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of <h1>Tribunal revokes penalties in export fraud case, emphasizing intentional aid requirement</h1> <h3>Smt. Sushma W/o. Late Shri Subhash Chand Versus Commissioner of Customs, New Delhi</h3> Smt. Sushma W/o. Late Shri Subhash Chand Versus Commissioner of Customs, New Delhi - 2022 (379) E.L.T. 376 (Tri. - Del.) Issues Involved:1. Allegation of abetment in fraudulent export.2. Conduct of market inquiry by the appellant.3. Imposition of penalty under Section 114 (iii) and 114 AA of the Customs Act, 1962.Issue-Wise Detailed Analysis:1. Allegation of Abetment in Fraudulent Export:The appellant, a retired Customs Inspector, was accused of abetting fraudulent exports by companies controlled by one Shri Sajjan Kumar. The fraudulent activities involved exporting carpets, garments, and fabrics at over-invoiced values to avail undue export incentives like duty drawback. The key allegation was that the appellant conducted a market inquiry in a manner that facilitated these fraudulent exports.2. Conduct of Market Inquiry by the Appellant:The appellant, along with another inspector, conducted a market inquiry to determine the value of hand-knotted carpets. The inquiry was conducted from two firms, M/s. Indus Chemitex Ltd. and M/s. S.R. Goyal and Sons, which were later found to be controlled by Shri Sajjan Kumar and not engaged in carpet exports. The firms denied providing any market rate information for carpets. The appellant argued that the inquiry was part of his official duties and any negligence should not be construed as abetment.3. Imposition of Penalty under Section 114 (iii) and 114 AA of the Customs Act, 1962:The Show Cause Notice proposed a penalty for abetting fraudulent exports, which was confirmed by the Order-in-Original and upheld in the Order-in-Appeal. The appellant contended that there was no evidence of intentional aid or collusion with the fraudulent exporter. The Department failed to prove that the appellant had any malafide intent or benefited from the fraudulent exports.Judgment:The Tribunal observed that to constitute abetment, there must be evidence of instigation, conspiracy, or intentional aid. The market inquiry conducted by the appellant was post the alleged fraudulent exports, and there was no evidence of the appellant's involvement in the fraud. The Tribunal noted that negligence or dereliction of duty does not amount to abetment. The appellant's actions were found to be improper and casual but did not constitute abetment. The Tribunal relied on precedents, including the Supreme Court's judgment in Shri Ram & Another vs. The State of Uttar Pradesh, which emphasized the need for intentional aid and active complicity for abetment. The Tribunal concluded that the Department failed to provide evidence of the appellant's complicity or benefit from the fraudulent exports. Consequently, the order imposing penalties was set aside, and the appeal was allowed.Conclusion:The Tribunal set aside the order imposing penalties on the appellant, concluding that the appellant's conduct amounted to negligence but did not constitute abetment of fraudulent exports. The appeal was allowed, and the penalties were revoked.
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