TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1084
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....services and drawings to the assessable value of the imported goods in terms of rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 [the 2007 Valuation Rules]. 3. The allegations relating to the appellant in the aforesaid show cause notice are as follows: "9.2. Sh. Nigam Chandra Bahl:- It appears that he, being the whole time Director of ESL, was involved in carrying out the instructions on a day to day basis. (a) He was responsible for all day to day operations of ESL and was taking decisions concerning running of the company. (b) He, being the whole time Director, cannot escape responsibility for the decision to exclude the impugned design charges from the declared value. (c) His culpability is also manifested in his attempts to mislead the investigations on account of imports made from 23rd MCC & CFMCC. Throughout the investigations, it was sought to be projected that only the structurals required for construction of plant were imported from these two suppliers, whereas the actual position, as discussed in Para 7.1.8 above, revealed otherwise. (d) He did not reveal correctly as to who was decidin....
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....-charge of imports and would be able to explain valuation of the goods. [Mr Bandopadhyay in his statement dt 21.04.2012 has stated that he was not conversant with the Customs valuation rules and wouldn't comment on the valuation]. Mr Bahl in his statement dt 26.09.2012 stated that payments for design charges and for supply of equipments were separate. He agreed to include the costs of design charges related to structural design as part of Customs valuation and approximated it to Rs 6.62 Crore and to be confirmed by M/s ESL. Therefore, the statements indicate the role of Mr N C Bahl was operational as well as financial [he was the whole time Director]. He was not aware of the Customs documentation at the time of import but was responsible for its filing. He stated that Mr Bandopadhyay is linked to customs matters, but post Mr Bandopadhyay statement of not being involved in Customs work, Mr Bahl agreed to the inclusion of certain portion of the design charges and accepted it to be Rs 6.62 Crore, to be confirmed later. So, there is direct evidence that Mr Bahl tried to shift blame on Mr Badopadhyay and on being countered, he accepted to inclusion of design charge....
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....duty immediately as it was facing financial crunch. There is no direct evidence that Mr Kejriwal was involved in clearing Customs related documents. However, Para 9.1 of the notice clearly brings out that Mr Kejriwal had control on M/s ESL working, being its Managing Director and his freedom to make persons of M/s Electrosteel Castings Ltd (ECL) work for M/s ESL. This hints only his indirect involvement as he was involved in managing the company. However, this didn't cover Customs related documentation. So, Mr Kejriwal had no act or omission making the import goods liable to confiscation. It was a role looked after by Mr Bahl and Mr Kejriwal accepted to Mr Bahl agreeing to valuation. So no penalty under section 112 of Customs act is leviable on him. Further he is not involved in submitting any false or incorrect material in relation to Customs work, and so no penalty under section 114AA of Customs act is leviable on him." (emphasis supplied) 10. The findings recorded by the Commissioner in respect of Durga Prasad Banerjee are reproduced below: "3.32 Role of Mr Durga Prasad Banerjee: The responsibility of Mr D P Banerjee as per statement dt 20.04.20....
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....as there is nothing on the record that may substantiate that the appellant was in any way responsible for any act or omission which would render the goods liable to confiscation under section 111 of the Customs Act; (ii) The statements made by the appellant or Biswaroop Bandopadhyay under section 108 of the Customs Act could not have been relied upon in the absence of the procedure contemplated under section 138B of the Customs Act having been followed. Even otherwise, the statement made by the appellant does not show that he was in any way responsible for any act or omission which could have rendered the goods liable to confiscation; (iii) The appellant had in his statement clearly stated that Biswaroop Bandopadhyay was in charge of imports and would be in a position to explain the valuation of goods; (iv) Penalty has been imposed upon the appellant for the reason that someone had to made the decision of document filing with customs and as Biswaroop Bandopadhyay (DGM Commercial) and Ashutosh Aggarwal (ED Finance) were not making it responsibility flows to a higher officer and, therefore, penalty should be imposed upon the appellant; (v) The find....
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.... or abets the doing or omission of such an act, shall be liable, in the case of dutiable goods, other than prohibited goods to a penalty not exceeding the duty sought to be evaded on such goods or Rs. 5000/- whichever is the greater. 17. It has, therefore, to be seen whether the appellant did or omitted to do any act, which act or omission would render goods liable to confiscation under section 111 of the Customs Act. 18. Paragraph 3.33 of the order which deals with the appellant have been reproduced above. It refers to the statement made by the appellant on 20.04.2012 under section 108 of the Customs Act wherein he stated that his responsibility is to supervise the role of Mr. D P Banerjee. He also stated that Biswaroop Bandopadhyay was incharge of imports and he would be able to explain the valuation of goods. 19. The Commissioner noted that Biswaroop Bandopadhyay in his statement dated 21.04.2012 stated that he was not conversant with the Customs Valuation Rules and, therefore, cannot comment on the valuation. Thereafter, the Commissioner proceeds to examine the statement made by the appellant on 26.09.2012 wherein he is said to have stated that he agreed to include the....
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....visions of sub-section (1) of these two Acts shall apply to any proceedings under the Central Excise Act or the Customs Act as they apply in relation to proceedings before a Court. What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has to form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the interests of justice. Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons making them would be of relevance for the purpose of proving the facts which they contain." 22. After examining various judgments of the High Courts and the Tribunal, the Tribunal observed as follows: "28. It, therefore, transpires from the aforesaid decisions t....
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....ioner as to why the responsibility should not have fallen upon Umang Kejriwal in that case and why it should fall upon the appellant. 26. In Paragraph 3.34 of the order, the Commissioner has dropped the imposition of penalty upon Umang Kejriwal proposed to be levied under section 112(a)(ii) of the Customs Act. For this purpose, the Commissioner has relied upon the statement made by Umang Kejriwal on 25.04.2012. In his statement made on 25.04.2012, Umang Kejriwal stated that Biswaroop Bandopadhyay looked after import logistics. The Commissioner recorded a finding that there was no direct evidence that Umang Kejriwal was involved in clearing customs related documents and he could be indirectly involved as he was the Managing Director of ESL but since he did not deal with customs related documentation so it cannot be said that he was responsible for any act or omission which would make the goods liable to confiscation. 27. The penalty proposed to be imposed upon Durga Prasad Banerjee has also been dropped for the reason he had stated that he was not aware of the customs documentation at the time of import and there was no direct evidence to show that he was involved in clearing ....