TaxTMI 
TaxTMI 
2005 (4) TMI 175
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....Customs Act, 1962 from M/s. MNS Exports in respect of the goods seized on 26-4-1999, which were clandestinely removed and kept outside the licence premises. Further, he demanded duty of Rs. 34,54,338/- from M/s. MNS Exports under Section 28 of the Customs Act, 1962 in respect of the consignments imported under the cover of 12 AWBs and the related Bills of Entry. He imposed a penalty of Rs. 7 lakhs on M/s. MNS Exports, Bangalore under Section 112 of the Customs Act, 1962. He ordered cancellation of EOU Licence bearing No. 55/96 granted to M/s. MNS Exports in terms of Section 58(3) of the Customs Act, 1962. He imposed a penalty of Rs. 1,00,000/- on Shri Narayana Bhatt, Managing Director of M/s. MNS Exports under Section 112 of the Customs Act. He imposed a penalty of Rs. 10,00,000/- on Shri H. Bhaskar, Inspector of Customs, under Section 112(b)(ii) of the Customs Act, 1962. He imposed a penalty of Rs. 50,000/- on Smt. Shilla Shree, w/o of Shri H. Bhaskar under Section 112 of the Customs Act, 1962. He imposed a penalty of Rs. 5,00,000/- on Shri Vikram Jain of M/s. Texworth International, Bangalore under Section 112(b)(ii) of the Customs Act, 1962. He imposed a penalty of Rs. 5,00,000/....
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....ar in his residence. Later, the consignments would be delivered to Shri Vikram Jain. Shri Vikram Jain would export these consignments to Singapore after re-cycling. The export would enable him to fulfil the export obligations in respect of the DEEC Licences obtained by him. The role of the three employees of M/s. MNS Exports would be to file the required documents with the ACC, Bangalore, for clearance of the consignments in the name of M/s. MNS Exports, but actually meant for Shri Vikram Jain. Shri Bhaskar would get certain consideration at the rate of Rs. 11/- per metre. The three employees of M/s. MNS Exports would also in turn receive certain consideration from Shri H. Bhaskar. The company at Singapore also would receive some commission. As per the records, all these activities had been carried out without the knowledge of M/s. MNS Exports. When M/s. MNS Exports learnt the nefarious activities of their employees, they took immediate action to dismiss them from service. In all, 12 consignments of imports have been cleared from ACC, Bangalore in the name of M/s. MNS Exports. The goods were described as lining material. The statements reveal that actually the goods would be silk f....
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....tributing personal knowledge to him regarding the removal of the goods. The only statement of Shri Chandrasekar does not incriminate Shri Narayana Bhatt. 8.The learned JDR reiterated the findings of the learned Adjudicating Authority. 9.On a very careful consideration of the circumstances leading to the removal of the goods to the adjoining premises, we are satisfied that there is no mala fide. There was no intention on the part of Shri Narayana Bhatt or M/s. MNS Exports to divert the goods to local market. Due to severe thunderstorm, the goods were removed to the adjoining premises to prevent damages. Hence, there is absolutely no justification in levying penalties on M/s. MNS Exports and also Shri Narayana Bhatt. Inasmuch as the goods were used with the permission of the Commissioner in the manufacture of goods, which were later exported, the demand of duty is not sustainable. 10.As regards the demand of duty of Rs. 34,54,338/- from M/s. MNS Exports, the learned Advocate adduced the following arguments : (i) Section 2(26) of the Customs Act defines 'Importer' as a person including any owner or any person holding himself ....
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....ke M/s. MNS the importer in view of the factual position that the letter of authority given to them can only be for clearance of the goods imported by M/s. MNS Exports and not in respect of goods imported by someone else. (ix) The 3 employees, in the facts and circumstances of the case, had acted as Agents of Shri Jain. As per Section 147(2) of the Customs Act, the liability of the Principal for the acts of an Agent is not unconditional. If the contrary is proved, then the principal is not liable for the act of the Agent. In this case, the categorical statements of the 3 errant employees and also the immediate action taken by the appellants to terminate their services go to establish that the acts of the 3 employees were without the knowledge and consent of the principal viz. M/s. MNS. Hence, no liability could be fastened on the MNS for the wrongful acts committed by the employees at their own risk and responsibility for their pecuniary gain. Strangely, the Commissioner, in the impugned order, has omitted the reference to "unless the contrary is proved" while dealing with Section 147(2) and deemed knowledge and consent of the owner/importer. (x)....
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....ss, for making the employer liable." (8) Thangalkunju Mudaliar v. Venkatachalam Pillai - 1955 (2) SCR 1196 "Mis-representation by an agent in matters outside the authority cannot affect the principal." (9) Skypack Service Specialists Ltd. v. CC, Mumbai - 2002 (149) E.L.T. 1464 (T) "Three employees involved in smuggling goods for illegal gains. Company cannot be held responsible for the misdemeanour of their employees." (10) Hetero Drugs Ltd. v. CC, Airport, Chennai - 2004 (168) E.L.T. 211 (Tri.-Bang.) "CHA liable to pay the duty as the importer is liable only for bona fide acts of CHA and not those which are in excess of their authority." (11) Hetero Drugs Ltd. v. CCE, Hyderabad - 2004 (171) E.L.T. 134 (Tri.-Bang.) "Importer not implicated in unauthorise....
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....lso set aside. Appeals of Shri Ravi Prakash, Shri B. Prasad & Shri Srinivasa Rao 14.Shri S. Raghu, the learned Advocate appeared for S/Shri Ravi Prakash, B. Prasad and Srinivasa Rao, employees of M/s. MNS Exports. He urged the following. 15.All the three persons had to deal with Shri H. Bhaskar, an officer posted in the EOU. When the Customs Officer threatened, the appellants had to concede to the dictates and the evil designs of the said Customs Officer. The appellants did not know as to how the imported goods would be disposed of by Shri H. Bhaskar. They bona fidely believed that the said Customs officer would not act against the interest of the Revenue. The connection between Shri Vikram Jain and Shri Bhaskar was only known when the Show Cause Notice was issued. At the insistence of the officials of M/s. MNS, the appellants voluntarily went to the Customs and disclosed the facts and co-operated in the investigation. This is the first instance in which the appellants are involved. In view of the co-operation of the appellants with the investigation, and also the financial difficulties of the appellants having lost their jobs, the learned Advocate pleaded for a lenient tr....
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....the same and allow her appeal. Appeal of Shri Vikram Jain 18.The learned Advocate Shri Laxminarayana made the following points : There is no evidence to implicate Shri Vikram Jain in the import of the consignments in the name of M/s. MNS Exports. There is no evidence for the receipt of the goods by Shri Vikram Jain. When Shri Jain wanted to cross-examine the officers who recorded his statement, the same was not allowed. This is a gross denial of the Principles of Natural Justice. Moreover, Shri Jain had immediately retracted from the statements he made before the Customs Officer. Under these circumstances, the penalty of Rs. 5,00,000/- is not justified. Moreover, Shri Vikram Jain did not know Shri Bhaskar at all. In his statement, he has referred only to one Shri Mohan. Revenue has not at all investigated the role of Shri Mohan in the entire episode. 19.The learned SDR urged that there is enough evidence to implicate Shri Jain. Even though Shri Jain retracted from his first two statements, he gave a statement after retraction in which he confirmed the facts of the earlier statements. In any case, there is no allegation that the statements have been made under coercion. ....