2024 (3) TMI 604 - AT - Customs

Advance Authorisation Scheme - Non-fulfilment of Export Obligation - fraudulent activities - allegation of collusion with the Customs officials - non-export of goods and getting the benefit of various export oriented schemes - only allegation was on the ground that because of his active connivance and participation of the Customs staff posted at Tikonia Land Customs Station, the Appellant has prepared fake documents showing fulfillment of Export Obligation in a fraudulent manner - HELD THAT - When the charges against the Appellant are observed, it is clear that only charge against the Appellant is towards preparing the fake documents showing fulfillment of Export Obligations in a fraudulent manner with the active connivance and participation of the Customs Staff posted at Tikona Land Customs Station. On the other hand, the Adjudicating Authority himself has held that no proper evidence is found towards their (Customs Officers) involvement in the fraud. In such a case, the allegation that the Appellant has actively colluded with the Customs officials cannot legally sustain. Therefore, on this ground, the penalty imposed on the Appellant is set aside. The same set of facts were before the Hon ble Tribunal wherein the present Appellant was not a Noticee at all. Therefore, it leads the conclusion that the present Appellant has been added merely based on certain presumptions and assumptions without any corroborative evidence by the Department. Even from the allegations given in the Show Cause Notice and the Findings in the OIO, as observed above, no case has been made out against the Appellant. Therefore, even on this count, the penalty imposed on the Appellant set aside. Appeal allowed.

Summary

Issues involved:
The issues involved in this case include delayed adjudication proceedings, violation of principles of natural justice, imposition of penalty under Section 112(a) of the Customs Act without providing a reasonable opportunity of hearing, lack of findings in the impugned order justifying the penalty, and discrepancies in the allegations against the Appellant compared to the Customs officers.

Summary:
The Appellant, engaged in trading food grains, faced a Show Cause Notice (SCN) in 1992 regarding alleged preparation of fake export documents in connivance with Customs authorities. The adjudication order imposing a penalty of Rs. 10,00,000/- was passed in 2018 without proper opportunity for defense. The Appellant challenged the order citing delays, lack of evidence, and violation of natural justice principles.

The Appellant argued that the delay of 25 years in adjudication was untenable in law, citing relevant legal precedents. They contended that the penalty was imposed without proper opportunity for representation and hearing as mandated by Section 124 of the Customs Act.

The Appellant highlighted that the allegations against them lacked specific evidence and that the Customs officers' involvement was not substantiated. The Tribunal noted discrepancies in the treatment of the Appellant compared to other parties involved in similar exports.

The Tribunal found that the penalty imposed on the Appellant was not legally sustainable due to lack of evidence and discrepancies in the case. The Tribunal set aside the penalty and allowed the appeal, emphasizing the importance of providing a fair opportunity for defense and ensuring proper adjudication based on evidence.

In conclusion, the Tribunal ruled in favor of the Appellant, setting aside the penalty and providing consequential relief as per law. The order was pronounced on 13/03/2024.