R. Sudhakar, J. - (1.)THIS Civil Miscellaneous Appeal filed by the Revenue as against the order of the Customs, Excise and Service Tax Appellate Tribunal allowing the appeal filed by the assessee was admitted by this Court on the following substantial question of law:
"Is the learned Appellate Tribunal correct in setting aside the penalty imposed by the Commissioner of Customs when admittedly the respondent has omitted to do an act or at least abetted in such omission under Section 114 of the Customs Act and as such liable to pay penalty under Section 114 of the Act -

(2.)THE brief facts are as follows:
"On 10.3.1998, the Officers of Customs Preventive Division, Tuticorin searched the godown at No. 111, Ettayapuram Road, Tuticorin and found rows of cartons stacked in. Three persons were also seen there. On enquiry, one person identified himself as Nathan of Trichy and stated that he employed other two persons, namely, Selvaraj and Kalkan for packing the goods. The Officers found 476 cartons in the godown, out of which 419 of them containing sandalwood and 57 containing roofing tiles intended for export to Singapore. Shri. R. Kalkan stated that as directed by Nathan, he along with Shri. Selvaraj had come to the godown for packing the tiles and that he did not know anything about sandalwood. Shri. Selvaraj also stated to the same effect. The sandalwood, export which was prohibited under the Customs Act, the Foreign Trade (D&R) Act and the EXIM policy 1997 -02, was seized by the officers. The roofing tiles, which appeared to have been used for concealing the sandalwood were also seized by them. The Officers also searched Room No. 212 of Chitra Lodge, Tuticorin on the same day and recovered documents including visiting card of one Shri. Rahuman Sait, Shri Nathan, who in his statement dated 11.3.1998 admitted that his real name was Rahuman Sait and the above visiting card was his. He further stated that he had come to know one Shri. Dhanapal who had been illicitly dealing in sandalwood and made discussion with him for smuggling of sandalwood to foreign countries and in one such meeting, Dhanapal told him that he was going to despatch sandalwood illicitly through Tuticorin Port and wanted suitable persons for the job. Accordingly, Rahuman Sait @ Nathan suggested the name of one Alexander who was running M/s. Gilbert Overseas Shipping Company at Tuticorin and in December, 2007, he met Dhanapal, who told him that 10 tons of sandalwood were to be smuggled to Singapore and that he contacted Alexander, who arranged for the illicit export. 200 bags of sandalwood were sent to Alexander, which was kept in a godown. Since the said Alexander did not pursue the export in the manner stated, the said Rahuman Sait @ Nathan along with Dhanapal met one Maideen of Mannadi, who was an exporter in Chennai and discussed the matter and it appears that Maideen told that he would arrange illicit export through one Janarthanan @ Janar, who is the respondent herein. Accordingly, he met the said Janarthanan on 02.03.1998 and requested for arranging a godown. The said Janarthanan arranged a godown through his friend Hari."

In the course of investigation, it has come to the knowledge of the Department that the respondent Janarthanan was doing export business under the banner "Janar Exports" and his relative Shri. Mohan introduced Maideen of Chennai to him and the Maideen asked Janarthanan to help him in exporting goods such as sandalwood through Tuticorin Port and on 02.03.1998, Maideen contacted him over phone and told him that he got one order for export of Mangalore Tiles to Singapore from one Nathan and requested for arranging a godown. On 06.03.1998 Shri. Maideen sent documents by fax and asked Janarthanan to file the shipping bill as roofing tiles. On 07.03.1998, Janarthanan handed over the documents to Ramesh for filing the Shipping bill, who also filed the same through CHA M/s. Ukkirapandian Pillai & Sons. On 09.03.1998 Nathan @ Rahuman Sait came to the office of the Janarthanan to ascertain that shipping bill was filed and also informed that two tonnes of sandalwood were also part of roofing tiles. It appears that there has been some altercation between Janarthanan and Maideen with regard to the nature of export of sandalwood in the guise of roofing tiles, but however, the process of filing shipping bill proceeded through the said Ramesh, who corroborated the statement of Janarthanan.

(3.)ON the basis of the oral and documentary evidence on record and complicity of various persons involved in the offence, the Commissioner of Customs, in paragraph 25 of the order dealt with the case of the respondent. The submissions made on behalf of the respondent, which was recorded by the Commissioner reads as follows:
"25. In case of Shri Janarthanan, it was argued that he had retracted the statement and the same was not voluntary one. Others, in whose statements he was implicated, had also retracted their statements. Janarthanan had no knowledge that consignment contained sanwood prior to filing of Shipping Bill. He was contacted by Shri A.T. Mohideen through Mohan for export of Onions, tiles etc. After filing of Shipping Bill by Ramesh, Shri Rahuman Sait informed about sandal wood being part of the consignment. He had immediately asked Ramesh to cancel the Shipping Bill. On intervention by Maideen that if he did so he would involve him. He did not take any further action. He informed the facts to Ramesh. As he had no knowledge, he could not be charged under Customs Act. The sandal wood was in the process of being packed and no attempt was made to export the same. The intention to cancel the Shipping Bill and that there was no attempt to export the same."