2008 (10) TMI 107 - AT - Customs

CESTAT Chennai: Penalty Set Aside for Lack of Evidence in Customs Violation Case

The Appellate Tribunal CESTAT, CHENNAI set aside a penalty of Rs. 8,20,000 imposed on the appellant under Section 114 (iii) of the Customs Act, 1962 for ... Abetment in availing undue drawback - no finding of involvement of the appellant in the attempted illicit export – statement of co-accused relied upon while imposing penalty on appellant - Commissioner’s observation that the appellant had played an active role as financier and abetted the offence committed by co-accused is without any supporting evidence - penalty imposed on appellant is not sustainable without establishing that he had rendered the export goods liable for confiscation Issues:Penalty imposed under Section 114 (iii) of the Customs Act, 1962 for attempted illicit export of 'Common Salt' misdeclared as 'G-SALT' to obtain inadmissible drawback. Lack of evidence establishing appellant's active role in the offense. Reliance on statement by another individual. Allegations of fabricating export documents and financial involvement.Analysis:The appeal before the Appellate Tribunal CESTAT, CHENNAI involved the challenge against a penalty of Rs. 8,20,000 imposed on the appellant under Section 114 (iii) of the Customs Act, 1962 for his alleged involvement in an attempted illicit export scheme. The appellant was accused of arranging the export of 'Common Salt' misdeclared as 'G-SALT' to fraudulently obtain an inadmissible drawback. The original authority had found the appellant, along with another individual, to be complicit in the offense, resulting in penalties and confiscation of the export goods. The main contention raised in the appeal was the lack of concrete evidence linking the appellant to the illicit export, as no statement from the appellant was relied upon, and the sole basis for implicating him was a statement by the other individual involved.In the proceedings, it was noted that the original authority primarily relied on the statement of the other individual to make adverse findings against the appellant, without substantial evidence directly implicating the appellant in fabricating export documents or actively participating in the offense. The Commissioner's observation that the appellant played an active role as a financier and abettor lacked supporting evidence. The Tribunal found that the penalty imposed on the appellant was unsustainable without clear establishment of his direct involvement in rendering the export goods liable for confiscation through misdeclaration. Consequently, the Tribunal set aside the penalty, emphasizing the necessity of sufficient evidence to hold an individual accountable for customs violations.The judgment highlighted the importance of concrete evidence and direct involvement in establishing liability for customs offenses, emphasizing that penalties cannot be sustained solely based on assumptions or indirect connections. The decision underscored the principle of due process and the burden of proof resting on the authorities to establish culpability beyond a reasonable doubt. The Tribunal's ruling served as a reminder of the significance of factual evidence and direct linkage to the offense in imposing penalties under customs laws, ensuring fair treatment and accountability in such matters.