2007 (3) TMI 61 - AT - Customs

Export manager penalty set aside by CESTAT for drawback claim error, stresses fair penalties in customs cases

The Appellate Tribunal CESTAT, Ahmedabad, set aside the penalty imposed on an export manager for a drawback claim that was not in accordance with the law. ... Penalty on manager – Alleged that appellant liable to pay penalty on the charges of mis-declaration that the drawback claim was not in accordance with law – Held that in view of exoneration of the main exporting unit, no such charges can be imposed against the employee of the same firm Issues:1. Imposition of penalty on the export manager for a drawback claim not in accordance with the law.Analysis:The judgment by the Appellate Tribunal CESTAT, Ahmedabad, dealt with the imposition of a penalty on an export manager in relation to a drawback claim filed by the exporting firm. The appellant, who was the export manager for a company, filed a drawback claim of approximately Rs. 57,000. However, upon investigation, it was revealed that the claim was not in accordance with the law, leading to the withdrawal of the claim by the exporting firm. The Deputy Commissioner did not impose any penalty on the exporting firm but imposed a penalty of Rs. 10,000 on the appellant under Section 117 of the Customs Act.Upon appeal, the Commissioner (Appeals) upheld the penalty but categorized it as being imposed under Section 114. The Tribunal, after considering the impugned order and the lack of penalty on the exporting firm, concluded that penalizing the manager was unjustified. Since the exporting firm had withdrawn the drawback claim and no penalty was imposed on them, the charges of mis-declaration against the appellant could not be upheld. Therefore, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellant.Additionally, the Tribunal dispensed with the stay petition in this matter. The judgment highlighted the importance of ensuring that penalties are imposed judiciously and in alignment with the culpability of the involved parties. It emphasized that in cases where the main exporting unit is exonerated, charges against an employee of the same firm may not hold, especially when the claim has been withdrawn.This judgment serves as a reminder of the need for thorough investigations and just application of penalties in customs-related matters, safeguarding the rights of individuals involved in such cases.