Manasa Imp ex Services Vs. S/ Shri S. Murugappan (CESTAT Chennai)
The Show Cause Notice has to be viewed in its entirety and cannot be vivisected as may be convenient for the Revenue. Thus, if a show cause notice is found as not valid or issued without jurisdiction in respect of the main protagonist, the very same SCN cannot be held as sustainable for other noticees like the appellants herein. Any attempt for such vivisection is akin to putting the cart before the horse. This is because the penal consequences on alleged abettors to the alleged offence under the Customs Act or the Rules made there under or will be directly proportional to the adjudication fortunes of the main players. Any contrary proposition would lead to a ludicrous situation wherein the main offenders are left unscathed because of the SCNs being not valid or issued without jurisdiction, but other smaller players like the CHAs, shipping lines etc., who were also noticees in the same SCNs, getting penalized for alleged negligence or for abetting the main offender. This is certainly not the intention of the law. Moreover, when the Tribunal is hand tied to determine the liability arising out of the main offence, due to the SCN being void, the liability for abetting the offence cannot be adjudged or sustained.
FULL TEXT OF THE CESTAT ORDER IS AS FOLLOWS:-
FINAL ORDER No. 40048-40065 / 2018
Per Bench
All these appeals relating to the question of imposability of penalty under Section 114 (iii) of the Customs Act, 1962 on the Custom House Agents/Shipping Lines in respect of alleged drawback fraud committed by concerned exporters, are taken up for common disposal.
2. The facts of the case are that on intelligence gathered by the Directorate of Revenue Intelligence (D.R.I.), investigations were conducted in respect of various consignments of shoe uppers, ready-made garments etc. which had been exported through ICD, Tiruppur, ICD Coimbatore. It appeared that concerned exporters had grossly over invoiced the value of the export goods with an intention to avail ineligible drawback benefits. It also appeared that this alleged fraud was facilitated by other persons, inter alia, the CHAs, shipping lines, freight forwarders etc. who are the appellants herein. Pursuant to the investigations, show cause notices were issued under Rule 16 & 16A of Drawback Rules, 1995 read with Section 75 (1) and Section 147 of Customs Act, 1962, which culminated in the impugned orders wherein, inter alia, recovery of the alleged fraudulently availed drawback amount was ordered by the adjudicating authority along with interest liability thereon. The confiscation of the offending goods was also ordered. Penalties were imposed on the concerned exporters as also on the appellants herein. The present appeals have been filed only by the concerned CHAs/shipping lines etc. who had been made noticees to the SCNs in respect of penalties imposed on them.
3. Today when the matter came up for hearing, the appellants were represented by the following Ld. Advocates:
