CESTAT reduces penalty of Rs 8 Lakhs to 4 Lakhs imposed on illegal exporter of non-basmati rice

CESTAT reduces penalty of Rs 8 Lakhs to 4 Lakhs imposed on illegal exporter of non-basmati rice The issue with CESTAT in this appeal is whether penalty of Rs. 8 lakhs have been rightly imposed upon the appellant who is a freight forwarder under Section 114 of the Customs Act. The appellant is a freight forwarder and facilitated the importer and exporters. The Revenue on receiving intelligence inspected Container No. HDMU2647744 pertaining to Shipping Bill No. 2402263 dated 02.02.2011, declared as sanitary ware. On inspection it was found as contain rice. The said shipping bill was filed by Sh. Rakesh Kumar on behalf of exporter – M/s V. G. Plastics Pvt. Ltd., through the CHA – M/s Neptune Cargo Movers Pvt. Ltd., As the goods were found mis-declared they were seized, the rice was found packed in gunny bags of 25 kg. each, revealed on one side ‘house brand premium quality rice white ponny’ and on the other side PAR boiled white ponni M/s KNP Trading Pte. Ltd., (Surya Trading ENTs Pte. Ltd.,). On further information that non-basmati rice was being fraudulently exported by using the IEC of M/s HSIL Limited (formerly Hindustan Sanitary Ware and Industries Limited) and by M/s GPR Export Pvt. Ltd. Being aggrieved, this appellant approached before the Commissioner (Appeals) inter alia on the following grounds- i) The submissions made in the reply to show cause notice were not considered by the adjudicating authority. ii) The appellant at the first opportunity retracted his statement when he was produced before the Court of Duty Magistrate in the Patiala House Court. A retracted statement had no evidentiary value. iii) No case can be foisted on the basis of the statements of co-accused. iv) In the search of appellant’s premises nothing incriminating was recovered, clearly indicated that the appellant had nothing to do with the entire episode and had become a victim of nefarious design of Sh. Sinder Pal. v) The recovery of fabricated documents/ passport/ stamps of government officials was from Sh. Sinder Pal’s premises. vi) All the documents were created, all stamps were affixed and all the containers were sealed by Sh. Sinder Pal without the knowledge of the appellant. vii) No charges can be levelled solely and only on the basis of uncorroborated statements of co-accused. Relied on the judgment of the Tribunal in the matter of Pradeep Sah -2006 (197) ELT 301 (Tri.) and in Mehmood Khan – 2002 (140) ELT 97 (Tri.). Learned Commissioner (Appeals) recording the finding that the appellant had evidently involved himself in the illegal export of non-basmati rice and have also admitted his role in so many words in his various statement recorded, and also have explained the details of modes operandi. Accordingly, the appeal was dismissed upholding the imposition of penalty. Being aggrieved, the appellant is before this Tribunal.

Tribunal Order

22. Having considered the rival contentions, so far the objection as to jurisdiction of Additional Commissioner (SIIB) to issue show cause notice is concerned, I hold that it is not the case of demand of duty from this appellant under Section 28(4). Accordingly, I hold that the issue of jurisdiction is not involved and the show cause notice have been rightly issued on the allegation of violating the provisions of the Customs Act including bringing of the prohibited goods in the customs area, for export, by resorting to mis-declaration. From a conjoint reading of the statements of this appellant alongwith the statement of Sh. Sinder Pal, Sh. Rakesh Kumar and Others, it is evident that this appellant have knowingly connived for money with Sh. Sinder Pal and Sh. Abhishek Gupta and others, in the export of prohibited goods, non-basmati rice, by resorting to mis-declaration and fraud. Further, admittedly in the course of various statements recorded on different dates from this appellant he has admitted the modus operandi and have stated in detail the modus operandi as well as the amount of remuneration he was getting from Sh. Sinder Pal, which leads to the conclusion that he had connived with Sh. Sinder Pal and Sh. Abhishek Gupta in the export of prohibited goods for money. 23. Accordingly, I confirm the penalty imposed upon him but in the facts and circumstances reduce the penalty from Rs. 8 lakhs to Rs. 4 lakhs. So far the retraction is concerned before the Court of Duty Magistrate, I find that the same is not of much consequence as the appellant have admitted the misdoing in his various statements recorded on various dates and such statements are supported by co-accused and also corroborated with the live consignment for export, intercepted, and forgery noticed by the Customs Officers to which the appellant has also admitted. 24. The appeal is allowed in part.