2013 (10) TMI 1148 - AT - Customs

Tribunal Upholds Penalty for Fraudulent Claim, Emphasizes Compliance

Kunal Travels Cargo Versus CC, New Delhi

The tribunal found no merit in waiving the pre-deposit requirement for the appellant's appeal due to their involvement in a fraudulent claim of drawback. ... Waiver of pre deposit - Held that:- appellant who has not refuted charge of abatement against it at the adjudication stage. The appellant was found to be conduit in the fraudulent claim of drawback as was inferred by adjudicating authority - Prima-facie appellant’s appeal has no merit for waiver of pre-deposit. Accordingly, stay application is dismissed. Issues involved:1. Failure of the appellant to pursue remedy against penalty.2. Allegations of abetment in fraudulent claim of drawback.3. Merit of waiver of pre-deposit in appellant's appeal.4. Consequences of penalty on other connected parties.Analysis:1. The appellant failed to pursue its remedy against a penalty of Rs.1,00,000 despite the appeal being filed and the matter coming up for hearing. The absence of the appellant and lack of adjournment application were noted by the tribunal. The respondent pointed out that the appellant was involved as an abettor in a fraudulent claim of drawback related to shipping bills, which had penal consequences. The tribunal observed that the appellant had knowledge of the fraudulent activities and did not refute the charge of abetment during the adjudication stage.2. Considering the gravity of the matter and the appellant's involvement in the fraudulent claim, the tribunal found no merit in waiving the pre-deposit requirement for the appellant's appeal. The appellant was identified as a conduit in the fraudulent activity, as determined by the adjudicating authority. Consequently, the stay application was dismissed, and the appellant was directed to deposit the entire demand of Rs.1,00,000 within four weeks of receiving the order, with compliance due by a specified date.3. The adjudication order imposing the penalty on the appellant was noted to have implications for the exporter and other connected parties. The registry was instructed to keep a copy of the order in all related appeals to remind the bench of the seriousness of the matter. Additionally, the learned DR was directed to highlight this aspect when the connected appeals were scheduled for hearing, ensuring that the broader implications of the case were duly considered.This judgment underscores the tribunal's assessment of the appellant's involvement in fraudulent activities, the importance of complying with penalty requirements, and the broader consequences for connected parties. The decision reflects a strict approach towards cases of abetment in fraudulent claims and emphasizes the need for timely and diligent pursuit of legal remedies in such matters.