2005 (8) TMI 597 - AT - Customs

Director held liable for company's export obligation non-compliance, penalty upheld.

SHALAKA V. RANE Versus COMMISSIONER OF CUSTOMS, GOA

SHALAKA V. RANE Versus COMMISSIONER OF CUSTOMS, GOA - 2007 (209) E.L.T. 420 (Tri. - Mumbai) Issues:Appeal against penalty imposed on a Director of a company for non-compliance with export obligations and confiscation of capital goods imported by the company.Analysis:The appeal was filed against the order of the Commissioner of Customs and Central Excise, Goa, which imposed a penalty of Rs. 1.00 lakh on the appellant, a Director of M/s. Prashant Polyconcrete Products Pvt. Ltd., for non-compliance with the conditions specified in Notification No. 13/81-Cus., dated 9-2-1981, regarding export obligations. The company had failed to fulfill the export obligations, leading to the confiscation of capital goods imported by the company. The appellant, being one of the Directors, was penalized for the company's non-compliance. The Tribunal noted that the appellant did not raise any substantial grounds in the appeal memorandum, except claiming a lack of effective opportunity to be heard. However, the Tribunal found this claim to be incorrect, as multiple hearings were granted even after the appellant's request for adjournment. Therefore, the appeal of violation of the principles of natural justice was deemed unsubstantiated.The Tribunal further highlighted that as per Section 140 of the Customs Act, 1962, in cases where an offence is committed by a company, the person responsible for the conduct of the company's business at the time of the offence shall be liable. The appellant's argument that she had ceased to be a Director of the company at the time of the Show Cause Notice was issued was dismissed, as she was a Director during the period when the offence was committed. The Tribunal emphasized that the appellant, being a Director during the relevant period, was liable for the company's actions. Therefore, the Tribunal found no merit in the appeal and accordingly dismissed it.In conclusion, the Tribunal upheld the penalty imposed on the appellant, a Director of the company, for non-compliance with export obligations, leading to the confiscation of capital goods imported by the company. The Tribunal clarified that being a Director during the period of the offence made the appellant liable, and her claim of ceasing to be a Director at the time of the Show Cause Notice issuance did not absolve her from responsibility. The appeal was dismissed based on these findings.