CESTAT sets aside Penalty imposed u/s 114(1) of Customs Act in absence of Evidence [Read Order]

The Bangalore bench of the Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) set aside the Penalty imposed under section 114(1) of the Customs Act, 1962 in the absence of evidence. It was viewed that there is no evidence adduced by the investigating agency to allege that the Appellant knew of the presence of Muriate of Potash in the above containers at the time of arranging transport.

M/s. B K Manjunath, the Appellant is challenging the penalty of Rs. 1,00,000/- imposed on the Appellant under Section 114(1) of the Customs Act, 1962. When the matter came up for hearing, none appeared on behalf of the appellant.

The exporter M/s Pacific Impex had brought a consignment stated to be Bentonite Powder for export and during examination, it was found that the container was loaded with Muriate of Potash. Thereafter DRI conducted an investigation and on conclusion of the investigation, SCNs were issued to different noticees including the Appellant herein proposing penalty under Section 114(i) of the Customs Act, 1962.

As per the impugned Order, it is alleged that the Appellant had assisted the exporter in arranging a lorry for the export of the goods and thereby abetted the illegal export of goods.  The appellant submits that there is no reason or justification to allege the involvement of the Appellant in the illegal export of goods. There is no averment either in the SCN or in the impugned order that the Appellant was aware of the presence of Muriate of Potash in the container while arranging lorries for shipment of the goods. Though it is admitted that the Appellant had arranged lorries, the same cannot be a reason for imposing a penalty under Section 114(i) of the Customs Act, 1962.

It was further found that while recording a statement from the Appellant on 22.07.2010, he furnished the details of 15 lorries arranged for transportation of the goods and there is no admission on the part of Appellant that he was aware of the presence of Muriate of Potash for transportation. It was submitted that the Appellant had arranged lorries for the transportation of the goods knowing that the goods being exported are prohibited goods for export. 

On bare perusal of the SCN and impugned order, it is admitted that the Appellant had arranged 15 lorries for the transportation of goods. However, there is no evidence adduced by the investigating agency to allege that the Appellant knew of the presence of Muriate of Potash in the above containers at the time of arranging transport. While considering the very same issue, the Tribunal set aside the penalty on the ground that “It is that the appellant or his agent or driver of the vehicle or person in-charge of conveyance did not know nature of the goods being transported.

A two-member bench comprising Mr. P. A. Augustian, Member ( Judicial ) and Mrs. R. Bhagya Devi, Member ( Technical ) viewed that in the absence of any admissible evidence, the penalty imposed on the Appellant is not sustainable.

To Read the full text of the Order CLICK HERE

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