TaxTMI 
TaxTMI 
2005 (4) TMI 326
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....der DEEC Scheme : The allegation in the show cause notice was that the goods were overvalued by six times, that is value declared by them was Rs. 30 per sacks whereas the actual value is Rs. 6 per sack. The Commissioner under Order-in-Original No. 3/2001, dated 16-1-2001 has passed the following Order : (a) Confiscated 17.23 lakhs pieces of PP and HDPE Woven sacks valued at Rs. 4.59 crores under Section 113(d) of the Customs Act with an option to redeem the same on payment of fine of Rs. 50 Lakhs. (b) Imposed penalty as under : (i) O.P. Agarwal Rs. 50 lakhs (ii) B.K. Karnawat Rs. 25 lakhs (iii) Dinesh Thakur Rs. 15 lakhs (iv) B.L. Dhaluka Rs. 10 Lakhs [Appeal Nos. C 393-396/2001-A] 2.2 M/s. Ganpati Combines Ltd. had obtained two value based advance licences for import of plastic granules and for export of plastic household articles; that though the import of plastic granules was effected by them without payment of duty of Rs. 20,37,08,675/- no export was made by them; that the imported raw material was diverted to domestic market. The Commissioner under Order-in-Original No. 5/2001 dated 16-1-2001 has - (a) Confis....
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.... redeem the same on payment of fine of Rs. 1.5 crores. (c) Imposed penalties as under : (i) O.P. Agarwal Rs. 2.5 crores (ii) B.K. Karnawat Rs. 1 crore (iii) Dinesh Thakur Rs. 1 crore (iv) B.L. Dhaluka Rs. 50 Lakhs [Appeal Nos. C/389-392/2001-A] 2.5. M/s. Ganpati Commerce Ltd. had obtained 2 Value Based Advance Licence for import of Plastic granules for manufacture and export of Plastic household articles to General Currency Area. They had imported the goods but did not export anything at all. The imported material was diverted to domestic market. The Commissioner under Order-in-Original No. 6/2001, dated 16-1-2001 has - (a) Confiscated the imported goods valued at Rs. 10,13,30,082/- and since the same were not available, imposed a penalty of Rs. 5 crores on the Company; (b) Confirmed Customs duty Rs. 11,74,21,799/- and imposed equivalent amount of penalty under Section 114A of the Customs Act against the Company; (c) Imposed penalties as under : (i) O.P. Agarwal Rs. 2.50 crores (ii) B.K. Karnawat Rs. 1 crores (iii) Dinesh Thakur Rs. 50 lakhs (iv) B.L. Dhaluka Rs. 50 Lak....
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.... this appears strange as copies of the impugned Order-in-Original were also sent and received by them by Registered post; that either possibly the address might have been wrongly written or some other infirmity in the despatch might have occurred; that further the Appellants had been given another opportunities of personal hearing on 20-12-2000, it is not mentioned as to when such notice was sent and whether it was received back or not; that in so far as the appellants are concerned, they never received any notice of the personal hearing and the orders have been passed ex parte. 4.1 The learned Advocate further contended that in the impugned Orders Nos. 3/2001, 7/2001 and 8/2001, the Commissioner has not made any mention in his discussion and findings of the Appellants, of the roles played by them; that even their names do not figure therein; that without even mentioning them, penalties have been imposed which is not in accordance with law. He relied upon the decision in Tirupati Granities (P) Ltd. v. CC, Kandla, [1995 (78) E.L.T. 301 (Tribunal)] wherein it has been held by the Tribunal that penalty on Managing Director, in addition to penalty on the company, is not justified un....
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....m unless the department is able to show as to how and to what extent a particular Director is liable." Reliance has also been placed on the following decisions :- (a) HMTD Engineering Pvt. Ltd. v. CCE - 2000 (122) E.L.T. 749 (T) As the show cause notice does not bring out any conscious act on the part of the Managing Director justifying the penalty under Rule 209A of the Central Excise Rules, 1944 and the Commissioner also does not find any specific culpability, the Tribunal has set aside the penalty imposed on him. (b) Steelco Gujarat Ltd. v. CCE - 2000 (121) E.L.T. 747 (T) penalty cannot be proposed in general terms. (c) ZU Alvi v. CCE, Bhopal - 2000 (117) E.L.T. 69 (T) An employee, who has dealt with the goods only as employee, cannot be subjected to personal penalty. (d) Perfect Embroidery v. CCE, Mumbai-VI - 2000 (122) E.L.T. 752 (T) A mere allegation that the noticees should have been aware of the unlawful activity is no ground to impose personal penalty on him. (e) Nanalal K. Jain v. CC (Prev.), Mumbai - 2000 (124) E.L.T. 401 (T). Penalty is not imposed merely because he is a partner of the firm. 4.3 Finally, ....
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.... certified to have also received copies of documents mentioned in the said letter; that Shri Rakesh Sharma, Marketing Executive of Ganapati Exports Ltd. has also certified to have received copies of certain documents under his letters dated 29-12-1997 and 24-9-1997. The learned Senior Departmental Representative submitted that as per the statements dated 31-5-1996 and 4-11-1996 of Shri B.K. Karnawat, Managing Director, he runs the Calcutta office and supervises the other offices of the Company; that imports are looked after by Shri Thakur and exports by Shri Dhaluka; that the latter directs distribution of import material and that all matter regarding import and export are being supervised by Calcutta office. She also submitted that the scales of operations themselves go to show that all the Appellants have knowingly done and omitted to have done the acts which have rendered the goods liable for confiscation under Section 111 and Section 113 of the Customs Act, making them liable for imposition of penalty; that the fact that imported goods had been diverted and export had been effected to Russia in contravention of the conditions of licence and exemption notification and the fact o....
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....he Customs Act, penalty is liable to be imposed on the person who does or omits to do any act which act or omission renders goods liable to confiscation, or abates the doing or omission of such act under Section 112 and Section 114 of the Act respectively. In Santanu Ray v. Union of India, relied upon by the learned Advocate, the Delhi High Court has held that the penalties can be imposed on the director who is concerned with the non levy/short levy of the duty. Shri O.P. Agarwal is the Chairman of all the Companies and Shri B.K. Karnawat is the Managing Director. As per the findings contained in the impugned orders the value of goods which were imported duty free and which had been diverted to domestic market is Rs. 19.96 crores, 7.63 crores and Rs. 10.13 crores in three cases and the Customs duty involved is Rs. 20.37 crores, Rs. 5.74 crores and Rs. 11.74 crores respectively. Similarly, where the goods have been exported or attempted to be exported, the value of such goods are Rs. 4.59 cores, 23.33 crores plus Rs. 7.53 crores and Rs. 13.30 crores. Import/Export of goods on such a large scale and violations of the enactments can not be made without the authority of Chairman and Ma....