TaxTMI 
TaxTMI 
2011 (4) TMI 1035
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....erut by mis-declaring the quantity, value and country of origin and thereby evading huge amount of Customs Duty, searched the premises at 5 p.m. on 18-7-2000. At that time one Shri P.K. Gupta was present in the premises, who on seeing the DRI officers tried to run away, but he was intercepted and in presence of two independent Panch witnesses, the premises were searched, as a result of which 7,76,945 pcs. of ball bearings and roller bearings of Nachi and NTN brands of Japan, FLT brand of Poland and LYC brand of China, totally valued at Rs. 6.3 crores were recovered. Since, Shri P.K. Gupta could not produce any document regarding their legal import, the bearings were placed under seizure under Section 110 of Customs Act, 1962. Statement of Shri P.K. Gupta was recorded under Section 108 of Customs Act, 1962, wherein he stated that he is the Director of M/s. Commando Courier, Kashmiri Gate, New Delhi, that another Director of M/s. Commando Courier is Shri Trilok Nath Mittal, on whose instructions he used to visit M/s. Dooab Exim, that Shri Trilok Nath Mittal also runs a firm M/s. Royal International, 2528/8 Rohatagi Mansion, 3rd Floor, Kashmiri Gate, Delhi, that M/s. Royal Internation....
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....uch lower side. Subsequently inquiry was made with Shri Balbir Singh Sethi of M/s. Dooab Exim, who was also authorised signatory of M/s. Meerut Exim, which had imported the consignment of bearings, Shri Trilok Nath Mittal, Proprietor of M/s. Royal International, 2528/8 Rohatagi Mansion, 3rd Floor, Kashmiri Gate, Delhi, Shri Ashwani Kumar Jain, Proprietor of M/s. Meerut Exim, Shri M.K. Gupta, Superintendent, Customs Meerut in charge of ICD, Meerut, who had allowed the clearance of the consignment of bearings imported by M/s. Meerut Exim under bill No. 23 dated 5-6-2000 and bill No. 26 dated 17-7-2000, Shri Ajay Kumar, Inspector, Customs at ICD, Meerut, Shri Deepak Mishra, Superintendent, U.P. Warehousing Corp., ICD, Meerut, Shri Mohd. Aslam and Shri Raghubir Singh, Drivers of the Trailer Truck No. HR-37-7229 and HR-47-3145 respectively which had been used for bringing the consignment of bearings from ICD, Tuglakabad to ICD, Meerut on 17-7-2000, Shri Sunil Jain, Partner of M/s. A.S. Pick & Move, New Delhi owner of the said truck number HR-37-7229 and HR-47-3145, Shri Jaswant Singh, Director M/s. Darshan Lifters (P) Ltd., New Delhi, the authorised contractors of U.P. Warehousing Corpo....
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....9/- CIF imported under bill of entry No. 23 dated 5-3-2000 which had been placed under seizure; (d) confiscation under Section 111(m) and 111(l) of the goods valued at Rs. 69,58,578/- CIF imported under bill of entry No. 23 dated 5-6-2000 which had been cleared by the Customs and which are not available for confiscation; and (e) imposition of penalty on Shri Ashwani Kumar Jain, Shri Balbir Singh Sethi, Shri Trilok Nath Mittal, Shri P.K. Gupta and also Shri M.K. Gupta, Superintendent of Customs under Section 112 of Customs Act, 1962. 1.2 The above show cause notice was adjudicated by the Commissioner of Customs and Central Excise, Meerut vide order-in-original No. 51/Commr/MRT/2001 dated 29-10-2001 by which - (a) Customs Duty demand of Rs. 1,18,17,739/- was confirmed under proviso to Section 28(1) of Customs Act, 1962 alongwith interest on this duty at the applicable rate as per the provisions of Section 28AB ibid; (b) penalty of Rs. 1,18,17,739/- was imposed on M/s. Meerut Exim under Section 114A of Customs Act, 1962; (c) the bearings value at Rs. 1,52,88,769....
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....sed under Section 114A of Customs Act, 1962 on M/s. Meerut Exim, separate penalty on the importer firm M/s. Meerut Exim, under Section 112 are not called for and that there is no justification for imposition of penalty on Shri Balbir Singh Sethi who had no role in these imports. The Tribunal by this order held that imposition of penalty of Rs. 1,00,00,000/- on Shri Ashwani Kumar Jain would meet the ends of the justice and other penalties imposed on M/s. Meerut Exim and Shri Ashwani Kumar Jain were set aside. As regards penalties on Shri Balbir Singh Sethi, the Tribunal observing that the materials on record do not justify penalty on him and set aside the penalties on Shri Balbir Singh Sethi. 1.4 Against this order of the Tribunal, the Department filed Civil appeal No. 3080 and 3081/2005 before Hon'ble Supreme Court and Shri Ashwani Kumar Jain also filed appeal No. 3082/2005 before Hon'ble Supreme Court. These appeals were disposed of by Hon'ble Supreme Court vide order dated 29-9-2010 [2010 (259) E.L.T. 6 (S.C.)]. By this order while dismissing Civil appeal No. 3082/2005 as infructuous, Hon'ble Supreme Court in respect of appeal No. 3080-3081/2005 filed by the Department, set....
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....ar finding of conspiracy in which Balbir Singh Sethi was involved, the Tribunal could not have arrived at the finding that Balbir Singh Sethi was not involved in the conspiracy. 6. In this view of the matter, we are constrained to set aside the impugned judgment and remit the matters to the Customs, Excise & Service Tax Appellate Tribunal. We direct the said Tribunal to decide the appeals de novo after hearing the parties. All questions are left open for the parties to be raised before the Tribunal. 7. In order to avoid further delay in the matter, we direct the parties to appear before the Tribunal on 25th October, 2010. We request the Tribunal to decide the appeals as expeditiously as possible. 1.5 In view of the directions of the Hon'ble Supreme Court, the matter was heard on 17-2-11, 23-2-11 and 24-2-11. 2. Heard both the sides. 2.1 Shri Ashwani Kumar Jain, appearing in person, pleaded that while he does not challenge the duty demand, he is contesting the penalty on him as well as on his firm M/s. Meerut Exim and on his brother-in-law Shri Balbir Singh Sethi, that Shri Balbir Singh Sethi had no role in these imports, that since on the date of arriv....
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....c) imposition of separate penalty under Section 112 on M/s. Meerut Exim as well as on him (Shri Ashwani Kumar Jain) are not correct; and (d) the penalty on M/s. Meerut Exim under Section 114A should be confined only to the short paid duty, which had not been paid at the time of issue of show cause notice and the imposition of penalty under this section equal to the duty demand confirmed is not correct; (e) simultaneous penalty under Section 114A and 112 cannot be imposed and when penalty under Section 114A had been imposed on M/s. Meerut Exim, there was no justification for imposing penalty on him as well as on M/s. Meerut Exim under Section 112 of Customs Act. 2.2 Shri Sumit Kumar, the learned Departmental Representative, pleaded that in this case huge quantity of ball bearings mainly of the costly Japanese brand had been imported by under declaring quantity as well as value and description, that the fact that the excess quantity had been imported and the value had been under declared have not even been disputed by the importers M/s. Meerut Exim and its proprietor Shri Ashwani Kumar Jain, that the excess qua....
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....a firm and its proprietor can be imposed. 3. We have carefully considered the submissions from both the sides and perused the records. 4. In this case the Appellant No. 1 through his firm M/s. Meerut Exim had imported two consignment of bearings at ICD, Meerut and had cleared the same under bills of entry No. 23 dated 5-6-2000 and No. 26 dated 17-7-2000. Containers containing the consignment of bearings had first arrived at ICD, Tuglakabad from the Gateway Port and from there the same had been transported to ICD, Meerut by trucks, - the consignment covered by bill of entry No. 26 dated 17-7-2000 was transported from ICD, Tuglakabad to ICD, Meerut by truck No. HR-37-7229 and HR-47-3145 belonging to M/s. A.S. Pick & Move, New Delhi. In this case there is no dispute that the value as well as quantity of the bearings had under declared and beside this, there was also mis-declaration of the description of the goods, which had resulted in short payment of duty amounting to Rs. 1,18,17,739/-. The duty demand is not under challenge in these appeals. What has been challenged is - (a) imposition of penalty on Shri Balbir Singh Sethi, brother-in-law of Shr....
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....ndent, U.P. Warehousing Corp. ICD, Meerut in his statement dated 18-7-2000 has stated that Shri Balbir Singh Sethi of the importer firm had taken delivery of the goods on 17-7-2000 and had endorsed his signatures on the two gate passes, that the trailers with the containers were parked outside the ICD gate, that after the issue of the gate passes, the containers went to the premises of the importers, and that since pass out order had been given by the customs, he did not verify as to how the containers did not come inside ICD premises. The manner in which this consignment was cleared by the customs is highly unusual, as not only the trucks containing the containers did not enter the ICD but were parked outside the ICD gate, neither the Customs Superintendent nor the Inspector conducted examination of the goods and the same were allowed to be cleared without any examination. Shri A.K. Jain in his statements dated 4-8-2000 and 5-8-2000 stated that the value and quantity had been deliberately under declared in the consignments cleared under bill of entry No. 23 dated 5-6-2000 and 26 dated 17-7-2000 and to ensure smooth customs clearance without examination of the consignment he had pa....
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.... bill of entry No. 26 dated 17-7-2000 had been shipped on account of mistake of the consignee - M/s. Al Daffa Al Zahabya RG Trading, Dubai this contention is difficult to accept as - (a) excess quantity was not only in the consignment covered under bill of entry No. 26 dated 17-7-2000, but was also in the consignment covered under bill of entry No. 23 dated 5-6-2000 ; and (b) from the statement dated 18-7-2000 of Shri P.K. Gupta it is clear that excess quantity had been imported in connivance with the suppliers, which is corroborated by the statements dated 4-8-2000 and 5-8-2000 of Shri A.K. Jain. Thus, the quantity of the goods had been deliberately mis declared. Beside this, it is not disputed that description and value of the goods had also been mis-declared. Therefore penalty on the importer under Section 114A of Customs Act, 1962 has been rightly imposed. 5.1 As regards the second contention of Shri A.K. Jain that penalty under Section 114A of Customs Act, 1962 should be confined only to the amount of duty which had remained short paid at the time of issue of show cause notice, this contention is not acceptable. Under Se....
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....ifferent types of offences. While penalty under Section 114A is for duty evasion by resorting to fraud, collusion, wilful misstatement or suppression of facts etc. and in such a situation, the penalty prescribed is an amount equal to the duty demand confirmed against the person under Section 28(2) of Customs Act, 1962, the penalty under Section 112 on a person is for - (a) any act or omission would render some imported goods liable for confiscation or abetment of such acts or omission ; and (b) acquiring possession of or in any way being concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which the person knows or has reason to believe are liable to confiscation under Section 111. 6.1 There is nothing in section 112 of Customs Act, 1962 from which it can be inferred that penalty under this Section cannot be imposed if penalty under Section 114A has also been imposed. In this can undisputedly the description, quantity and value of the goods had been misdeclared with intent to evade the payment of duty. Now mis-declaration of descripti....
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....een disposed of by the importer, the plea of the appellants is that since the goods are not available for confiscation, no redemption fine under Section 125 can be imposed, while the learned DR citing the judgment of Hon'ble Supreme Court in the case of Weston Components Ltd. v. CC, New Delhi (supra) pleads that even if the goods have been released and are not available for confiscation, the fine under Section 125 can be imposed. 7.1 Section 125(1) of Customs Act, 1962 states that whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation, such fine as the said officer thinks fit. In terms of 1st proviso to this Section, such redemption fine shall not exceed the market price of the goods confiscated, less in the case of imported goods, the duty chargeable thereon. Thus, what Sectio....
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.... the goods are held to be liable for confiscation, in term of bond executed by him, he can be asked to pay the redemption fine under Section 125(1). The judgment of Hon'ble Supreme Court in case of Weston Components Ltd. v. CC, New Delhi (supra) is in respect of such a case. According to the learned DR, this judgment of the Apex Court is applicable in all the cases including the cases at (b) above where the goods are not available for confiscation, as the same had been unconditionally released by the customs without any objection, at the time of import/export. This plea is not acceptable as what Section 125(1) prescribes is giving an option to the owner of the goods/person from whom possession the goods had been seized, to get the confiscated goods released on payment of fine determined by the adjudicating authority and therefore this section can be invoked only in those cases where either at the time of confiscation order, the goods are available and the owner of the goods is in a position to exercise the option to redeem the goods on payment of fine or the owner of the goods, pending the settlement of dispute regarding confiscation, but before the i confiscation order, had opted ....