Custom, Excise & Service Tax Tribunal
M/S.Waho Wireless Pvt. Ltd vs C.C.E.&S.T., Lucknow on 29 July, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066.
Date of Hearing 29.07.2015
For Approval &Signature :
Honble Honble Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal Nos.C/3211-3216, 3254-3255, 3269-3274/2012-CU[DB]
[Arising out of Order-in-Original No.03/2012, dated 13.07.2012 passed by C.C. (Preventive), Lucknow]
Shri Dharmender Bansal
Shri Nitin Bansal, Proprietor
Shri Jasbir Singh
Shri Pradeep Kumar
Shri Vimal Shukla
Saurabh Agarwal
M/s. Gold Mannaer Overseas
Shri Ravinder Singh
Shri Yogesh Kumar Mishra
Shri Arun Gupta
M/s. Hari Om Couriers
Shri Virendra Kumar Pandey
Shri Mukesh Kumar
M/s.Waho Wireless Pvt. Ltd. Appellant
Vs.
C.C.E.&S.T., Lucknow Respondent
Appearance Mr. Priyadarshi Manish, Advocate Mrs. Anjali Jha Manish, Advocate - for the appellant Ms. Suchitra Sharma, DR - for the respondent CORAM: Honble Justice G. Raghuram, President Honble Mr. R.K. Singh, Member (Technical) Final Order Nos.53724-53737/2015, dated 29.07.2015 Per Mr. R.K. Singh :
Appeals have been filed by the appellants against Order-in-Original No.03/2012, dated 13.07.2012 in terms of which inter alia the following order was passed:-
(i) Confiscation of 77 seized cartons of Chinese mobile phones and TCO goods valued at Rs.96,40,150/- as detailed in the panchnamas dated 09.08.2011 and 10.08.2011 under Section 111(b) and (d) of the Customs Act, 1962.
(ii) Out of 77 confiscated cartons of mobile phones, the confiscation of 29 cartons (remained unclaimed till date) was in absolute terms.
(iii) However, as envisaged under Section 125 of the Customs Act, 1962, option was given to pay the redemption fine in lieu of confiscation to the owners/claimants of the goods with the condition that this option may be exercised within thirty days of the issuance of the impugned Order-in-Original:-
(a) M/s. BM Technologies Company (appellant Shri Nitin Bansal and Shri Dharmander Bansal) Rs.5,00,000/-.
(b) Shri Jasbir Singh Rs.3,00,000/-
(c) Shri Vimal Shukla Rs.1,50,000/-
(d) Shri Saurabh Agarwal Rs.50,000/-
(e) Shri Pradeep Kumar Rs.2,50,000/-
(iv) Penalty was imposed under Section 112 of the Customs Act, 1962 upon each of the appellants as indicated below:-
(a) Shri Virendra Pandey Rs.2,00,000/-
(b) Shri Arun Kumar Gupta Rs.3,00,000/-
(c) Shri Yogesh Kumar Gupta Rs.3,00,000/-
(d) M/s. Hari Om Couriers Rs.5,00,000/-
(e) Shri Nitin Bansal Rs.10,00,000/-
(f) Shri Dharmender Bansal Rs.10,00,000/-
(g) M/s. Gold Manner Overseas Rs.10,00,000/-
(h) M/s. Waho Wireless Pvt. Ltd. Rs.10,00,000/-
(i) Shri Jasbir Singh Rs.5,00,000/-
(j) Shri Vimal Shukla Rs.2,00,000/-
(k) Shri Saurabh Agarwal Rs.1,50,000/-
(l) Shri Pradeep Kumar Rs.7,00,000/-
(m) Shri Mukesh Kumar Rs.1,00,000/-
(n) Shri Ravindra Singh Rs.2,50,000/-
2. Based on the information that foreign origin goods smuggled from Nepal through off-route to Delhi were to be diverted to Lucknow by Shatabdi Express (Train No.12004), a team of officers of Customs (Preventive) Division, Lucknow kept a vigil and seized the impugned goods at Lucknow. Investigations revealed that the traders in Delhi handed over the said goods to Shri Mukesh Kumar, a worker of M/s. Hari Om Couriers (Lucknow based) owned by Shri Yogesh Kumar Mishra, for which receipt was given to the persons who booked the goods. Shri Mukesh Kumar handed over the goods to Shri Arun Kumar Gupta, a contractor of lease van of Shatabdi Express Delhi-Lucknow bound at New Delhi Railway Station, which were loaded on the lease van to be transported to Lucknow. At Lucknow, an employee of Shri Arun Kumar Gupta, namely, Shri Virendra Kumar Pandey unloaded the said goods and handed over the same to Shri Yogesh Kumar Mishra, owner of the courier company. Finally the goods were given to respective persons at Lucknow on the basis of booking receipts issued at Delhi.
3. Foreign origin mobile phones were classified in CTH 8517 for the purpose of assessment and were admitted subject to MRP based assessment under Section 4A of the Central Excise Act, 1994 for the purpose of levy of CVD (Additional Customs Duty under Section 3(1) of the Customs Tariff Act, 1975) on their import. Further, in terms of General Notes regarding Import Policy, it was mandated that all pre-packaged commodities (which included mobile phones) imported into India shall in particular carry the following declaration:-
(a) Name and address of the importer
(b) Generic or common name of the commodity packed
(c) Net quantity in terms of standard unit of weights and measures
(d) Month and year of packing
(e) Maximum retail sale price at which the commodity in packaged form may be sold to the ultimate consumer.
4. On examination by Revenue, it was found that on seized cartons of mobile phones, there was no name and address of the importer and also the individual packets of mobile phones did not carry MRP in any manner viz., in the form of print/sticker of MRP / RSP, which indicated that the aforesaid mobile phones of Chinese origin and other foreign origin goods contained in 77 cartons were illicitly imported from Nepal into India through unauthorised routes contravening to the provisions of Notification No.63/94-CUS(NT), dated 21.11.1994 as amended issued under Section 7(1)(c) of the Customs Act, 1962 and the provisions of Notification No.9/96-CUS(NT), dated 22.01.1996 issued under Section 11 ibid read with Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 by some unknown persons with active connivance of the appellants rendering the same liable to confiscation under Section 111(b) and (d) of the Customs Act, 1962. Accordingly, Commissioner passed the impugned order of confiscation of impugned goods and imposed penalties on persons found liable to penalty under Section 112 ibid.
5. The appellants essentially contended as under through their advocate.
6. Shri Arun Kumar Gupta, holder of the leased van, contended that he was not concerned with the smuggling of the goods seized and therefore the same may be confiscated. He merely sends the goods of various dealers in Delhi to Lucknow in the leased van. These goods were brought to him by the courier of the parties, which are loaded on the SLR van and on their arrival at Lucknow they were unloaded by his employee Shri Virendra Kumar Pandey and were transferred to the authorised persons of the recipient parties and therefore penalty cannot be imposed on him. Shri Yogendra Kumar Mishra, proprietor of M/s. Hari Om Couriers contended that he was not given any RUDs, which in any way established the smuggled nature of goods and the mobile phones were freely importable without import licence. His is merely a courier company, which couriered the goods. Shri Mukesh Kumar, stated that he is merely an employee of M/s. Hari Om Couriers and was only doing work assigned by his employer. M/s. BM Technology & Co claimed ownership of 1637 pieces of mobile phones contained in 20 cartons, Shri Jasbir Singh claimed the ownership of 793 pieces of mobile phones contained in 10 cartons, Shri Vimal Shukla claimed ownership of 370 pieces of mobile phones contained in 04 cartons, Shri Saurabh Agarwal claimed ownership of 230 pieces of mobile phones contained in 2 cartons, Shri Pradeep Kumar claimed ownership of 806 piece of mobile phones contained in 10 cartons. The appellants claimed that panchnama was not prepared on the spot and the witnesses were daily wagers of Customs office and therefore the panchnama was inadmissible. They stated that the duty on the mobile phone was nominal and therefore there was no reason to smuggle them from Nepal to Delhi and then divert them to Lucknow thereby spending lot of money on freight than duty leviable. It was also contended that the mobile phones were imported in the name of M/s. Gold Manner Overseas and M/s. Waho Wireless Pvt. Ltd. The Bills of Entry of these two importers covered the impugned goods and were not properly appreciated. It was emphasised that mobile phones, besides being freely imported were not notified under Section 123 of the Customs Act, 1962.
7. Ld. Departmental Representative, on the other hand, stated that the mobile phones were clearly smuggled as the Bills of Entry, which were produced to show their licit import did not cover the impugned goods. He stated that the goods also did not have MRP marked thereon. All these rendered them liable to confiscation and the appellants liable to penalty.
8. We have considered the contentions of both sides. There is force in the contention of the appellants that mobile phones are not notified under Section 123 of the Customs Act, 1962 and therefore the onus is on Revenue to prove that the impugned goods were smuggled. We find that the only ground on which the goods are held to be smuggled is that the Bills of Entry produced by M/s. Gold Manner Overseas and M/s. Waho Wireless Pvt. Ltd. did not cover the impugned goods. In this regard, it is pertinent to mention that the Bills of Entry filed for import of mobile phones do not mention details of individual mobile phones. Once the goods are in the open market, it is the onus of Revenue to establish with sustainable evidence that these goods were smuggled in any sense other than that they did not carry MRP. We find that Revenue has not been able to discharge this onus. Even if the appellants had not produced any Bills of Entry to show the licit import of the impugned goods, they would not have been worse of because it is Revenues onus to establish smuggled nature of goods and there is no evidence in the Show Cause Notice or in the impugned order which even prima facie discharged that onus. It has been held in the case of MB Enterprises Vs. CC, New Delhi [2009 (233) ELT 83 (Tri.-Ahmd.)] that merely in the absence of MRP stickers on packages without any other cogent evidence it cannot lead to conclusion that goods smuggled in nature. In the case of Naveed Ahmed Khan Vs. Bangalore [2005 (182) ELT 494 (Tri.-Bang.)], the CESTAT held that when the provisions of Section 123 are not attracted, burden of proving the smuggled nature of goods is on Revenue and the fact that listed documents were not available was no ground for holding the goods as smuggled goods. Similar view was held in the case of Lakhpat Rai & Sons Vs. CC [2004 (177) ELT 934 (Tri-Del)], wherein CESTAT held that inference of smuggled nature of ball bearings cannot be drawn by Revenue merely from inability of assessee to produce purchase bills or to name seller/broker from whom goods purchased. Circumstances that assessee could not name the broker, may at best create suspicion which cannot substitute proof. Ball bearings not having been notified under Section 123 of Customs Act, 1962, it is not the burden of the assessee to prove their non-smuggled nature when Revenue has failed to discharge its initial burden of proving smuggled nature of ball-bearings. However, it is a fact that mobile phones are classified under CTH 8517, which is subjected to MRP based assessment for the purpose of levying CVD and in terms of General Notes regarding Import Policy, all pre-packaged commodities (which include mobile phones) imported into India shall in particular carry the declarations as mentioned in para 3 above, which includes marking of MRP on the impugned mobile phones; that there is such a requirement is not disputed by appellants and therefore we dwell on this point no further. It has clearly been brought out that no such MRP was printed on the impugned mobiles and therefore their import and clearance were in violation of provisions of Exim policy which rendered them liable to confiscation under Section 111(d) ibid. In the case of Pacific India Trade Concern Vs. CC (Prev) [2014 (307) ELT 650 (Del)], Delhi High Court held that in case of goods which required MRP to be declared on the goods, non-declaration of MRP results in violation of Foreign Trade Policy and rendered the goods liable to confiscation. Twenty nine Cartons of mobile phones remained unclaimed and therefore their absolute confiscation is clearly sustainable. Regarding mobile phones which were claimed, we find that an option was given to the claimants to redeem the same on redemption fine, which was about 20% of the value of the goods, which in our view is not unreasonable or arbitrary having regard to the nature of the goods and therefore does not warrant appellate intervention.
9. We find that all the claimants acquired possession or/and were concerned in carrying, keeping, selling, purchasing or dealing with the impugned goods, which were liable to confiscation and as they were aware that the impugned goods did not carry MRP thereon and so were liable to confiscation, they were liable to penalty under Section 112 of the Customs Act, 1962. However, we find that the impugned goods were held liable to confiscation in the impugned order on the ground that they were smuggled and also that they did not carry MRP. As stated above, Revenue has not been able to discharge the onus to establish smuggled nature of goods in any sense other than that they did not carry MRP. Having regard to this fact, we are of the view that the penalties imposed on the claimants-appellants are on the higher side and need to be suitably moderated. Similarly, M/s. Gold Manner Overseas and M/s. Waho Wireless Pvt. Ltd. have claimed that they had imported these goods which became liable to confiscation in the absence of MRP thereon. Therefore, they are liable to penalty under Section 112 ibid. Shri Arun Kumar Gupta has admitted that he was concerned in carrying and transporting the impugned goods as he collected them from various persons in Delhi before they were loaded in SLR van. He was regularly doing so and therefore there was no way that he was not aware that the goods did not carry the MRP which rendered them liable to confiscation and so he is liable to penalty. Similar reasoning applies for imposition of penalty in respect of the other appellants mentioned in para 10 (iv) below. However, in the given circumstances and for the same reason as applicable to the claimant-appellants, penalties imposed need to be moderated. However, we find that Shri Virendra Kumar Pandey and Shri Mukesh Kumar were mere employees and were only doing the job as assigned by their employers and there is nothing on record which showed that they would have had any idea about the liability to confiscation of the impugned goods and therefore, penalty on them under Section 112 ibid is not warranted. Also, once a proprietary firm is penalised, separate penalty on the proprietor is not imposable.
10. In the light of the foregoing discussions, we uphold the impugned order except that (i) the penalties on Shri Virendra Kumar Pandey and Shri Mukesh Kumar are set aside. (ii) Penalty on Shri Ravinder Singh, proprietor of M/s. Gold Manner Overseas is set aside because penalty on M/s. Gold Manner Overseas is upheld. (iii) Penalty on Mr. Yogesh Kumar Mishra is also set aside as he is proprietor of M/s. Hari Om Couriers on which penalty has been imposed. (iv) On the remaining appellants, the penalties are reduced to the amounts mentioned against their names:-
(a) Shri Arun Kumar Gupta Rs.50,000/-
(b) M/s. Hari Om Couriers Rs.50,000/-
(c) Shri Nitin Bansal Rs.2,00,000/-
(d) Shri Dharmender Bansal Rs.2,00,000/-
(e) M/s. Gold Manner Overseas Rs.2,50,000/-
(f) M/s. Waho Wireless Pvt. Ltd. Rs.2,50,000/-
(g) Shri Jasbir Singh Rs.1,25,000/-
(h) Shri Vimal Shukla Rs.50,000/-
(i) Shri Saurabh Agarwal Rs.37,500/-
(j) Shri Pradeep Kumar Rs.1,75,000/-
11. The appeals are disposed of on the above terms.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) SSK -2-