Imposition of penalty under Customs Act for abetment of duty evasion affirmed after factual findings; appeal dismissed.

Imposition of penalty under the Customs Act for abetment of duty evasion was sustained on factual findings that the appellant participated in a scheme to import goods through an EOU route and circumvent payment of customs and anti-dumping duty. The tribunal and tax authority found active involvement and collusion facilitating clearance of misdeclared goods, resulting in revenue loss; those factual conclusions were affirmed and treated as determinative, yielding no substantial question of law. Criticisms of the impugned order as cryptic or procedurally defective were noted but did not alter the factual verdict sustaining the penalty.

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Issues involved: Impugning order by CESTAT confirming Commissioner's order, imposition of penalty on appellant, liability for confiscation of imported goods, breach of natural justice.

The appeals were filed challenging an order by the Customs Excise and Service Tax Appellate Tribunal (CESTAT) dated 19th May 2017, which upheld the Commissioner of Central Excise, Thane's decision and dismissed the appellant's appeal.

Appellant in CUAPP No. 11 of 2020, a Director of appellant in CUAPP No. 12 of 2020, contested a common order by CESTAT pronounced on 19th May 2017, regarding the import and sale of Ascorbic Acid to various parties, including Suprapti Plastic Limited, a 100% Export Oriented Unit (EOU).

The department alleged that Suprapti cleared the goods into the domestic tariff area without entitlement to concessional duty rates, leading to confiscation of goods and imposition of penalties on appellants for abetting the evasion of duty.

Mr. Sanghavi argued that the sale was on a principal-to-principal basis, disputing the penalty imposed on the appellant as an abettor. The substantial questions of law raised in the appeal pertained to the imposition of penalty under Section 112(a) of the Customs Act, 1962, liability for confiscation under Section 111 of the Customs Act, 1962, and the breach of natural justice by the Appellate Tribunal.

The Court declined to interfere with the CESTAT's order, as both the CESTAT and the Commissioner found that the appellants had abetted in the evasion of duty. The Court found it implausible that the appellants were unaware of Suprapti's lack of electricity connection while engaging in the sale and purchase of Ascorbic Acid.

The Commissioner's Order-in-Original detailed how the original importer, Vishal Export Overseas Limited, and its Managing Director, Mr. Pradeep Mehta, colluded in manipulating the law to evade duty, resulting in a substantial loss to Government Revenue. These findings were upheld by CESTAT, leading to the dismissal of the appeals based on the established abetment of duty evasion by the appellants.

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