2009 (2) TMI 189 - AT - Customs

Penalty and fines reduction imposed for diversion of imported goods - The two proprietary concerns do not challenge the finding of diversion of imported goods and only seek reduction in the quantum of fines and penalties. The two brokers challenge the finding that they were involved in the diversion of the imported goods held that in the totality of facts and circumstances the penalty on Mr. Laxmikant Todi is reduced to Rs. 2, 50, 000/- - in the totality of facts and circumstances of the case we reduce the penalty imposed upon P.M. Rajen to Rs. 2, 50, 000/-

Summary

Issues:
Confirmation of duty demand, confiscation of imported goods, imposition of fines and penalties, challenge to involvement in diversion of goods, reduction in fines and penalties, freezing of bank balance, involvement of brokers, retraction of statement, coercion in confession, aiding and abetting offenses.

Analysis:

1. Confirmation of Duty Demand and Imposition of Fines and Penalties:
The Commissioner of Customs confirmed the demand of duty against two proprietary concerns and imposed fines and penalties in accordance with Section 28 of the Customs Act, 1962. The fines and penalties were commensurate with the value of the goods imported, with an option for redemption upon payment of specified fines. The proprietors and brokers were held liable for penalties based on their involvement in the diversion of imported goods.

2. Challenge to Involvement in Diversion of Goods:
While the two proprietary concerns did not contest the finding of diversion of imported goods, they sought a reduction in the quantum of fines and penalties. On the other hand, the brokers challenged the determination of their involvement in the diversion of goods.

3. Reduction in Fines and Penalties:
After hearing both sides, the Tribunal upheld the fines imposed on the proprietary concerns considering the value of the imported goods. However, the penalty imposed on the proprietrix of one concern was reduced, taking into account the circumstances of the case.

4. Freezing of Bank Balance:
The Tribunal vacated the freezing of bank balances of the two concerns, noting the specific amounts involved and the overall context of the case.

5. Involvement of Brokers and Reduction in Penalties:
The role of the brokers in the diversion of goods was established through statements and evidence. While one broker admitted to his involvement, the other broker was implicated by the former. The Tribunal upheld the penalties against the brokers but decided to reduce the amounts imposed on them based on the facts and circumstances presented.

6. Retraction of Statement and Coercion:
The Tribunal considered the retraction of a statement by one of the brokers and the absence of evidence regarding coercion in obtaining the confession. The lack of timely retraction and supporting documentation led to the validation of the penalties imposed on the broker.

7. Aiding and Abetting Offenses:
Another broker was found to have aided and abetted the commission of offenses related to the diversion of goods. Despite the lack of a clear admission of involvement, the broker's actions and connections were deemed sufficient for upholding the penalty, albeit with a reduction in the amount imposed.

8. Operative Part of the Order:
The appeals were disposed of with varying outcomes, including dismissal and partial allowance, with specific adjustments made to the penalties imposed on the proprietors and brokers involved in the case. The order was pronounced in open court on a specified date.