Tribunal Reduces Customs Act Penalty for Director in Fraudulent Export Case

The Tribunal partially allowed the appeal challenging a penalty of ? 5 lakhs imposed under Section 114(iii) of the Customs Act, 1962, reducing it to ? 2 lakhs. The appellant, a Director of a CHA firm, was involved in fraudulent exports of low-quality goods, benefiting from illegal schemes through over-invoicing and misrepresentation. The Commissioner acknowledged the appellant's responsibility but found the original penalty excessive. The Tribunal's decision, rendered on 28/02/2018, highlighted the appellant's involvement in facilitating illegal exports due to failure to verify documents and obtain proper authorization.

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Issues:
Penalty imposed under Section 114(iii) of Customs Act, 1962 for fraudulent exports of goods.

Analysis:
The appeal challenged a penalty of Rs. 5 lakhs imposed by the Commissioner of Customs (EP), Mumbai under Section 114(iii) of the Customs Act, 1962. The appellant, a Director of a CHA firm, was involved in handling export goods of low quality and cheap quality, benefiting from fraudulent DEPB and rebate schemes through over-invoicing and misrepresentation of procurement prices. The Commissioner's findings highlighted the appellant's failure to obtain proper authorization from exporters, not verifying signatures on documents, and intentionally submitting shipping bills to facilitate illegal exports. The Commissioner acknowledged the appellant's responsibility but deemed the original penalty amount too harsh, reducing it to Rs. 2 lakhs. The Tribunal, comprising Shri Ramesh Nair and Shri C J Mathew, partly allowed the appeal on 28/02/2018.

Judgment Highlights:
- The appellant's involvement in fraudulent exports of low-quality goods.
- Failure to obtain proper authorization and verify documents.
- Reduction of penalty from Rs. 5 lakhs to Rs. 2 lakhs due to overall responsibility of the appellant.
- Decision pronounced by the Tribunal on 28/02/2018.

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