The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) reduced the penalty under section 114AA of the Income Tax Act, 1961 to Rs. 2 Lakh for the negligence of CHA resulting in the attempt of fraudulent export.
Parthiv V Dave, the assesseechallenged the order passed by the Commissioner of Customs (Appeals) whereby penalties imposed upon the appellant for Rs. 5 Lakhs each under Section 114 (iii) and Section 114AA respectively of the Customs Act, 1962 was upheld. The appellant has facilitated the exporter of M/s. Nilcha Int. Traders for fraudulent export of ladies’ Leather Uppers Shoe for claiming Drawback Incentive Scheme from ICD, Khodiyar.
The department viewed that the goods attempted to be exported vide 8 shipping Bills were declared with a value of Rs. 47852112/- and drawback amount of Rs. 39,23,870/- whereas, on examination of the cargo, it was found that instead of 30,000 pairs declared by the exporter, it was found only 405 pairs.
The exporter has mis-declared the description as well as quantity of the goods with intent to avail fraudulent drawback. The appellant was made liable for penalty under Section 114(iii) and Section 114AA.
A Coram comprising of Mr Ramesh Nair, Member (Judicial) observed that though the appellant has acted as CHA and it does not appear the direct involvement of the appellant in the fraud of export goods when against one invoice, the exporter asked the appellant CHA to split the consignment and make 8 shipping Bills, that itself is a reason that the appellant should have acted diligently and inquired about the reason for this abnormal act of splitting the consignment into 8 shipping Bills.
The negligence of the CHA resulted inan attempted fraudulent export by his client. The Tribunal viewed that the penaltyof Rs. 5,00,000/- in each section is very harsh and reduced the penalty from 5 lakhs each under Section 114(iii) and Section 114AA of the Income Tax Act, to Rs. 2 Lakhs in each section.
Shri. D.K. Trivedi, Advocate appeared for the Appellant and Shri. Rajesh K Agarwal appeared for the Respondent.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
