2015 (12) TMI 312 - AT - Customs

Tribunal upholds penalty on Almas Impex for Customs Act violation

Almas Impex Versus Commissioner of Customs (EP), Mumbai

The Tribunal upheld the penalty of &8377; 10 lakhs imposed on M/s. Almas Impex under Section 114AA of the Customs Act for using false documents to ... Imposition of Penalty - benefit of Vishesh Krishi Upaj Yojana - Benifit on the basis of forged bills - Held that:- It can be seen that in cases were movement of goods into and outside the country is involved there are separate sections dealing with the legal provisions. Section 114AA specifically deals with cases where documentation, which is incorrect or false. There may been cases where documents are made and there no movement of goods either way and benefits are claimed. Section 114AA is intended to cover those cases. In this respect, the term of 'penalty not exceeding five times of the value of the goods' needs to be read as 'penalty not exceeding five times of the value of the goods declared in the said declaration or statements or documents'. The appellants relies on the case law with reference to the Section 114 is not relevant that in so far as Section 114 deals with violation in respect of actual movement of goods outside the country. Thus for invocation of Section 114 the actual movement of goods is necessary, however for the purpose of Section 114AA movement or existence of goods is not necessary. In view of the above, I am of the opinion that penalty under Section 114AA can be legally imposed in the present circumstances. - Decided against assessee. Issues:1. Imposition of penalty under Section 114AA of the Customs Act.2. Validity of penalty imposed on the appellant.3. Applicability of penalty under Section 114AA in the present circumstances.Analysis:Issue 1: Imposition of penalty under Section 114AA of the Customs ActThe case involves M/s. Almas Impex, exporters availing benefits under VKUY scheme. The appellant obtained VKUY scrips based on shipping bills, some of which were found to be not genuine. The proprietor admitted to submitting false documents to DGFT. The Additional Commissioner imposed a penalty of &8377; 10 lakhs under Section 114AA, which the appellant challenged. The appellant argued that they surrendered the scrips and paid the penalty. The main contention was whether the penalty under Section 114AA could be imposed due to the involvement of false documents.Issue 2: Validity of penalty imposed on the appellantThe appellant claimed they were severely punished as their scrip was cancelled, including genuine bills, and a penalty of &8377; 5 lakhs was paid. The appellant argued that they were entitled to only &8377; 4 lakhs worth of scrips, but the entire &8377; 7.2 lakhs worth was cancelled. The Commissioner (Appeals) upheld the penalty. The appellant contended that they were not personally responsible as the agent handled the matter, which was rejected by the authorities.Issue 3: Applicability of penalty under Section 114AA in the present circumstancesThe appellant's counsel argued that no penalty under Section 114AA could be imposed as there were no goods involved in the first bill of entry. They relied on a High Court decision stating that penalty cannot be imposed without confiscation of goods. However, the Tribunal clarified that Section 114AA pertains to false documentation, not necessarily involving physical goods movement. The penalty can be imposed for knowingly using false documents, irrespective of actual goods movement.In conclusion, the Tribunal found that the penalty under Section 114AA could be legally imposed in the given situation. Considering the appellant's involvement in the activities and the seriousness of the forgery, the penalty was upheld. The appeal was dismissed based on the involvement of false documents and the need for a deterrent penalty due to deliberate forgery.