2019 (1) TMI 921 - AT - Customs

Tribunal ruling: Varied penalties for import discrepancies based on individual roles and involvement

M/s. Trichur Traders, C.K. Boban, A.R. Ajeesh Versus The Commissioner of Customs

The tribunal found M/s. Trichur Traders liable for penalties due to import process discrepancies but set aside penalties due to lack of direct ... Imposition of penalty - Mis-declaration of imported goods - Smuggling - Whereas the goods were declared as toys, the actual goods were batteries, CFL, ladies inner ware, soap, etc. - appellant have already suffered arrest and served detention for some time under COFEPOSA - Held that:- From the case records, it is seen that M/s. Trichur Traders are the importers and have filed the Bills of Entry. It is on record that discrepancies in the weight and description of the goods in the Bills of Lading and goods actually arrived in the containers is established. He has arranged for the import of the consignment and paid the foreign supplier. It is very difficult to believe that goods for which an order has not been placed and for which payment has not been made would arrive just like that without the active knowledge of the importer. The importer has filed the Bill of Entry under Section 46 of the Customs Act, 1962. The importer has accepted his guilt in the statements given before DRI. As such, the importer cannot hide under the reason that they have simply signed the documents given by the CHA for the purpose of clearance of the cargo. The thrust of appellant argument is that they were not aware of the clandestine/illegal clearance of the goods from the port premises itself without payment of duty. Such an argument would not obviate the fact that they are the importers and as such, they are liable for the discrepancies in the import. Therefore, they have rendered themselves liable to pay penalty. However, penalty cannot be imposed both on the proprietor as well as the firm. The imposition of penalty on Shri C. K. Boban is valid. Penalties imposed on M/s. Trichur Traders are set aside. Penalty on Shri A. R. Ajeesh, working for CHA - Held that:- The incontrovertible evidence has been placed to show the role of Shri A. R. Ajeesh in the modus operandi which was also corroborated by the statements of others and photocopy of container cell permission letter recovered from the premises of CHA. Therefore, the retraction by Shri A. R. Ajeesh does not hold any water - penalties on Shri A. R. Ajeesh are tenable, however, quantum is reduced. Appeal allowed in part. Issues involved:1. Alleged smuggling of imported goods without payment of duty and customs procedures.2. Mis-declaration and illegal clearance of goods.3. Imposition of penalty on appellants.4. Role and liability of the appellants in the illegal activities.5. Consideration of penalty on the basis of involvement and circumstances.Issue 1: Alleged smuggling of imported goods without payment of duty and customs procedures:The case involved allegations against M/s. Trichur Traders for attempting to smuggle imported goods out of Cochin Port without paying duty and not following customs procedures. The goods, declared as toys, were found to be batteries, CFL, ladies inner wear, soap, etc. Investigations led to the issuance of show-cause notices proposing confiscation of goods and penalties on the appellants.Issue 2: Mis-declaration and illegal clearance of goods:DRI registered a case against M/s. Cherry Medicals, Trichur, for mis-declaration and illegal clearance. Shri A. R. Ajeesh was implicated in aiding in the clearance of goods. The cases highlighted mis-declaration of imported items and illegal removal of goods from the port with the involvement of various individuals.Issue 3: Imposition of penalty on appellants:The appellants contested penalties imposed on them, arguing lack of awareness and innocence in the illegal activities. They claimed to be victims of circumstances and not directly involved in duty evasion. The appellants challenged the valuation process and penalties, citing suffering under COFEPOSA detention.Issue 4: Role and liability of the appellants in the illegal activities:M/s. Trichur Traders and Shri C. K. Boban denied direct involvement in the smuggling activities, asserting they were unaware of the clandestine methods used. Shri A. R. Ajeesh, a student, claimed innocence and lack of authorization for port entry, attributing his actions to the influence of others. The tribunal examined the evidence to determine the extent of the appellants' participation in the illegal clearance of goods.Issue 5: Consideration of penalty on the basis of involvement and circumstances:After reviewing the facts and submissions, the tribunal found M/s. Trichur Traders liable for penalties due to discrepancies in import processes. However, the tribunal acknowledged the lack of direct involvement of the importer in the illegal activities, leading to the setting aside of penalties on M/s. Trichur Traders. Penalties on Shri C. K. Boban were deemed valid but subject to reduction. Shri A. R. Ajeesh's role as a CHA worker was established, justifying the penalties imposed on him. Despite some reduction due to the passage of time, the penalties on Shri A. R. Ajeesh were upheld.This detailed analysis of the judgment showcases the tribunal's assessment of the alleged smuggling and mis-declaration, the appellants' arguments, and the final decision on penalty imposition based on individual involvement and circumstances.