2004 (5) TMI 332 - AT - Customs

Tribunal Upholds Penalty for Customs Act Violation despite Appellant's Retraction

ALOK GUPTA Versus COMMISSIONER OF CUSTOMS, NEW DELHI

ALOK GUPTA Versus COMMISSIONER OF CUSTOMS, NEW DELHI - 2004 (170) E.L.T. 546 (Tri. - Del.) Issues: Imposition of penalty under Section 112 of the Customs Act, 1962 based on under-valuation of imported goods and subsequent retraction of statement by the appellant.Imposition of Penalty:The appellant, Shri Alok Gupta, challenged the penalty imposed upon him under Section 112 of the Customs Act, 1962, amounting to Rs. 2,50,000. The penalty was based on the under-valuation of imported glassware in March 2001, where the appellant was involved in arranging the import along with the proprietor of the importing firm, M/s. Essem Enterprises. The customs authorities suspected under-valuation, leading to a statement under Section 108 of the Customs Act by the appellant. Despite the retraction of the statement, a show cause notice was issued proposing confiscation of goods, penalties, and demanding differential duty. The Commissioner passed the order based on the appellant's initial statement, leading to the imposition of the penalty.Ownership and Involvement:In the appeal, the appellant argued that he was merely assisting the semi-educated proprietor of the importing firm and should not be held liable for the penalty as he was not the importer. However, the learned SDR contended that the appellant was the main orchestrator behind the under-valuation scheme, justifying the penalty. The Tribunal noted that the appellant's involvement in the import process, detailed disclosures in the statement regarding under-valuation arrangements, and subsequent retraction indicated his significant role in the scheme. The retraction was viewed as an attempt to avoid consequences rather than a genuine change in position, reinforcing the appellant's involvement.Legal Justification for Penalty:The Tribunal analyzed the appellant's actions in arranging under-valuation and attempting to evade customs duty, which rendered the goods liable to confiscation under Section 111 of the Customs Act. It was highlighted that under Section 112, any person involved in acts leading to goods' confiscation or aiding such acts is liable for penalty, irrespective of ownership. The Tribunal found the appellant squarely within the ambit of Section 112 due to his central role in the under-valuation scheme. The penalty amount was deemed moderate considering the value of imported goods and duty evasion. Consequently, the Tribunal upheld the legality of the penalty imposition, emphasizing the appellant's serious involvement and dismissing the appeal.In conclusion, the Tribunal upheld the imposition of the penalty under Section 112 of the Customs Act, 1962, on the appellant for his significant role in orchestrating the under-valuation of imported goods, despite his subsequent retraction of the statement. The decision highlighted the appellant's active involvement, justifying the penalty as legal and proportional to the duty evasion scheme.