2003 (5) TMI 343 - AT - Central Excise

Tribunal upholds penalties for customs duty evasion in nylon yarn case, reduces penalty amount

The Tribunal upheld penalties imposed on the appellant under Central Excise Rules and the Customs Act for conniving in fraudulent transactions to evade ... Evidence - Statement - Confessional statement - Retraction - Evidentiary value - Penalty on authorized signatory Issues:Imposition of personal penalty under Rules 198 and 209A of Central Excise Rules, 1944 and Sections 112 and 117 of the Customs Act on the appellant.Analysis:The appellant, as the authorized signatory of a company, was accused of conniving with his brother in fraudulent transactions involving the evasion of Customs duty on nylon filament yarn. Investigations revealed that the material was not physically dispatched as claimed, leading to show-cause notices against the parties involved. The appellant contested the allegations, claiming he was unaware and acted under instructions. However, the Commissioner imposed penalties on the appellant and others, along with a substantial duty demand on the company. The Tribunal dismissed appeals by the company and the brother, upholding the penalties.The appellant argued against the penalty under Rule 209A, contending no goods were confiscated from him and that his retracted statements were not considered. The appellant's confessional statements were crucial in establishing his involvement in the fraudulent transactions. The Tribunal noted the lack of evidence of retraction before the adjudicating authority, leading to reliance on the confessional statements. The appellant's role in abetting Customs duty evasion was confirmed, including forging documents to facilitate the scheme.The case law cited by the appellant was deemed inapplicable, as the appellant's position as an authorized signatory distinguished him from mere employees in previous cases. The Tribunal emphasized the appellant's active role in the fraudulent transactions, highlighting the seriousness of fraud and forgery in establishing liability for penalties. Despite reducing the penalty amount due to certain aspects of the case, the Tribunal upheld the imposition of penalties on the appellant for his involvement in the Customs duty evasion scheme.In conclusion, the Tribunal upheld the penalties imposed on the appellant under various provisions of the Central Excise Rules and the Customs Act, emphasizing the seriousness of his role in fraudulent activities. Despite a reduction in the penalty amount, the Tribunal affirmed the liability of the appellant for his actions in connivance with his brother in evading Customs duty, ultimately dismissing the appeal while modifying the penalty amount to Rs. 5 lakhs.