There is one case law which I am giving below for your kind attention . Maybe it could be of assistance
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Appeal No. C/1065/97
WEST ZONAL BENCH AT MUMBAI
Arising out of Order-in-Original No.106/97/CAC/CCI Dated : 21.07.1997
passed by Commissioner of Customs (Imports), Mumbai
Date of Decision 18.07.2006
COURT NO.II
SHRI SHYAM CHAGANLAL AGARWAL -Vs- THE COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI
Appellants Rep. by : None
Respondent Rep. by : Shri Pramod Kumar, JDR
CORAM : Mrs. Archana Wadhwa, Member (Judicial)
Mr. K K Agarwal, Member (Technical)
Bottom line: DEEC - in the absence of any evidence produced by the revenue to show that the appellants had knowledge that the goods imported by the importer would not be used in manufacture of exported garments but diverted to domestic market, penal provisions of Section 112 cannot be invoked.
ORDER NO. A/839/WZB/2006/C-II/CSTB
Per : Mrs. Archana Wadhwa :
1. The challenge in the present appeal is to penalty of Rs.3 lakhs imposed by the Commissioner of Customs under the provisions of Section 112 of the Customs Act, 1962 on the alleged ground that the appellants, who is a Chartered Accountant, has issued certificate showing past experts of one M/s. Jesal Kumar Exports, with manipulated figures without verifying any records. On the basis of such certificate, the importer was able to procure four advance licences and imported raw silk duty free. The allegation is that such duty free procured silk was diverted into market without utilizing the same for fulfillment of export obligation.
2. We find that identical proceedings were initiated against the same appellants in respect of issuance of certificates to the same importer. While adjudicating those proceedings, the Commissioner of Customs vide his order dated 17.12.97 dropped the penal charges against the appellants by observing as under:-
"So far as Shri Shyam Chaganlal Agarwal, Proprietor of the C.A. firm is concerned. I find that on the basis of evidence brought on record, the allegations against him are that he issued certain bogus certificates on the basis of which Shri Kantilal Rathod was able to obtain the DEEC licences in question. There is no allegation against him that he has abetted the disposal of the exempt material knowingly and that such disposal was contrary to law. As pleaded by him in his written reply dated 10.11.97, the question whether he issued bogus certificates thereby facilitating issue of the DEEC licences to Shri Kantilal Rathod by the Licensing Authorities cannot be a subject matter of proceedings under the Customs Act, 1962,. This is a matter where action against him could he taken by the concerned licensing authorisation, DRI, Mumbai may bring this investigation report to the notice of the concerned licensing authorities for appropriate action, if it has not already been done.
Since there is no evidence nor even any allegation that Shri Shyam Chaganlal Agarwal, Proprietor of the C.A. Firm, abetted in the disposal of the goods, the penal proceedings against him under Section 112 of the Customs Act, 1962, are therefore not tenable and are hereby dropped".
3. No appeal is reported to have been filed by the revenue against the above part of the said order dropping penal charges against the same appellants.
4. We also find that the Tribunal in the case of Commissioner of Customs, Mumbai Vs. M.M. Raikhanna (2005 (4) TMI 348 - CESTAT, MUMBAI)= (2005 (186) ELT 322 (Tri.-Mum) has held that assistance by respondents in obtaining advance licence for another person for import of polyester fabrics does not amounts to trafficking in any advance licence and in the absence of any evidence produced by the revenue to show that the appellants had knowledge that the goods imported by the importer would not be used in manufacture of exported garments but diverted to domestic market, penal provisions of Section 112 cannot be invoked. The said decisions stands followed by the Tribunal in the case of Naresh A. Shah vide order No.A/478/WZB/06/C-II dated 27/03/2006. We find no reasons to take different view, inasmuch as nothing has been produced on record to show that the appellant was in knowledge of the fact that the duty free imports would be diverted to the domestic market instead of utilizing the same in the manufacture of goods to be exported. In view of the foregoing, we set aside the impugned order and allow the appeal with consequential relief to the appellants.
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