Custom, Excise & Service Tax Tribunal
Shri R. Yellaiah vs The Commissioner Of Central Excise on 30 October, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeals (s) Involved: C/430 & 430A/2009 [Arising out of Orders-in-Original: (i) No.V/Cus./15/23/08 Adjn.BNG.II/1650 dated 27.2.2009 (Sl. No.1/09); & (ii) No.V/Cus./15/29/08 Adjn. BNG.II/1641 dated 27.2.2009 (Sl. No.2/09 Both passed by the Commissioner of Central Excise (Adjudication), Bangalore.] Shri R. Yellaiah No.2570, 17th Main Road Kumaraswamy Layout Bangalore 560 078. Appellant(s) Versus The Commissioner of Central Excise, Bangalore-II Commissionerate CR Building, Queens Road, Bangalore 560 001. Respondent(s)
Appearance:
Mr. Raghavendra B. Hanjer, Advocate For the Appellant Mr. N. Jagadish, AR For the Respondent Date of Hearing: 18.09.2017 Date of Decision: 30.10.2017 CORAM:
HON'BLE SHRI S.S. GARG, JUDICIAL MEMBER Final Order No. 22652 - 22653 / 2017 Per : S.S. GARG Appellant have filed these two appeals against the two impugned adjudication orders dated 27.2.2009 passed by the Commissioner, whereby the Commissioner has imposed a penalty of Rs.1,00,000/- each on the appellant under Section 112(a) of the Customs Act, 1962 on the allegation of abetting smuggling.
2. Since the issue involved in both the appeals is identical and the evidence is also the same, therefore both the appeals are being disposed of by this common order.
3. For the sake of convenience, the facts of appeal No.C/430/2009 are taken.
3.1 Directorate of Revenue Intelligence (DRI) Bangalore received information that four foreign speed post parcels containing computer parts consigned to M/s. Acuta Spectra Inc. Bangalore would be delivered at Frazer Town Post Office on 28.12.2005. It was also informed that Customs Duty was not paid for the said four parcels. Based on the information received, DRI maintained surveillance near Frazer Town Post Office, Bangalore on 28.12.2005. A person who took delivery of the four parcels at the said Post Office was intercepted after the said person took delivery of the said parcels and while he was placing the four parcels into a car.
3.2 The person informed that his name is Shri Mohammed Riyazudeen and he confirmed that he has received the four parcels from Frazer Town Post Office. He further informed that he has received the parcels on behalf of M/s Acuta Spectra Inc. and showed the parcels to the offices. On the query of officers as whether he was in possession of any documents relating to the said parcels, he stated that he was instructed by one Shri Abdul Khader to introduce himself to the Postal Officers of Frazer Town Post Office, as representing M/s. Acuta Spectra Inc. to take delivery of the said four parcels and was also asked to keep these parcels at the premises of M/s. Acuta Spectra Inc. at Lingarajapuram and that Abudl Khader had not given any document to him. He further stated that as per Abdul Khaders instructions he (Md. Riyazudeen) had appended his signature in the Frazer Town Post office acknowledging the receipt of four parcels and taken delivery of the same.
3.3 Shri Mohammed Riyazudeen also introduced Shri Putta Ramu and informed that he was the driver of the car being Registration No.KA 02 C 7591 which was arranged by the said Abdul Khader for transportation. Shri Mohammed Riyazudeen also informed that Shri Abdul Khader is residing at 201, 12th Main, 1st Block, Manjunatha Nagar, Bangalore 10 at the ground floor and he (Mohammed Riyazudeen) is residing at the first floor in the same premises and that Shri Abdul Kader belonged to his native place viz., Illayangudi of Sivagangai District, Tamil Nadu. The officers inquired from Shri Mohammed Riyazudeen as to where he was going to store the four parcels, for which he replied that Shri Abdul Kader had given him the keys of M/s. Acuta Spectra Inc. located at Lingrajpuram and instructed him to keep the said four parcels there.
3.4 After the completion of investigation by the DRI, show-cause notices were issued to various persons involved in the commission of the offence and after following the due process of law, the Commissioner vide the impugned order confiscated all the parcels and also imposed penalties on various persons including the appellant on whom penalty of Rs.1 lakh in each case has been imposed under Section 112A of the Customs Act, 1962.
5. Heard both the parties and perused the records.
6. Learned counsel for the appellant submitted that the impugned order imposing penalty on the appellant under Section 112(a) of the Customs Act, 1962 is not sustainable in law and is against the evidence on record. He further submitted that in the present case, a show-cause notice was issued by DRI who has no power to issue the show-cause notice prior to the amendment to the definition of Customs Officer as defined under Section 4(1) of the Customs Act, 1965 prior to 6.7.2011 and hence, the impugned show-cause notices issued by the DRI prior to 6.7.2007 is without jurisdiction. He further submitted that the proceedings initiated for imposition of penalty cannot be sustained. In support of this submission, he placed reliance on Mangali Implex Ltd. vs. UOI: 2016 (335) ELT 605 (Del.). He further submitted that the CBI Court vide its order dated 31.10.2011 acquitted the appellant from the alleged charges levelled against him in respect of parallel proceedings initiated under the provisions of Section 120B read with Section 420 IPC and therefore, he submitted that the question of imposing penalty for abetment under Section 112(a) of the Customs Act, 1962 does not arise. In support of this submission, he relied upon the decision of Department of Customs vs. Arvind Kumar: 2017 (348) ELT 411 (Del.). He further submitted that the disciplinary proceedings initiated against the appellant under CCS (CCA) Rules has been dropped vide enquiry report dated 2.7.2013, therefore, the present proceedings initiated on the basis of the very same allegations cannot be sustained. In support of this submission, he relied upon the following decisions:
* Commissioner vs. Parminder Jit Singh: 2013 (293) ELT 241 (Tri.) * Suraj Prakash vs. CC, New Delhi: 2016 (333) ELT 366 (Tri.-Del.) 6.1 He also submitted that there was no proposal in the show-cause notice either for classification of the imported parcels or for demanding of duty or for denying the exemption under any of the Notifications. Hence, the allegation of the Department with regard to alleged loss of revenue and other allegations with regard to abetment does not hold any water.
6.2 He also submitted that the proper officer for examination of imported parcels as per the Customs Act, 1962 read with relevant Notifications issued thereunder, is the inspector of Customs and hence, the imposition of penalty on the alleged involvement of the appellant has no merit without proposing to impose penalties on the inspector who had examined the imported boxes. Further, the investigating authority has not conducted any investigations on any of the postal officers who are the custodian of the imported parcels and documents and are supposed to produce the imported parcels along with documents for examination. Further, the investigating authority has not initiated any action on the person (Riyazudden and the Driver of the vehicle) who were in possession of the disputed parcels.
7. On the other hand, the learned AR reiterated the findings of the impugned order and submitted that the Commissioner vide the impugned order has given detailed reasoning considering each and every piece of evidence on record and also the statements made by the appellant under Section 108 of the Customs Act, 1962. He further submitted that the role of the appellant has been discussed by the Commissioner and thereafter, he has been imposed the penalty of Rs.1,00,000/- each on the appellant under Section 112(a) of the Customs Act, 1962.
8. After considering the submissions of both the parties and perusal of the material on record, I find that the imposition of penalty on the appellant under the provisions of Section 112(a) of the Customs Act, 1962 is not sustainable in law, as the same has been passed without any clinching evidence against the appellant showing his involvement in abetment of clearance of imported parcels without payment of customs duty. Further, I also find that on the same allegations, the appellant was prosecuted under Section 120B read with Section 420 IPC by the CBI Court, which vide its order dated 31.10.2011, has acquitted the appellant by observing that there is absolutely no cogent, consistent and satisfactory evidence on record to hold that the appellant was found guilty of charges levelled against him. Further, I also find that there was disciplinary enquiry initiated by the department and in the said enquiry also, he was exonerated and it was held in the enquiry that the charge of intentional eliminating parcel by the appellant to assist M/s. Acquite Spectra International in smuggling was not proved. In the said enquiry, it was held that the appellant has not exercised due care as required while discharging his duties and responsibilities. Further, I also find that in the case of Commissioner of Customs vs. ParminderJit Singh (supra) relied by the appellant, it has been held that if when disciplinary proceedings under CCS (CCA) Rules, 1965 are dropped, then the imposition of penalty under Section 112(a) of the Customs Act, 1962 on the same charges and same evidence cannot survive. Therefore, keeping in view my discussions above and the decisions cited supra, I am of the considered view that the impugned orders imposing the penalty on the appellant under Section 112(a) of the Customs Act, 1962 are not sustainable in law and therefore, I set aside the impugned orders by allowing both the appeals of the appellant.
(Order was pronounced in open court on 30.10.2017.) S.S. GARG JUDICIAL MEMBER rv 9 1