Demand of Customs Duty after Verification of Burden of Proof: CESTAT quashes Allegation of Smuggling of Computer Parts [Read Order]

The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal quashed the appeal by the Commissioner of Customs, Air Special Cargo (The Appellant) demanding Customs Duty and Penalty for smuggling computer parts as per Section 28 of the Customs Act, 1962 from Deepak Dilani (The Respondent) as required documents were not submitted.

In an investigation conducted by the Directorate of Revenue Intelligence (DRI) based on information received by them that the respondent along with several others was running a racket of smuggling computer parts, peripherals, and subsequent selling of such goods in the local market against bills/invoices of various companies, a show cause notice was issued by the revenue demanding duty on computer parts and peripherals smuggled under Section 28 of the Customs Act, 1962 and penalty under Section 112(a) and (b).

The show cause notice was adjudicated by the Commissioner (Appeals) and the order was confirmed, aggrieved by the order, the appeal was filed before the tribunal, and the case was taken up for denovo adjudication by the learned Commissioner of Customs (Adjudication) as per the directions of the Tribunal, according to the non-supply of documents and cross-examination of witnesses, the order was passed dropping the proceedings initiated in the show cause notice. Hence the present appeal was filed.

The counsel who appeared on behalf of the revenue reiterated the grounds made in the appeal papers and Deepak Dialani was the mastermind in this case operating through carriers and courier companies for the smuggling of goods and the depositions made by carriers, buyers, agents, etc. had confirmed this. Therefore, the demand of duty invoking extended period and imposition of penalties was sustainable.

The counsel who appeared on behalf of the respondent submitted that the department had not supplied all the documents and failed to make all witnesses available (except four) for cross-examination during the denovo proceedings and thus the directions of the Tribunal in their case were barely compiled. The counsel further submitted that various documents submitted by the revenue had materials bearing the falsity of the allegations.

The two-member bench consisting of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) after hearing both sides held that “we find that denovo proceedings have been conducted in accordance with the law, abiding by the principles of natural justice duly giving opportunity for personal hearings, the opportunity for cross-examination and submission of documents/evidence by both the parties to the dispute. Further, various legal provisions regarding the demand of duty, and imposition of penalty have been examined by the learned Commissioner (Adjudication) on the basis of evidence after examining the burden of proof under Section 123 ibid and on the basis of the decision of the Apex Court” and the appeal by the revenue was dismissed.

To Read the full text of the Order CLICK HERE

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