2011 (3) TMI 221 - AT - Customs

Penalty under Section 114AA - The contention of the applicants is the during investigation no statement was recorded - The allegation against the applicants is that they failed to comply with the provisions of the Act and also failed to bring the matter regarding export of the prohibited goods namely non-basmati rice to the notice of the Customs Department - The contention is that all the consignments were cleared for export after due examination - There is no evidence on record to show that the applicants had acted mala fide - Therefore the penalty imposed on the applicants is not sustainable - Held that the consignments were earlier cleared for export after due examination and there is no evidence on record to show the involvement of the applicants in the mis-declaration of the goods - Therefore pre-deposit of the penalty is waived and recovery thereof stayed till disposal of the appeal.

Summary

Issues: Delay in filing appeal, Penalty under Section 114AA of the Customs Act, 1962

In the judgment delivered by the Appellate Tribunal CESTAT, New Delhi, the applicants filed an application for condonation of a 7-day delay in filing the appeal, which was allowed after considering the reasons provided by the applicants. Subsequently, the applicants, M/s Kunal Travels (Cargo), sought waiver of a penalty of Rs. 75,000 imposed under Section 114AA of the Customs Act, 1962.

Regarding the penalty issue, it was noted that the applicants, who were involved in the export of basmati rice, faced penalties due to the export of non-basmati rice, which was prohibited under the Import-Export Policy. The adjudicating authority had ordered confiscation of the non-basmati rice and imposed penalties on both the exporter and the Customs House Agent (CHA). The applicants contended that they had not acted mala fide, as all consignments were cleared after examination, and no evidence suggested their involvement in misdeclaration.

On one hand, the Revenue argued that the applicants failed to ascertain the nature of the goods and did not notify the Revenue about the prohibited non-basmati rice consignments. They claimed that the applicants' representative visited the exporter's premises and was aware of the export of non-basmati rice, justifying the penalty imposition. However, the Tribunal observed that no statement from the applicants' authorized representative was recorded, and there was no evidence implicating them in the misdeclaration.

Considering the circumstances, the Tribunal found a strong prima facie case in favor of the applicants. Consequently, the pre-deposit of the penalty was waived, and recovery stayed pending the appeal's disposal. The Tribunal allowed the stay petition, providing relief to the applicants in this matter.