Case Law Details
P. Sinnamani Vs Commissioner of Customs (CESTAT Chennai)
Introduction: The case of P. Sinnamani against the Commissioner of Customs, adjudicated by CESTAT Chennai, revolves around the imposition of a penalty under Section 117 of the Customs Act, 1962. The appellant, one of the co-noticees, faced the penalty in relation to a Show Cause Notice issued on 25.02.2020. The order-in-original, dated 30.06.2020, imposed a penalty of Rs.4,00,000 on P. Sinnamani.
Detailed Analysis: The impugned order imposed a common penalty against 12 co-noticees, including the present appellant, in response to a Show Cause Notice. In the adjudication, the Commissioner of Customs (Preventive) confirmed a penalty of Rs.4,00,000 on P. Sinnamani under Section 117 of the Customs Act, 1962.
Upon further examination, it was revealed that four co-noticees, who faced similar penalties, had successfully appealed the decision before a co-ordinate Bench of CESTAT Chennai. The co-ordinate Bench, in Customs Appeal No. 40220 of 2021 & others, deleted the penalties against these appellants on September 25, 2023. The decision emphasized the lack of evidence to allege connivance in the overvaluation of the imported goods.
Despite the absence of representation from the appellant during the hearing, the Additional Commissioner for the Revenue informed the tribunal about the favorable decision in the cases of the other co-noticees.
The Tribunal, after reviewing both the impugned order and the co-ordinate Bench’s decision, concluded that there was no evidence to support the allegation of connivance by the present appellant. The adjudicating authority itself acknowledged the lack of direct evidence of connivance by P. Sinnamani.
Conclusion: CESTAT Chennai, in its order pronounced on 03.11.2023, sets aside the penalty imposed on P. Sinnamani under Section 117 of the Customs Act. The lack of direct evidence of connivance and the absence of clarity on the appellant’s specific duty to comply with justified the decision to quash the penalty. This case highlights the importance of concrete evidence in penalty proceedings under Section 117 of the Customs Act.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The appellant appears to be one of the co-noticees against whom a Show Cause Notice dated 25.02.2020 was issued. Copy of the said Show Cause Notice is not placed on record in the appeal memorandum, but however, appeal number is given.
2. In adjudication, it appears that the Commissioner of Customs (Preventive) passed a common adjudication order against 12 co-noticees vide impugned Order-in-Original No. TCP-CUS-PRVCOM-06-2020 dated 30.06.2020 wherein he has inter alia imposed a penalty of Rs.4,00,000/- (Rupees Four Lakhs only) under Section 117 of the Customs Act, 1962 on the present appellant.
3. From the impugned order, we find that the following four co-noticees who also suffered similar penalties, had preferred appeals before this forum: –
(1) M/s. Cochin Air Cargo Clearing House, No. A6, First Floor, Khajamian School Complex, TVS Tollgate, Trichy – 620 020.
(2) Kochu Rani, Managing Partner, M/s. Cochin Air Cargo Clearing House, No. 30/369A, Matsyapuri Post, Cochin – 682 029
(3) Shri V.A. Mary Das, Manager, M/s. Cochin Air Cargo Clearing House, No. 30/369A, Matsyapuri Post, Cochin – 682 029
(4) M/s. Cochin Air Cargo Clearing House, No. 30/369A, Matsyapuri Post, Cochin – 682 029
Against the above appellants, penalties under Section 114(iii) and Section 114AA of the Customs Act, 1962 had been levied. Against the present appellant, the Commissioner has confirmed the levy of penalty under Section 117 ibid.
4. When the matter was taken up for hearing, none appeared for the appellant.
5. Shri Rudra Pratap Singh, Ld. Additional Commissioner appearing for the Revenue would however submit that in respect of other four co-noticees (supra), the co-ordinate Bench vide Final Order Nos. 40842 to 40845 of 2023 dated 25.09.2023 in Customs Appeal No. 40220 of 2021 & ors. (CESTAT – Chennai) has deleted the penalty levied by the adjudicating authority against the said appellants.
6. We have gone through the impugned order as well as the order passed by the co-ordinate Bench of this Tribunal furnished by the Ld. Additional Commissioner.
7. This Bench vide Final Order dated 25.09.2023 (supra), after considering the facts as pleaded by both the sides, has inter alia held that there was no evidence to allege that the appellants therein had connived in any manner, in the overvaluation of the goods imported. We find that most of the other appellants are the employees of the Customs Broker namely, M/s. Cochin Air Cargo Clearing House, Cochin, including the appellant before us.
8. Further, even the adjudicating authority himself has observed, at paragraph 20.06 of the impugned order, that this appellant did not have any direct connivance as to the subject exporter, but was only used by one of the co-noticees; but this Bench vide Final Order (supra) has held that the Revenue had not placed any evidence on record as to the connivance of any of the appellants therein in the subject export.
9.1 Section 117 of the Customs Act, 1962 invites penalty for contravention, etc., of any provision of the Act or abets any such contravention or who fails to comply with any of the provisions of the Act, which was his duty to comply with.
9.2 A perusal of the impugned order does not point out as to what was expected of the present appellant, being one of innumerable employees of the Customs Broker, as his duty to comply with, which the appellant had ‘failed’ to perform. Insofar as this appellant is concerned, the Commissioner himself has observed that there was no direct evidence of connivance.
10. In the light of the above, we do not find any justification in the imposition of penalty under Section 117 ibid. on the present appellant in the peculiar facts of this case, as discussed hereinabove.
11. Resultantly, we set aside the impugned order insofar as the present appellant is concerned and allow the appeal.
(Order pronounced in the open court on 03.11.2023)
