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2022 (9) TMI 227
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....ty under section 112 on Shri Joginder Kumar. Customs Appeal No. 51193 of 2019 is filed by the Revenue assailing the non-imposition of penalty under Section 112 on Shri Surinder Kumar. Customs Appeal No. 52152 of 2019 is filed by M/s K R Express Pvt Ltd. assailing the entire impugned order. Customs Appeal No. 51309 of 2019 is filed by Shri Joginder Kumar assailing the imposition of penalty upon him. Customs Appeal No. 51310 of 2019 is filed by Shri Surinder Kumar assailing the imposition of penalty upon him. Customs Appeal No. 52153 of 2019 is filed by Shri Pradeep Kumar assailing the imposition of penalty upon him and also assailing the order of recovery of differential duty along with interest from him. 4. The facts of the case are that the eighteen (18) bills of entry were filed by M/s K R Express Pvt Ltd. [K R Express] who is a licensed customs broker in the name of M/s Samay International, New Delhi whose IEC is 0511069324. All the documents such as bills of lading, invoices, Import General Manifest [IGM] were in the name of M/s Samay International. The goods were cleared after assessment by the assessing officers. 5. The Delhi unit of Directorate Revenue of Intelligence ....
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..../- per month for agreeing to the proposal. He had provided his bank card using which they created a firm in the name of M/s Raj International and thereafter they opened a new firm in the name of M/s Samay International. They would get blank papers signed by him but he was not aware of their purpose. He neither signed the cheque book of his firm nor had visited the ICICI bank where these firms had their accounts. 7. Officers searched the office of M/s Samay International and K R Express and resumed documents and hard disks along with cash of Rs. 10,60,000/- under a panchanama dated 05.1.2013. The hard disks were examined under a panchanama on 29.03.2014 and they had several formats of invoices and packing lists related to imports created in word and Excel formats with missing details. The officers of DRI inferred that these were meant to create bogus documents. The statement of accounts and the remittances showed that Rs. 102 crores were remitted abroad using the account of M/s Samay International. These remittances in the name of M/s Samay International are not in question in the present proceedings. Under dispute in these proceedings are the imports actually made in....
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....e differential duty short paid on the import of goods in the name of M/s Samay International. In a subsequent statement, Shri Pradeep Kumar stated that K R Express and Shri Joginder Kumar were also equal earners in the imports made in the name of M/s Samay International. 10. Conclusions drawn from the above investigation by DRI were that M/s Samay International was not the importer of the goods at all. The goods were imported in the name of M/s Samay International by Shri Pradeep Kumar, K R Express and Shri Joginder Kumar and Shri Surinder Kumar by undervaluing the goods with an intent to evade the payment of duty. The extent of under valuation was assessed by the investigating agency. 11. Of the 18 bills of entry 7 are listed in Annexure A to the show cause notice. In respect of three bills of entry, viz, 6118312 dated 28.02.2012, 6288714 dated 19.03.2012 and 6089748 dated 24.02.2012 the statement of Shri Pradeep Kumar that these goods were under-valued to the extent of three to four times was relied upon and accordingly values were enhanced by 3.5 times. In respect of the remaining four bills of entry, the values were correspondently assessed at double declared valued based....
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....the demand of differential Customs duties amounting to Rs. 97,55,307/- (Rs. Ninety Seven Lakh Fifty Five Thousand Three Hundred Seven Only) as detailed in Annexure A and B to the said SCN evaded/shortpaid by them and order for recovery of the said Customs duties from Noticee No. 01 (M/s K.R. Express Pvt. Ltd.) and Noticee No. 04 (Shri Pradeep Kumar) under Section 28(4) of the Customs Act, 1962; (iv) I, hereby, order and confirm for recovery of interest under Section 28AA of the Customs Act, 1962 at the applicable rates on the above said duty as mentioned in para ) above from Noticee No. 01 (M/s KR. Express Pvt Ltd.) and Noticee No. 04 (Shri Pradeep Kumar). (v) , hereby, order for appropriation of Rs. 10,60,000/- deposited by them during investigation towards their duty liabilities i.e. Noticee No. 01 (M/s K.R. Express Pvt. Ltd.) and Noticee No. 04 (Shri Pradeep Kumar); (vi) I, hereby, impose Penalty amounting to Rs. 97,55,307/- (Rs. Ninety Seven Lakh Fifty Five Thousand Three Hundred Seven Only) under Section 114A of the Customs Act, 1962 on Noticee No. 01 (M/s K.R. Express Pvt. Ltd.) and Noticee No. 04 (Shri Pradeep Kumar) for their acts of omission and ....
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....KYC norms and other requirement stipulated under the Board Circular and Circular & Customs Brokers Licensing Regulations, 2013. (ix) Invocation of penalty under Section 114AA is not sustainable. (x) Penalty not impossible on the appellant company and the penalty already imposed on both the directors of the appellant firms. 16. Although the judgment of Supreme Court in Canon India vs. Commissioner of Customs in Customs Appeal No. 187 of 2018 in which the Supreme Court held that DRI officers are not proper officers to show cause under Section 28 was relied upon earlier, but during the hearing, learned consultant said that he was not pressing this submission as the matter is pending before the Supreme Court in Review petition filed by the Revenue and also certain amendments were made in the Finance Act, 2022. He argued only on merits. 17. Learned consultant for the appellants submitted that there is no relationship between the alleged modus operandi discovered by the DRI that remittances were being made using various accounts including that of M/s Samay International but no imports were being made at all and the present show cause notice which alleges that impo....
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....edge that the impugned goods were undervalued. He further submits that K R Express scrupulously followed the KYC norms and other stipulated in the Board circular and the Customs Brokers Licensing Regulations, 2013. 20. Further, learned consultant for the appellant drew attention of the bench of the fact that the goods were confiscated in the impugned order under section 111 (d) and 111(m) of the Customs Act but no redemption fine was imposed. In other words, the goods were absolutely confiscated. Once the goods are confiscated, the goods vest in the Government of India and so no duty is payable by them. For this reason also, the impugned order is not sustainable. He, therefore, prays that the impugned order may be set aside and appeals may be allowed and Revenue's appeals may be rejected. 21. Learned Authorised Representative for the Revenue vehemently supported the impugned order. He points out that although the goods were imported in the name of M/s Samay International, as evident from the statement of Shri Anil Kumar, its proprietor, the goods were imported without his knowledge and all documents were prepared in the name of M/s Samay International and Bills of entry were ....
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.... himself but its extent was further explained. Therefore, the value was re- determined in respect of the bill of entry in Annexure A to the show cause notice. So far as the other bills of entry are mentioned in Annexure B are concerned, he submits that these goods were re-valued based on the contemporaneous data of imports. Therefore, there is no infirmity in re-assessment of duty and demand of duty under section 28 (4) of the Customs Act along with interest. 23. As far as the confiscation of the goods under section 111(d) and Section 111 (m) are concerned, he submits that Section 111(m) provides for confiscation of goods imported into India which do not correspond in value or in any the particular with the entry made (i.e. bills of entry) under the Act. A true declaration in the bill of entry is a requirement under the Customs Act as well as under the Foreign Trade Development and Regulation Act, 1992 [FIDR Act]. The imports were made without making a true declaration and hence they have also become liable to confiscation under section 111(d). Regarding the redemption of the goods, he submits that while the goods were liable to confiscation under Section 111, no redemption fine....
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....'beneficial owner' is defined as follows. Section 2(3A) 'beneficial owner' means any person on whose behalf the goods are being imported or exported or who exercises effective control over the goods being imported or exported; 29. During the relevant period there was no concept of beneficial owner as there was only one importer in respect to the goods. Admittedly in this case, the bill of entry was filed with M/s Samay International as the importer. The bills of lading, IGM etc., were in the name of M/s Samay International and the duty was assessed in the name of M/s Samay International and it was paid in the name of M/s Samay International. However, subsequent statements of Shri Pradeep Kumar, Shri Surinder Kumar, Shri Joginder Kumar and the owner of M/s Samay International show that duty was paid in cash by Shri Pradeep Kumar to K R Express who deposited it through TR-6 challans in the name of M/s Samay International. Shri Anil Kumar the proprietor of M/s Samay International claimed that he had no knowledge of the imports. Shri Pradeep Kumar confessed to being the importer of the goods. Shri Surinder Kumar and Shri Joginder Kumar have admitted that they had not met th....
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....of delay or expense which, under the circumstances of the case, the court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall so far as may be apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court." 31. In this case, the Commissioner has not followed the above process and hence the statements are not relevant, let alone admissible in this case. This becomes even more important in this case because of the contradictions between the statements of Shri Pradeep Kumar on the one hand and Shri Joginder Kumar and Shri Surinder Kumar on the other. Since the statements are not relevant, the importer is the one which all the documents state to be the importer viz, M/s Samay International. 32. As far as the demand of differential duty is concerned, it can be recovered if duty is not levied, short levied....
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....al Government. (2) The officer adjudging confiscation shall take and hold possession of the confiscated goods." 35. It is responsibility of the adjudicating officer to take and hold possession of the confiscated goods. This takes us to the next question about the dutibility of the goods. Section 12 of the Customs Act reads as follows: 12. Dutiable goods.- (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, on goods imported into, or exported from, India. (2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government." 36. As may be seen duties of customs are charged on the goods imported into or exported to India and this charge will apply to all goods belonging to Government as they apply to all goods not belonging to Government. This applies not only where goods were imported by the Government but also to cases where title of the goods gets tra....
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....eep Kumar that the actual values of the goods was three to four times the declared value. Hence, the declared value was multiplied by 3.5 times. We do not find any provision in the Valuation Rules which permit enhancement values based on a statement and taking the averages. Similarly, in respect of Bill of Entry at serial no. 4 to 7 of Annexure A to the show cause notice the transaction values were multiplied by two which is again based on a statement of Shri Pradeep Kumar which also has no place in Valuation Rules. It is true that if there is a reason to doubt the transaction values, they can be rejected and then valuation has to be done sequentially as per the Valuation Rules. In this case rule 9 of the Valuation Rules has been adopted ignoring the previous rules and without discussing the as to why the previous rules are not applicable. Further, the statements of Shri Pradeep Kumar, based on which the value was re- determined, is not relevant as the procedure under Section 138 B was not followed. 40. In so far as the 11 bills of entry mentioned in Annexure B to show cause notice are concerned, the declared prices were enhanced on the basis o....