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2023 (9) TMI 665 - AT - CustomsLevy of penalties u/s 114 of the Customs Act, 1962 - overvaluation of export of goods for availment of higher rate of drawback - Penalty on person who partnered with exporter - Penalty on Bank / Approved Banker for abetment - HELD THAT:- The department had not issued any summon(s) to the appellant Shri Sanjay D. Bhalerao for recording of statement(s) with regard to irregular exportation of the subject goods and for ascertaining his specific role with regard to such activities. Though, the impugned order has stated that the appellant had earned 50% of profit out of the export proceeds, but did not elaborate any findings with regard to the actual role played by the appellant in irregular exportation of the goods - in absence of proper substantiation of the case, especially with regard to the appellant herein, the penal provisions contained in Section 114 ibid, cannot routinely be invoked for penalising the appellant. The Indian bank’s role is confined only for scrutinization of documents to be submitted by the exporter and to forward the same to the Russian designated bank. It has also been provided that if no discrepancy report is received from the Russian Bank within seven days, then the documents sent by the Indian bank should be considered as sufficient for lodgment of claim with the RBI - when the appellant’s role starts after exportation of the goods and issuance of the Let Export Order (LEO) and issue of exchange control copy of Shipping Bill by the Customs department, it would not be proper to allege that the appellant had omitted or did some act in relation to improper export of goods. In the present case, since the appellants’ role as a banker has started after physical exportation of the goods, more particularly after issuance of LEO and physical movement of goods from the port of export, it cannot be said that they were involved in improper exportation of goods and consequently, would be exposed to the penal liabilities provided under Section 114 ibid. There are no merits in the impugned order, in so far as it has imposed penalties under Section 114 ibid, on the appellants - appeal allowed.
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