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2024 (3) TMI 360 - CESTAT AHMEDABADCountry of origin of copper cathodes - mis-declared the country of origin (COO) of goods as Zambia instead of Iran - False/fabricated/un authentic COO Certificate - import of goods under Non-Ferrous Metal Import Monitoring System - confiscation - imposed heavy penalties on the Appellant and its directors along with redemption fine - burden of proof - HELD THAT:- In our view country of origin cannot be determined basis the movement of goods or the country where the same were inspected. As has been discussed, nothing stopped the department from reaching out to National Iranian Industries Co. to ascertain if the goods originated from Iran. Accordingly, we have no hesitation in holding that goods are not liable for confiscation as there is no contravention of Sections 111(d) and (m). We have found that no evidence has been produced by the Department to remotely show that there was wilful involvement of the Appeallant in the issuance of COO certificates. The submission of the Appellant that the COO certificates have not been cancelled by the Zambian Authorities cannot be overlooked or brushed aside just because the department has formed a view that the same were not authentic. We have already observed that the said view is without any basis and unsupported by any evidence. Department has not made any effort to check the correctness of the COO certificates and if any attempt is made the documents proving the same have not been annexed to the SCN or placed on record. Furthermore, the Department choosing to not investigate the Iran entities viz., National Iranian Industries Co. and Coppernium International FZE goes on to show the incomplete nature of investigation. Therefore as held by us the authenticity of the documents cannot be doubted due to lack of evidence. Thus, penalty u/s 112(a) and 114AA of the Act cannot be imposed on both the Appellant and its directors and the same deserves to be set aside. Penalty On Appellant - In cases where there is absolutely no involvement of assessee and where there is no evidence produced to show their role in the alleged fraud/mis-declaration, then imposition of penalty in our view will amount to injustice as far as the assessee is concerned. Penalty generally is imposed as a penal consequence of a person enjoying benefits of a thing which it is not entitled to or the said benefits are obtained by him due to fraud or mis representation. In Akbar Badruddin Jiwani vs Collector of Customs [1990 (2) TMI 50 - SUPREME COURT] has held that mens rea is to be established even in case for imposition of penalty u/s 112 (a) of the Act. No evidence has been produced by the department showing any role of Appellant and its directors in the alleged mis-declaration Penalties as confirmed by the impugned order are required to be set aside. We have provided detailed findings in relation to failure on the part of the department to either prove that goods had originated in Iran or prove role of the Appellant or its Directors in the alleged Mis-declaration. Penalty u/s 114AA also in our view cannot be imposed in the facts of the present case. Individual Penalties imposed on the directors - We have gone through the statement of both the directors and note that nothing incriminating is found therein. None of the other witnesses have stated anything against the directors. No document has been produced that shows any involvement of either of them in the alleged mis-declaration which in any event department has not been able to prove. Mr. Satish Amlani was not even looking into import related transaction. Given the above we are loss to understand as to how department has imposed penalties u/s 112(a) and 114AA on two directors. Thus, we set aside the impugned order and allow the Appeals with consequential relief, if any, in accordance with law.
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