TaxTMI 
TaxTMI 
TaxTMI 
2010 (3) TMI 365
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.... 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 DRI, on receipt of an information on 27-7-97 that an advance licence No. 03030976 dated 27-7-99 registered in Nhava Sheva Custom House is forged and release advices have been issued against such a licence, initiate....
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....he 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. Trade Links, Shri Sanjeev Khurana, M/s. Kaveri Enterprises and M/s. Ashok Metal Industries; Shri Prabhat Kumar, Advocate, representing M/s. Rahuijee & Co. and Shri Anil Goel, Shri J.M. Sharma, Consultant, representing Shri Manoj ....
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....r 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 aware about the forged nature of the advance licences. (ii) Shri Manoj Shah had no role to play in forgery or fabrication of advance licence or their sale/transfer to importers. No role has been played by Shri Manoj Shah in issue of TRAs. (iii) ....
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....ri 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 the licences heaving the same number and the-same licence holder's name but valid for duty free import of copper/brass scrap have been fabricated. This is clear from the - (i) Statements dated 7-1-03 and 17-1-03 of Shri Vasudev V. Kataria of M/s. Vindas Chemical Indu....
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.... 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 discussed above, the advance, licences against which the duty free imports of copper/brass scrap had been made are bogus. 5.1.1 Allegation against Shri Manoj Shah is that while Shri Vishvanath Jalan and Shri Bipin Shah fabricate/forged, DEEC Books and advance licences, Shri Manoj Shah assisted and a....
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....orged 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 registered in the Custom house. In view of these circumstances we do not find any merit in the plea of Shri Gautam Chatterjee in the appeals filed by him that he was not aware of the bogus nature of the licences. His plea that his statements are not voluntary also merits dismissal as - (i) Statements of Shri G....
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....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, the purchaser is generally bound to view the land and to enquire after and inspect the title-deeds; at his peril if he does not. 25. Upon a sale of goods, the general rule with regard to their nature or quality is caveat emptor, so that in the absence of fraud, the buyer has no remedy against the seller for any defect in the goods not....
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....emium 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 scrap was freely importable, the imported consignments are not liable for confiscation under Section 111(d) and since no post import condition has been violated, the provisions of Section 111(o) are not attracted and since the imported goods are not liable to confiscation, there is no question of penalty under Section 112(b) on Shri Anil Go Executive Director of....
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.... 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 without any objec tion, and subsequently the same are held to be liable to confiscation, the redemption fine under Section 125 of Customs Act cannot be imposed if the same are not physically available for confiscation. 8.2 The question of redemption fine will be decided keeping in view the law laid down by the Apex Court and Hon'ble Punjab & Haryana High Court, a....