2015 (1) TMI 840 - AT - Customs

Appeal dismissed for false CA certificate aiding customs duty evasion. Upheld penalty under Customs Act.

The appeal against the penalty imposed under Section 112(a) of the Customs Act for issuing a false Chartered Accountant certificate was dismissed. The ... Penalty for issuance of false certificate under Section 112(a) of the Customs Act, 1962 - liability for aiding and abetting customs duty evasion by issuing a false Chartered Accountant certificate - duty of a Chartered Accountant to verify audited books of account before certifying turnover - facilitation of imports without bank guarantee leading to customs contravention - confiscation under Section 111(o) of the Customs Act, 1962Penalty for issuance of false certificate under Section 112(a) of the Customs Act, 1962 - liability for aiding and abetting customs duty evasion by issuing a false Chartered Accountant certificate - duty of a Chartered Accountant to verify audited books of account before certifying turnover - Whether the appellant Chartered Accountant is liable to penalty under Section 112(a) for issuing false certificates which facilitated customs duty evasion - HELD THAT: - The Tribunal found as an established fact that the appellant issued certificates certifying export turnover for the years 1998-99, 1999-2000 and 2000-2001 which were false. The appellant's defence that the certificates were issued in good faith on documents produced by the client was rejected because the documents were unsigned and not audited. The adjudicating authority recorded that the appellant did not verify purchase or export documents, had no audited balance sheet or books of account before certifying, and issued the certificates at the instance of the client's representative, thereby facilitating imports without bank guarantees. Those findings established that the appellant, by acts of omission and commission, aided the contravention rendering the goods liable to confiscation and made the appellant liable to penalty under Section 112(a). The Tribunal found no infirmity in the lower authority's reasoning and agreed with the Commissioner (Appeals) in upholding the penalty.Appeal dismissed; penalty imposed on the appellant under Section 112(a) upheld.Final Conclusion: The appeal is dismissed and the penalty imposed on the appellant for issuing false Chartered Accountant certificates that facilitated contravention of Customs requirements is upheld. Issues: Appeal against imposition of penalty under Section 112(a) of Customs Act for issuing a false Chartered Accountant certificate leading to evasion of Customs duty.Analysis:1. Issue of False Certificate: The appellant, a Chartered Accountant, issued a certificate regarding the financial turnover of a company for the purpose of obtaining a DEEC certificate. However, it was found that the certificate was false and based on unsigned and unaudited documents. The appellant admitted to issuing the certificate without verifying audited books of accounts, which is against professional standards. The lower adjudicating authority found that the appellant intentionally and consciously certified false export turnover, facilitating the evasion of Customs duty.2. Appellant's Defense: The appellant argued that the certificate was issued in good faith and professional capacity based on documents provided by the company. The appellant claimed innocence, stating that he was not involved in the fraud committed by the company. However, the tribunal noted that the appellant's duty as a Chartered Accountant was to issue certificates only based on audited documents, which was not the case in this instance.3. Findings and Penalty Imposition: The tribunal upheld the penalty imposed under Section 112(a) of the Customs Act, as the appellant's actions directly or indirectly aided the company in contravening Customs provisions, leading to the evasion of duty. The tribunal agreed with the lower authority's findings that the appellant's issuance of false certificates facilitated the company in obtaining authorizations without fulfilling necessary requirements, resulting in the diversion of goods in the local market.4. Conclusion: The tribunal dismissed the appeal, stating that the offense committed by the appellant was clearly established based on the findings, and there was no error in upholding the penalty imposed. The judgment serves as a reminder of the professional responsibilities of Chartered Accountants in issuing certificates and highlights the consequences of facilitating fraudulent activities that lead to Customs duty evasion.