2018 (2) TMI 1972 - AT - Customs

Customs Act Appeal Success: Alleged Connivance Not Proven

N.S. MAHESH Versus COMMISSIONER OF CUSTOMS, COCHIN

The appeal against the rejection of the appellant's appeal by the Commissioner (Appeals) under Section 112(a) of the Customs Act, 1962, based on alleged ... Imposition of penalty on CHA - Mis-declaration of value of goods - no corroborative evidences - case of appellant is that impugned order has been mechanically passed without considering the submission of the appellant - principles of natural justice - HELD THAT:- There is no corroborative evidence to the allegation that the appellant has helped the importer by undervaluing the imported goods. The penalty has only been imposed on the basis of the e-mails received from his e-mail account which have not been corroborated by independent evidence - Further, it is found that the clearance of the impugned goods were done not by the appellant but some other Customs broker and the appellant had not played any role in the clearance of the impugned consignment. In view of insufficient evidence against the appellant to impose penalty on him under Section 112(a) of the Customs Act, 1962, penalty cannot sustain - appeal allowed - decided in favor of appellant. Issues:- Appeal against rejection of appeal by Commissioner (Appeals) under Section 112(a) of the Customs Act, 1962 based on alleged connivance in undervaluing imported goods.Analysis:The case involved an appeal against the rejection of the appellant's appeal by the Commissioner (Appeals) under Section 112(a) of the Customs Act, 1962. The appellant was accused of conniving with an importer to undervalue imported goods to evade Customs duty. The impugned order was challenged on the grounds that it was passed without proper appreciation of the material and documents on record. The appellant's counsel argued that there was no substantial evidence to prove connivance, highlighting the lack of independent corroborative evidence besides e-mails from the appellant's account. It was emphasized that the appellant was neither a Customs House Agent (CHA) nor authorized to handle imported goods, raising doubts about his capacity to engage in such activities. The appellant contended that the order-in-original implicated him based solely on his e-mail account, without sufficient evidence linking him to the undervaluation scheme.During the proceedings, both parties presented their arguments, with the appellant's counsel asserting that the impugned order lacked a legal basis. On the other hand, the Assistant Commissioner reiterated the findings of the impugned order. After careful consideration of the submissions and examination of the evidence on record, the Member (J) observed that there was a lack of corroborative evidence supporting the allegation that the appellant assisted in undervaluing the imported goods. It was noted that the clearance of the goods was handled by a different Customs broker, not the appellant, who had no involvement in the clearance process. Due to the insufficient evidence linking the appellant to the alleged misconduct, the Member (J) concluded that the penalty imposed under Section 112(a) of the Customs Act, 1962 was unwarranted. Consequently, the impugned order was deemed unsustainable in law, and the appeal of the appellant was allowed, setting aside the penalty imposed.In the final judgment, delivered on 5-2-2018, the Member (J) pronounced the operative portion of the order, thereby overturning the penalty imposed on the appellant for alleged connivance in undervaluing imported goods.