2017 (11) TMI 222 - AT - Customs

Penalty u/s 112(a) of the CA 1962 - case of appellant is that he was never a Director of the company nor was he involved in the company as an Officer-in-charge of the affairs of the company - Held that - the Department has not been able to bring any evidence against the present appellant regarding the involvement of the appellant in the affairs of the company - as per Form No.32 filed with the Registrar of Companies appellant was allegedly made Director on 14/08/1997 much after of the import of the goods. In view of lack of evidence against the appellant the impugned order imposing penalty of Rs. 1 lakh on the appellant is not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Imposition of penalty under Section 112(a) of the Customs Act, 1962 on the appellant.

Analysis:
The appeal was filed against the Commissioner of Customs' order imposing a penalty of Rs. 1 lakh on the appellant under Section 112(a) of the Customs Act, 1962. The case involved M/s. Cochin Plastics Pvt. Ltd., a unit in the Cochin Export Processing Zone, where attempts were made to clear goods after the expiry of the Letter of Permission. The investigations revealed over-invoicing and attempts to avail undue benefits. The show-cause notice was issued to various individuals, including the appellant. The Commissioner ordered confiscation of goods and imposed penalties after due process.

The appellant argued that he was not a director or involved in the company's affairs during the relevant period. Evidence was presented to show the date of his alleged appointment as a director, which was after the import of goods and after the resignation of the individuals in charge. It was contended that there was no proof of his involvement in company meetings or any mens rea on his part.

Upon review, the Tribunal found that the Department failed to provide sufficient evidence linking the appellant to the company's affairs or establishing mens rea. The Form No.32 indicated the appellant became a director after the import of goods. Due to the lack of evidence against the appellant, the Tribunal concluded that the penalty imposed was not sustainable. Consequently, the appeal was accepted, and the penalty of Rs. 1 lakh under Section 112(a) of the Customs Act was dropped. The decision was pronounced in open court on 31/08/2017.