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of <h1>Court Imposes Penalties for Customs Act Violations</h1> <h3>RS. TRADE LINK Versus COMMISSIONER OF CUSTOMS, NEW DELHI</h3> The court found Shri Manoj Shah and Shri Gautam Chatterjee liable for penalty under Section 112 of the Customs Act, 1962, due to their involvement in ... Confiscation of goods- Show cause notices were issued to the importer companies, the Directors/persons incharge of the importer companies, Shri Manoj Shah, Shri Bipin Shah, Shri Vishwanath Jalan and Shri Gautam Chatterjee for demand of duty from the importer companies with interest, confiscation of the goods imported against RAs issued against forged advance licences and for imposition of penalty under Section 112 on the importers and other persons involved. Held that- declaration of importers in bills of entry was one which they knew were false. This was in contravention of Rule 14 of Foreign Trade (Regulation) Rules, 1993 read with section 11(1) of Foreign Trade (Development & Regulation) Act, 1992, which rendered goods liable for confiscation under Section 111(d) of Customs Act, 1962. The former was not liable to fine whereas in latter case fine was imposable under section 125 of Custom Act, 1962. Issues Involved:1. Liability of Shri Manoj Shah and Shri Gautam Chatterjee to penalty under Section 112 of Customs Act, 1962.2. Liability of importers (M/s. R.S. Trade Links, M/s. Ashok Metal Industries, M/s. Rahuljee & Co., and M/s. Kaveri Enterprises) to pay duty along with interest and penalty under Section 114A of the Customs Act, 1962.3. Liability of Shri Anil Goel and Shri Sanjeev Khurana to penalty under Section 112 of the Customs Act, 1962.4. Confiscation of consignments under Section 111(d) of the Customs Act, 1962 and imposition of redemption fine under Section 125 of the Customs Act, 1962.Detailed Analysis:1. Liability of Shri Manoj Shah and Shri Gautam Chatterjee to Penalty under Section 112 of Customs Act, 1962:5.1 Shri Manoj Shah:- Allegations: Assisted in forgery and abetted fraudulent imports using forged advance licenses.- Defense: Claimed no role in forgery, merely forwarded documents without knowledge of their forged nature.- Findings:- Did not cooperate with investigating officers.- Implicated by Shri Bipin Shah and Shri Gautam Chatterjee.- Arranged meetings and earned commissions for delivery of forged licenses.- Held to have knowledge of forged nature and abetted duty-free imports, attracting penal provisions of Section 112(a).5.2 Shri Gautam Chatterjee:- Statements: Admitted awareness of forged licenses and acted as a middleman, receiving commissions.- Circumstances: Apprehended at Custom house with forged licenses.- Findings:- Statements under Section 108 of Customs Act are admissible.- Statements corroborated by others.- Held to have abetted illicit imports, attracting penal provisions of Section 112(a).2. Liability of Importers to Pay Duty and Penalty under Section 114A of Customs Act, 1962:6.1 Importers' Plea:- Not aware of forged nature of licenses; hence, neither extended period under Section 28(1) nor penalty under Section 114A is applicable.6.1.1 Duty Liability:- Judgments Referenced:- East West Exporters v. AC, Customs (1993)- ICI India Limited v. CC, Calcutta (2005)- CC, Amritsar v. ATM International (2008)- Conclusion: Imports treated as made without any advance license, making duty exemption unavailable. Importers liable to pay duty.6.1.2 Extended Period for Duty Recovery:- Supreme Court Judgment:- CC (P) v. Aafloat Textiles (I) P. Ltd. (2009): Extended period applicable due to principle of Caveat Emptor.- Conclusion: Extended period for duty recovery applicable, importers liable for penalty under Section 114A.3. Liability of Shri Anil Goel and Shri Sanjeev Khurana to Penalty under Section 112 of Customs Act, 1962:7.1 Importers' Plea:- Goods freely importable; no post-import condition violated; hence, not liable for confiscation or penalty.Findings:- Importers made false declarations in Bills of Entry, knowing licenses were forged.- Goods imported in contravention of prohibitions under Section 11 of Foreign Trade (Development & Regulation) Act, 1992.- Held liable for confiscation under Section 111(d) and penalty under Section 112(a).4. Confiscation and Redemption Fine:8.1 Relevant Appeals:- M/s. Rahuljee & Co., M/s. R.S. Trade Links, M/s. Ashok Metal Industries, and M/s. Kaveri Enterprises.Legal Precedents:- Weston Components v. CCE (2001): Redemption fine imposable even if goods not available for confiscation if initially cleared against bond/undertaking.- CC, Amritsar v. Raja Impex (2008): No redemption fine if goods cleared unconditionally and not available for confiscation.8.2 Findings:- Appeal No. C/357/05: Fine imposed only on provisionally released goods, upheld.- Appeal No. C/354/05, C/350/05, C/356/05: Goods cleared unconditionally, not available for confiscation; redemption fine set aside.Conclusion:- Appeals by Shri Anil Goel, Shri Sanjeev Khurana, Shri Manoj Shah, and Shri Gautam Chatterjee dismissed.- Appeals by M/s. Rahuljee & Co., M/s. R.S. Trade Links, and M/s. Kaveri Enterprises dismissed except for setting aside redemption fine on goods not available for confiscation.- Miscellaneous applications for extension of stay dismissed.
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