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HIGH COURT OF KERALA
MANJULA CHELLUR , JC, A.M.SHAFFIQUE , J
R.SREEKUMAR – Appellant
Versus
THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL – Respondent
Cus.Appeal 1 2014
Customs - Writ Petition - Customs Act 1962, Sections 112, 114A, 108, 124 - The court ruled on the procedural fairness of penalty proceedings, finding the appellant guilty of abetting misdeclaration of goods and validating the penalty reduction by the Tribunal.
Fact of the Case:
The appellant, as manager of a Customs House Agency, was implicated in a misdeclaration of goods upon inspection of a container, leading to penalty proceedings based on alleged involvement in the concealment of actual goods' value.
Finding of the Court:
The court found the appellant's statement under Section 108 credible, deemed the retraction an afterthought, and upheld the Tribunal's decision to reduce the penalty.
Issues: Whether the appellant was provided a fair opportunity for defense and whether the penalty imposed was justified based on the evidence of complicity in the misdeclaration.
Ratio Decidendi: The court emphasized that the absence of earlier attempts to retract the statement indicated the truthfulness of the appellant's involvement in the misconduct.
Final Decision: The appeal was dismissed, confirming the penalty's appropriateness.
JUDGMENT
Manjula Chellur, C.J.
Heard learned counsel for the appellant on admission.
2. The brief facts that led to filing of the present Writ Petition are as under:
Appellant was the manager of a Customs House Agency by name Total Shipping India (P) Ltd. The controversy pertains to one consignment of consumer goods and household items imported from UAE by one Kunhimohammed through importer M/s.Pride International Trading Company. The entire issue is based on the allegation that there was misdeclaration of goods covered under Bill of Entry No.151584 dated 25.11.2004 said to be in the container. Customs seal on the container was found broken. Further when container was examined, excess goods worth ₹56,33,360/- as against declaration of value of goods at ₹1,00,000/- were found, hence investigation was initiated which culminated into the present penalty order which is besides Customs.Appeal.No.1/14 2 confiscation of the goods. Involvement of the present appellant as a Manager of Customs House agency firm is, the department found him guilty of abetting the misdeclaration of goods in the container by consignee, therefore, a show cause notice was issued to him which culminated into the penalty order. Paragraph 49(v) of Annexure-I order of the Commissioner of Customs is relevant, which reads as under:
“49(v) Sri.R.Sreekumar, the authorised signatory of the CHA M/s.Total Shipping (India) Pvt. Ltd., who actively colluded in the conspiracy and abetted in the commission of the offence for a consideration of ₹10,000/- from Sri.Kunhi Mohammed, but subtly kept away from the scene of occurrence was called upon to show cause as to why penalty should not be imposed on him under section 112(a) & (b)/114A of the Customs Act 1962.”
3. This was challenged before the Appellate Tribunal.
Though the Tribunal confirmed imposition of penalty, having regard to the other circumstances, reduced the penalty of ₹2,00,000/- to ₹20,000/- taking a very lenient view. According to learned counsel representing the appellant, he had not filed import application for movement of container from port to CFS paying extra charges and he was not given a fair opportunity of Customs.Appeal.No.1/14 3 cross-examining the witnesses concerned and further, there was no proper consideration of statement of retraction made by him.
4. Tribunal, after referring to the submissions made by the party, narrated reasoning of the Commissioner in the impugned order relevant for the purpose of disposal of the appeal with reference to actual involvement of the appellant in handling goods as agent of the customs house agency firm and then proceeded to opine that the statement given by the appellant coupled with other facts clearly indicated that there was meddling with the container and there was intentional information as declaration given to mislead the department concealing actual valuation of the goods contained in the consignment and involvement of the appellant was for a consideration of ₹10,000/-, therefore, he was found guilty of the allegation, rejecting all the objections and defence raised by the appellant.
5. We have gone through the order of the Commissioner as well as the Tribunal. The statement of the appellant was recorded either on 30.11.2004 or 1.12.2004 as per the submissions of learned counsel for the appellant. He was found involved in the entire episode by abetting the act of pilferage. Bail application of the appellant came to be filed subsequent to 1.12.2004 and Customs.Appeal.No.1/14 4 incidentally he was granted bail on 4.12.2004. Prior to this, he had given statement under Section 108 of the Customs Act, which seems to be the sole basis for imposing penalty. The show cause notice is dated 20.11.2005 to which reply was sent on 17.12.2005. What happened after 30.11.2004 till the reply given on 17.12.2005 has to be looked into in order to understand whether there was compulsion, persuasion or coercion in giving a statement under Section 108 of the Act as contended by the a
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