2007 (3) TMI 492 - AT - Customs

Insufficient Evidence in Fraudulent Import Case; Penalties Overturned

The Tribunal found insufficient evidence to support charges against the appellants regarding alleged involvement in fraudulent import activities using ... Penalty on partner of clearing agency - Customs House Agent’s licence - Revocation/cancellation of Issues:1. Alleged involvement in the import of cars using forged documents.2. Penalties imposed on individuals for alleged connivance in illegal imports.3. Revocation of CHA license based on involvement in fraudulent import activities.Issue 1: Alleged involvement in the import of cars using forged documents:Between April 1992 and July 1992, nine Bills of Entry were filed for clearance of imported cars under Public Notice No. 197-I.T.C. Investigations revealed that the imports were not permissible as claimed, and penalties were imposed. The appellant, Shri Salim Khatri, denied involvement in the import and highlighted that the allegations were related to passport usage, not his direct involvement in obtaining them. The evidence indicated his role in assisting with the resale of imported cars, which was not illegal. The Tribunal found insufficient evidence to support the charges against the appellants. The imports were questioned due to alterations in passports, but the appellants were not directly linked to the preparation of false documents for import benefits. The involvement of Shri Salim Khatri was deemed limited to facilitating post-import car sales, which was lawful.Issue 2: Penalties imposed on individuals for alleged connivance in illegal imports:The penalties imposed on Shri Salim Khatri and Shri A.K. Joshi were challenged. Shri Joshi, a clearing agent, contended that he acted in good faith and was not involved in preparing false passports or filing misleading documents. The evidence showed that the importers had legitimate reasons for claiming Transfer of Residence benefits, and the clearing agents had no reason to doubt their authenticity. The Tribunal noted that the charges against the appellants lacked substantial evidence. The investigations did not establish their connivance in fraudulent import activities. The Tribunal concluded that the penalties imposed were unjustified, considering the lack of direct involvement or evidence supporting the allegations.Issue 3: Revocation of CHA license based on involvement in fraudulent import activities:The CHA license of M/s. Sealand (India) was revoked due to Shri A.K. Joshi's alleged involvement in the import of Honda Cars using forged documents. However, as the penalty imposed on Shri Joshi was set aside in the earlier appeals, the basis for revoking the CHA license no longer stood. The Tribunal allowed the appeal of the CHA, emphasizing the lack of evidence supporting the involvement of Shri Joshi in fraudulent import activities. The decision to revoke the CHA license was overturned, providing consequential relief to the appellant CHA.---