2009 (9) TMI 519 - AT - Customs

Abetment on DEPB fraud testing laboratory penalty Held that - appellant is a testing laboratory and their job is only to analyse the samples and accordingly to prepare a test report and the appellant has nowhere any role in misdeclaration or undervaluation of the impugned goods In fact the appellant has given the vague report as it was not up to the mark as prescribed by the literature and on the basis of that vague test report the department was able to find that the impugned goods are misdeclared of the quantity and the value. in the absence of conscious knowledge penalty on charge of aiding and abetting would not sustained. Penalty set aside

Summary

The Appellate Tribunal CESTAT, Mumbai, in the citation 2009 (9) TMI 519, heard an appeal against a penalty of Rs.50,000 imposed on the appellants under Section 114(i) of the Customs Act, 1962. The case involved the misdeclaration of goods for export, specifically "Industrial Lubricant Pericin-9." The appellant, a testing laboratory, submitted a test report on the goods, which was deemed vague and ambiguous by the adjudicating authority. Subsequent testing revealed that the product did not meet the specifications declared in the shipping bills, leading to confiscation and penalties. The appellant argued that they were not responsible for misdeclaration and relied on legal precedents to support their case.

After reviewing the submissions, the Member (J) noted that the appellant's role was limited to analyzing samples and preparing test reports, with no involvement in misdeclaration. The appellant's vague report inadvertently led to the discovery of the misdeclaration. Drawing on legal references, the Member concluded that in the absence of conscious knowledge, penalties for aiding and abetting cannot be sustained. As a result, the impugned order was set aside, and the appeal was allowed with consequential relief. The judgment was pronounced on 17-9-2009.