, leading to the appellant filing an appeal challenging the same.

Issue 4: Grounds of Appeal
The appellant's grounds of appeal included contentions that the impugned order was illegal, showed non-application of mind, and ignored specific grounds raised. The appellant also cited judgments from the Gujarat High Court and the Tribunal, which were not considered by the Commissioner (Appeals).

Issue 5: Tribunal's Decision
The Tribunal considered the statements of the appellant, where he admitted to selling DEPB licenses obtained through forged documents. The Tribunal noted the appellant's involvement in creating fake documents and benefiting from the fraudulent scheme. Based on the evidence and legal provisions, the Tribunal upheld the imposition of the penalty under section 114AA, dismissing the appeal.

In conclusion, the Tribunal found that the penalties imposed on the appellant for his role in the Customs fraud scheme were justified under the Customs Act, 1962. The Tribunal upheld the impugned order and dismissed the appeal, emphasizing the seriousness of fraudulent activities in Customs transactions.