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2025 (4) TMI 705 - HC - CustomsLevy of penalty - Liability of appellant for evasion of customs duty - appellant s claim is that he merely lent his Importer Exporter Code (IEC) to Mr. Rajat Arora and was not involved in the import activities - opportunity for crossexamination of two witnesses was not granted - violation of principles of natural justice - HELD THAT - The Court does not find any question of law that would arise in the present appeal. Moreover the Appellant has at various stages tried to evade the true facts and has taken incorrect pleas before various authorities. Such acts on part of the Appellant also shows that the conduct of the Appellant does not deserve any indulgence - the amounts and penalties which have been imposed upon the Appellant in the Impugned Order are liable to be upheld. The Appellant who enjoyed the IEC registration ought to have acted responsibly and ensured that the same was not misused by any third party. Apart from not being careful about the IEC codes etc. in the present case this Court is clearly of the opinion that the Appellant and Mr. Rajat Arora were conniving with each other and were fully aware of the transactions and imports that were being undertaken. Their role cannot be delineated and differentiated in the manner that the Appellant seeks to delineate himself. Both were acting in concert with each other as is clear from the findings of CESTAT. Appeal dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS 1. Liability for Customs Duty Evasion and Penalties The relevant legal framework includes Section 28 and Section 114A of the Customs Act, 1962, which deal with recovery of duties not levied or short-levied and penalties for duty evasion, respectively. The Court upheld the findings of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) that Mr. Umesh Kumar was liable for the customs duty evasion. The Tribunal found that the appellant had mis-declared imported goods, which were liable to confiscation under Section 111 (m) and (o) of the Customs Act, 1962. The Tribunal also confirmed the penalties imposed under Section 114A for collusion/wilful misstatement/suppression of facts. Key evidence included the appellant's provision of his IEC code and bank account details to Mr. Rajat Arora, and the fact that VAT returns were filed as NIL, indicating an intention to evade customs duty. The Court concluded that the appellant's conduct did not merit any leniency, as he consistently attempted to evade true facts and mislead authorities. 2. Credibility of Appellant's Claim of Non-Involvement The appellant contended that he only lent his IEC to Mr. Rajat Arora and was not involved in the import activities. However, CESTAT rejected this claim, noting that the appellant had not appeared for cross-examination, and the evidence suggested that he was intricately connected with the business operations of the importer, M/s Aromatech. The Court found no merit in the appellant's claim, emphasizing that both Mr. Umesh Kumar and Mr. Rajat Arora were acting in concert and were fully aware of the transactions and imports being conducted. The Court highlighted that the appellant's role could not be delineated from that of Mr. Rajat Arora, as both were complicit in the customs violations. 3. Denial of Cross-Examination The appellant argued that the denial of cross-examination of two witnesses by CESTAT was unjust. However, the Court noted that opportunities for cross-examination were provided but not utilized by the appellant, as he failed to appear on the scheduled dates. The Court found that the procedural opportunities were adequately provided, and the appellant's failure to avail them did not constitute a valid ground for challenging the CESTAT's decision. 4. Entitlement to Customs Exemption The appellant claimed entitlement to customs exemption under notification no. 12/2012 for past imports. However, the investigation revealed that the appellant did not comply with the conditions of the exemption notification, leading to the denial of exemption benefits. The Court upheld the CESTAT's decision, which confirmed the denial of exemption due to non-compliance with the notification's conditions. The appellant's failure to meet the exemption criteria justified the imposition of additional duties and penalties. SIGNIFICANT HOLDINGS The Court upheld the CESTAT's findings and conclusions, emphasizing the following core principles:
The Court concluded that the penalties and demands imposed in the Order-in-Originals dated 24th February, 2016, and 4th January, 2018, were valid and upheld the CESTAT's decision to dismiss the appeals. The appellant's appeal was dismissed, and all pending applications were disposed of.
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