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of <h1>Tribunal upholds findings on fraudulent importation scheme, reduces penalties, holds appellants liable under Customs Act.</h1> <h3>AR GUPTA Versus COMMISSIONER OF CUSTOMS, MUMBAI</h3> AR GUPTA Versus COMMISSIONER OF CUSTOMS, MUMBAI - 2000 (126) E.L.T. 1152 (Tribunal) Issues Involved:1. Unauthorized Importation2. Fraudulent Documentation3. Misdeclaration of Goods4. Violation of DEEC Scheme5. Imposition of PenaltyDetailed Analysis:1. Unauthorized Importation:The case involved the importation of defective cold-rolled (CR) sheets/coils by a non-existent firm, M/s. United Mechanical Works (UMW), using an Advance Licence and DEEC Book obtained through fraudulent means. The importation was facilitated by M/s. H.P. Dagha & Co., a customs house agent (CHA). The goods were imported under nine Bills of Entry, and some of the goods had already been cleared and seized under Section 101(1) of the Customs Act.2. Fraudulent Documentation:The appellants used bogus and forged documents to obtain the Advance Licence and DEEC Book. The SSI Registration Certificate and the Registration Membership Certificate submitted by the importer were found to be fraudulent. The investigation revealed that the documents were created to mislead the authorities and facilitate the unauthorized importation of goods.3. Misdeclaration of Goods:The declared transaction value of the imported goods was significantly lower than the actual value. The correct value was determined to be Rs. 88,16,992/- CIF, and the goods were liable for customs duty amounting to Rs. 1,15,49,471/-. The goods were also misdeclared in terms of weight, leading to a miscalculation of the customs duty payable.4. Violation of DEEC Scheme:The importation was made under the DEEC Scheme, which required the importer to fulfill export obligations. The importer failed to comply with these conditions, and the goods were diverted to the market instead of being used for manufacturing export products. The Advance Licence and DEEC Book were canceled ab initio by the licensing authority, rendering the importation unauthorized.5. Imposition of Penalty:The appellants, including Shri A.R. Gupta and his sons, were found to be the masterminds behind the fraudulent scheme. They were actively involved in obtaining the Advance Licence and DEEC Book and facilitating the importation and clearance of goods. The penalty imposed on the appellants was initially Rs. 12 lacs on A.R. Gupta, Rs. 5 lacs on Pravin Gupta, and Rs. 3 lacs on Bipin Gupta. However, the Tribunal reduced the penalties to Rs. 1 lac on A.R. Gupta and Rs. 50,000/- each on Pravin Gupta and Bipin Gupta, considering the circumstances and evidence presented.Conclusion:The Tribunal upheld the findings of the impugned order regarding the involvement of the appellants in the fraudulent importation scheme. The penalties were reduced to ensure justice, but the appellants were held liable for their actions under the Customs Act. The appeal was allowed in part, with the modified penalties providing consequential relief according to law.
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