TaxTMI 
TaxTMI 
2019 (6) TMI 1034
X X X X Extracts X X X X
X X X X Extracts X X X X
....used ATA Carnet route by importing, under the guise of exhibitions at Delhi and Mumbai, and diverting the same without payment of duty instead of re-exporting. On completion of investigation the Show Cause Notice dated 19.03.1999 was issued seeking to confiscate the seized goods; demanding differential duty alongwith interest and we impose penalty on both the firms i.e. M/s. Galaxy Fun world Pvt. Ltd and M/s. J. K. International. The Adjudicating Authority vide order dated 2.11.99 passed an order confirming duty of Rs. 2,81,837 on M/s. Galaxy Fun world Pvt Ltd and duty of Rs. 11,25,480 on M/s. J. K. International; confiscating 5 Nos. plus 20 Nos. of games and machines totally valued at Rs. 7,10,000 plus 18,50,000 imported by M/s. Galaxy Fun world Pvt. Ltd, while imposing total redemption fine of Rs. 9,00,000; imposing penalty of Rs. 7,50,000 each on M/s. Galaxy Fun world Pvt. Ltd., M/s. Billiards of Tulsa Inc. USA and Shri Mukesh J. Shah; Penalty of Rs. 6,00,000 on M/s. J. K. International and penalty of Rs. 2,50,000 on Shri Jeetendra H. Shah. On an appeal filed by the Appellants, CESTAT vide final order A/636-640/WZB/2006/CSTB/CI dated 17.07.2006, remanded the matter, back to adju....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sel for the appellants, submits on behalf of M/s J.K. International that goods were imported by M/s. Billiards of Tulsa Inc., USA under ATA Carnet Scheme from USA, which is an admitted position; goods after import were sold by M/s. Billiard of Tulsa Inc., to M/s. J.K. International who in turn sold to M/s. Galaxy fun world Pvt. Ltd; said goods were seized from the premises of M/s. Galaxy fun world Pvt Ltd; M/s J.K. International have neither imported the goods nor goods were seized from their premises; hence, proposal of recovery of duty and appropriation thereof of the amount of Rs. 13,63,242 paid during investigation is not legal and proper; as per Section 28 of the Customs Act,1962 duty can be demanded from importer or the agent or the employee of the importer; Appellant is neither an importer nor agent or employee of M/s. Billiard of Tulsa; even under Section 124 of the Customs Act, 1962, it is permissible to recover duty either from owner of goods or where such owner is not known then person in whose possession or custody such goods have been seized is liable to pay duty; There....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts submits, on behalf of M/s. Jeetendra H. Shah, Director of Galaxy Fun world Pvt. Ltd. that as submitted above valuation of the amusement machines cannot be made on the basis of statement of Shri Jeetendra Shah. In such case there would not be any reason for confiscation of goods and accordingly no penalty can be imposed upon Shri Jeetendra H. Shah. 5. Ms. Trupti Chavan, Assistant Commissioner, Authorised Representative, for the Revenue, reiterated the findings of OIO and submitted that the case of the department is strong and based on documents. Shri Jeetendra Shah, in his statement recorded during investigation, stated that he along with Shri Mukesh J. Shah and Shri R. D. Mehta had supervised the imports under ATA Carnet; all the imports were at the behest and directions of Shri Mukesh J. Shah and he acted as per directions of Shri Mukesh J. Shah; Billiards of Tulsa sold all the machines to M/s. J. K. International, which were subsequently sold to M/s. Galaxy Fun world Pvt. Ltd. It is pertinent to note that the statement was not retracted and therefore, has evidentiary value. M/s. J.K. International have deposited the duty during the investigation and as such are deemed to ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heir premises. Therefore, they cannot be treated as importers and duty cannot be demanded from them both in terms of section 28 and section 124 of the Customs Act 1962. The second argument is that in the de novo proceedings Learned Commissioner has not followed the principals of valuation properly. Coming to the first question we find that the Appellants have raised this issue for the first time. This issue was not submitted to the adjudicating authority in the original proceedings as well as de novo proceedings. However, the Learned Counsel for the Appellants argues that this being a question of law can be raised at this juncture. We find that there is merit in his submission in this regard. We find that as discussed above, the main allegation of the department in respect of these two ATA Carnets is that they are obtained by M/s. Billiards Tulsa Inc USA. As stated above the Show Cause Notice acknowledges the fact in para 2 of the Show Cause Notice wherein it was stated that M/s. Billiards Tulsa Inc. USA had participated in two exhibitions at Delhi and Mumbai in 1997-98 and 1998-99 and displayed various machines imported by them under international ATA Cornet. However, after comple....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd temporary exportation of goods under the Convention and, therefore, instead of normal bill of entry/Shipping bill, only the ATA Carnet would be filed. ii) The "FICCI" shall be the sole guaranteeing association for ATA Carnet in India. iii) The validity of ATA Carnet shall not in any case exceed one year from the date of issue and iv) The temporary importation of goods under the Convention has been exempted from ITC Regulations under the saving clause of the Import Trade Control Order, 1955. It is also pertinent to note that the Government of India has vide notification no.14/1990 notified the ATA Carnet (Form of B/E and Shipping Bill) Regulations, 1990. 6.2 We fail to understand as to how Commissioner, having given such elaborate finding on the provisions of Law, proceeded to confirm the duty on M/s JK International. As argued by Learned Authorised Representative, the Revenue has presumed M/s J.K. International to be the importers as they have come forward and paid the duty and as per the statement of Shri Jeetendra H. Shah. We find that neither the Show Cause Notice nor the initial OIO/the de novo OIO have given reasoning as to why M/s JK ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... along with Shri Mukesh J. Shah and Shri R. D. Mehta had supervised the imports under ATA Carnet; all the imports were at the behest and directions of Shri Mukesh J. Shah and he acted as per directions of Shri Mukesh J. Shah; Billiards of Tulsa sold all the machines to M/s. J. K. International, which were subsequently sold to M/s. Galaxy Fun world Pvt. Ltd. It is pertinent to note that the statement was not retracted and therefore, has evidentiary value. We find that both M/s J.K. International and Shri Jeetendra H Shah have rendered themselves liable for penalty under Section 112 of the Customs, Act, 1962. The Learned Counsel for the appellants submitted that penalty cannot be imposed on M/s Galaxy Fun world and Shri Jeetendra H Shah its proprietor. As we are looking in to the acts of commissions and omissions of M/s JK International, we find that there is no infirmity in demanding penalty from M/s J.K. International of which Shri Jeetendra H. Shah is a director. However, looking in to fact that the case is very old and mired in litigation and the circumstances of the case we are inclined to reduce the penalties. However, as we hold that duty cannot be recovered from M/s J. K. Int....