2024 (10) TMI 1140 - AT - Customs

Appellate Tribunal overturns penalty under Customs Act, dismisses Revenue appeals due to lack of evidence and monetary grounds.

M/s. General Export Enterprises, Gulabdas & Co., Provogue India Ltd. Versus Commissioner of Customs, Tuticorin and Commissioner of Customs, Chennai (Vice-Versa)

The Appellate Tribunal CESTAT Chennai set aside the penalty imposed on the appellants under section 112(a) of the Customs Act, 1962, due to insufficient ... Levy of penalty under section 112(a) of CA, 1962 - Alleged forged DFRC license for import - HELD THAT:- There is no dispute insofar as the fact that the DFRC license is freely transferable. It is also a fact borne on record that the appellants were not even aware as to who was the holder of license once they admittedly sold it on 14.06.2007. Hence, it was for the buyer of DFRC license to register at the port of export and then apply for Telegraphic Release Advice – TRA, in terms of para 8 of the Public Notice No. 75/2000 dated 10.7.2000. The above facts when considered relied up on by the appellants, cumulatively suggest that as pointed out by the bench, it is nowhere seen as to the mischief played by the appellants insofar as the alleged change that was alleged by the revenue. Hence, when the role of these appellants itself are not clear, saddling them with penalty is not in accordance with law. The impugned orders is set aside - deletion of penalty imposed on the appellants - appeal allowed. Issues: Alleged forged DFRC license for import, imposition of penalty under section 112(a) of the Customs Act, 1962.Analysis:1. The revenue alleged that the first appellant, who was issued a DFRC license for the import of cotton fabrics, imported polyester fabrics instead, based on intelligence input. The investigation revealed discrepancies in the license transfer and the actual items imported and exported, leading to the imposition of a penalty under section 112(a) of the Customs Act, 1962.2. The first appellant submitted documents in response to the summons, indicating that the export item was cotton printed fabrics and the import item was cotton processed fabrics. However, further investigation revealed that the actual items imported and exported were dyed and printed polyester fabrics, contrary to the license terms.3. The revenue contended that the description of export and import items in the DFRC license was changed only at the time of registration, leading to the issuance of a show cause notice and subsequent imposition of a penalty by the Commissioner of Customs, Tuticorin.4. The appellants challenged the penalty imposition, arguing that they were not involved in any manipulation of the DFRC license. They cited a previous case where a similar issue was addressed by the Tribunal, emphasizing the lack of evidence showing their involvement in the alleged changes to the license.5. The Tribunal considered the undisputed facts, including the transfer of the license to multiple parties and the lack of clarity regarding the role of the appellants in the alleged manipulation. Relying on previous orders and guidelines, the Tribunal concluded that penalizing the appellants without clear evidence of their involvement was not justified.6. Consequently, the Tribunal set aside the penalty imposed on the appellants, ruling in favor of the importer/appellants and deleting the penalty.7. Additionally, the appeals filed by the Revenue in relation to disputed demands were dismissed on monetary grounds, as they fell below the monetary limit fixed by CBIC instructions.8. The judgment was pronounced on 22.10.2024 by the Appellate Tribunal CESTAT CHENNAI, with detailed analysis and considerations of the legal provisions and previous decisions in reaching the final decision to set aside the penalty imposed on the appellants.