No Penalty or Conviction can be based merely on Speculations: CESTAT [Read Order]

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that Penalty or conviction cannot be based merely on speculations. The appellant in the present appeal is Mohammed Irfan Abdul K. Munshi.

On the basis of an intelligence, the 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 of the Notification No.85/2004-Cus. dated 31.08.2004.

Consequent evasion of Custom Duty amounting to Rs.26 lakhs which culminated into issuance of a Show Cause Notice dated 20.05.2014 to the importer i.e. the Company and its four Directors including the Appellant and the Adjudicating Authority denied the duty exemption benefit and confirmed the differential duty with interest and imposed a penalty.

Instant appeal has been filed by the 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 the appellant as devoid of merits thereby imposing unwarranted penalty on the appellant.

A Coram consisting of Ajay Sharma, Judicial Member observed that “No penalty or conviction can be based merely on speculations.There has to be some role assigned to that person corroborated by some concrete evidence on record. In my view no one can be penalised merely on the basis of speculations/doubt.”

“The authorities below have 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 has to be imposed separately” the Tribunal said.

To Read the full text of the Order CLICK HERE

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