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of <h1>Penalty reduced from Rs. 3 lakh to Rs. 50,000 for abetting duty drawback fraud through fake identity creation</h1> CESTAT Kolkata reduced penalty imposed on appellant from Rs. 3 lakh to Rs. 50,000 in a duty drawback fraud case. The appellant, proprietor of M/s. East ... Duty Drawback - Levy of penalties u/s 114(i) and 114 (ii) as well as under section 114AA of the Customs Act, 1962 for abetment - Rejection of duty Drawback claim - gross over-valuation of the export goods for the purpose of claiming unintended and highly inflated drawback amounts - HELD THAT:- It is found from the statement of Anupam Mondal, Proprietor of M/s. East India Impex that he has admitted to his role as an abettor to Ajay Madan alias Jassi alias Ashutosh Birla, the real exporter of this case, and in enabling by creation of a fake identity for him, by helping him open a bank account and handing it over to Debasis Mukherjee for the purpose of the subject exports of neckties and kept in hiding the vital export documents with him. The appellant therefore is guilty of culpability in the matter. He has not been able to dismiss his role in the entire fraudulent activity with a degree of conviction. The fact that concerned incriminating documents, blank signed papers were found from his possession are sufficient enough to fasten the needle of suspicion at his involvement. The appellant had further admitted to his support in the fraud though later retracted his version. If the appellant was not involved, as claimed by him, he has not been able to satisfactorily respond to the query about receipt of money from Jassi and paying it over to Debasis Mukherjee. It be noted that the appellant has continued to do so, even after the case was booked by the department. The case does not warrant imposition of harsh penalties on the appellant, as would require stronger evidence in the matter - the penalty imposed on the appellant are disproportionate to his role as made out from whatever evidence the department has been able to muster and the ends of justice would be met by reducing the same from Rupees Three Lakh to Rupees Fifty Thousand only - Appeal disposed off. Issues:The issues involved in this case are the confiscation of export goods, re-determination of assessable value, rejection of drawback claim, penalties imposed under the Customs Act, 1962, abetting in fraudulent activities, and imposition of penalties on the appellant.Confiscation of Export Goods and Rejection of Drawback Claim:The appellant filed an appeal against the Order-in-Original passed by the Commissioner of Customs, Kolkata, directing the confiscation of export goods (Neck Tie) covered under 32 Shipping Bills. The Ld. Commissioner also ordered the re-determination of the assessable value and rejected the drawback claim on the said goods. The rejection of the drawback claim was due to the gross over-valuation of the export goods for claiming inflated drawback amounts.Allegations against the Appellant:The appellant, a trader of readymade garments, was accused of abetting Shri Ajay Madan alias Jassi alias Ashutosh Birla in fraudulent activities related to the export of neckties. The appellant was charged with creating a fake identity for Ajay Madan, opening a bank account using the fake identity, receiving money from him, and handing it over to another individual for the purpose of exporting neckties. Penalties were imposed on the appellant under sections 114 and 114AA of the Customs Act, 1962.Investigations and Findings:The investigations revealed that certain exporters were involved in unscrupulous exports of goods declared as 'Neck Tie' under the duty drawback scheme, claiming inflated drawback amounts. The Customs House Agent, Debasis Mukherjee, was found to have signed export documentation on behalf of exporters without authorization. Incriminating documents, blank signed papers, and various rubber stamps were recovered from his office premises.Role of the Appellant and Decision:The appellant admitted to his role as an abettor in the fraudulent activities but later retracted his statement. Despite denying his involvement, incriminating documents were seized from his residence. The tribunal found the appellant guilty of abetting in the fraudulent activities based on the evidence and his financial dealings. However, considering the evidence presented, the tribunal reduced the penalties imposed on the appellant from Rupees Three Lakh to Rupees Fifty Thousand.Conclusion:The appeal filed by the appellant was disposed of with a modification in the penalty amount. The tribunal concluded that the penalties imposed were disproportionate to the appellant's role and reduced the penalty amount. The decision was pronounced in the open court on 25 January 2024.
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