Custom, Excise & Service Tax Tribunal
M/S. K. Shyam International vs C.C.(Icd) (Tkd), New Delhi 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/209 & 210/2009-CU[DB]
[Arising out of Order-in-Original No.70/2008, dated 26.12.2008 passed by the C.C., ICD, TKD, New Delhi]
M/s. Shivam Newsprint Agency
M/s. K. Shyam International Appellants
Vs.
C.C.(ICD) (TKD), New Delhi Respondent
Appearance None - for the appellants Ms. Suchitra Sharma, DR - for the respondent CORAM: Honble Justice G. Raghuram, President Honble Mr. R.K. Singh, Member (Technical) Final Order Nos.52549-52550/2015, dated 29.07.2015 Per Mr. R.K. Singh :
These appeals have been filed against penalties imposed on the appellants vide Order-in-Original dated 26.12.2008 in terms of which penalty of Rs. 5 lakhs was imposed on each of these two appellants
2. this case involved evasion of customs duty on newsprint by adopting a modus operandi where traders misused the facility of import of newsprint at concessional rate of duty of 5% under Notification No. 21/2002Cus (Entry Srl. No.154) by importing newsprint on the strength of Registrar of Newspaper of India (RNI) certificate in the name of non-functional small-time newspaper publishers and such imported newsprint was sold in the open market while the concessional rate of duty was applicable only on actual user condition. In this case imports were made in the name of Jai Sai Times and the Bills of Entry were filed in the name of Jai sai Times and the RNI certificate was issued in the name and favour of Shri G Devendiran proprietor of M/s Jai Sai Times and Sewa Times, who inter alia admitted in his statement recorded under Section 108 of Customs Act, 1994 that he had nothing to do with the printing of any magazine/periodical/newspapers; that he did not known Hindi and therefore question of printing of any magazine did not arise; that the RNI Registration was obtained by him on advice of Sh. Moovandan in lieu of an amount of Rs.10,000/- per month; that he had opened a Bank Account in the name of M/s Jai Sai Times in Karur Vysya Bank, Karol Bagh and the signed chequebooks were handed over to Sh. Moovandan; that one Chartered Accountant sent by Sh. Moovandan had come with him that day who could tell about the import of goods; that he had not placed any order for any import; that he had nothing to do with the imported consignments.
3. When the case was called for hearing, the advocate on record stated that he had no instructions to appear. Thus, none appeared on behalf of the appellants. In the Memorandum of Appeals, the appellants have contended that they are not the importers and therefore no customs duty is payable by the appellants and that they have also not abetted any evasion and therefore no penalty is imposable on them and that there was no allegation in the Show Cause Notice alleging abetment by the appellants.
4. Ld. Departmental Representative on the other hand stated that the primary adjudication order clearly brings out the role of the appellants in abetting the duty evasion and therefore they are liable to penalty and hence the appeals should be dismissed.
5. We find that the primary adjudicating authority while confirming the demand of customs duty, inter alia imposed penalties of Rs. 5 lakh each on these two appellants after discussing their role in para 37 of the primary adjudication order which is reproduced below:-
37. Regarding remaining two noticees M/s. Shivam Newsprint Agency (Noticee No.3) and M/s. K. Shyam International (Noticee No.4), it is observed from the available records of the case that the proprietor of both these firms is Sh. M.L. Gupta. In the defence reply these two noticees have contended that the statement given by Sh. M.L. Gupta before customs officers during the course of investigation were retracted by him and that they did not have anything to do with the wrong availment of the exemption notification benefits in respect of the goods imported by M/s. Jai Sai Times. I however, observe in this context that the statement given by Sh. M.L. Gupta were recorded under section 108 of the Customs Act, 1962 and therefore have got the evidentiary value. As is evident from the available records of the case, imports by M/s Jai Sai Times were made basically to meet the orders placed on M/s. Jai Sai Times and their sister firms M/s. Seva Times by two firms of Sh. M.L. Gupta, i.e., M/s. Shivam Newsprint Agency and M/s K. Shyam International. It is further observed that Sh. M.L. Gupta had at one point of time agreed to pay the differential duty worked out in respect of consignments that were purchased by his firms from M/s Jai Sai Times who had wrongly availed the benefit of exemption notification. Sh. M.L. Gupta indeed made payments of Rs. 28 lakhs towards discharge of the differential duty liability. Although I do not find any direct and clinching evidence on record to indicate that it was Sh. M.L. Gupta or his firms who played any active role in fraudulent procurement of RNI certificate by M/s Jai Sai Times and made use of that RNI certificate for wrong availment of the benefit of exemption notification, yet the fact remains that it was Sh. M.L. Gupta and his firms who were purchasing the goods imported by M/s Jai Sai Times at concessional rate of duty for further trading in the market. Since Sh. M.L. Gupta, by his own admission, was in the business of trading in papers for long, he should and could have found it out as to whether or not the duty liability had been fully and correctly discharged by the importer from whom he was purchasing the imported goods, especially when the firms of Sh. M.L. Gupta were the sole purchaser of the goods imported by the firms of Sh. G. Devendiran. The facts and circumstances available on record clearly suggest that Sh. G. Devendiran, proprietor of M/s Jai Sai Times and M/s Seva Times evaded payment of appropriate amount of import duty on the impugned consignments in connivance with Sh. M.L. Gupta, proprietor of M/s. Shivam Newsprint Agency and M/s K. Shyam International. The acts of omission and commission on the part of Sh. M.L. Gupta and his firms clearly abetted Sh. G. Devendiran and his firms to indulge in such activities that have rendered the goods in question liable to confiscation under section 111 of Customs Act, 1962. M/s. Shivam Newsprint Agency (Noticee No.3) and M/s. K. Shyam International (Noticee No.4), proprietor of which is Sh. M.L. Gupta are therefore liable to penal action under Section 112 of Customs Act, 1962. Held accordingly.
6. No demand of duty has been confirmed against the appellants. Only penalty is imposed upon them. Their contention that the penalty imposed is beyond the Show Cause Notice because there was no allegation of abetment against them in the Show Cause Notice, is factually not correct in-as-much-as the Show Cause Notice brings out their role and required them to show cause as to why they should not be penalised under Section 112 of Customs Act, 1962. The impugned goods were imported at the behest of the proprietor of the appellants. The fact that the proprietor of the appellants paid Rs. 28 lakhs towards differential duty when he was not even the importer on paper also shows their involvement in the modus operandi to evade customs duty on import of newsprint. He was the sole purchaser of the entire quantity of impugned newsprint imported and as he has been dealing in the newsprint for a considerable period of time, he was fully aware that the impugned newsprint was imported at concessional rate of duty on actual user condition. Indeed, as has been clearly brought out by the primary adjudicating authority in para 37 (of the impugned order) quoted earlier, Mr. M L Gupta, proprietor of the two appellants abetted the smuggling of impugned goods which were liable to confiscation and was purchasing the said newsprint imported at concessional rate of duty. Thus, the appellants are clearly liable to penalty. We find that the amount of penalty imposed is neither excessive nor arbitrary and therefore the impugned order with regard to penalties imposed on the appellants does not warrant any appellate intervention. The appeals are therefore dismissed.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) SSK -2-