Custom, Excise & Service Tax Tribunal
Sumeet Agarwal vs Nhava Sheva - Iii on 11 September, 2020
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST ZONAL BENCH AT MUMBAI
REGIONAL BENCH - COURT NO. 02
Customs Appeal No. 87805of 2019
(Arising out of Order-in-Appeal No. 1297 & 1298 (CRC-SAD-
VI)/2019(JNCH)/Appeal-II dated 19.09.2019 passed by Commissioner of
Customs (Appeals), Mumbai-II)
M/s Mayank Granite .....Appellant
Plot No. 2232/2233/2234, Malvani Church,
Near Bageecha Hotel,
Marve Road, Malad (West),
Maharashtra: 400095
VERSUS
Commissioner of Customs, .....Respondent
Nhavasheva-III JNPT, Custom House, Nhava Sheva, Raigad - 400707 WITH Customs Appeal No. 87803 of 2019 (Arising out of Order-in-Appeal No. 1297 & 1298 (CRC-SAD- VI)/2019(JNCH)/Appeal-II dated 19.09.2019 passed by Commissioner of Customs (Appeals), Mumbai-II) Shri Sumeet Agarwal .....Appellant Plot No. 2232/2233/2234, Malvani Church, Near Bageecha Hotel, Marve Road, Malad (West), Maharashtra: 400095 VERSUS Commissioner of Customs, .....Respondent Nhavasheva-III JNPT, Custom House, Nhava Sheva, Raigad - 400707 Appearance:
ShriNeeravMainkar, Advocatefor the Appellant Ms. Trupti Chavan, Authorized Representative for the Respondent CORAM:
HON'BLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) 2 Appeal No. C/87805 & 87803/2019 FINAL ORDER NO. A/85728-85729/2020 Date of Hearing: 02.12.2019 Date of Decision: 11.09.2020 Per: S.K. MOHANTY Briefly stated, the facts of the case are that the appellant herein, M/s Mayank Granites had filed the Bills of Entry being nos. 8902086 and 8902228 both dated 17.11.2018 by declaring the goods as 'Crystallised Glass Panel Grade B'. Classification of the said goods were claimed under CTH 70169000 with assessable value at Rs.38,48,585/- in respect of each of the Bill of Entry. The goods were imported from M/s Guangdong Yongcheng Ceramics, China.Based on specific information, the above goods were intercepted by SIIB (import), JNCH, Nhava Sheva and the samples were drawn from the consignments for testing in the Customs Laboratory. The test reports revealed that the goods were "Agglomerated Marble" and not "Crystallised Glass Panel Grade B", as declared by the appellant. Accordingly, the department undertook detailed investigation into the matter and recorded statement of Shri Sumeet Agarwal, Proprietor of the appellant-importer under Section 108 of the Customs Act, 1962. The proprietor had admitted in his voluntary statement that the goods were mis-declared both in respect of description and value. Upon investigation into the matter, the department concluded that "Agglomerated Marble" is classifiable under HS Code 68109990 and as per Policy Condition No. 4 of Chapter 68 of the ITC (HS) Schedule - Import Policy, import of processed tiles/ slabs of agglomerated/artificial stones is permitted freely, provided CIF value is US$ 50 and above per square meter; that since the declared unit value of the imported goods was US$ 23/SQM, it was alleged that the subject goods were imported by the importer-appellant in violation of the Foreign Trade Policy. On the basis of investigation, the department initiated proceedings by issuance of the SCN dated 24.05.2019 to the appellant-importer, M/s Mayank Granites and its Proprietor Shri 3 Appeal No. C/87805 & 87803/2019 Sumeet Agarwal, proposing for change in the classification of the subject goods, confiscation of the imported goods and imposition of redemption fine and penalties. The matter arising out of the said SCN was adjudicated vide order dated 30.07.2019, wherein the proposals made therein were confirmed. The adjudication order had confiscatedthe goods under Section 111(d) and 111(m) of the Customs Act, 1962, with option for redeeming the same on payment of redemption fine of Rs.1,18,85,000/- and imposed penalty of Rs.15,00,000/- on the appellant-importer under Section 112(a)(i) ibidand imposed another penalty of Rs.10,00,000/- on Shri Sumeet Agarwal, Proprietor under Section 114AA ibid. On appeal against the adjudication order, the learned Commissioner of Customs (Appeals), Mumbai-II vide the impugned order dated 19.09.2019 has upheld the adjudged demands confirmed against the appellants, excepting the penalty imposed on the appellant-importer under Section 112(a)(i) ibid. To such extent, he has modified the adjudication order, in reducing the quantum of penalty from Rs. 15,00,000/- to Rs.7,50,000/-. Feeling aggrieved with the impugned order, the appellants have preferred these appeals before the Tribunal.
2. ShriNiravMainkar, the learned Advocate appearing for the appellants submitted that the purchase order was placed by the appellant-importer on the overseas supplier for supply of Crystallised Glass Panels, but the wrong consignment was shipped by the supplier, which had also been accepted by the supplier in the letter dated 09.12.2018. Thus, he submitted that there is no mis-declaration of goods and accordingly, redemption fine and penalties cannot be imposed on the appellants. The learned Advocate has relied upon the judgment of Hon'ble Bombay High Court in the case of Commissioner of Cus., CSI Airport, Mumbai vs. Gyanchand Jain-2015 (321) ELT 199 (Bom.) and the decisions of this Tribunal in the case of Guru Ispat Ltd. vs. Commissioner of Customs (port), Calcutta-2003 (151) ELT 384 (Tri.-Kolkata), HCL Comnet Systems & Services Ltd. vs. 4 Appeal No. C/87805 & 87803/2019 Commr. of Cus., New Delhi-2003 (158) ELT 349 (Tri-Del.), to justify the above stand.
3. On the other hand, Ms. Trupti Chavan, the learned AR appearing for the Revenue has reiterated the findings recorded in the impugned order. She further submitted that since the goods declared in the Bills of Entry were not actually imported by the appellant-importer and such mis-declaration of goods were detected by the department, confiscation of the imported goods, imposition of redemption fine and penalty in the adjudication process is justified and as such, the impugned order sustains on merits and cannot be interfered with.
4. Heard both sides and perused the records.
5. In this case, the facts are not in dispute that the appellant had filed the Bills of Entry, declaring the description of goods as 'Crystallised Glass Panel Grade B', whereas as per the test report obtained by the department, the same were reported to be 'Agglomerated Marble'; that the value in respect of both the category of goods were also different. Thus, there was mis- declaration in respect of both description and value of goods. Further, the subject goods were also imported in violation of the provisions of Foreign Trade Policy. All these aspects of statutory contravention were admitted and accepted by the Proprietor of the appellant-importer in the statement recorded under summon in terms of Section 108 ibid. Hence, under the facts and circumstances of the case, it is evident that the penal consequences provided under Sections 111, 125(1), 112(a)(i) and 114AA ibidare attracted for confiscation of imported goods, imposition of redemption fine and penalties. We are convinced that the authorities below have rightly invoked the above statutory provisions in respect of improperly importation of goods made by the importer-appellant. However, the subject matter of dispute involved in this case for consideration by the 5 Appeal No. C/87805 & 87803/2019 Tribunal is confined only for determination of the quantum of fine and penalties imposed on the appellants.
6. We find from the available records that though the importer-appellant had placed the purchase order for import of 'Crystallised Glass Panel, but the overseas supper had wrongly shipped different types of goods, the fact of which had also been acknowledged in the e-mail correspondence dated 09.12.2018. Further, the supplier had also expressed his willingness to take back the consignments as per the description provided in the Bills of Entry filed by the importer-appellant. However, it an admitted position that the importer-appellant did not take proper steps to check the cargo before presentation of the Bills of Entry for assessment purpose and accordingly, it cannot plead that the action on its part is entirely bonafide. The ratio of decisions of this Tribunal (supra) relied upon by the learned Advocate are not applicable to this case inasmuch as the goods involved in those decided cases were exported by the concerned parties and were not allowed clearance for home consumption. We have also noted the contentions of the importer-appellant that due to wrong shipment, owing to detention of goods by the port authorities, it had incurred heavy demurrage and detention charges. Therefore, considering the overall facts and circumstances of the case, we are of the view that the quantum of redemption fine and penalty imposed on the importer- appellant can be reduced to meet the ends of justice. Accordingly, while upholding the impugned order on merits of the case, we reduce the redemption fine from Rs.1,18,85,000/- to 18,00,000 (RupeesEighteen Lakhs only). We also reduce the penalty, imposed under Section 112 of Customs, Act, 1962 from Rs.7,50,000 to Rs.2,50,000 (Rupees Two Lakh Fifty Thousand Only).
7. Coming to the penalty of Rs.10,00,000/-imposed, under Section 114AA ibid, on Shri Sumeet Agarwal, proprietor of the 6 Appeal No. C/87805 & 87803/2019 importer-appellant, we find that the learned counsel argues that it is a settled principle of law that simultaneous penalties cannot be imposed on both. He relies upon the judgement of Hon'ble Bombay High Court in the case of Gyanchand Jain (Supra) wherein it was held that separate penalties cannot be imposed both on the sole proprietorship firm and its proprietor. We find that Hon'ble High Court was dealing with the issue of levying penalty on the importer/appellant as well as the proprietor under Section 112(a) of the Customs, Act 1962. What we have before us is the imposition of penalty on the company under Section 112(a) and imposition of Penalty on the proprietor under section 114AA, ibid. The facts of the case and issue dealt are different. However, looking in to the facts and circumstances of the case, as discussed above, we are inclined to reduce the penalty imposed on Shri Sumit Agarwal to Rs 1,00,000 (Rs. One Lakh Only).
8. Both the appeals are disposed of in above terms.
(Order pronounced in the open court on 11.09.2020) (S.K.Mohanty) Member (Judicial) (P. Anjani Kumar) Member (Judicial) HK