2022 (10) TMI 964 - AT - Customs

Levy of penalty on the appellant under Section 112(b) of the Customs Act, 1962 - existence of material on record to prove that the appellant had submitted the fake gate pass or not - illegal removal of the subject container - prohibited goods or not - HELD THAT - The findings of the Adjudicating Authority, clearly exonerates this appellant from the penal action under Section 114AA of the Customs Act, 1962, for the reason that there was no material on record to prove that the appellant had submitted the fake gate pass. The above, clubbed with the earlier portion of the order of the Adjudicating Authority that there was no evidence other than the statement of one Shri R. Suresh to suggest the involvement of this appellant in the illegal removal of the subject container, clearly indicates that the appellant has been targeted for no reason whatsoever in this case. Further, there is no material brought on record as to the role of this appellant, i.e., act or omission, that has led to the confiscation of the prohibited goods and it is a matter of record that no goods were confiscated at all in this case on hand. It is also a matter of record that the subject container was very much in the custody of the SIIB Officers since no Bill-of-Entry was ever filed and hence, the alleged removal from the CFS could only attract act of theft under the Indian Penal Code, for which a separate police complaint was lodged and the Revenue has not placed before me the current status of the said complaint - Revenue has also not placed anything on record as to against whom such complaint has been lodged and if this appellant is one of the accused. Fastening the penalty under Section 112(b) ibid against this appellant is only a fallacy, which cannot be sustained at any stretch of imagination - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Levy of penalty under Section 112(b) of the Customs Act, 1962.

Analysis:
The judgment revolves around the central issue of whether the authorities were justified in levying a penalty on the appellant under Section 112(b) of the Customs Act, 1962. The case involved the import of goods declared as "Stationery Goods," which upon examination, were found to also contain unauthorized cosmetic items. The appellant was accused of misdeclaring the goods and infringing Intellectual Property Rights, leading to suspicions of prohibited goods under the Customs Act. The investigation revealed involvement of various individuals, including the appellant, in the illegal removal of the goods. The Adjudicating Authority imposed a penalty of Rs. 5,00,000 under Section 112(b) on the appellant, which was challenged in appeal.

The Adjudicating Authority's observations indicated doubts regarding the appellant's direct involvement in the illegal activities. The appellant was exonerated from penal action under Section 114AA due to lack of evidence linking them to submitting fake documents. The judgment highlighted the absence of concrete proof implicating the appellant in the removal of goods or any role leading to confiscation. Notably, no goods were confiscated, and the container remained under SIIB custody. The Revenue's reliance on statements from individuals lacked substantial corroboration, with key witnesses denying knowledge of the appellant's involvement. The judgment emphasized the arbitrary nature of the penalty imposed on the appellant, deeming it unsustainable and based on insufficient grounds.

In conclusion, the appellate tribunal found the penalty under Section 112(b) against the appellant to be unfounded and lacking substantial evidence. The impugned order imposing the penalty was set aside, and the appeal was allowed in favor of the appellant. The judgment highlighted the importance of concrete evidence and the necessity to establish a clear link between the accused party's actions and the alleged violations under the Customs Act.