TaxTMI 
TaxTMI 
2010 (3) TMI 365
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.... Order-in-Original No.13/05 dated 17-3-05 5. C/563/05 Gautam Chatterjee -do - 6. C/353/05 Anil Go Executive Director of M/s. J Non-Ferrous Alloys Pvt. Order-in-Original No. 14/05 dated Ltd. 17-3-05 7. C/560/05 Gautam Chatterjee - do 8. C/350/05 M/s. R.S. Trade Link An importer of non-ferrous scrap against forged advance licence Order-in-Original No. 15/05 dated 17-3-05 9 C/351/05 Sanjeev Khurania, person incharge of M/s. R.S. Trade Link - do- 10. C/561/05 Gautam Chatterjee - do - 11. C/356/05 M/s. Kavery Enterprises An importer of non-ferrous scrap against forged advance licence Order-in-original No. 16/05 dated 17-3-05 12. C/562/05 Gautam Chatterjee - do- 13. C/252/06 Manoj Shah Order-in-Original No. 75/05 dated 31-8-05 14. C/253/06 Manoj Shah Order-in-Original No. 76/05 dated 31-8-05 15. C/65/06 Gautam Chatterjee Order-in-Original No. 90/05 dated 19-10-05 16. C/254/06 Manoj Shah -do- 1.1 The facts of these appeals are common and the same are, in brief, as under. 1.1.1 The officers of....
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....inquiry also revealed Shri Vishvanath Jalari as the person who alongwith Shri Bipin Shah had fabricated and forged the DEEC books and advance licence. 1.1.3 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. Some of such orders are No. 12/05 dated 26-2-05; 13/05 dated 17-3-05; 14/05 dated 17-3-05; 15/05 dated 17-3-05; 16/05 dated 17-3-05; 75/05 dated 31-8-05; 76/05 dated 31-8-05 and 90/05 dated 19-10-05. The 16 appeals detailed in para 1 have been filed against these orders. 1.1.4 Miscellaneous application No. 670/09 in appeal No. C/356 of 2005 and Misc. application No. 667 of 2009 in appeal No. C/357 of 2005 are for extension of stay. 2. Heard both the sides. 2.1 None appeared for Shri Gautam Chatterjee. 2.2 M/s. Reena Khair and Shri Abhishek Jaju, Advocates, representing M/s. R.S. Tr....
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....he licence is expiring etc., just from licence premium one cannot make judgment about the genuineness of the licence. (4) Shri Gautam Chatterjee while admitting the forged nature of the license has not implicated the importers or their Directors/persons in charge. In fact, the Importer companies have initiated criminal proceedings against Shri Gautam Chatterjee and other perpetrators of fraud before Deputy Commissioner of Police. (5) In any case, redemption fine in lieu of confiscation cannot be imposed on the importers in respect of the goods which have already been cleared and are not available for confiscation. (6) Where the importer is a proprietorship firm, separate penalty on the importer firm and proprietor is not imposable. (7) As regards Shri Manoj Shah, no penalty is imposable on him in view of the following :- (i) It is only Shri Vishvanath Jalan, Shri Bipin Shah, Shri Manikchand Tarkar and Shri Cautam Chatteijee who are involved in forging of advance licences and their sale to various importers. Shri Manoj Shah merely forwarded the documents given by Bipin Shah, to Shri Gautam Chatterjee and vice-versa, for which he was getting a commission. He was not aw....
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....ny precaution. 3. Since the order could not be issued within a period of three months from the date of hearing, the appeals were re-listed and heard again on 8-1-10 when Shri L.P. Asthana, Advocate, representing M/s. R.S. Trade Link, Shri Sanjeev Khurana, M Kaveri Enterprises and M/s. Ashok Metal Industries; Shri Prabhat Kumar, Advocate, representing M/s. Rahuljee & Co. and Shri Anil Goel; Shri J.M. Sharma, Consultant, representing Shri Manoj Shah, and Shri Vijay Kumar, the DR. representing the Department appeared and reiterated the submissions made at the time of hearing on 3-9-2009. 4. We have carefully considered the submissions from both the sides and perused the records. In this case, out of 12 licences, the RAs issued in respect of which had been used by various importers for duty free imports of copper/brass scrap, 7 licences, as reported by the office of the concerned Jt. DGFT, had never been issued and, thus, are bogus. As regards the remaining 5 licences, as per the report of the Jt. DGFT, though the licences bearing the same numbers and same licence holder's name had been issued, but for the import of chemicals, not copper/brass scrap, from which it is clear that t....
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....1962 and whether redemption fine in lieu of confiscation under Section 125 of the Customs Act, is imposable on the importers of the goods which are not available for confiscation. 4.1 Our findings on the above points are as under. 5. Liability of Shri Manoj Shah and Shri Gautam Chatterjee to penalty under Section 112 of Customs Act, 1962. 5.1 Shri Manoj Shah is the appellant in appeal No. C/252/06 where the duty free imports had been made by M/s. Holy Sales, No. C/253/06 where the duty free imports had been made by M/s. Micro Metal and No. C/254/06 when the duty free imports had been made by M/s. Dinesh International. Gautam Chatteijee is the Appellant in appeal No. C/555/05 where the duty free imports had been made by M/s. Rahuijee & Co., No. C/563/05 where the duty free imports had been made by M/s. Ashok Metal Industries, No. C/560/05 when the duty free imports had been made by M/s. M.B. Non-ferrous Alloys Pvt. Ltd., No. C/561/05 when the duty free imports had been made by M/s. R.S. Trade Links, No. C/562/05 where the duty free imports had been made by M/s. Kaveri Enterprises, and No. C/65/06 when the duty free imports had been made by M/s. Dinesh International. As disc....
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....re of the licences. Moreover one does not earn huge commission just for forwarding/passing on some documents received from one person to another. In view of this, we hold that Shri Manoj Shah had knowledge about forged nature of the licence and he has abetted in duty free import of copper/brass scrap against forged licences and thereby attracting the penal provisions of Section 112(a). 5.2 As regards Shri Gautam Chatterjee, he, in his statements dated 1-2-2000, 2-2-2000, 8-2-2000, 24-2-2000, 7-3-2000, 27-3-2000 and 30-6-2000 has stated that he was aware that the licences for which he had arranged the customers (importers), are forged, that he used to get commission at the rate of Rs. 0.25 paise per kg. of scrap from importers and same commission from Shri Bipin Shah and that he knew that M/s. Uno Enterprises, in whose name the Demand drafts were being collected from the Importers for purchase of licences, is owned by Shri Bipin Shah. It is also seen that on 1-2-2000 Shri Gautam Chatterjee had been apprehended at the Nhava Sheva Custom house by the DRI officers alongwith Shri Manik Chand Tarkar who had come to the custom house for issue of RAs against bogus advance licences....
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.... 194 (P & H), the imports would have to be treated as if made without any advance licence and accordingly the customs duty exemption would not be available and since the goods had been cleared by availing full duty exemption, the imports would be liable to pay the duty. 6.1.2 As regards the applicability of extended period for recovery of duty under proviso to Section 28(1) of the Customs Act, 1962, the legal position on this point is now very clear in view of Hon'ble Supreme Court's judgment in case of CC (P) v. Aafloat Textiles (I) P. Ltd. reported in 2009 (235) E.L.T. 587 (S.C.) wherein invoking the principle of Caveat Emptor the Apex Court has held that in such cases the extended period for recovery of duty under Section 28(1) of the Customs Act would be applicable. In this regard, para 23, 24, 25, 26, 27, 28 & 29 of this judgment are reproduced below :- "23. Caveat emptor, qui ignorare non debuit quod jus alienum emit. A maxim meaning "Let a purchaser beware; who ought not to be ignorant that he is purchasing the rights of another." 24. As the maxim applies, with certain specific restrictions, not only to the quality of, but also to the title to, land which is sold, t....
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....ences through a petty employee of a CHA instead of a regular licence broker; (b) Licence premium was paid by demand draft in favour of M/s. Uno Enterprises, while the licence holder were different persons - like M/s. Super Abrasive Tooling, M/s. Supric Chemicals, M/s. Oriental Containers etc. which should have raised suspicion. (c) The licence premium in these cases is 50 to 75% as against normal premium of around 98% of the duty foregone. The premium was payable only after the clearance of the goods. In view of the above, we hold that not only extended period under proviso to Section 28(1) is available to the Department for recovery of duty, the importers being guilty of deliberate evasion of duty, are also liable for penalty under Section 114A of the Customs Act. 7. Are the consignments of copper scrap imported duty free against forged' advance licence liable for confiscation under Section 111(d) & 111(c) of Customs Act, 1962 and whether Shri Anil Goel of M/s. Rahuijee & Co. and M B.M. Non-ferrous Pvt. Ltd. and Sanjiv Khurana of M R.S. Trade Links liable for confiscation under Section 12 of Customs Act, 1962? 7.1 It has been pleaded that since the copper/brass scra....
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....s are not available for confiscation. 8.1 Thus question is relevant in appeal No. C/3M/OS filed by M/s. Rahuljee & Co., appeal No. C/350/05 filed by M/s. R.S. Trade Links, appeal No. C/357/05 filed by M/s. Ashok Metal Industries and appeal No. C/356/05 - filed by M/s. Kaveri Enterprises, the law on this issue is now very clear. As per the judgment of the Apex Court in case of M/s. Weston Components v. CCE reported in 2001 (115) E.L.T. 278 (S.C.) redemption fine in lieu of confiscation of the imported goods can be demanded from the importers under Section 125 of the Customs Act, 1962 even if the goods are not physically available for confiscation, if at the time of import, there was dispute / doubt regarding their importability and the same had, been allowed to be cleared against a bond or undertaking, but subsequently the goods are held to be liable for confiscation. However as per the judgment of Hon'ble Punjab & Haryana High Court in case of CC, Amritsar v. Raja Impex reported in 2008 (229) E.L.T. 185 (P&H), which has been affirmed by the Apex Court vide judgment reported in 2008 (184) E.L.T. A36 (S.C.) (sic), if initially the goods are allowed to be cleared unconditionally wi....