2022 (10) TMI 443 - AT - Customs

Tribunal Upholds Penalty for Exporting Under Investigation, Rejects Challenge on Notice Scope

VAIBHAV GOEL Versus COMMISSIONER OF CUSTOMS, New Delhi

The Tribunal upheld the imposition of a penalty on Shri Vaibhav Goel for his active involvement in managing M/s. Goel Enterprises and M/s. Seguro Traders ... Duty Draw back scheme - Focus Product Scheme - Misdeclaration of export goods - unscrupulous traders /exporters were exporting goods describing as floor covering (braided) of man made fiber for availing undue export incentives under Duty Draw back and Focus Product Scheme (in short FPS) by resorting to mis-declaration of description and value - HELD THAT:- From the show cause notice, it is apparent that the goods covered under 15 shipping bills which were detained and later seized on 18.12.2014 and 18.03.2015 and finally got confiscated vide the aforementioned Order-in-Original which has been upheld by the Order under challenge. Further perusal of the table given in the show cause notice reveal that six shipping bills pertaining to M/s. Seguro Traders and nine shipping bills thereof were of M/s. Goel Enterprises - The Original Adjudicating Authority after meticulous discussion while rejecting the classification has held the applicable entry to be 6301 9090. But the fact remain is that proposal of rejection of classification was very much raised in the show cause notice which has been upheld by the Original Adjudicating Authority. This observation is sufficient to reject the submissions of the learned Counsel of the appellant that findings of the Adjudicating Authority below are beyond the scope of show cause notice. From his subsequent statements dated 3.6.2015 about purchasing goods of impugned consignment from Panipat through a broker for both the firms, purchasing is very much apparent. The role of Vaibhav Goel has been discussed in the show cause notice and is clearly been appreciated as proved by the Adjudicating Authority Below. Since no documents could have been produced to falsify those findings and that the documents as produced are held to be highly insufficient to discharge Shri Vaibhav Goel from the impugned penalty, it is held that penalty which has been imposed upon him for the reason that the goods under investigation in the present matter were the consignments not only of M/s. Goel Enterprises but were also the goods of consignment of M/s. Seguro Traders under proprietorship of Vaibhav Goel has rightly been imposed. The confirmation of demand against M/s. Goel Enterprises and imposition of penalty on this firm as well as on its proprietor Mr Krishan Goel should have been abated as proceedings cannot continue against the dead person - Appeal allowed. Issues:1. Imposition of penalty on Shri Vaibhav Goel.2. Classification of impugned goods.3. Involvement of M/s. Goel Enterprises and M/s. Seguro Traders.4. Proprietorship issues and penalty imposition.5. Deceased person's liability.Imposition of Penalty on Shri Vaibhav Goel:The case involved the imposition of a penalty on Shri Vaibhav Goel for his alleged involvement in managing and controlling M/s. Goel Enterprises and M/s. Seguro Traders. The appellant argued that Shri Vaibhav Goel was not the proprietor of M/s. Goel Enterprises, and documents supported this claim. However, the Departmental representative contended that Shri Vaibhav Goel was managing both firms, making him liable. The Tribunal held that evidence showed Shri Vaibhav Goel's active involvement in both entities, and the penalty was rightly imposed due to his role in exporting goods under investigation.Classification of Impugned Goods:The issue of the classification of the impugned goods was raised, with the appellant arguing that the findings went beyond the scope of the show cause notice. However, the Tribunal found that the show cause notice clearly proposed the rejection of the classification of the goods, and the Adjudicating Authority correctly classified them under a different entry. The Tribunal upheld the classification and rejected the appellant's argument regarding the scope of the notice.Involvement of M/s. Goel Enterprises and M/s. Seguro Traders:The investigation revealed that M/s. Goel Enterprises and M/s. Seguro Traders were involved in exporting goods with misdeclarations to avail export incentives. Both firms were controlled by individuals connected to each other, leading to the seizure and subsequent penalties imposed. The Tribunal found sufficient evidence to establish the involvement of these entities in the fraudulent activities.Proprietorship Issues and Penalty Imposition:The Tribunal examined the proprietorship details of M/s. Goel Enterprises and M/s. Seguro Traders, noting that Shri Vaibhav Goel was managing both firms. Despite attempts to disassociate him from the penalty, the Tribunal determined that his active role in the operations of both entities justified the penalty imposition. The Tribunal also considered the involvement of deceased proprietor Mr. Krishan Goel and modified the order to abate proceedings against him.Deceased Person's Liability:Regarding the liability of a deceased person, the Tribunal acknowledged the death of Mr. Krishan Goel, the proprietor of M/s. Goel Enterprises, and held that proceedings could not continue against a deceased individual. As a result, the confirmation of demand against M/s. Goel Enterprises and the penalty on Mr. Krishan Goel were modified accordingly. The Tribunal upheld the order with this modification, disposing of the appeal.