Customs penalty reduced from Rs. 5 lakhs to Rs. 10,000 in settlement order dispute.

The Tribunal upheld the Commissioner of Customs (Appeals) decision to reduce the penalty imposed on the appellant from Rs. 5 lakhs to Rs. 10,000 based on the settlement order reached with other parties involved in the mis-declaration of imported goods. Despite the appellant's argument citing the S.K. Colombowala judgment, the Tribunal found the appellant's involvement in the illegal import established, leading to the penalty reduction in line with the treatment given to settled parties. The appeal was dismissed, affirming the reduction of penalty by the Commissioner.

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Issues: Reduction of penalty by the Commissioner of Customs (Appeals) based on Settlement Commission order; Appellant's involvement in mis-declaration of imported goods; Applicability of S.K. Colombowala judgment on the present case.

The appeal before the Appellate Tribunal CESTAT Mumbai challenged the Order-in-Appeal passed by the Commissioner of Customs (Appeals) Mumbai-I, wherein the penalty imposed on the appellant was reduced from Rs. 5 lakhs to Rs. 10,000. The appellant, a G Card Holder and Power of Attorney Holder, was involved in customs clearances where mis-declaration of imported goods was discovered regarding description, quantity, and value. The lower authorities found the appellant aware of the actual importer and involved in the mis-declaration. Other parties in the case had settled with the Settlement Commission, resulting in penalties of Rs. 50,000 and Rs. 10,000 imposed on them. The Commissioner (Appeals) reduced the appellant's penalty based on this settlement order.

The appellant argued that the case of the main persons settled by the Settlement Commission should have precluded adjudication against other co-noticees, citing the S.K. Colombowala judgment. It was contended that the appellant was not directly involved in the mis-declaration but only in handling documents and goods clearance, lacking knowledge of the actual content of the consignment. On the contrary, the Revenue's representative maintained that the penalty reduction to Rs. 10,000 was appropriate based on the settlement order, despite the S.K. Colombowala judgment.

After considering the arguments, the Tribunal found that the appellant was aware of the actual importer and knowingly handled documents of an IEC holder who was not the actual importer, implicating him in the illegal import of goods. While the appellant's knowledge of the consignment's content was disputed, his involvement in the illegal import was established. The Tribunal held that the essence of the S.K. Colombowala judgment required extending the treatment given to settled parties to the appellant. Since penalties were imposed on other parties based on settlement, the Commissioner (Appeals) appropriately reduced the penalty from Rs. 5 lakhs to Rs. 10,000. Upholding the Commissioner's decision, the Tribunal dismissed the appeal, affirming the reduction of penalty based on the settlement order.

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