TaxTMI 
TaxTMI 
TaxTMI 
2018 (1) TMI 225
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....tains to the import of 550 'modems' between 11th October 1987 and 21st December 1987 against 53 bills of entry by M/s Hindustan Engineering Corporation by declaring these to be 'electricals' and by concealment of true value. M/s Dipali Electronics Pvt Ltd, M/s Philips India Ltd and S/shri JP Mody and Suketu Mody are in appeal. The second notice (decided in 155/2007) pertains to import of 10 'automated teller machines' and 5 'automated teller machine processors' while the third (decided in 157/2007) pertains to 33 'automated teller machines' and 16 'automated teller machine processors.' The latter two were consequences of notice dated 4th July 1992 and 11th September 1992. 3. The 'automated teller machines' manufactured by M/s Diebold, USA were marketed by M/s Philips Holland who had exclusive rights for the entire globe except the country of manufacture. These were supplied to M/s Exportek, Belgium who shipped them to M/s Hindustan Engineering Corporation in India. M/s Phillips Holland manufactured 'automated teller machines processors' at Jarfalla, Sweden and were supplied to M/s Exportek Belgium who shipped these to M/s Hindustan Engineering Corporation. The importer filed 180 b....
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.... order with M/s Exportek, Belgium by M/s Hindustan Engineering Corporation who procured the goods M/s TRT, France (a company within the Philips group). 7. That the 31 'machines' and 8 'processors' for which purchase order was placed with M/s Suketu Computers Pvt Ltd, with M/s Suku Exports Pvt Ltd for 12 'machines' and with M/s Maulik Electronics Pvt Ltd for 13 'processors' had been supplied is not in dispute; in the absence of manufacture, by implication, imports could have been the only source and, that too, by misdeclaration as neither the importer, or any of its group companies, nor M/s Peico Electronics & Electricals Ltd was in possession of 'special import licence' mandated in the extant Export-Import Policy for import of 'modems', 'machines' and 'processors.' Allegedly, the camouflage of the import of 'modems', 'machines' and 'processors' in the modus operandi was the apparently unconnected placing of import order with M/s Exportek, Belgium by M/s Hindustan Engineering Corporation who procured the goods M/s TRT, France (a company within the Philips group), M/s Diebold, USA and from M/s Philips Holland. 8. According to the impugned order, this complex chain was established t....
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....chines as well as ATM processor from M/s Suku Computers Pvt Ltd ("SCPL" in short) for supply to HSBC and Citi Bank. The goods were shipped to India through Hindustan Engineering Corporation ("HEC" in short), who filed bills of entry and supplied the impugned goods to M/s Suku Computers Pvt Ltd. Other entities similar to Hindustan Engineering Corporation, not concerned in these appeals, there were suppliers to Suku Computers Pvt Ltd. Philips Holland sold ATMs and 21 processors to an exporter of Belgium and that exporter sold the goods to Hindustan Engineering Corporation. 11. He further submitted that M/s Philips India, though not in any way concerned with of declaration of the goods on arrival in India, and the individual employees, though not abettors, were penalised under section 112 of the Customs Act, 1962. According to him, the adjudication order was passed without any valid grounds or any evidence for concluding that the appellants had abetted in any wrong doing on the part of the importers. It was also submitted that M/s Philips India had not made any financial gain to be charged with being a beneficiary. 12. It is his further contention that Shri JP Mody, who had connecti....
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....llant a party to it. 15. Learned Senior Counsel further stated that confiscation and imposition of fine thereof without valid grounds is not in accord with law in the absence of breach of law or evidence of connivance. It was also contended that the quantum of penalty was arbitrary and not commensurate with the alleged role and the failure to take submissions into consideration rendered the order to be unsustainable. A further submission was that none of the statements under section 108 of Customs Act, 1962 implicated the bank and their officers had not been examined to ascertain the truth. 16. Shri Anil Balani, appearing on behalf of Shri AA Ansari, an employee of Shri JP Mody, submitted that he was not, in any way, connected with the import of the machines, processors or modems and had only carried out the directions of his employer to visit Belgium and that the handling of the consignments was on instructions of M/s Philips India, that he was not involved or concerned and that he had not aided, connived or colluded with any person or entity to evade duties thus not warranting the penalty of Rs. 25 lakhs and Rs. 30 lakhs imposed by the two adjudication orders emanating from the....
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....andalal Kalyani [1990 (27) ECR 302] was also relied upon. 20. Learned Counsel appearing for Shri Suketu Modi submitted that the Hon'ble Supreme Court in Commissioner of Customs v. Sayed Ali [2011 (265) ELT 17 (SC)] had held that jurisdiction to issue notice for recovery of duty was vested only in 'proper officer' and had been directed to file a miscellaneous application for raising this additional ground which was to be taken up with the hearing in the appeal on merit. 21. In C/MA (Ors)/92727 to 92729/17, it was submitted on behalf of appellant that the adjudication suffers from lack of of jurisdiction as the Collector who issued show cause notice was not a 'proper officer' empowered to initiate proceedings and that this irreparable infirmity should lead to setting aside of the impugned order in accord with the decision in re Sayed Ali. 22. It was also contended on behalf of appellant that he, as a management trainee, had no knowledge about the imports and had, without reason, been implicated and penalized. According to Learned Counsel, that he was neither the importer nor a party to the import had not been considered by the adjudicating authority and raised the following issues....
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....es against penal proceeding initiated under section 124 of Customs Act, 1962 for the contraventions. It is a further contention that Collector of Customs finds specific mention in section 28 as it then stood with defined jurisdiction for recovery of duty without the need for support from empowerment separately as 'proper officer.' 25. Relying on the judgment in Maharaja Chintamani Saran Nath Shahdeo Vs. State of Bihar [(1999) 8 SCC 16], Revenue submits that "25. This Court in Hitendra Vishnu Thakur v. State of Maharashtra has culled out the principles with regard to the ambit and scope of an amending Act and its retrospective operation as follows: (SCC p. 633, para 26) "(i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits. (ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right....
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....plicability of the provisions invoked against the appellant. Submitting that the classification was erroneous, it is his contention that the deeming of the parts as a whole was not correct when the parts were distinctly identifiable and classifiable on their own merit. Relying on the statement dated 29th June 1992 of Shri Suketu Mody, Learned Counsel submits that, in the absence of any inculpatory statement, the appellant cannot be held liable to penalty. 30. Countering the arguments made on behalf of Shri Suketu Mody, Learned Authorized Representative submitted it is undoubtedly clear that there was no factory for manufacture of the machines, processors or modems; for the want of technology and not being in possession of any import licence or industrial licence there was no justification for the claim that the importer was capable of manufacturing the finished goods that were claimed to have been manufactured from these parts. According to Learned Authorised Representative, the goods declared as 'electricals', 'parts of thyrister control panel' and 'parts of distribution control panel' had been dismantled at Belgium and the misdeclaration directed by Shri Suketu Mody and Shri JP ....
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.... Chrome [1999 (112) ELT 753 (SC)]. 33. On behalf of Revenue, it was submitted that all the documents relied upon had been provided to the appellant, that the charges against the appellant were specifically mentioned in the show-cause notice and the findings categorically recorded in the adjudication order. Furthermore, Learned Authorized Representative contends that all the three adjudication orders survive in relation to confiscation of smuggled goods under section 111 and imposition of penalty under section 112 of Customs Act, 1962 with the power to issue show-cause notices and to adjudicate being conferred under section 122 and 124 which do not restrict issuance of show-cause notices to 'proper officer.' Hence, all the three show-cause notices were correctly issued by the Collector of Customs, ACC Sahar, Mumbai i.e. the port of import. 34. Shri Hitesh Shah, Learned Authorized Representative, took us through the entire scheme of import and the alleged conspiracy hatched by the noticees and the roles played by them. The notes of proceedings for each day of hearing have elaborated on the submissions of Revenue. 35. The submissions made as recorded in note of proceedings on vario....
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....ion at HSBC, India. (xiii). Telex dt 24.7.1987 from Philips India to Philips Holland for supply of Price Lists and Invoices of ATMs and ATMPs supplied to JPM. 2. HSBC in its reply to the SCNs and paras 9,11,17(B) and 9,10, 16(B) of their Appeal Memoranda, categorically stated that, they have been buying ATMs and ATMPs globally from Philips Holland and they consciously knew that, the ATMs and ATMPs purchased by them for their India Project were to be imported. Following relevant facts remained unrebutted by none of the appellants and became proved facts: (i). By letter dt. 12.9.1986, Philips India refers to its discussions with HSBC and proposed sale of ATMs and ATMPs to HSBC. (ii). By letter dt. 12.9.1986, Philips India offers a Maintenance Agreement for ATMs and ATMPs to be sold by it, to HSBC @ 13% of the purchase price of the Machines. (iii). By letter dt. 18.12.1986, Shri K. Basu for Philips India quotes prices for ATMs and ATMPs to HSBC. At para (f), the Quotation states that, Sales Tax, Other Local Taxes will be on actuals and so also Octroi and Delivery Charges outside Mumbai. It is stated that such Taxes shall be @ 10% subject to confirmation. (iv). By Letter ....
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....to sell and purchase. Yet, both consciously avoid any reference to Import Duty payable on the ATMs and ATMPs which are to be sold/ purchased. These duties are neither stated as a variable nor are they stated to be included in the sale price. (xiii). Both HSBC and Philips India have in their Appeal Memoranda and replies to the SCNs, stated categorically that, the goods sold/purchased are imported ATMs and ATMPs. The P.A. and M.A. specifically distinguish between ATMs, ATMPs, Equipment and Spare Parts. Yet, the onus is cast onto Philips India only for obtaining licences and permissions for importation of the required Spare Parts as per the P.A. The P.A. does not state anything about Import duties or licences for import of ATMs and ATMPs. The M.A. specifically provides for Import taxes and Duty on spare parts only, on Philips India. (xiv). Hence, both HSBC and Philips India are aware that, the ATMs and ATMPs being contracted for sale under the said P.A. are not going to be imported under any import licence and that import duties shall not be paid on such machines. (xv). Inspite of the fact that, in 1987, HSBC contracted for purchase of ATMs and ATMPs at a price of approximately ....
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....l No.C/708/08 filed by Philips India. 10. JPM in his statements dt. 8.8.1991, 14.8.1991, 14.9.1991, 22.6.1992 and 6.8.1992 agreed that the ATMs and ATMPs could only be marketed by Philips Holland and that there was no transfer of technology to JPM for their manufacture. 11. Shri V. Ramamrutham, Director, Philips India, in his statements dt 10.9.1991, 26.9.1991 and 23.6.1992 agreed that he mediated the sale of ATMs and ATMPs from Philips Holland to JPM India via Belgium, to supply to HSBC and Citibank. He submitted the said POs and Invoices and did not deny contents thereof. He also did not deny or retract above facts in any of his 3 statements given over a period of 9 months. 12. Shri K. Basu, Marketing Manager, Telecom & Data Systems (TDS), Philips India in his statements dt. 29.6.1992 and 20.7.1992 agreed that Philips India placed orders on Philip Holland for supply of the said ATMs and ATMPs to Exportek, Belgium for supply to JPM and did not deny that he had signed the POs and Invoices. He has not denied or retracted his 2 statements. 13. Shri H.J. Rensma, Managing Director, Philips India and Shri P. Patnaik dt. 24.9.1991, Senior Vice President of Philips India, did not den....
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....itted by him. He did not deny the facts stated in his statements or retracted them till date. He produced copies of all such Bills of Entries along with the CHA Register detailing the imports. ARGUMENT OF REVENUE AGAINST APPEAL OF Shri V. Ramamrutham, Director, Philips India AND Shri K Basu, Marketing Manager (TDS), Philips India In Appeal no.C/349-352/08 MUM: 19. Ld. DR submitted that these two appellants in their Appeal Memoranda, have agreed with the facts stated in the SCNs and the OIOs and have not denied the contents of various documents to which they were party. Also they did not dispute genuineness or the contents thereof. They have agreed that, there by no means the goods could have been manufactured in India and they failed to establish the legality of their transactions with SCPL, SEPL and MEPL. 20. In their Appeal Memoranda, they have also stated that, they discussed and negotiated with Shri J. P. Mody for the supply of the ATMs and ATMPs, which were to be imported. In their reply dt. 21.6.1993, to the 2 SCNs, they have not brought on record any documents or facts to controvert the charges made therein. Their only defence is that, they ....
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.... the above said goods to Exportek, Brussels for onward smuggling into India. They placed Purchase Orders on SCPL, SEPL and MEPL for supply of such ATMs and ATMPs which were to be imported requiring SIL. They designed the import through another Group Company of JPM Group viz. HEC. Hence, they are liable for penalty under Section 112(a) of the CA, 1962. 24. S/Shri V. Ramamrutham and K. Basu have dealt with such goods, knowing them to be liable for confiscation for having been illegally imported, by selling them to HSBC and Citibank under invoices of Philips India which they have signed. Hence, they are liable for penalty under Section 112 (b) of the CA, 1962. 25. Hence, the SCN has correctly brought out both charges under Section 112 of the CA, 1962 and the OIO has correctly imposed penalty on account of both charges under Section 112 of the CA, 1962. ARGUMENT OF REVENUE AGAINST APPEAL OF Shri Suketu J. Mody (SJM) In Appeal no.C/353 & 361/08. 26. This appellant had signed all the invoices of SCPL and MEPL for sale of ATMs & ATMPs to Philips India. In his Appeal Memorandum (A.M.) in para 2 he has agreed that they have imported the said goods. In para 11 and 12.4 of the Appe....
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....y were sham companies and apprehended prosecution. This establishes that they accepted the charges in the SCNs and the findings in the OIOs so also they had malafide. Their entire modus operandi to cause duty evasion stands established and involvement of Philips India in dealing with smuggled goods no more remained in mystery. They knew that the goods were liable for confiscation. 30. Neither Philips India nor S/Shri V. Ramamrutham nor K. Basu sought cross examination of either JPM, SJM or A.A. Ansari. They failed to lead any evidence to show that, these sham companies were authorised for manufacture of ATMs and ATMPs by Diebold, USA and Philips Holland/Jarfalla. They could not led any evidence to show that, Philips Holland supplied parts of ATMs and ATMPs to Exportek. 31. Inspite of the charges specifically made in the 2 SCNs, Philips India has never explained the veracity of the transactions relating to equipment and Spare Parts appeared in their various correspondence and the Purchase Agreements and Maintenance Agreements signed with HSBC, so far as Import duty/taxes and licences/permissions were concerned. 32. Philips India never denied the inculpatory statements made by S/....
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.... made specific provision for payment of import duty on the spare parts by Philips India. There was also no clause in the purchase agreement in respect of import duties on the ATMs and ATMPs. Yet, as per details in the said para 26 they suppressed the fact as to whether Phillips, India had obtained licences and permissions for import of ATMs and ATMPs although the agreement mentioned about licence and permission against spare parts. 36. HSBC was aware while entering into purchase agreement with Philips India that the said ATMs & ATMPs were only manufactured by Diebold, USA and Philips Holland and Phillips India has no manufacturing facility for the same without SIL. In spite of the charges specifically made in the 2 SCNs, HSBC had never cross-examined S/Shri V. Ramamrutham or K. Basu nor Shri JPM, SJM, A.A. Ansari. It failed to explain the details on Import duty/taxes and licences/permissions relating to equipment and Spare Parts procured although purchases thereof appeared in their various correspondences to fulfil contractual obligation under Maintenance Agreement. They have not filed any law suit against Philips India or Philips Holland or S/ Shri V. Ramamrutham or K. Basu, who ....
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.... could only be made by manufacturers who uses the imported goods in further manufacture. Shri Ansari, specifically JPM group was merely traders, but not manufacturer of the goods. Yet, he obtained clearance under REP Licences, though, none of the Companies/Firms had a Factory for the manufacture of ATMs and ATMPs. 41. In para 7 of the A.M.s, Shri Ansari has relied on the facts submitted by the Importer M/s HEC in their Appeals. The Appeals of HEC have already been dismissed. In para 12.4 of the Grounds of Appeal, no grounds have been made to counter the charges in the show-cause notice as well as findings in the Order-in-Original. The charges of misdeclaration of description and value in the impugned Bills of Entries were proved against him when the goods were held liable to confiscation under Section 111 of the CA, 1962 and also for following above modus operandi smuggling the goods. 42. Shri A. A. Ansari as Authorised Signatory of the Importer M/s HEC has consciously and deliberately dealt with the import of the misdeclared and undervalued goods which were held liable for confiscation. He went to Brussels and dismantled the ATMs and ATMPs and repacked them in packages. He orga....
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....o Electronics C/708/08-Mum C/710/08-Mum Shri V. S. Nankani, Senior counsel & Shri Anay Banhatti, Advocate 2 Shri V. Ramamrutham C/352/08-Mum C/351/08-Mum 3 Shri K. Basu C/349/08-Mum C/350/08-Mum 4 Hongkong & Shanghai Banking Corporation C/318/08-Mum C/319/08-Mum Shri. D.B. Shroff, Sr. Counsel & Shri Shehzad A.K. Najam-Es-Sani, Advocate 5 Shri J. P. Mody C/363/08-Mum C/354/08-Mum None 6 Shri S J. Mody C/361/08-Mum C/353/08-Mum Shri T. Vishwanathan, Advocate 7 Shri A. Ansari C/362/08-Mum C/355/08-Mum Shri Anil Balani, Advocate Modems Sr. No. Name of the Appellant Order-in-Original No.156/2007 Represented By SCN dated 02.11.1992 Appeal No. 1 Philips India @ Peico Electronics C/709/08-Mum Shri V. S. Nankani, Senior counsel & Shri Anay Banhatti, Advocate 2 Shri J. P. Mody C/358/08-Mum None 3 Shri S J. Mody C/357/08-Mum Shri T. Vishwanathan, Advocate 4 Deepali Electronics Pvt. Ltd. C/359/08-Mum None 46. The Learned DR relied upon the following case laws to submit that in case of such mis-declaration and under valuation of goods, the evidence gathered by Revenue is sufficient to prove the smuggling of ATMs, ATMPs and Modems by Philips....
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....0 2 Kevin Infotech (P) Ltd. v/s CC(Port), Kolkata 2007(216)ELT 435(Tri.-Kolkata) 3 CC(Import), Mumbai v/s Videomax Electronics 2011(264)ELT 466(Tri.-Mumbai) 14 to 18 4 Electronics Instrumentation v/s Commissioner 2011(270)ELT A90(SC) 5 Pine Chemical Suppliers v/s Collector of Customs 1993(67)ELT 25(SC) 10 to 14 6 Union of India v/s Mustafa & Najibai Trading Co. 1998(101)ELT 529(SC) 20, 30 to 33, 37 7 Collector of Customs, Calcutta v/s Sanjay Chandiram 1995(77)ELT 241(SC) 16,18, 20,21, 22 8 Collector of Customs v/s Television & Components Ltd. 2000(116)ELT 412(SC) 9 CC(Gen), Mumbai v/s Abdulla Koyloth 2010(259)ELT 481(SC) 16-19 10 Collector of Customs, Bangalore v/s Maestro Motors Ltd. 2004(174)ELT 289(SC) 19 11 Samay Electronics (P) Ltd. v/s CC(Import)/(General), Mumbai 2015(328)ELT 238(Tri.-Mumbai) 5.5 to 5.18, 5.22 12 CC(Prev.), Mumbai v/s M. Ambalal & Co. 2010(260)ELT 487(SC) 5-8, 12-14 13 Carpenter Classic Exim Pvt. Ltd. v/s CC, Bangalore 2006(200)ELT 593(Tri.-Bang.) 6,7 14 Carpenter Classic Exim P. Ltd. v/s CC(Imports) 2009(235)ELT 201(SC) 8 15 Magpie Elechem Pvt. Ltd. v/s Collector of Customs, New Delh....
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....1987 to 21.12.1987, in terms of 53 Bills of Entry (B/E), misdeclaring description of the goods as 'Electricals' and undervalued the same. These Modems were shown to be exported by Exportek from Brussels, Belgium to Mumbai under 6 Master Airway Bills (MAWB) and 53 House Airway Bills (HAWB). Such Modems were manufactured by TRT, France, a Group Company of Philips Holland and marketed by Philips, Holland. No person, other than Philips, could market/sell the Modems across the world and no person, other than Philips, Holland could market the Modems in India. The adjudication order No.156/07 gave rise to appeals of JPM, DEPL, Suketu J. Mody and Philips India. 52. Specific Import Licences (SIL) were required for import of these Modems into India. Peico Electronics & Electricals Ltd.(Philips India) did not have such SILs. Scrutiny of documents seized from Philips India and J.P. Mody (JPM), as detailed at para 2 & 3 of SCN dt. 2.11.1992, revealed that, Philips Holland i.e. the Principal of Philips India was concerned for sale of such Modems in India. The Confidential Note dt. 13.12.1986 and Visit Note dt. 10.2.1987 discovered in the course of search revealed that, Philips India did not ha....
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....t of Modem. There has been no transfer of technology (TOT) from TRT, France or Philips Holland/ Jarfalla, to DEPL for manufacture of Modems. There was no assignment of marketing rights from TRT, France or Philips Holland/ Jarfalla, to DEPL for marketing of these Modems. 54. Philips India by their letter dt. 4.9.1992 submitted copies of 5 invoices under which DEPL supplied above said 550 Modems. Such fact was proved from the reply dt. 29.6.1993 of Peico Electronics & Electricals Ltd (Philips India) filed against SCNs dt. 23.9.1992 and 2.11.1992. There was no denial to the charges made and documents relied upon in SCN dt. 23.9.1992 and 2.11.1992. Philips India has documented purchase and supply of such Modems in India. 55. 550 Modems of TRT Philips, France brand of the aforesaid model numbers were imported into India. The design and configuration of these modems was communicated to Philips Holland by Philips India. On such advice, the Modems were procured from TRT, France and supplied to M/s Exportek in Brussels, Belgium. Such goods came to India and those were supplied by Philips India under their invoices to HSBC and Citibank. Such facts was corroborated by the reply dt. 29.6.19....
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.... and 220-6818-3216, from Exportek, Belgium to HEC/JPM, Mumbai invoiced as 'Parts of Control Panel/ Control Switches' and described as 'Electricals' in the HAWBs and Bills of Entries were actually Modems of Model no.s S2411 and S4821. 61. The Annexure to the SCN dt. 2.11.1992 gives MAWB/HAWB/B/E wise details of the Model type and number of Modems imported under the said 6 MAWBs referred in the said Telexes. The MAWBs and HAWBs were resumed from M/s Airlift, the agent for Lufthansa and the Consolidator in India. 62. Shri J.P. Mody replied to the SCN and appeared for Personal hearing on behalf of himself, Suketu J. Mody, DEPL and HEC. He did not deny the contents of the said Telexes or contest their genuineness. He did not produce any evidence to the contrary. Shri A.A. Ansari, Authorised Signatory for JPM Group in his statements dt. 1.10.1991, 23.3.1992 and 26.5.1992 has submitted that he signed all the B/Es of the JPM Group Companies including HEC. He did not deny the facts stated in his statements or retracted the same at any time. He produced copies of all such BEs along with the CHA Register detailing the imports. 63. HEC and DEPL were firms companies controlled and operated b....
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....ch does not require interference. 66. DEPL as an importer of the said Modems misdeclared and undervalued the same rendering such goods liable for confiscation and also liable to penalty under Section 112(a) of the Act. 67. DEPL has dealt with the offending modems, knowing that the said goods were liable to confiscation being illegally imported and sold to Philips India under their own invoices. Accordingly penalty under Section 112 (b) of the Act was rightly imposed. SCN rightly brought out entire allegations which remained undefended by the appellant and penalty was rightly imposed under Section 112(a) of the Act. ARGUMENT OF REVENUE AGAINST APPEAL OF Shri Suketu J. Mody (SJM) IN Appeal no. C/357/08. 68. The appellant Suketu J Mody signed all the invoices of DEPL for sale of Modems to Philips India. In para 7 and para 12.4 of his Appeal Memorandum, he has averred that he had imported the offending Modems. In para 12 thereof, charges in the SCN as well as the findings in the OIO remained uncontroverted. This appellant relied on the facts stated in the Appeal of HEC which was already dismissed by the Tribunal as stated hereinbefore. The charges of misdeclaration of ....
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....and by no means caused any prejudice to the interest of Revenue. 72. According to ld. D.R., submission of appellant that show-cause notice does not speak the allegations in clear terms does not have merit because show-cause notice is not expected to be read hyper-technically. Substance therein brings out the allegations. To support his contention ld. D.R relied on the decisions in Indix from Sr. No.3 to 45 appearing in Volume VII of the paper book. Relying on Volume VIII of the paper book, Revenue submits that statements recorded by investigation proves against appellants bringing out their involvement in the commitment of the offence. He relies on Sl. 9, 11 and 12 of Index in Volume VIII dealing with various aspects of the evidence and relevancy thereof. 73. In rejoinder, Shri D.B. Shroff, Sr. Counsel submits that Revenue's contention that charges were not denied is baseless since reply was filed by the appellant M/s. HSBC. Order-in-original was reproduction of the show-cause notice. There is no consideration of the contentions of the appellant in adjudication. But mechanical adaptation of the proposal appeared in the show-cause notice for passing the adjudication order made th....
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.... of Revenue ld. Sr. Advocate submits that there is no mens rea brought out by Revenue against HSBC. Accordingly, allegation in para 4 of Notes of Revenue is baseless without any material to suggest that HSBC was party to the alleged offence. Therefore, for no reason, penalties can be imposed on HSBC. 76. On behalf of Shri K. Basu, in rejoinder, learned Advocate Shri Anil Balani, submits that the appellant was merely an employee of Jitin Mody. He was required to do the work as his master was directing. He did not have any independent say over any matter. He was not involved in any commitment of breach of law. Therefore imposition of penalty of Rs. 55 lakhs on him is unreasonable. The penalty so imposed relates to the import of ATM. This appellant was not a signatory to any document. He had no control over the goods imported. So also he had not made any design to commit any offence alleged by Revenue. Accordingly Section 112 of the Customs Act, 1962 does not apply to him. Because he travelled to Belgium, that shall not be a reason to impose penalties on him. The import came from Belgium described the goods properly as appeared in the sales documents. But authorities below brought ou....
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....pellant, not being involved in any of the imports, made by J.P. Mody that does not make it liable to any penalty. Placing a chart he brings out how the transactions had occurred, demonstrating the origin of the purchase order and supply of the goods without involving the appellant in any offence. When the goods came from the port of lading without any mis-declaration, allegation of Customs is baseless. Therefore, mis-declaration if any, at the discharge port not being related to M/s. Phillips India it is not answerable to Customs. 79. Placing Volume III of the paper book of the Revenue, Sr. Advocate Shri V.S. Nankani for M/s. Phillips India submits that purchase order were placed by M/s. Phillips as appearing at page 7 thereof and page 12 demonstrates the transaction of M/s Phillips. Description of the goods supplied to HSBC matches with the description on the invoices. Placing page 16 of the above Volume of the paper book of the Revenue, appellant submits that it was not a party to any breach of law for which it cannot be held responsible. To demonstrate that, page 68 of the paper book was placed and submitted that all the description therein related to ATM. M/s Phillips was not ....
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...., who filed the bill of entry and who was proceeded under section 28 of Customs Act, 1962 for recovery of duty that was short-paid at the time of import is not before at this juncture. Their appeal was dismissed for non-compliance with requirements of pre-deposit and, with the failure to get relief from the Hon'ble Supreme Court, the demand based on re-classification and re-determination of value had attained finality even before we took up the appeal. The other notices are thus debarred from raising this issue and, by proxy, determining a finding in a matter that is not in appeal before us. The plea of jurisdiction of Collector to effect a demand under section 28 of Customs Act, 1962 raised before us also fails on this count alone. Even otherwise, as narrated above, the provisions, as it existed then, mandated that in any proceedings for recovery grounded on misrepresentation, suppression, fraud, collusion jurisdiction was vested exclusively with the Collector as the specified authority. 37. The ATMs were manufactured by M/s Diebold, USA and marketed by Philips, Holland. The technology for manufacture of such ATMs was not transferred by Diebold to anyone and none, other than M/s ....
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.... the Modys. 43. Consequently, we proceed with the determination of the appeals before us on the foundation of incorrect declaration of description and value; and that the goods imported were 'automated teller machines', 'automated teller machine processors' and 'modems.' The Export Import Policy of the time had restricted the import of these goods to actual users qualified to be issued with special import licence. Likewise, parts could be imported for manufacture under restricted conditions. Admittedly, the imports were effected without such a licence entailing liability to confiscation of goods under section 111 of Customs Act, 1962. With that, penalties under section 112 of Customs Act, 1962 would have to be visited upon those who were concerned in any manner with the handling of goods that were liable for confiscation or had, in any way, dealt with such goods. All that remains is for us to examine whether any of the appellants had been erroneously found to be so in the impugned order. 44. For undertaking that exercise, it is necessary for us to step back in time. Today, 'automated teller machines' are commonplace and literally accessible to all at street corners but this was n....
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....statements cited by Revenue as well as the correspondence referred to in the course of hearings that various options had been considered along with the constraints of the restricted industrial and import regimes that existed then. The subterfuge established in proceedings against the importer was conceived to overcome the imperatives of that regime and, having thus been connected to the impugned goods, M/s Philips India Ltd cannot be excluded from coverage under the penal provisions. 47. Shri JP Mody is not in appeal and, for that reason, the role of the group companies in the import of goods under the cover of import of parts for the ostensible purpose of manufacture which, considering the character of the imported goods, was not required goes unchallenged. With that finality, the findings against Shri Suketu Mody in the impugned order can be overcome only by demonstrating his absolute lack of any contact with the impugned goods. His role has been documented and the plea of having been a mere participant in a command performance does not suffice to exclude him from penal provisions. As the son, and presumptive heir, of Shri JP Mody who has been found to have orchestrated the enti....