2023 (1) TMI 1148 - AT - Customs

Penalty Confirmations and Reductions for Individuals and Companies in Recent Court Decision

M/s. CELEBI Delhi Cargo Terminal Management India Pvt. Ltd., M/s. Shri Krishna Logistics Management, Shri Upendra Kumar Chaubey, Shri Dhananjay Kumar Singh and Shri Abhishek Mishra Versus Principal Commissioner of Customs, New Delhi

The court confirmed penalties of Rs.5,00,000 under Section 112 and Rs.20,00,000 under Section 114 AA for Shri Dhananjay Kumar Singh. Shri Upendra Kumar ... Imposition of penalty u/s under Section 112 and Section 114 AA of the Act - using fake/fabricated gate passes and on being unsuccessful, have filed bill of entry on forged/fabricated Air Way Bill (AWB) - removal of imported goods on fake gate passes without filing bill of entry - HELD THAT:- Shri Dhananjay Kumar Singh is the kingpin in the attempted removal of valuable cargo from Customs-Custodian by resorting to forgery and other acts of omissions and commissions. It is he, who received instructions from Ms. Sonia of Hong Kong for removal of cargo from the Customs Department of India without filing bill of entry. For this work, Ms. Sonia agreed for giving remuneration @Rs.750/- per kg. or Rs.7,00,000/- approximately. Thereafter, Shri Dhananjay Kumar Singh, who was handling the clearance for Shri Mohit Jain of M/s.Shankeshwar Impex, used the IEC of M/s. Shankeshwar Impex for import of the goods. Shri Mohit Jain has allowed the use of his IEC in good faith, not knowing about the illegality or attempt to smuggle the goods by Shri Dhananjay Kumar Singh - Shri Dhananjay Kumar Singh had also admitted that on earlier two occasions also, he had cleared the valuable consignment by resorting to smuggling, as the earlier two consignments were cleared without filing bill of entry by resorting to forgery and delivery without actual gate pass. Accordingly, penalty imposed on Shri Dhananjay Kumar Singh of Rs.5,00,000/- under Section 112 and Rs.20,00,000/- under Section 114 AA are confirmed and his appeal is rejected. Penalty on Shri Upendra Kumar Chaubey - HELD THAT:- He has actively connived in the whole episode of smuggling, morefully described hereinabove. He has knowingly used forged documents like gate pass etc. having knowledge of its forged nature. However, he is a person of small means and employee of the importer - M/s.Shankeshwar Impex. The penalty imposed upon him is disproportionate. Accordingly, this appeal is allowed in part. The penalty of Rs.4,00,000/- under Section 112 reduced to Rs.1,00,000/- and penalty of Rs.15,00,000/- under Section 114 AA to Rs.3,00,000/-. Penalty on Shri Abhishekh Mishra - HELD THAT:- He is H-Card Holder employed with CHA firm viz. M/s Aeroship Logicare Pvt. Ltd., being engaged in the Customs clearance work for the last few years, was aware of the basic Customs procedure. Further, he was promised for Rs.10,000/- for abetting in the smuggling done by Shri Dhananjay Kumar Singh. Normally, this high amount of remuneration is not given for simple delivery of the import consignment. Thus, connivance on the part of this appellant is evident on the basis of the record - penalty for falsification of the documents and its use, having knowledge of false/or forged nature of the documents is not attracted. Accordingly, the penalty of Rs.1,00,000/-under Section 112 is confirmed and the penalty under Section 114 AA of Rs.5,00,000/- is set aside. Accordingly, the appeal is allowed in part. Penalty on M/s. Krishna Logistics Management - HELD THAT:- They have acted bonafidely as a CHA and there is no lapse on their part in taking instructions and filing the bill of entry. Further, they have filed the bill of entry on first check basis and also requested for examination of the goods and the documents before the Customs Department. Further, there is no allegation of any connivance on their part in the attempted smuggling of the imported goods on 28.07.2017. Accordingly, appeal is allowed and the penalties imposed is set aside. Penalty on M/s. Celebi Delhi Cargo Terminal Management India Pvt. Ltd. - HELD THAT:- It is evident that they are not party to the attempted removal by other appellants in the nature of smuggling, particularly, Shri Dhananjay Kumar Singh. However, there appears to be lack of ‘internal control procedures’ in their office/warehouse, and taking advantage of such loop holes in the procedures/mechanism, Shri Dhananjay Kumar Singh and others in collusion have attempted to remove the imported goods without filing bill of entry by using forged documents - M/s Celebi Delhi Cargo Terminal Management India Pvt. Ltd. have immediately informed the Customs of the incident, which had happened on 28.07.2017 as 29th and 30th July, 2017 were holidays in the Customs Department, and on 31.07.2017, the whole episode was brought to the knowledge of the Customs along with evidences collected by them as well as the statement of Forklift driver. The penalty of Rs.5,00,000/- imposed under Regulation 12 (8) of the Handling of Cargo in Customs Areas Regulations, 2009 is reduced to Rs.1,00,000/-. Penalty of Rs.5,00,000/- under Section 112 of the Act is set aside - Appeal allowed in part. Issues Involved:1. Involvement of Shri Dhananjay Kumar Singh in the attempted removal of imported goods.2. Role of Shri Upendra Kumar Chaubey in the foiled smuggling attempt.3. Liability of Shri Abhishek Mishra in the use of forged documents.4. Responsibility of M/s. Krishna Logistics Management as the CHA.5. Compliance failures by M/s. Celebi Delhi Cargo Terminal Management India Pvt. Ltd.Detailed Analysis:1. Involvement of Shri Dhananjay Kumar Singh:Shri Dhananjay Kumar Singh was identified as the central figure ('kingpin') in the attempted removal of valuable cargo from Customs-Custodian by using forged documents. He received instructions from Ms. Sonia of Hong Kong to remove the cargo without filing a bill of entry, promising a remuneration of Rs.750/- per kg. He used the IEC of M/s. Shankeshwar Impex and worked closely with Shri Upendra Kumar Chaubey to execute the plan. His involvement was confirmed through his own admissions and corroborated by other evidence. The penalties imposed on him are Rs.5,00,000/- under Section 112 and Rs.20,00,000/- under Section 114 AA, which were confirmed and his appeal was rejected.2. Role of Shri Upendra Kumar Chaubey:Shri Upendra Kumar Chaubey actively connived in the smuggling attempt, using forged documents with knowledge of their nature. He directed others to remove the goods without filing a bill of entry. Despite being an employee of M/s. Shankeshwar Impex, the penalty imposed on him was considered disproportionate. The penalties were reduced from Rs.4,00,000/- to Rs.1,00,000/- under Section 112 and from Rs.15,00,000/- to Rs.3,00,000/- under Section 114 AA.3. Liability of Shri Abhishek Mishra:Shri Abhishek Mishra, an H-Card Holder employed with CHA firm M/s Aeroship Logicare Pvt. Ltd., was involved in the attempted removal by using a forged gate pass. Although he claimed to act without knowledge of the forgery, the evidence suggested otherwise. The penalty of Rs.1,00,000/- under Section 112 was confirmed, but the penalty of Rs.5,00,000/- under Section 114 AA was set aside, acknowledging that he did not directly forge the documents.4. Responsibility of M/s. Krishna Logistics Management:M/s. Krishna Logistics Management acted in good faith as a CHA, filing the bill of entry on a first check basis and requesting examination of the goods. There was no evidence of their involvement in the smuggling attempt. Consequently, their appeal was allowed, and the penalties imposed were set aside.5. Compliance Failures by M/s. Celebi Delhi Cargo Terminal Management India Pvt. Ltd.:M/s. Celebi Delhi Cargo Terminal Management India Pvt. Ltd. was not directly involved in the smuggling attempt but had lapses in internal control procedures. These lapses allowed the smuggling attempt to occur. They informed Customs of the incident promptly after the holidays. The penalty under Regulation 12 (8) of the Handling of Cargo in Customs Areas Regulations, 2009 was reduced from Rs.5,00,000/- to Rs.1,00,000/-, and the penalty under Section 112 was set aside.Summary of Judgments:- Shri Dhananjay Kumar Singh: Penalties of Rs.5,00,000/- under Section 112 and Rs.20,00,000/- under Section 114 AA confirmed. Appeal rejected.- Shri Upendra Kumar Chaubey: Penalties reduced to Rs.1,00,000/- under Section 112 and Rs.3,00,000/- under Section 114 AA. Appeal allowed in part.- Shri Abhishek Mishra: Penalty of Rs.1,00,000/- under Section 112 confirmed, penalty under Section 114 AA set aside. Appeal allowed in part.- M/s. Krishna Logistics Management: Appeal allowed, penalties set aside.- M/s. Celebi Delhi Cargo Terminal Management India Pvt. Ltd.: Penalty under Regulation 12(8) reduced to Rs.1,00,000/-, penalty under Section 112 set aside. Appeal allowed in part.