2016 (3) TMI 774 - AT - Customs

Penalty overturned for aiding fraudulent exports due to lack of evidence and residency outside India

The penalty imposed on the appellant for aiding fraudulent exports by M/s SLN Overseas Traders was set aside by the Tribunal due to insufficient evidence, ... Imposition of penalty - Section 114 (i) of the Customs Act, 1962 - Aiding and abetting the fraudulent export - Held that:- separate proceedings were initiated against the same appellant arising out of the same set of facts and circumstances resulting in imposition of a separate penalty of ₹ 2 crores upon him. The appeal filed by the appellant against an earlier order, which relate to same set of investigations, was considered by the Tribunal. Inasmuch as the earlier appeal of the same appellant and the present appeal arise out of the same investigations including the same exporters and the same statements, the penalty imposed upon the appellant is set aside. Also as the appellant was a resident of Dubai, the Customs Act is not applicable against a person residing outside India followed by the Tribunal in a judgement in the matter of Shafeeq PK v. CC, Cochin [2015 (9) TMI 1257 - CESTAT BANGALORE]. Therefore, the relief has been granted to the assessee on this ground also and the penalty is set aside. - Decided in favour of appellant with consequential relief Issues:Imposition of penalty under Section 114 3(i) of the Customs Act 1962 for aiding and abetting fraudulent export by M/s SLN Overseas Traders.Analysis:1. The appellant was penalized for aiding fraudulent export by M/s SLN Overseas Traders, involving undervalued goods and illegal money transfers. Investigations revealed discrepancies in export containers, remittances, and statements of involved parties.2. The Commissioner imposed the penalty based on circumstantial evidence, emphasizing the use of Section 105 of the Evidence Act to shift the burden of proof. The appellant benefitted from fraudulent exports through duty-free schemes and illicit money transfers orchestrated by a consortium.3. The Tribunal noted a lack of tangible evidence linking the appellant to the offense in a separate penalty case. Confessions of co-accused were deemed insufficient, and no direct involvement in export activities was established, leading to the previous penalty being set aside.4. Considering the appellant's residency in Dubai and legal precedents, the Tribunal set aside the penalty, emphasizing that the Customs Act does not apply to individuals residing outside India. This ground, along with the lack of conclusive evidence, led to the appeal being allowed and the penalty overturned.In conclusion, the penalty imposed on the appellant for aiding fraudulent exports by M/s SLN Overseas Traders was set aside by the Tribunal due to insufficient evidence, lack of direct involvement, and the appellant's residency outside India, as per legal precedents.