Fraudulent Import of Vehicles as Brand-New Vehicles: CESTAT reduces Excessive Penalty [Read Order]

A Single Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), reduced excessive penalty imposed on fraudulent import of vehicles as brand-new vehicles.

The Appellant, Charanjit Singh filed the appeal against imposition of penalty under Section 112(a), 112(b) & 114AA of the Customs Act, 1962. Show Cause Notices were issued in respect of fraudulent import of vehicles declared as brand-new vehicles of foreign origin through Kolkata Port on different dates and cleared against Bills of Entry.

The importers paid the duty and claimed the benefit of Notification No.21/2002-CUS dated 01.03.2002. It was found that the importers availed the exemption wrongly with the help of various persons. The Adjudicating authority passed various orders and imposed penalty on different persons.

The allegation against the appellant is that the appellant had actively participated in the operations regarding fraudulent import of the said cars and undertook the clearance of the cars from Kolkata port, where the said car was cleared as per the declaration.

The Counsel for the appellant submitted that that Section 114AA is not applicable in charging the Appellant for penalty when documents on the basis of which Appellant is charged are not in the manner laid down under Section 138C. The same should be authenticated in the manner which is prescribed under Section 138C. As Section 138C is not proved then the penalty levied under Section 114AA will not be attracted.

The Tribunal of P K Choudhary, Judicial Member observed that “I am not impressed by the submissions of the Counsel, appearing on behalf of the Appellant. The main contention of the Counsel is that DRI Officer, without any investigation, has come to a conclusion that the cars were old and used.”

“However, taking the overall facts and circumstances into consideration, the quantum of penalty is reduced @10% of the penalty imposed” the Tribunal added.

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