2024 (7) TMI 942 - HC - Customs

Exonerating the assessees from the levy of customs duty and levy of penalty - active involvement in import of the goods and undervaluation of the same - HELD THAT - There is clear inconsistency in the order passed by the Tribunal. The Tribunal has elaborately referred to a statement recorded from John Miranda. In fact, the entire statement has been reflected. The statement of Shri Rakesh Magoo has been referred. The finding of the Tribunal is only in paragraph 10 wherein it has been held that in the light of the discussion made by the Tribunal, it is clear that Rakesh Magoo and John Miranda were using IEC Code of various IEC holders for import of car electronic goods by undervaluing the same and differential amount has been paid to the oversees suppliers through their office in India by illicit means - if learned Tribunal had to rely upon the statement of those two persons, it has to discuss the statement in its entirety and cannot pick and choose a few paragraphs more particularly there is nothing on record to show that there was a valid retraction of the statement by Rakesh Magoo and John Miranda. The Tribunal should re-consider the matter and taking note of all factual matrix and then come to a clear conclusion. This exercise is required to be done by the learned Tribunal, since learned Tribunal is last fact finding authority in hierarchy of authorities - So far as the imposition of penalty on the clearing agency namely Sai Dutta Clearing Agency Pvt. Ltd., the said order has been affirmed by this Court as the appeal filed by the said clearing agency in CUSTA/17/2024 was dismissed by judgement dated 26.04.2024. The order passed by the learned Tribunal to set aside in so far as the respondents alone namely Rakesh Magoo and John Miranda and the matter is remanded back to the learned Tribunal for fresh consideration in accordance with law - the appeals filed by the revenue as well as appeals filed by the assessee are allowed.

Summary

Issues:
Appeals against a common order passed by the Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata involving levy of customs duty, penalty imposition, and inconsistencies in the Tribunal's order.

Levy of Customs Duty:
The High Court noted that both the revenue and the assessee appealed against a common order by the Tribunal. The revenue contested the exoneration of the assessees from customs duty, while the assessees challenged the penalty imposition. The Court observed an inconsistency in the Tribunal's order where it exonerated the assessees from duty but affirmed the penalty without clear reasoning. The Tribunal's findings on the involvement of the assessees in undervaluing imported goods were deemed unclear and inconsistent. The Court emphasized the need for a clear conclusion based on a comprehensive reconsideration by the Tribunal, highlighting the importance of the Tribunal as the final fact-finding authority in the hierarchy of authorities.

Penalty Imposition:
The High Court pointed out discrepancies in the Tribunal's order regarding the imposition of penalties on the assessees. The Tribunal referenced statements from individuals involved in the case, but the Court found inconsistencies in how these statements were utilized in the decision-making process. The Court highlighted the lack of clarity on the extraction of statements and the need for a thorough discussion of the entire statement rather than selective paragraphs. The Court emphasized the importance of a valid retraction of statements and the necessity for a detailed analysis by the Tribunal before reaching a conclusive decision on penalty imposition.

Remand and Fresh Consideration:
The High Court allowed the appeals filed by both the revenue and the assessee, setting aside the Tribunal's order concerning the assessees. The matter involving the assessees was remanded back to the Tribunal for fresh consideration in line with the law, stressing the significance of notifying all parties involved. Additionally, the imposition of penalties on the clearing agency was affirmed by the Court based on a previous judgment. The Court's decision highlighted the need for a comprehensive reevaluation by the Tribunal to address the inconsistencies and uncertainties in the original order, ensuring a fair and lawful resolution of the customs duty and penalty issues.