Penalty Set Aside by CESTAT Due to Lack of Sufficient Evidence The Appellate Tribunal CESTAT, Ahmedabad, set aside the penalty of Rs. 3 lakhs imposed on the appellant under Section 114 of the Customs Act, 1962. The ...
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Penalty Set Aside by CESTAT Due to Lack of Sufficient Evidence
The Appellate Tribunal CESTAT, Ahmedabad, set aside the penalty of Rs. 3 lakhs imposed on the appellant under Section 114 of the Customs Act, 1962. The penalty was based on the appellant's alleged role as a middleman between the manufacturing company and the merchant-exporter. The Tribunal found that the evidence provided by the Revenue, primarily a statement from the manufacturing company's director and a cheque book signed by the appellant, was insufficient to prove the appellant's involvement in the export process. As such, the Tribunal allowed the appeal, emphasizing that a penalty cannot be imposed solely based on an uncorroborated statement of a co-accused.
Issues involved: Imposition of penalty under Section 114 of Customs Act, 1962 based on the appellant acting as a middleman between a manufacturing company and a merchant-exporter.
Summary:
The Appellate Tribunal CESTAT, Ahmedabad, addressed the challenge in the appeal concerning the penalty of Rs. 3 lakhs imposed on the appellant under Section 114 of the Customs Act, 1962. The penalty was imposed due to the appellant's alleged role as a middleman between the manufacturing company M/s Ratan Lila & Co. and the merchant-exporter M/s. Convest Overseas. The Revenue contended that the goods exported were not actually manufactured by M/s. Ratan Lila & Co. and were different from those claimed for drawback. The Revenue relied on a statement by Shri C.P. Gupta, Director of the manufacturing unit, indicating that the appellant introduced him to the exporting firm and managed affairs, supported by a cheque book signed by the appellant. However, apart from Gupta's statement, no other evidence implicated the appellant in the manufacturing or exporting process. Notably, a representative of the exporting firm did not mention the appellant's involvement. The Revenue did not record a statement from the appellant, and the alleged cheque book was not produced. The Tribunal emphasized that an uncorroborated statement of a co-accused cannot solely justify imposing a penalty on another accused.
Therefore, the Tribunal set aside the penalty imposed on the appellant and allowed the appeal.
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