2019 (8) TMI 1256 - AT - Customs

Penalty Disputes in Goods Clearance Case: Key Conspirator Identified, Transport Penalties Overturned

The judgment in the case addressed penalty disputes related to the illicit clearance of goods under false documentation. The main conspirator, Shri Sajjan ... Illicit clearance - fraudulently obtained ‘advance licence’ with intent to divert for sale instead of utilisation in manufacture - ‘brass scrap’ and ‘copper scrap’ - benefit of N/N. 43/02-Cus dated 19 April 2002 - Penalty on transporters - HELD THAT:- It is seen from the impugned order that the findings pertaining to the role of the transport undertakings is sketchy and devoid of facts that would link the activity of transportation with knowledge of the illicit nature of the movement. Any transporter, in the commercial sense, is merely required to deliver goods at the consigned address; there is no evidence here that the delivery had been effected to a different location. It is also not in the nature of their professional commitment to require establishment of the provenance of the articles carried by them or to be conversant with the various schemes of import or the provisions of Customs Act, 1962. Nor are they required, under section 151 of Customs Act, 1962, to act as watchdogs of officers of customs. In the absence of any evidence of their awareness that the goods transported by them should legally have been delivered at the address provided for in the advance licences, the imposition of penalty against them is not justified - the penalties imposed on Shri Gulbir Singh Anand and Shri Naresh D Bhanushali are set aside. Penalty on other conspirators - beneficiaries of, the diversion of ‘brass scrap’ and ‘copper scrap’ imported against fraudulently obtained advance licences purportedly for manufacture and export - HELD THAT:- Customs Act, 1962 prescribes limitations for the recovery of duty under section 28 of Customs Act, 1962. However, there is no such limitation insofar as confiscation proceedings are concerned and, likewise, on the imposition of penalty. There is no doubt that a reasonable proximity of detriment with the cause is a consummation devoutly to be sought for. Nevertheless, that cannot be a reason, or a ground, for failing to act within the confines of the statute that is intended to protect the country from the ill-effects of smuggling - there is no illegality in the imposition of penalties for incidents that have occurred more than five years prior. Retraction of statements - HELD THAT:- In the present instance, it is the link between the offending goods and Shri Goel that is sought to be established through the statements whose credibility is now cast in doubt. The adjudicating authority is directed to decide afresh the submissions in response to the show cause notice to the extent that we have not ruled upon - appeal allowed by way of remand. Issues:Dispute over penalty imposed on appellants for illicit clearance of 'brass scrap' and 'copper scrap' under notification no. 43/02-Cus dated 19 April 2002.Analysis:1. The judgment addresses penalty disputes against appellants involved in the illicit clearance of goods under false documentation. The importer did not appeal, focusing on appellants' roles. The conspiracy involved obtaining advance licenses for duty-free clearance, later suspended due to investigations by the Directorate of Revenue Intelligence.2. Statements from individuals associated with the importer were recorded during investigations, leading to a show cause notice. Subsequently, the main conspirator was identified as Shri Sajjan Kumar Goel, with others allegedly aiding in diversion. An addendum charged Goel with complicity in import and diversion of goods.3. The judgment scrutinizes the roles of transport undertakings, concluding that penalties on them are unjustified due to lack of evidence linking them to the illicit nature of goods movement. The appellants, except transporters, were actively involved in the diversion scheme, with Goel alleged as the prime conspirator.4. Challenges against Goel's inclusion in the notice, reliance on his confession, and imposition of penalties after a considerable time were raised. The authority defended its reliance on Goel's confession citing legal precedents, emphasizing the need to act within statutory confines to combat smuggling.5. The judgment questions the consistency and credibility of corroborative statements with Goel's confession. It highlights the lack of reconciliation of inconsistencies in the order, emphasizing the importance of addressing challenges raised by Goel to determine his role accurately.6. Due to doubts on the foundation of Goel's involvement and credibility of statements, the order is set aside for a fresh decision on the submissions made by the appellants. Penalties on transporters are overturned, while others are remanded for further assessment.This detailed analysis covers the key issues and intricacies of the judgment, emphasizing the legal considerations and challenges faced by the appellants in the penalty dispute over illicit clearance of goods.