2014 (4) TMI 195 - AT - Customs

Tribunal rules on jurisdiction in fraud case, clarifies penalties

TATA CONSULTANCY SERVICES LTD. Versus COMMISSIONER OF CUSTOMS (CSI AIRPORT), MUMBAI

The Tribunal set aside the clause for further action against the appellant if connivance in fraud was found, ruling it exceeded the Commissioner ... Validity of Commissioner (A) order – Appellant fraudulently named as importer – Held that:- Appellant is not the importer in the matter and somebody has used their name for import of the goods and after arriving at the decision, he exonerated the appellant from imposition of penalty - Therefore, the observation of the Commissioner (A) “without prejudice to taking further action against them, if necessary, and if found that they have also connived/colluded in the fraud committed in this matter, on conclusion of the investigations directed above” are not warranted -Thus, that part of the order is set aside - Appeal disposed of – Decided in favour of appellant. Issues:1. Appeal against observation in impugned order regarding penalty imposed on the appellant for goods found liable for confiscation.2. Jurisdictional exceedance by Commissioner (Appeals) in ordering further action against the appellant if found conniving in the fraud.Analysis:1. The appellant appealed against an observation in the impugned order related to a bill of entry filed by M/s UPS Jetair Express P. Ltd. in the name of the appellant as the importer. The goods in question were liable for confiscation, leading to a penalty imposed on the appellant. However, the appellant claimed they did not import the consignment and that their name was fraudulently used. The Commissioner (Appeals) set aside the penalty but included a clause for further action if the appellant was found to have connived in the fraud. The appellant challenged this clause, leading to the current appeal.2. The counsel for the appellant argued that since the Commissioner (Appeals) acknowledged that the appellant was not the actual importer and had been a victim of fraud, the inclusion of the clause for further action if connivance was found was beyond the Commissioner's jurisdiction. After hearing the arguments, the Tribunal agreed with the appellant's position. The Tribunal noted that since the Commissioner had already exonerated the appellant from the penalty due to being an innocent party in the fraud, there was no basis for the clause allowing further action. Consequently, the Tribunal set aside that part of the order and disposed of the appeal in favor of the appellant.This judgment clarifies the limits of jurisdiction for authorities when dealing with cases involving fraudulent use of names in import transactions and emphasizes the importance of ensuring penalties are imposed only on those directly involved in the wrongdoing.