TaxTMI 
TaxTMI 
2015 (12) TMI 1149
X X X X Extracts X X X X
X X X X Extracts X X X X
....gistered in the country of export prior to the export. Since second hand cars attracted higher customs duty than new cars, there was an obvious loss of revenue as a result of such import. Moreover, according to the Appellant, it was revealed that that Mr. Walia was also involved in under-invoicing the value of these vehicles at the time of import thereby evading the differential customs duty. A search was conducted in the premises of Mr. Walia and various documents were found. From the documents it appears that among several cars, one was Mercedes Benz GL 320 Cdi car, the bill of entry for which had been filed in the name of Mr. Tarun Kumar, containing an invoice dated 17th March 2008 of M/s. A.K. International (IE) Limited. The price disclosed in the invoice was US$47,700. A concessional customs duty was paid by declaring it to be a new car. 4. The statements of Mr. Sumit Walia, Mr. Tarun Kumar and Mr. G.S. Prince, the G-card holder of the Customs House Agent ('CHA'), M/s. Buhariwal Logistics (Respondent No. 1 herein) were recorded. According to the Appellant, the investigations revealed that the aforementioned vehicle after import had been sold to Respondent No. 2 who was a resi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the car as proposed in the SCN; denying the benefit of the concessional customs duty; confirming the demand for differential duty and interest, confiscating the car and giving an option to Respondent No. 2 herein to redeem it on payment of a fine of Rs. 22 lakhs after due compliance with Section 125 (2) of the Act. 8. As far as Respondent 2 herein was concerned, the CCIG imposed a penalty of Rs. 10 lakhs each under Sections 112 (a) and 114AA of the Act and as far as Respondent No. 1 was concerned, a penalty of Rs. 10 lakhs was imposed under Section 112 (b) of the Act. 9. Both Respondent Nos. 1 and 2 herein filed separate appeals before the CESTAT. In the impugned common order dated 17th December 2014 in both appeals, the CESTAT held as under: (i) The car in question was initially imported for sale to M/s. Oswal in Ludhiana and later on purchased by Respondent No. 2 on 21st April 2008. Initially it had been imported by Mr. Walia in the name of Mr. Tarun Kumar on 4th April 2008. Respondent No. 2 had purchased the car after clearance from the customs. He was a bona fide purchaser of the car. He took a loan of Rs. 60 lakhs for purchase of the car. (ii) The contention of Respond....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../163/2010-JC dated 17th August 2011 issued by the Central Board of Excise & Customs, New Delhi ('CBEC'). The minimum monetary limit below which an appeal shall not be filed by the Department in this Court was fixed at Rs. 10 lakhs. It has been clarified in the aforementioned instruction that for ascertaining "whether a matter would be covered within or without the aforementioned limits, the determinative element would be duty/tax under dispute." It states that no appeal shall be filed in this Court if the duty involved does not exceed Rs. 10 lakhs with or without penalty and interest. 12. As regards the first preliminary objection, it has been rightly pointed out by Mr. Rahul Kaushik, learned Senior standing counsel for the Appellant, that as far as the Respondents herein are concerned, both the order-in-original dated 18th July 2013 passed by the CCIG as well as the impugned order dated 17th December 2014 passed by the CESTAT dealt with only the question of penalty. Therefore, as far as Respondents 1 and 2 are concerned, the present appeal does not involve any question of valuation or the corresponding customs duty. The first preliminary objection is accordingly rejected. 13. As....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ence to show that Respondent No. 1 was aware of the acts of his agent, Mr. Prince, as far as clearance of the car in question was concerned. Sections 112 (a) and 114AA of the Act are penal in nature. Therefore, in the absence of some tangible material to show that the illegal import was with the knowledge of Respondent No. 1, no penalty can be imposed on Respondent No.1. 18. Mr. Kantawala then referred to the findings recorded in the order-in-original dated 18th July 2013. The Court finds that in the said order as far as Respondent No.1 is concerned, one reason for justifying the penalty is that Respondent No.1 had failed to verify the antecedents of the importer diligently so as to inform the Department in case of any adverse observation. The other reason is that it had failed to "supervise its employees so as to thwart the illegal import of the impugned car." There was no finding, based on the evidence on record, that Respondent No. 1 was aware of the illegal import in which the G-card holder was involved. Considering that it was a question of penalty, there ought to have been some tangible material to show that Respondent No. 1 was aware of the acts of its employee/agent, Mr. P....