AI Drafter 
TaxTMI 
TaxTMI 
2018 (1) TMI 225
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.... vogue then. 2. One (decided in 156/2007) pertains to the import of 550 'modems' between 11^th 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 11^th 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 Hindust....
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.... 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). 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. Accordi....
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.... K. Basu C/349/2008 40,00,000/- C/350/2008 40,00,000/- 10. He elaborated that M/s Philips was the buyer of ATM machines 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....
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....y reproduced in the adjudication order without any cogent evidence on record. According to him, the alleged modus operandi did not pertain to the imports which was not within the knowledge of the appellants; nor was the appellant 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 involv....
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....laced on the decision in RP Hussain v. Collector of Customs [1990 (29) ECR 253] to contend that mere suspicion cannot be a ground to bring appellant to charges. Likewise, the decision in BS Ravat, Asstt. Collector of Customs v. Bharat Nandalal 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 ....
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....before the Hon'ble High Court of Bombay and Hon'ble Supreme Court but not allowed. On the issue of jurisdiction, Revenue contends that the decision in re Sayed Ali was in relation to recovery under section 28 of Customs Act, 1962 whereas the present appeal lies 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 textu....
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.... of the group. Drawing attention to the findings in the impugned orders, he claimed that the adjudicating authority had not found the appellant guilty to warrant the consequences of breach of law envisaged in section 124 of the Customs Act, 1962; likewise, show cause notice also failed to bring out the applicability 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 29^th 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 ....
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....f such 'savings clause' brought into force after issue of the notices having been elaborately explained by the Constitution Bench of the Hon'ble Supreme Court in Universal Imports Agency and Another v. Chief Controller of Imports and Exports [(1961) 1 SCR 305: AIR 1961 SC 41] and in Union of India v. Indian Charge 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, Learne....
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....). Telex dt. 12.6.1987 and 30.6.1987 from Shri T. P. Gangopadhyay to Philips Holland asking whether the latter were able to place Orders on Atalla for Atalla Boxes (required for semiconductor based security, cryptography and PIN identification/security) on behalf of JPM. (xii). Telex dt. 16.6.1987 of Shri K. Basu to Philips Sweden about supply of Atalla Boxes to Exportek, Belgium for installation 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 ....
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....on account of Philips. As per para 30, this M.A. will be subject to and construed in accordance with the laws of India. (xi). By Agreements dt. 22.12.1987, the terms and conditions of the P.A. and M.A. dt. 6.4.1987 were extended to and applied for sale/ purchase of another 18 ATMs and 4 ATMPs. (xii). Both parties to the Agreements, HSBC and Philips India, on 6.4.1987, are aware of the various taxes and duties which would be leviable on the goods which they have contracted 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....
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....12 of adjudication order 155/07 and 157/07. 7. In their Appeal Memoranda of Appeal Nos.C/359 & 361/08, Shri V. Ramamrthum did not deny the facts narrated in para 1 to 12 of OIO Nos.155/07 and 157/07. 8. In their Appeal Memoranda of Appeal nos.C/360 & 362/08, Shri K. Basu did not deny the facts narrated in para 1 to 12 of OIO nos.155/07 and 157/07. 9. Above facts are corroborated by the reply dt.21.6.1993 and in paragraphs 4 to 13 at pg 3 to 7 thereof and paragraph N at page 29 and paragraph (l) onwards at page 35 of Appeal 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 ....
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....TMPs were imported. He agreed that, he visited Brussels, Belgium and dismantled and repacked the ATMs and ATMPs in split packages with descriptions provided by JPM. He agreed that, he signed the Bills of Entries on behalf of Hindustan Engineering Corporation (HEC) with the altered descriptions without that exhibited as ATMs and ATMPs in the said Bills of Entries. Details of such 125 Bills of Entries (34+91) for 43 ATMs and 55 Bills of Entries (22+33) for 21 ATMPs, as detailed in Annexure III & IV to the 2 SCNs dt. 4.7.1992 and 11.9.1992 were submitted 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 t....
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....ned with HSBC, as far as Import duty/taxes and licences/permissions are concerned. Strangely, till date, over the past 25 years, from 1992 to 2017, they did not filed any suit for damages or any criminal complaint against SCPL, SEPL, MEPL, JPM, SJM or A. A. Ansari if they were cheated by against supply of smuggled goods. This proved their malafides. 23. Shri V. Ramamrutham and Shri K. Basu have caused import of the ATMs and ATMPs making deliberate mis-declaration of description and value thereof rendering that liable to be confiscated. They liaised with Philips Holland for supply of 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 a....
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....h were misdeclared and undervalued and were confiscated. They placed purchased orders on SCPL, SEPL and MEPL for the said ATMs & ATMPs manufactured by Diebold, USA and their own Principal Company Philips Holland at Jarfalla, Sweden. They were aware that SIL was required for import of these ATMs and ATMPs. Yet, they conspired with JPM, SJM, SCPL, SEPL and MEPL to import the said ATMs and ATMPs through their Principals Philips Holland and Exportek. 29. Shri Suketu Mody was Director of SCPL, SEPL and MEPL, the 3 Companies/ Firms who supplied the smuggled goods. When these three companies did not file appeal, that established that they 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, t....
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.... ARGUMENT OF REVENUE AGAINST APPEAL OF HSBC in Appeal no.s C/318-319/08. 35. Revenue urged that in para 9, 11, 17(B) and 9, 10, 16(B) of the Appeal Memoranda, this appellant has categorically averred that, it has understood the charges made against it and was fully aware that the ATMs and ATMPs to be supplied, importing from countries outside India. In para 26 of the Memo appeal, it is averred by the said appellant that it entered into Purchase Agreements with Phillips India for supply of Equipment (in numbers of pieces) and spare parts. There was no whisper about import duty on the ATMs and ATMPs to be supplied to them, although; they 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....
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....carried out by these companies. 40. He did not deny that he had signed all the import documents under which the ATMs and ATMPs, smuggled into India were misdeclared and undervalued. He himself, prepared the Bills of Entries with deliberate misdeclarations. He travelled to Brussels, Belgium and during such trips he had dismantled and repacked the 43 ATMs and ATMPs into separate packages describing that to be Distributed Control Panel, Front Mounting Frame, Thyrister Control Panel, Inverter etc. He also organised the shipment of these goods under different HAWBs, but one MAWB ATM/ ATMP wise, from Brussels to Mumbai. He cleared the goods under REP Licences. Such clearance under REP licences 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 th....
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....e. Hence, Philips India were to profit by at least Rs. 15,60,000-7,96,296=Rs.7,63,704 for each of the 14 ATMs and Rs. 15,60,000-7,65,005= Rs. 7,94,995 for each of the 8 ATMs, i.e. a total of Rs. 1,06,91,856 +63,59,960=Rs.1,70,51,816 for 22 ATMs supplied by Proforma Invoices dt. 12.8.1988 of Philips Holland. 45. To supports all the contentions by Revenue today learned Commissioner (AR) places following Table depicting citation and summary in that regard for consideration. ATM and ATM Processors Sr. No. Name of the Appellant Order-in-Original No. 155/2007 Order-in-Original No. 157/2007 Represented By SCN dated 04.07.1992 SCN dated 11.09.1992 Appeal No. Appeal No. 1 Philips India @ Peico 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. M....
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....he buyer of the goods shall step into the shoes of the importer / seller for the purposes of penalty also: Sr. No. Title Case Laws/ Citation Para No. 1 CC(Preventive) v/s Aafloat Textiles(I) P. Ltd. 2009(235)ELT 587(SC) 1, 19 to 29 2 CC, Mumbai v/s Special Steels Ltd. 2004(163)ELT 242(Tri.-Mumbai) 3 Tata Iron and Steel Co. Ltd. v/s CC, Mumbai 2015(319)ELT 546(SC) 48. He further places reliance on the following case laws for justifying the position of penalties on the various Appellants who have consciously conspired to commit fraud by dismantling, repacking, mis-declaring, undervaluing and smuggling the ATMs, ATMPs and Modems to defraud revenue and overcome the prohibitions imposed by the Import & Export (Control Act) 1947, the Import Control Order, 1955 and the Customs Act, 1962: Sr. No. Title Case Laws/ Citation Para No. 1 CC(Import), Mumbai v/s Pundrick Ravindra Trivedi 2015(322)ELT 812(SC) 12 to 18, 20 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....
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.... Sheikh Mohd. Omer v/s Collector of Customs, Calcutta and Others 1983(13)ELT 1439(SC) 4 to 7, 14 31 CC, Kolkata v/s Grand Prime Ltd. 2003(155)ELT 417(SC) 9-10 32 Om Prakash Bhatia v/s CC, Delhi 2003(155)ELT 423(SC) 9 33 Mytri Enterprises v/s CC, Mumbai 2004(174)ELT 389(Tri.-Mumbai) 34 Mytri Enterprises v/s Commissioner 2015(323)ELT A71(SC) 35 Mytri Enterprises v/s Commissioner 2016(336)ELT A35(SC) 36 CC(Import), Mumbai v/s Jagdish Cancer & Research Centre 2001(132)ELT 257(SC) 11,12 49. He reads paragraph 12 to 16 of the decision of the Constitution Bench of the Supreme Court in the matter of Sachidananda Banerjee, ACC, Calcutta v/s Sitaram Agarwala reported at 1999(110) ELT 292(SC) to emphasize that any person who is found in possession of or has purchased any goods which are prohibited is liable to penalty even if he may not have been concerned with the physical act of importation. 50. Urging as aforesaid Revenue prayed that all the Appeals may be dismissed being devoid of merit. 51. Revenue urged that OIO No.156/07 adjudicated SCN dt. 2.11.1992 issued for demand of duty and....
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....educed by 50% to 60% and the Supply costs were reduced from 20% to 6% or 8%. Accordingly, Phillip India decided to import Modem misdeclaring that as different goods which did not require a SIL for import and at a lower value declared to Customs for levy of Import duty to make its desired profit. Import of modem was thus misdeclared as to its description and value. In order to overcome this difficulty, Philips India discussed with Shri J. P. Mody (JPM) for import and procurement of the Modems manufactured by TRT, France. 53. Philips India by their letter dt. 4.9.1992 placed Purchase Order dt. 4.6.1987 on M/s Dipali Electronics Pvt Ltd. (DEPL) for manufacture and supply of 550 Modems of Model no.s S2411, S1234, S1032, S4821 and S2422. They described them as Modem Control Unit Type S2411, S1234, S1032, S4821 and S2422. All these Modem Types were Model numbers of Philips brand Modems manufactured by TRT, Philips in France. The Purchase Orders placed by Philips India on DEPL were signed by Shri V. Ramamrutham and Shri K. Basu. The invoices of DEPL on Philips India were signed by Shri Suketu J. Mody (SJM). DEPL had no factory for manufacture of Modem nor it had any such facility to do....
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.....2.7.1992, corroborated the statements of S/Shri V. Ramamrutham and K. Basu. He has not denied or retracted at any time. Philips India and S/Shri V. Ramamrutham and K. Basu relied upon Notes/ Memoranda and Telexes of Philips India and Philips Holland dt.3.12.1986, 10.2.1987, 20.5.1987, 20.3.1987, 16.2.1987. These documents came to light during search operation. That proved the strategy of sale of Modems by Philips India and Philips Holland and the strategy of export of Modems by Philips Holland to India through Exportek, Brussels, Belgium and JPM, India. Such fact remained undenied by Phillips, its officials and JPM group as well as their employees. 59. Telexes dt. 24.11.87, 26.11.87, 27.11.87 from the Consolidator Agent, M/s Herfurth Boutmy, Brussels to HEC/JPM were recovered which showed that the goods consigned under MAWB nos. 220-6818-3463, 220-6818-3474, 220-6818-3485, from Exportek, Brussels to HEC/JPM, Mumbai and invoiced as 'Parts of Control Panel/ Control Switches' and described as 'Electricals' in the HAWBs and BEs were actually Modems of Model no.s S2411, S1032, S4821 and S1224. 60. Telexes dt. 29.12.1987 and 13.1.1988 from Exportek, Belgium to JPM were recovered i....
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....e OIO as to why they could not have manufactured the said Modems. However, they failed to adduce any evidence of having a factory for manufacturing Modems or technology to manufacture the same. In Para 13.9, they have stated that, they filed the BEs for the said Modems and cleared the goods after assessment. All such contradictory averments made in the Appeal Memorandum establish that, DEPL defrauded Revenue by all such misstatements suppressing material facts. There was no manufacture of the TRT/Philips brand Modems supplied by DEPL to Philips India under the cover of 8 invoices. DEPL having demonstrated that it had imported the offending Modems, that proved entire charge against them. 65. Suketu J Mody (SJM) was the Director of HEC, a JPM Group company. Bills of Entries were filed in the name of HEC for import of the offending Modems. Appeal of HEC has already been dismissed by Tribunal for non compliance to the pre-deposit order. Hence, the charges of misdeclaration of description and value in the impugned B/Es are confirmed. Modems were held liable to confiscation under Section 111 of the Act. DEPL being a Group Company of HEC, the modus operandi followed by all of them caus....
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....t although placed purchased orders on DEPL for the said Modems, those were manufactured by the own Group Company of Phillips i.e., TRT, France and were imported without SILs. Phillips conspired with JPM, SJM and DEPL to import the said Modems through their Principals Philips Holland and Exportek. Such fact remained uncontroverted and Phillips could not come out with clean hands to prove that it was a stranger to the import. They were all hand in glove to act to the detriment of law and unduly enrich themselves at the cost of Revenue. 70. Plea of Phillips that they were assured of supply of the Modems by JPM/DEPL for a mutually agreed price was pretence when their organised bid with JPM group came to light by the investigation result urged as above. Philips India was deliberately and knowingly involved in the smuggling of modems placing Purchase Orders on DEPL, a JPM group company and organising manufacture thereof from the Philips group company in France, it proved its active role in defrauding customs. Accordingly the appeal should be dismissed. 71. Placing written argument learned Commissioner (D.R.) says that corporate veil was lifted bringing out breach of law made by app....
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....e installation but not with the import of the goods. Whether any import was made under any license or any license was required was not concern of HSBC. In Para 37 of its note, Revenue contends that there was no basis to implicate HSBC. Similarly Para 44 thereof does not speak about any evasion of duty by HSBC for which HSBC cannot be said to have abetted in commitment of any offence. The documents on records not being relied upon by the Revenue, the documents filed before the Tribunal under Volume VI shall not be piece of evidence for fresh consideration. 75. Reading of para 9, 10 and 17B of the appeal memo of HSBC that shows the understanding between HSBC and Philips was to provide ATM in terms of Section 19 of Sale of Goods Act. Order placed by the HSBC on Philips India, for supply of ATM as well as modem was on proper commercial terms. The agreement covered the cost of ATM as well as installation thereof in terms of the legal agreement without any agreement for imports thereof. Accordingly HSBC cannot be alleged to have abetted in commitment of any offence by Philips in import of goods by them. The submission of the appellant were not considered by ld. adjudicating authority ....
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....ause appellant was Director, he cannot be ipso facto held to be guilty of commitment of any offence. Hindustan Engineering Corporation was controlled by appellant is presumption of Revenue. He had no involvement therein at all. This is bias of Revenue against appellant. When nothing could come out from J.P. Mody about the involvement of this appellant in any of the offences alleged in the show-cause notice, this appellant is proved to be innocent. His statement given clearly proves that he was never an instrumental for any commitment of offence. The business was under the control of J. P. Mody and because JPM family was running whole business under the banner of JPM. that shall not automatically implicate the appellant for levy of penalty under Section 112(b) of Customs Act, 1962. To contend so, appellant relied on the following decisions:- (a) T.V.S. Electronics - 1996 (84) ELT 340 (Tri.) Affirmed by Hon'ble SC at 1997 (93) ELT A185. (b) East India Commercial Co. Ltd. - 1983 (13) ELT 1342 78. Ld. Sr. Advocate Shri Nankani appearing on behalf of M/s. Philips India in rejoinder, says that there was a contract between HSBC and Philips India for supply of goods. T....
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....s against appellant. Statement of Shri K. Basu and V. Ramamrutham the employees of M/s Phillips India were not inculpatory to bring the appellant to penal provisions under law. Adjudicating authority dealt this appellant suspiciously without evidence showing commitment of any breach of law made by appellant. Law is well settled that suspicion cannot be a substitute of proof. Learned Sr. Counsel relied on the decision of Commissioner of Central Excise v Patran Pipes (P) Ltd. - 2012 (261) ELT 1173 (Tri. Del.). Accordingly to him, evidence should be adduced by Revenue to prove its case since that is must in quasi criminal proceedings like imposition of penalty. That was not done. Relying on the decision of the judgement of the Apex Court in the case of Asstt. Commissioner, Commercial Tax Department v. Shukla Brothers - 2010 (254) ELT 6 (SC), it was submitted that evidence should have been cogent with reason for confirmation of penalty. That was not done. 81.Lastly appellant's prayer was that there should not any adjudication against appellant for various reasons argued previously. Ld. Sr. Counsel submits that to impose penalty under Section 112 of Customs Act, 1962 mens rea is esse....
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....6(22+34) packages described as different parts and electrical goods. These very ATMs and ATMPs were, thereafter, supplied by M/s Philips India under their invoices to the banks. 40. The purchase orders issued to the JP Mody group companies were signed by Shri V Ramamrutham and Shri K Basu of M/s Philips India. The invoices raised on M/s Philips India were signed by Shri Suketu Mody or by Shri Jiten Parmanand Mody. M/s Philips India documented purchase and supply of such ATMs and ATMPs to Hong Kong and Shanghai Banking Corporation Ltd and Citibank in India. The invoices raised on HSBC and Citibank were signed by Shri V Ramamrutham and Shri K Basu. 41. The contractors for supply to M/s Philips India were firms/companies being controlled and operated by Shri JP Mody and Shri Suketu J Mody. M/s Philips India and S/Shri V Ramamrutham and K Basu of Philips India admitted to having discussed the procurement routes with Shri JP Mody and Shri Suketu J Mody and they placed purchase orders on entities that did not have a factory for manufacture of these goods; nor were they able to furnish any evidence of compliance with Central Excise formalities. There was no transfer of technology fr....
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.... a few banks who were permitted to operate in India under strict and circumscribed conditions, including that of branch expansion, specified licence issued by the banking regulator. 45. There is nothing on record to demonstrate that M/s Hongkong & Shanghai Banking Corporation Ltd were eligible to procure 'automated teller machines'; at the same time, their global policy envisaged such a facility for their customers. The sole alternative was to procure them from local manufacturers. In the narrated circumstances of the restricted import and operational regime, nothing has been adduced by them to establish that they were unaware of the source of the goods that were ultimately to be installed in their premises and, hence, have them excluded from the purview of coverage under section 112 of Customs Act, 1962. There is a specific finding in the impugned order which, for overcoming, would have to be controverted other than by protestation of innocence. Owing to lack of any credible justification, we find no reason to exclude M/s Hongkong & Shanghai Banking Corporation Ltd from the ambit of the penal provision. 46. As far as M/s Philips India Ltd is concerned, they were the supplier....