Case Law Details
Mohammed Irfan Abdul Vs Commissioner of Customs (CESTAT Mumbai)
Conclusion: Since none of the orders of the authorities below was at any discussion or finding regarding mensrea or unlawful gain to the appellant or attributing any knowledge on his part, therefore, the orders denying the duty exemption benefit and confirmed the differential duty of Rs.26,12,902/- with interest and imposed a penalty of Rs.26,12,902/- along with interest under Section 114A was merely proceed on basis of speculations which was not justified.
Held: Directorate of Revenue Intelligence, (DRI) gathered information that some importers had imported gold jewellery from Thailand without payment of Basic Custom Duty of 10% by misusing the benefit of exemption notification No.85/2004-Cus. Dated 31.08.2004 read with Notification No.101/2004-Cus. (NT) dated 31.08.2004. The consignment had been cleared only on payment of 1% Special Additional Duty (SAD) of Customs. Enquiry was initiated against M/s Damasy Retail Jewellery Pvt. Ltd, who had imported 07 consignments of studded gold jewellery from Thailand and cleared the same through Precious Cargo Customs Clearance Centre (PCCCC), Mumbai by availing the duty exemption benefit and consequent evasion of Custom Duty amounting to Rs.26,12,902/- which culminated into issuance of a Show Cause Notice dated 20.05.2014 to the importer i.e. the Company and its four (4) Directors including the Appellant herein. Adjudicating Authority denied the duty exemption benefit and confirmed the differential duty of Rs.26,12,902/- with interest and imposed a penalty of Rs.26,12,902/- along with interest under Section 114A on M/s Damasy Retail Jewellery Pvt. Ltd. and penalty of Rs.16,00,000/- under Section 114AA, 112(a) & 112(b) on the Appellant herein being one of the Directors of M/s. Damasy Retail at the time of filing of Bill of Entry dated 23.03.2009 and so far as other Directors are concerned proceedings against them was dropped. On appeal filed by the Appellant, the Commissioner upheld the penalty but its quantum was reduced from `16 lakhs to `10 lakhs. Instant appeal had been filed by Appellant on the grounds that the adjudicating authority proceeded in most cryptic manner and adjudicated the show cause notice without considering relevant facts and while proceeding to adjudicate the show cause notice, in a hasty manner, simply rejected the submissions made by appellant as devoid of merits thereby imposing unwarranted penalty on the appellant; that the import of studded gold jewellery covered by 7 Bills of Entry, relied upon in the impugned show-cause notice, took place during the period when the appellant was not the Country Head and had ceased to be so in the importer company, therefore the question of the appellant having committed any act or omission or having abetted in any act or omission did not arise, hence there was no basis to impose any penalty on the appellant. It was held that in none of the orders of the authorities below there was any discussion or finding regarding mensrea or unlawful gain to the appellant or attributing any knowledge on his part. The orders merely proceed on speculations as it used the terms like ‘the appellant must have experience’ or ‘must have been aware’. No penalty or conviction could be based merely on speculations. There had to be some role assigned to that person corroborated by some concrete evidence on record. The authorities had imposed the combined penalty on the appellant without specifically mentioning the quantum of penalty imposed under each provision separately. Penalty under each of the sections of the Customs Act had to be imposed separately.
FULL TEXT OF THE CESTAT MUMBAI ORDER
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