2018 (10) TMI 670 - AT - Customs

Penalties Upheld for Illegal Exports Involvement, Appeal Allowed for Lack of Awareness

The appeal of M/s ICS Cargo was allowed as they were found unaware of the illegal activities. However, the penalties on Shri Praveen Kumar, M/s Dattar ... Smuggling - red sanders - absolute confiscation - penalty u/s 114(i) of CA for omissions and commissions which have rendering the subject goods liable for confiscation - Held that:- In the entire findings on the role played by M/s ICS Cargo, I find that the Adjudicating Authority has recorded, M/s ICS Cargo being CHA/Customs Broker as employer of Shri Praveen Kumar and said Shri Praveen Kumar master minded illegal export of red sander wood logs, are liable for penalty. In my view, the findings recorded by the Adjudicating Authority are unacceptable as there was no omission on the part of the appellant M/s ICS Cargo, as per statements recorded of Shri Praveen Kumar, wherein he stated that M/s ICS Cargo is not aware of the situation of his embarking into illegal export of red sander wood logs - penalty set aside. Penalty imposed on Shri Praveen Kumar & M/s Dattar Shipping & Logistics - Held that:- Shri Praveen Kumar was advising many people how to do the illegal export of red sander wood logs. Shri K. Somasekhar and Shri Pydi Raju have clearly stated that they were engaged in the export of red sanders under the advice of Shri Praveen Kumar - The findings recorded by the Adjudicating Authority in paragraph No. 30.2 of his Order-in-Original and also paragraph No. 30.3 clearly indicate the complicity of Shri Praveen Kumar in master minding the illegal export of red sander wood logs - penalty upheld. Penalty on Shri Pydi Raju - Held that:- It is on record that Shri K. Pydi Raju had received monetary consideration from Shri Praveen Kumar for illegal exports of red sanders and it is also not disputed during the search operations in his residence, unaccounted cash of ₹ 24 lakhs were found which can be considered as sale proceeds of illegal export of red sandal woods - penalty upheld. Penalty on Shri K. Soma Sekhar - Held that:- Adjudicating Authority has clearly brought out on record that various rubber stamps of the customs officers were recovered from his residence and he had agreed and admitted to the said fact - penalty upheld. Appeal allowed in part. Issues:- Imposition of penalties under Section 114 of the Customs Act, 1962 on various individuals for involvement in illegal export of red sander wood logs.Detailed Analysis:1. Background and Investigation:The appeals were against an Order-in-Original related to the illegal export of red sander wood logs. Intelligence revealed a smuggling operation, leading to the interception of containers at Visakhapatnam Port. Statements were recorded, show cause notices issued, and penalties imposed under Section 114 of the Customs Act, 1962.2. Arguments by Appellants:The appellants contested the penalties, arguing lack of involvement in the illegal activities. For instance, M/s Dattar Shipping and Logistics Pvt. Ltd. claimed innocence, stating they were merely involved in container booking. Other appellants challenged the validity of statements and panchanamas, seeking cross-examination.3. Departmental Representative's Submission:The Departmental Representative highlighted the roles of the appellants in the illegal export scheme, emphasizing admissions and evidence linking them to the activities. Monetary considerations, fabrication of documents, and unexplained cash were key points.4. Judicial Findings:- M/s ICS Cargo: The penalty on M/s ICS Cargo was deemed incorrect as they were unaware of the illegal activities, leading to the allowance of their appeal.- Shri Praveen Kumar & M/s Dattar Shipping: The penalties on these appellants were upheld due to their direct involvement and facilitation of the illegal exports.- Shri Pydi Raju: His role as a facilitator in the scheme was established, justifying the penalty imposed.- Shri K. Somasekhar: His possession of unauthorized rubber stamps and lack of valid explanations supported the penalty under Section 114(i).5. Final Decision:The appeal of M/s ICS Cargo was allowed, while appeals of Shri Praveen Kumar, M/s Dattar Shipping and Logistics Pvt. Ltd., Shri K. Pydi Raju, and Shri K. Somasekhar were rejected. The penalties imposed under Section 114 of the Customs Act, 1962 were upheld based on the established roles and evidence presented.This comprehensive analysis outlines the key aspects of the legal judgment, including the background, arguments presented, departmental submissions, judicial findings, and the final decision on the penalties imposed in the case of illegal export of red sander wood logs.