Advance Authorisation Scheme penalty set aside due to lack of evidence against appellant

CESTAT Kolkata allowed the appeal and set aside the penalty imposed on the appellant under the Advance Authorisation Scheme for alleged non-fulfilment of export obligations through fraudulent activities. The tribunal found that while the appellant was accused of preparing fake documents showing export obligation fulfillment with customs officials' connivance, the adjudicating authority itself held there was no proper evidence of customs officers' involvement in fraud. The tribunal concluded the appellant was added as a noticee based on presumptions without corroborative evidence, making no case against the appellant.

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Issues involved:
The issues involved in this case include delayed adjudication proceedings, violation of principles of natural justice, imposition of penalty under Section 112(a) of the Customs Act without providing a reasonable opportunity of hearing, lack of findings in the impugned order justifying the penalty, and discrepancies in the allegations against the Appellant compared to the Customs officers.

Summary:
The Appellant, engaged in trading food grains, faced a Show Cause Notice (SCN) in 1992 regarding alleged preparation of fake export documents in connivance with Customs authorities. The adjudication order imposing a penalty of Rs. 10,00,000/- was passed in 2018 without proper opportunity for defense. The Appellant challenged the order citing delays, lack of evidence, and violation of natural justice principles.

The Appellant argued that the delay of 25 years in adjudication was untenable in law, citing relevant legal precedents. They contended that the penalty was imposed without proper opportunity for representation and hearing as mandated by Section 124 of the Customs Act.

The Appellant highlighted that the allegations against them lacked specific evidence and that the Customs officers' involvement was not substantiated. The Tribunal noted discrepancies in the treatment of the Appellant compared to other parties involved in similar exports.

The Tribunal found that the penalty imposed on the Appellant was not legally sustainable due to lack of evidence and discrepancies in the case. The Tribunal set aside the penalty and allowed the appeal, emphasizing the importance of providing a fair opportunity for defense and ensuring proper adjudication based on evidence.

In conclusion, the Tribunal ruled in favor of the Appellant, setting aside the penalty and providing consequential relief as per law. The order was pronounced on 13/03/2024.

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