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2023 (6) TMI 316 - AT - CustomsLevy of penalty u/s 112(a) and u/s 114AA of the Customs Act, 1962 - allegation of abetment in undervaluation - evasion of Customs Duty by several syndicates of crane importers - procuring invoices of notional value of Rs.28/- to Rs.40/- per kg. of the weight as against the actual transaction value of the cranes which was higher - suppression of freight charges paid to the shipping lines - HELD THAT - From the impugned order there are no discussion on the role played by the appellant in facilitating the charges of suppression of value. The entire discussion is based in respect of one co-noticee i.e. Shri Madan Lalwani. The only finding recorded in the impugned order is in para 35 onwards. Nothing recorded with regard to evidence leading to finding of such discussion - The fact that the show cause notice as contended by the appellant counsel has been issued on 02.07.2012 in respect of the imports made during the period 2005 to 2007. In absence of any clear-cut finding against the appellant, the penalty imposed on the appellant is excessive. Further the fact is also noted that the appellant was involved in the case of M/s. KCH (noticee No.2) on whom finally penalty has been imposed by the Settlement Commission to the extent of Rs.10,000/- only and on Shri Bajranglal Agarwal, partner in the said firm, penalty of Rs.5,000/- has been imposed. The interest of justice will be met if penalty imposed on the appellant under Section 112(a) is reduced from Rs.50,000/- to Rs.1,000/- only and that under 114AA from Rs.1,00,000/- to Rs.5,000/- - appeal allowed in part.
Issues Involved:
1. Whether the show cause notice was barred by limitation. 2. Applicability of Section 114AA of the Customs Act, 1962 to imports. 3. Comparison of penalties imposed by the Settlement Commission and the Commissioner. 4. Role and involvement of the appellant in the alleged undervaluation and evasion of customs duty. 5. Validity of statements recorded under Section 108 of the Customs Act, 1962. 6. Appropriateness of penalties imposed on the appellant. Issue-wise Detailed Analysis: 1. Whether the show cause notice was barred by limitation: The appellant argued that the show cause notice was issued after five years from the date of import, making it barred by limitation. The Bill of Entry was dated 27-11-2006, and the show cause notice was issued on 02-07-2012. The appellant relied on various judgments, including Bhatinda District Co-Op Milk P. Union Ltd [2007(217) ELT 325(SC)], Hari Concast (P) Ltd. [2009 (242) ELT 12 (P&H)], and Swastik Wires [2008 (231) ELT 448(T)]. 2. Applicability of Section 114AA of the Customs Act, 1962 to imports: The appellant contended that Section 114AA applies to exports and not imports, citing the decision in Sri Krishna Sounds and Lighting [2019(370) ELT 594(T)]. 3. Comparison of penalties imposed by the Settlement Commission and the Commissioner: The appellant highlighted that the penalties imposed by the Settlement Commission on M/s. Kandla Cargo Handlers and Shri Bajranglal G. Agarwal were significantly lower (Rs.10,000/- and Rs.5,000/- respectively) compared to the penalties imposed on the appellant (Rs.1,00,000/- and Rs.50,000/- under Sections 114AA and 112(a) of the Customs Act, 1962 respectively). 4. Role and involvement of the appellant in the alleged undervaluation and evasion of customs duty: The Commissioner's order noted that the appellant, along with other noticees, was involved in undervaluing cranes and suppressing freight charges to evade customs duty. The investigation revealed that the appellant facilitated the import of cranes by providing manipulated invoices and suppressing actual transaction values. The Commissioner found that the appellant played a significant role in the undervaluation and evasion of customs duty. 5. Validity of statements recorded under Section 108 of the Customs Act, 1962: The appellant argued that his statements were recorded under duress and were retracted. However, the Commissioner relied on precedents where statements recorded under Section 108, even if retracted, were considered binding. The Commissioner cited various judgments, including Surjeet Singh Chhabra V/s Union of India (1997 (89) ELT 646 (SC)) and Assistant Commissioner of C.Ex, Rajamundry Vs Duncan Agro Industries Ltd. (2000 (120) E.LT 280 (S.C)), to support the validity of the statements. 6. Appropriateness of penalties imposed on the appellant: The Tribunal found that the impugned order lacked a clear-cut finding against the appellant regarding his role in facilitating the suppression of value. The Tribunal noted that the penalties imposed on M/s. Kandla Cargo Handlers and Shri Bajranglal G. Agarwal by the Settlement Commission were significantly lower. Consequently, the Tribunal reduced the penalties imposed on the appellant under Section 112(a) from Rs.50,000/- to Rs.1,000/- and under Section 114AA from Rs.1,00,000/- to Rs.5,000/-. Conclusion: The Tribunal modified the impugned order by significantly reducing the penalties imposed on the appellant, considering the lack of clear findings against him and the lower penalties imposed on other noticees by the Settlement Commission. The appeal was disposed of in these terms.
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