2005 (11) TMI 156 - AT - Customs

Appeal successful for Assistant Commissioner; Penalties upheld for others in customs fraud case

SATISH GUPTA Versus COMMISSIONER OF CUSTOMS, NEW DELHI

SATISH GUPTA Versus COMMISSIONER OF CUSTOMS, NEW DELHI - 2006 (202) E.L.T. 438 (Tri. - Del.) Issues Involved:1. Imposition of penalties under Section 114(iii) of the Customs Act.2. Role and liability of Shri J.P. Singh, Assistant Commissioner (Drawback).3. Role and liability of Shri S.N. Ojha, Assistant Commissioner (Export), and Inspectors of Customs, Shri Zaki Anwar and Shri Lovkesh Sharma.4. Role and liability of Shri Satish Gupta, CHA, and Shri Yashpal Gupta, CA.Issue-Wise Detailed Analysis:1. Imposition of penalties under Section 114(iii) of the Customs Act:The appellants challenged the imposition of penalties under Section 114(iii) of the Customs Act. They did not contest the confiscation, disallowance, or demand of the drawback but focused solely on the penalties imposed.2. Role and liability of Shri J.P. Singh, Assistant Commissioner (Drawback):The contention was that Shri J.P. Singh, as Assistant Commissioner (Drawback), had no role in the export of goods and was only responsible for sanctioning the drawback claims after verifying the shipping bills. The adjudicating authority found no proof of monetary benefit or direct involvement in the fraudulent activities. It was noted that Shri J.P. Singh had directed the bank not to release the drawback amount to the exporter once the investigation started. Therefore, the imposition of penalty on Shri J.P. Singh was deemed unsustainable, and his appeal was allowed.3. Role and liability of Shri S.N. Ojha, Assistant Commissioner (Export), and Inspectors of Customs, Shri Zaki Anwar and Shri Lovkesh Sharma:The contention for Shri S.N. Ojha was that he followed the procedure where the shipping bills were marked for examination by Inspectors of Customs. The Inspectors, Zaki Anwar and Lovkesh Sharma, did not report any discrepancies in their examination reports. However, it was found that the goods were not examined properly, and the shipping bills were cleared without verifying the samples as instructed. The adjudicating authority held that Shri S.N. Ojha, being in charge of exports, was responsible for ensuring the goods matched the declaration. The penalties imposed on Shri S.N. Ojha, Shri Zaki Anwar, and Shri Lovkesh Sharma were upheld, and their appeals were dismissed.4. Role and liability of Shri Satish Gupta, CHA, and Shri Yashpal Gupta, CA:The contention for Shri Satish Gupta, CHA, was that he merely filed shipping bills as per the exporter's directions and had no knowledge of the misdeclaration. However, evidence showed that he was aware of the fraudulent activities and still filed the shipping bills. For Shri Yashpal Gupta, CA, it was contended that he only advised the exporter and had no role in the misdeclaration. However, it was found that he created fictitious firms to withdraw the drawback claims and admitted to doing so on a commission basis. The penalties imposed on both Shri Satish Gupta and Shri Yashpal Gupta were upheld, and their appeals were dismissed.Conclusion:The appeals filed by Shri J.P. Singh were allowed, setting aside the penalty imposed on him. The appeals filed by Shri S.N. Ojha, Shri Zaki Anwar, Shri Lovkesh Sharma, Shri Satish Gupta, and Shri Yashpal Gupta were dismissed, upholding the penalties imposed on them. The judgment emphasized the responsibilities of customs officials and agents in preventing fraudulent activities and ensuring compliance with customs regulations.