2019 (5) TMI 611 - AT - Customs

Confiscation, Penalties, and Jurisdiction: Economic Offenses Case Analysis

The case involved confiscation of duty-free raw material, duty confirmation, penalty imposition on companies, confiscation and redemption of export ... Misdeclaration of export goods - cheap stone powder was exported by declaring the same as Pharmaceutical Products - role of CHA in fraud committed by exporters - Principles of natural justice - HELD THAT:- In the present case the notices have been issued to all the appellant at number of times, but there was no response from most of the appellants except M/s Fast Forward. Since all the matters arise out of the same order which is of 2009 and nearly 10 years have elapsed in interest of justice all the appeals have been taken up for consideration and disposal. From the findings of the Commissioner as recorded above the case of export fraud has been well made out against all the other appellants except the two CHAs. Sufficient evidence has been brought on record to uphold the charges made against them and the penalties proposed on them along with confiscation of goods and demand of duties are justified. In our opinion in such cases of economic offences where such fraudster are playing with the economic fabric of the country strict actions as provided under the law is warranted - In case of the CHA namely M/s Fast Forward and M/s Santon Shipping Services when Commissioner himself is recommending the action under CHALR, 2004 there are no justifiable reason for imposition of penalty under Section 112(b) of the Customs Act, 1962. Appeal allowed in part. Issues Involved:1. Confiscation of duty-free raw material imported by M/s Surya Pharmaceuticals Ltd.2. Duty confirmation and penalty imposition on M/s Surya Pharmaceuticals Ltd.3. Duty confirmation and penalty imposition on M/s Sai Shradha Export Pvt Ltd.4. Confiscation and redemption of export consignments under DEEC Scheme.5. Confiscation and penalty imposition on export goods under DEPB Scheme.6. Penalty imposition on various individuals involved in fraudulent exports.7. Penalty imposition on Clearing House Agents (CHA) for presenting fabricated documents.8. Jurisdictional issues regarding different ports involved in exports and imports.9. Legal arguments presented by the appellants and the revenue.10. Consideration of evidence and findings by the Commissioner.Analysis:1. Confiscation of Duty-Free Raw Material:The Commissioner ordered the confiscation of duty-free raw material imported by M/s Surya Pharmaceuticals Ltd valued at a specific amount under Section 111(o) of the Customs Act '62. Additionally, a fine was imposed on the importer in terms of Section 125 of the Act.2. Duty Confirmation and Penalty on M/s Surya Pharmaceuticals Ltd:Duty amount along with interest was confirmed on M/s Surya Pharmaceuticals Ltd under relevant sections of the Customs Act '62. Furthermore, a penalty was imposed on the company in accordance with Section 112(a) of the Act.3. Duty Confirmation and Penalty on M/s Sai Shradha Export Pvt Ltd:For imports made under DEPB License, duty confirmation, interest imposition, and penalty were levied on M/s Sai Shradha Export Pvt Ltd. Provisions of Section 28(2), Section 28AB, and Section 114A of the Customs Act '62 were invoked.4. Confiscation and Redemption of Export Consignments:Export consignments under DEEC Scheme were confiscated under specific sections of the Act. However, considering the market value, redemption was offered to the exporter on payment of a redemption fine.5. Confiscation and Penalty on Export Goods under DEPB Scheme:Export goods under the DEPB Scheme were held liable for confiscation, with penalties imposed on the involved parties. The penalty amounts were specified, and provisions of the Customs Act '62 were cited for penalty reduction under certain conditions.6. Penalty Imposition on Individuals:Significant penalties were imposed on various individuals involved in the fraudulent export activities. The penalties were based on their roles and actions that rendered the export goods liable for confiscation under the Act.7. Penalty Imposition on Clearing House Agents (CHA):Penalties were imposed on CHAs for presenting fabricated documents to customs authorities and abetting illegal acts committed by exporters. The penalties were justified based on their roles in the fraudulent exports.8. Jurisdictional Issues:The judgment highlighted jurisdictional issues due to exports and imports through different ports. A common adjudicating authority was appointed to address the matter, ensuring uniformity in the adjudication process.9. Legal Arguments Presented:The legal arguments presented by the appellants and the revenue were considered during the proceedings. The arguments focused on the roles and responsibilities of the involved parties, the nature of the fraud, and the penalties imposed under the Customs Act '62.10. Consideration of Evidence and Findings:The Tribunal carefully considered the evidence, findings, and recommendations made by the Commissioner in the original order. The judgment upheld penalties and confiscations where sufficient evidence supported the charges, emphasizing the seriousness of economic offenses and the need for strict actions as per the law.