2009 (2) TMI 673 - AT - Customs

Summary

Issues involved: Imposition of penalty on the appellant u/s 114(i) of the Customs Act, 1962 for providing false valuation certificates leading to ineligible DEPB benefits to exporters.

Summary:
The appellant, a Chartered Engineer, was penalized for providing valuation certificates without inspecting the goods, resulting in exporters obtaining ineligible DEPB benefits. The Adjudicating Authority imposed a penalty of Rs. 20,000 on the appellant under Section 114(i) of the Customs Act, 1962. The appellant contested the penalty, arguing that Section 114 applies only when goods are confiscated under Section 113. The Revenue contended that the penalty was justified as the appellant's certificates led to ineligible benefits for exporters. The Tribunal found that since the goods were not liable for confiscation under Section 113, the penalties under Section 114 were not applicable. Consequently, the impugned orders imposing penalties on the appellant were set aside, and the appeals were allowed.

The Tribunal noted that the penalties were based on the appellant's false valuation certificates, which allowed exporters to receive ineligible DEPB benefits. The Adjudicating Authority had imposed penalties on other individuals involved in the export transactions, but the appellant was not part of those proceedings initially. Subsequently, the Authority adjudicated the appellant's case separately and imposed a penalty of Rs. 20,000 under Section 114(i) of the Customs Act, 1962.

The appellant argued that Section 114 penalties apply only when goods are confiscated under Section 113. The Revenue contended that the penalties were justified due to the appellant's role in providing false certificates, leading to ineligible benefits for exporters. The Tribunal analyzed the provisions of Section 114 and found that since the goods were not liable for confiscation under Section 113, the penalties imposed on the appellant were not valid.

The Tribunal concluded that as there was no confiscation or liability for confiscation of the goods under Section 113, the penalties under Section 114 could not be invoked. Therefore, the impugned orders imposing penalties on the appellant were set aside. The Tribunal allowed the appeals, providing consequential relief as necessary.