2025-VIL-2050-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs – Sections 114 and 114AA of Customs Act, 1962 – Imposition of penalty – Sustainability – Laxmi Fabrics, a proprietorship firm, obtained Duty Free Import Authorisation to import goods duty free – Investigation revealed that said firm was mis-using licenses by diverting imported duty free silk fabrics to local market without using same in manufacture and export of resultant products, and instead were exporting cheap rags by mis-declaring export goods as silk fabrics – Department issued show cause notice alleging that Appellants while working as Air Cargo Helpers have actively involved in violations of provisions of the Act committed by Laxmi Fabrics – Adjudicating Authority confirmed duty demands made on Laxmi Fabrics and imposed penalties on Appellants – Whether penalties imposed on Appellants under Sections 114 and 114AA of the Act are tenable – HELD – Section 114 of the Act has a penal character of being a penalty in personam. Burden of proof is on Customs authorities to bring home the guilt with respect to a person alleged to have done or omitted to do an act or abetted the doing or omission of doing an act in relation to goods liable to confiscation by adducing satisfactory evidence. Neither show cause notice nor impugned order discusses as to how Appellants have abetted Laxmi Fabrics in alleged mis declaration of goods in shipping bills. Penalties imposed on Appellants under Section 114 of the Act are unsustainable. Although Appellants have been imposed with a penalty under Section 114AA of the Act, it is surprised to notice a complete absence of a finding in impugned order that Appellants are liable for penalty under Section 114AA of the Act. Imposition of penalty under Section 114AA of the Act without rendering a specific finding in this regard is indicative of a non-application of mind. Impugned order in original to extent it imposes penalties on Appellants cannot be sustained and is liable to be set aside to that extent – Appeals allowed - Customs – Section 125 of Customs Act, 1962 – Non imposition of redemption fine – Whether Adjudicating Authority has erred in not imposing redemption fine on goods imported availing benefit of applicable notifications, on ground that goods are physically unavailable – HELD – Section 125 of the Act empowers authorities after adjudication to release goods to person from whose possession the same has been seized on collection of redemption fine in lieu of confiscation. Admittedly, in instant case, imported goods are not physically available. In absence of any evidence that bond, if any executed, is still live and bank guarantee, if any, is still valid in respect of goods, it cannot be stated that authorities have any lien or effective control over said goods so as to confiscate same and to impose redemption fine on such goods, when these goods are not physically available. Adjudicating Authority had fairly exercised his discretion in refraining from imposing redemption fine on imported goods that are unavailable – Appeal dismissed
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