Tribunal reduces penalty under Customs Act for employee's role in fraudulent export scheme.

The Tribunal partially allowed the appeal, reducing the penalty imposed on the appellant under the Customs Act. While setting aside the penalty under Section 114(iii) due to lack of direct involvement in exporting goods, it upheld the penalty under Section 114AA for knowingly preparing documents related to the fraudulent export scheme. The appellant's role as an employee following instructions was considered, leading to a reduction in the penalty amount to the pre-deposit made by the appellant. The judgment emphasized the distinction between the appellant's role and knowledge in the fraudulent activities, resulting in a reduced penalty.

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Issues:
Penalty imposed under Section 114(iii) and Section 114AA of the Customs Act for alleged involvement in fraudulent export activities.

Analysis:
The case involved an appeal against the imposition of penalties on an appellant for his alleged role in fraudulent export activities. The appellant, an Accountant working for a company involved in overvalued exports, was accused of conniving with his employer in fraudulent practices to claim undue export benefits. The investigation revealed a scheme where goods were overvalued for export, leading to inflated invoices submitted to customs authorities. The appellant's involvement included preparing invoices, packing lists, and bank-related work under the direction of his employer.

The appellant argued that he merely followed instructions, did not participate in the export process, and did not personally gain from the fraudulent activities. He contended that the penalties were imposed mechanically without establishing his direct involvement in the fraudulent export scheme. The appellant's role was limited to administrative tasks and he had no part in negotiating or purchasing goods.

The Tribunal considered the appellant's role as an employee following instructions and not directly presenting documents to customs authorities. It concluded that the appellant did not attempt to export goods improperly, thus setting aside the penalty under Section 114(iii) of the Customs Act. However, the Tribunal found the appellant knowingly prepared documents for export, understanding the dual-invoice scheme for inflated values. Therefore, the Tribunal upheld the penalty under Section 114AA but reduced it to an amount already paid by the appellant as a pre-deposit.

In the judgment delivered on 14.09.2020, the Tribunal allowed the appeal in part, reducing the penalty imposed on the appellant. The decision highlighted the distinction between the appellant's role as an employee following instructions and his knowledge of the fraudulent export scheme. The penalties under different sections of the Customs Act were analyzed in light of the appellant's involvement, resulting in a reduction of the penalty amount under Section 114AA.

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