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TMI Blog2024 (10) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... 103.1 kg. of Red Sanders attempted to be exported and imposed penalties on 7 individuals. The operative part of this order is as follows : - (i) I order for confiscation of the seized consignment of 1103.1 kgs. of Red Sanders under section 113 (d) and section 113 (h) (i) of the customs Act, 1962. (ii) I reject the declared value of the consignment (as mentioned in Para-32 of the SCN) under Rule 8 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 and re-determine the assessable value of Red Sanders as Rs. 2,00,00,306/- in terms of Rule 6 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007. (iii) I impose penalty of Rs. 50,00,000/- (Rupees Fifty Lakhs) on Shri Prashant Jha under section 114 and 114AA of the Customs Act, 1962. (iv) I also impose a penalty of Rs. 75,00,000/- (Rupees Seventy Five Lakhs) on Shri Prashant Kumar Jha under section 114AA of the Act ibid. (v) I impose penalty of Rs. 15,00,000/- rupees fifteen Lakhs) on Shri Sarvesh Kumar under section 114 and but do not propose any penalty on him under section 114AA of the Customs Act, 1962. (vi) I impose penalty of Rs. 25,00,000/- (Rupees Twenty Five lakhs) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation Branch SIIB of the custom house received specific intelligence that prohibited goods were being attempted to be exported mis- declaring them as unaccompanied package through Malaysian Airlines. Acting on this intelligence, officers visited the office of Malaysian Airlines where they found one, Shri Ankit Kumar, trying to hand over the baggage declaration, airway bill and other documents to the Malaysian Airlines. Shri Ankit Kumar was the agent of M/s Sky Barge Freight Pvt. Ltd. He said that one, Shri Krishna Chandra Jha had requested him to hand over those papers at the Malaysian Airlines and he was simply handing over the baggage declaration No. 2593 dated 01.11.2017 and airway bill No. 232 672 4723 to the Malaysian Airlines. Otherwise, he had nothing to do with the consignment or the exporter. He said that he had known Shri Krishna Chandra Jha and, therefore, on his request took the papers from him to give to the Malaysian Airlines. Shri Jha works for M/s Avlokan Exim Pvt. Ltd. 11. The officers examined the goods covered by the baggage declaration and the airway bill and found that the baggage declaration was filed in the name of Shri Vipin Dua Passport No. H3535709 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay bill in the name of fictitious company M/s Sikki Auto Pvt. Ltd. Thus, the airway bill was filed and space was booked in the name of M/s Sikki Auto Pvt. Ltd. while the baggage declaration was filed in the name of Shri Vipin Dua. Thereafter, two letters dated 17 and 18 October 2017 were given by Shri Prashant Jha through Sarvesh Kumar and Ravindra Kumar to Mayank Gupta to change the description of the consignor and consignee. Thus the consignor and consignee's names have been changed to Shri Vipin Dua in the airway bill and the description of the goods were changed to unaccompanied baggage and as personal effects - handicraft item. 15. To sum up, neither Shri Vipin Dua in whose name the baggage declaration was filed with the customs nor M/s Sikki Auto Pvt. Ltd. (which is the fictitious entity) had anything to do with the airway bill or the baggage declaration or the consignment. In this manner, they attempted to smuggle out red sanders. 16. After investigation, the SCN dated 05.11.2018 was issued to 7 persons of which notices were sent at two addresses each in case of Shri Krishna Chandra Jha, Nishant Kumar, Mayank Gupta and Sarvesh Kumar. It was proposed in the SCN to confisca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were changed to Shri Vipin Dua. (g) Shri Krishna Chandra Jha collected the baggage declaration and the airway bill and gave them to Ankit Kumar to hand over to the Malaysian Airlines. Shri Ankit Kumar was intercepted by the officers while doing so and on examination the consignment was found to be red sanders. (h) Neither Shri Vipin Dua nor M/s Sikki Auto Pvt. Ltd. in whose name the baggage declaration and the airway bill were respectively filed had anything to do with the consignee. (i) Section 114AA of the Act mandates penalty for use of false or incorrect material with knowledge. All the noticees played an important role in use of false documents without verifying their authenticity. Therefore, penalties should have been imposed under section 114AA on Shri Mayank Gupta, Shri Sarvesh Kumar, Shri Ravindra Kumar and Shri Krishna Chandra Jha. (j) The impugned order needs to be modified only to this extent. (k) The appeals filed by Shri Mayank Gupta and Shri Ravindra Kumar deserve to be dismissed. 19. Submissions on behalf of Shri Mayank Gupta : Learned counsel for Shri Mayank Gupta made the following submissions :- (a) Shri Mayank Gupta was not aware of the alleged mis- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be set aside. 21. We have considered the submissions from both sides and perused the records. 22. We now proceed to decide the appeals with respect to each of the appellant/respondents. 23. Mayank Gupta : Revenue's Appeal C/50017 of 2020 against Shri Mayank Gupta seeks imposition of penalty under section 114AA of the Act. The role of Shri Mayank Gupta was recorded by the Commissioner is as follows :- "Shri Mayank Gupta, Director of M/s Sky Barge Freight Pvt. was third and final forwarder in sequence of arranging space in Airlines and shipping lines for the fake exporter without obtaining KYC of the main (fake) exporter from M/s Vin Global Logistics and M/s FSD Cargo Movers in respect of all the concerned AWB used for export of Red Sanders. Shri Mayank Gupta, vide his statement date 09.11.17 stated that being freight forwarder they used to arrange space in airlines and shipping lines for the exporter/importers and other sub-agents for their cargo; that his company had issued the six AWB's as mentioned in the Panchnama dated 09.11.2017 (6 in nos.) in the name of M/s Sikki Auto India Pvt. Ltd., B-11/29, Mohan Co-Operative Industrial Estate, Badarpur, New Delhi - 110 004. Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner erred not imposing the penalty under section 114AA of the Act upon Shri Mayank Gupta. 26. In his appeal No. C/52761 of 2019, Mayank Gupta submitted that he had no knowledge of fraud being committed and that he had issued the airway bill on request from another freight forwarder Shri Ravindra Kumar and, therefore, he was not liable to any penalty under section 114 of the Act at all. 27. Section 114 : Penalty for attempt to export goods improperly, etc. - Any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 113, or abets the doing or omission of such an act, shall be liable,- (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding three times the value of the goods as declared by the exporter or the value as determined under this Act, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sought to be evaded or five thousand rupees, whichever is the greater; (iii) in the case of any other g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. It also needs to be noted that section 114 does not require the intent of an individual to be established. The act or omission which rendered the goods liable for confiscation under section 113 of the Act is sufficient. 32. As for the Revenue's appeal seeking imposition of penalty under section 114AA of the Act, this section renders a person liable to penalty only if he knowingly or intentionally makes, signs, or uses any declaration statement or document which is false or incorrect in any material particular in the transaction of any business for the purpose of this act. The document for the purpose of the Act in this case was the baggage declaration which was not filed by Shri Mayank Gupta. The airway bill is not a document filed under the Act but is a document required by the airlines. It is the counterpart of bill of lading filed for transport by ships. Although the airway bill is an essential document to take the goods out of the country it is not the document filed under the Act. In view of the above, we find that the Commissioner was correct in not imposing a penalty on Shri Mayank Gupta under section 114AA of the Act. 33. Shri Ravindra Kumar : The role of Shri Ravindr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed only if the knowledge of the person is established and the mis-declaration was in respect of a document filed for the purposes of the Act. In this case, the document filed for the purpose of Act is the baggage declaration. The role of Shri Ravindra Kumar was in getting the airway bill filed which was the document related to the airlines. Therefore, we do not find that any penalty was imposable on section 114AA of the Act. The Commissioner was correct in not imposing penalty on him under this section. 38. Shri Sarvesh Kumar : Revenue filed Appeal No. C/50018 of 2020 to assail the non-imposition of penalty under section 114AA of the Act on Shri Sarvesh Kumar. The role of Shri Sarvesh Kumar, as discussed in the impugned order is as follows :- "I find that Shri Sarvesh Kumar received the manual documents from Shri Prashant Kumar Jha without obtaining kYC of the main exporter on cash basis. He further forwarded the manual documents to another freight forwarder M/s Vin Global Logistics and further to M/s Sky Barge Freight Pvt. Ltd. to facilitate the export of prohibited goods i.e. Red Sanders issued in the name of non-existing company M/s Sikki Auto India Pvt. Ltd. He forwarde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty not exceeding five times the value of the goods for mis-declaration. No minimum penalty is stipulated under this section. Considering the role of Shri Sarvesh Kumar, we find it appropriate to impose penalty of Rs. 75,00,000/- on Shri Sarvesh Kumar under section 114AA of the Act. 41. Shri Krishna Chandra Jha : Revenue's Appeal No. C/50015 of 2020 assails non-imposition of penalty on Krishna Chandra Jha under section 114AA of the Act. Shri Krishna Chandra Jha was the last person in the chain of conspiracy before Ankit Kumar. He had obtained the fake baggage declaration and the airway bills which, together, could have resulted smuggling in the red sanders but for the investigation by the officers. Instead of personally going to the airlines to hand over the papers, he used Shri Ankit Kumar to submit the papers to the airlines during which process the documents were intercepted. The Commissioner imposed penalties of Rs. 25,00,000/- on Shri Krishna Chandra Jha under section 114 of the Act but had not imposed any penalty under section 114AA of the Act. 42. In our view, the role of Shri Krishna Chandra Jha is clear and so is his knowledge. Knowledge or guilty state of mind c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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