Custom, Excise & Service Tax Tribunal
Bhalinder Singh Mann vs Commissioner, Customs (Import)-New ... on 26 February, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH, COURT NO. 1
CUSTOMS APPEAL NO. 51911 OF 2018
[Arising out of Order-in-Original No. 10/2018/RNS/COMMR/IMP/ICD
dated 30.03.2018 passed by the Commissioner of Customs, (Import) New
Delhi]
BHALINDER SINGH MANN,
Appellant
A-2/207, First Floor, Janakpuri
New Delhi-110058
VERSUS
COMMISSIONER OF CUSTOMS (IMPORT) Respondent
Inland Container Depot,
Tughlakabad,
New Delhi
Appearance:
Ms. Reena Rawat, Advocate for the appellant
Shri Rakesh Kumar, Authorised Representative for the Department
WITH
CUSTOMS APPEAL NO. 52193 OF 2018
[Arising out of Order-in-Original No. 10/2018/RNS/COMMR/IMP/ICD/TKD
dated 30.03.2018 passed by the Pr. Commissioner of Customs, (Import)
Tughlakabad, New Delhi]
SHRI ROHIT SHARMA
Appellant
R/o 34 MC Colony Near Tikona Park
Hissar, Haryana
VERSUS
COMMISSIONER OF CUSTOMS (IMPORT) Respondent
Inland Container Depot,
Tughlakabad,
New Delhi-110044
Appearance:
Shri Ashutosh, Advocate for the appellant
Shri Rakesh Kumar, Authorised Representative for the Department
Date of Hearing : 17/01/2024
Date of Decision: 26/02/2024
2
AND
CUSTOMS APPEAL NO. 52419 OF 2018
[Arising out of Order-in-Original No. 10/2018/RNS/COMMR/IMP/ICD
dated 30.03.2018 passed by the Commissioner of Customs, (Import) New
Delhi]
CONTAINER CORPORATION OF INDIA
LIMITED Appellant
Inland Container Depot,
Tughlakabad, New Delhi
VERSUS
COMMISSIONER OF CUSTOMS (IMPORT) Respondent
Inland Container Depot,
Tughlakabad,
New Delhi
Appearance:
Shri Usmaan Khan, Advocate for the appellant
Shri Rakesh Kumar, Authorised Representative for the Department
CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. P. V. SUBBA RAO, MEMBER ( TECHNICAL )
Final Order Nos. 54487-54489 /2024
Date of Hearing : 22/01/2024
Date of Decision: 26/02/2024
P V SUBBA RAO:
1. These three appeals have been filed to assail the Order-in-
Original1 dated 30.03.2018 passed by the Commissioner of
Customs (Import) ICD TKD whereby he decided the proposals
made in the show cause notice dated 18.11.2015. The operative
part of this order is as follows:
1 impugned order
3
ORDER
1. I reject the declared value of Rs. 19,20,433/-in r/o bill of entry no. 7418730 dt. 18.11.2014 under Rule-12 of the Customs Valuation (Determination of Value of Import Goods) Rules, 2007 and re-determine the same as Rs. 5,93,25,481/- under Rule-9 of the rules ibid.
2. I hold that the goods with re-determined value of Rs. 5,93,25,481/- are liable for confiscation under Section 111 (1) & (m) and 119 of the Customs Act, 1962 but refrain from imposing redemption fine as the said goods have been pilfered and are not available for confiscation.
3. Against the total duty of Rs. 1,71,16,587/-, I appropriate Rs. 2,82,534/- already deposited by M/s Nomita International and demand the differential duty amounting to Rs. 1,68,34,053/- from M/s Container Corporation of India Ltd. under Section 45 of the Customs Act, 1962.
4. I impose a penalty of Rs. 1,00,000/- (Rupees one lakh only) on M/s CONCOR under Section 117 of Customs Act, 1962.
5. I impose a penalty of Rs. 1,00,00,000/- (Rupees one crore) under Section 112(a)(v) of the Customs Act, 1962 and of Rs. 50,00,000/- (Rupees fifty lakh only) under Section 114AA of the Act ibid on M/s Nomita International (Prop. Sh. Lalit Kumar).
6. I impose a penalty of Rs. 2,00,00,000/- (Rupees two crore) under Section 112(a)(v) of the Customs Act, 1962 and of Rs. 50,00,000/- (Rupees fifty lakh only) under Section 114 AA of the Act ibid on Sh. Atal Bhushan Bhatt.
7. I impose a penalty of Rs. 20,00,000/- (Rupees twenty lakh only) under Section 112(a)of the Customs Act, 1962 and of Rs. 10,00,000/- (Rupees ten lakh only) under Section 114 AA of the Act ibid on Sh. B.S.Mann.
8. I impose a penalty of Rs. 5,00,000/- (Rupees five lakh only) under Section 112(a) of the Customs Act, 1962 and of Rs. 50,000/- (Rupees fifty thousand only) under Section 114 AA of the Act ibid on Sh. Rohit Sharma.
4
2. Customs Appeal No. 52419 of 2018 filed by M/s Container Corporation of India Limited2 to assail the demand of duty amounting to Rs. 1,68,34,053/- made under section 45 of the Customs Act, 19623 on the goods lost while under its custody and imposition of penalty of Rs. 1 lakh under section 117.
3. Customs Appeal No. 51911 of 2018 filed by Shri Bhalinder Singh Mann assailing the imposition of penalty of Rs. 20 lakhs under section 112(a) and Rs. 10 lakhs under section 114 AA on him.
4. Customs Appeal No. 52193 of 2018 is filed by Shri Rohit Sharma to assail the imposition of penalty of Rs. 5 lakhs under section 112 (a) and Rs. 50,000/- under section 114 AA of him.
5. The facts of the case in brief are that a Bill of Entry dated 18.11.2014 was filed by one M/s Nomita International having IEC No. 0513081143 in the Inland Container Depot4 declaring the imported goods as "glass beads with holes" through their Customs Broker M/s B S Mann, a proprietary firm. These goods were imported from China stuffed in Container No. OOLU1372503. The description of the goods in the Bill of Entry is as follows:
S Description of Unit Quantity declared Value Duty paid No goods as per declared . imported documents
1. Glass Beads with two KGS 14,652 18,32,057 2,69,532 holes 2 CONCOR 3 Act 4 ICD 5
2. Glass seeds beads KGS 942 88,377 13,002 with holes Total 15,594 19,20,434 2,82,534
6. The Bill of Entry was initially marked for 10% examination and since some boxes appeared to contain glass chatons, which were not declared in the Bill of Entry the case was handed over to a Special Intelligence and Investigation Branch5 who carried out 100% examination of the goods on 20.11.2014 in the presence of Shri Rajesh Jha "G" card holder and Shri Akhilesh Kumar, "H" card holder of the Customs Broker M/s B S Mann. On examination, the following goods were found:
S. Description of goods CTH Quantity (in
No. KGS)
1 Glass beads (with two holes) 70181020 3,971
and Glass seed beads (with
holes)
2 Glass beads (with two holes) 70181020 936
and Glass seed beads (with
holes)
3 Glass Chatons (undeclared ) 70181090 19,104
TOTAL 24,011
7. Since samples could not be drawn, the container was resealed with Customs Seal Nos. 227352 and 227353 and it was re-opened the next day on 21.11.2014 in the presence of Shri Rajesh Jha and Shri Akhilesh Kumar. Samples were drawn from for further investigation under Panchanama dated 21.11.2014.
However, as gate pass to take out the samples from the investigation area could not be obtained after completing of proceedings, the drawn samples were put inside the container and 5 SIIB 6 it was sealed with Customs Seal Nos. 227376 and 227377. The container was reopened on next date on 22.11.2014 in the presence of panchas and in the presence of Shri Rajesh Jha and Shri AKhilesh Kumar by Panchnama dated 22.11.2014 and samples were taken out from the container and it was sealed with Customs Seal Nos. 227393 and 227394. The container was lying in the ICD Tughlakabad and by Seizure Memo dated 23.02.2015, the goods were seized under section 110 as they were found to be liable to confiscation under section 111. Voluntary statements of various persons connected with the said imports were recorded, investigation was completed from which the following facts emerged:
(a) M/s Nomita International, 0-158, Geeta Enclave, Vani Vihar, Uttam Nagar, New Delhi - 59 having IEC No. 0513081143 had filed Bill of Entry No. 7418730 dated 18.11.2014 for clearance of goods declared as Glass Beads with holes and Glass Seed Beads with holes through their Custom Broker M/s B. S. Mann (CHA No. AIQPM7764HCH001).
(b) On examination, 564 cartons of undeclared Glass Chatons weighing 19,104 kg along with 209 cartons of 3,971 kgs and 39 plastic bags of 936 kgs of declared Glass Beads of both types were found
(c) Shri Lalit Kumar who was the Proprietor of M/s Nomita International was in judicial custody in connection with some attempt to murder charge and thus his statement could not be recorded.
(d) Shri Atal Bhushan Bhatt (Marketing Manager of the CHA firm) was aware of the mis-declaration since the 7 importer had provided him with samples of goods prior to imports as revealed in the various statements recorded.
(e) Shri Atal Bhushan Bhatt, who himself was owner of a logistics company in the name of M/s LCLSHIP Logistics, was also working with CHA firm and was well aware of Customs laws and procedures since he had also cleared CHALR Exams in 2012
(f) Shri Bhatt did not inform the Customs authorities about the misdeclaration and instead filed documents through his CHA Firm B S Mann.
(g) Shri Bhatt paid Customs duty through his account whereas the duty ought to be paid by the importer or Customs Broker account which again proved his malafide intention.
(h) Shri Bhatt tried to mislead the investigations by giving wrong statements inasmuch as earlier he had wrongly stated that in the case of Nomita International, money emanated from M/s Krishna Logistics account, but in all the imports of M/s Nomita International, the duty deposits were made in cash by him as received from Mr. Lalit Kumar (importer) and Rohit Kumar (Manger of the Importer).
(j) Shri Rohit Sharma (Manager of M/s Nomita International) was aware of the mis- declaration in the import consignment as well as about the nature of sample; he was actually participating in getting his mis- declared goods cleared from Customs.
(k) Shri B. S. Mann, CHA knew Sh. Lalit Kumar and M/s Nomita International and was aware of mis-declartion made in respect of the impugned Bill of Entry, as well as violation of CBLR Rules by himself/ by his CHA firm/ by Marketing Manger of his CHA firm.
(I) The seized goods lying in Container No. OOLU1372503 which were required to be kept in safe custody by 8 CONCOR were stolen for which an FIR was also lodged with Delhi Police and thus CONCOR also failed to discharge it's duties and obligations."
8. Accordingly, a show cause notice dated 18.11.2014 was issued which culminated in the issue of the impugned order.
9. CONCOR in its reply dated 26.10.2016 submitted as follows:
(a) That container was shipped from China to India and had moved under transhipment bond of the shipping line to ICD Tughlakabad by train and it was shifted to import warehouse on 19.11.2014. The seal was intact and it was cut on 20.11.2014 in the presence of representative of Customs, CONCOR, CISF and Shipper/CHA;
(b) By a letter dated 24.02.2015 customs reported that the container was seized and sealed by Customs Seal No. 227393 and 227394 by Seizure Memo dated 23.02.2015 and it had requested to keep the goods under safe custody;
(c) A letter dated 24.02.2015 was written after gap of 94 days after the examination of the goods on 20.11.2014, 21.11.2014 and 22.11.2014 by the Customs;
(d) After seal cutting by customs on 20.11.2014, CONCOR received a letter for conducting a joint survey on 9 05.03.2015 and the purported theft of goods came to knowledge of CONCOR and, accordingly, an FIR was registered with the Police on 07.03.2015. On 20.11.2014 it was originally sealed with Seal No. 227393 of the shipping line was intact. However, on 03.03.2015 container was found with a private red colour seal whose number was not visible as it was completely mutilated. After opening the container it was found completely empty;
(e) No Customs seal number was made available on 22.02.2015 although the goods were examined on 20.11.2014 and 22.11.2014 and resealed with the customs seals. Thus, the CONCOR was neither a witness to the presence of glass chatons in the container nor was it advised either by the importer CHA about the presence of glass chatons in the said container;
(f) After preparation of the Panchanama and annexure to the panchnama, the container was again examined and a panchnama was again prepared on 21.11.2014 and again sealed with different customs seal numbers and the same were conducted on 20.11.2014. The seizure memo prepared on 23.02.2015 was not sent to CONCOR but it was only sent to the importer; 10
(g) CONCOR received information about the seizure only by the customs letter dated 23.02.2015 which it had received on 22.04.2015 and thereafter it checked the container and found that there is no customs seal and there was only a red coloured private seal without any seal number. The CONCOR was not at all aware of happenings until it tried to handover the container to the CISF for safe custody by which time the goods had gone. CONCOR is not liable to pay customs duty under section 45 (3) and is also not liable for any penalty under section 117;
(h) There is a severe lapse on the part of the customs as proper investigation would reveal, therefore, the demand of duty and imposition of penalty on CONCOR cannot be sustained.
(i) During the personal hearing held on 26.10.2016 Shri P L Kaul, Manager CONCOR along with Ms. Yuktri Anand, learned counsel for CONCOR appeared and reiterated the submissions.
10. Learned counsel for CONCOR asserted that the demand of duty on CONCOR was not sustainable for the reason that it was not part of Panchnama drawn under which the goods were seized by the customs. It became aware of the seizure only when it received a letter from the Customs on 24.02.2015 when it found the customs seal was missing and replaced by a red colour private seal 11 with no number. He further asserted that penalty under section 117 was wrongly imposed on CONCOR.
11. Learned authorized representative appearing for the department placed on record a letter dated 24.02.2015 sent by the Superintendent SIIB to the General Manager of CONCOR intimating that the goods contained in the aforesaid container were seized under section 110 by seizure memo dated 23.02.2015 and sealed with customs seal Nos. 227393 and 227394 and requesting the CONCOR to keep the goods under safe custody until further orders from the customs. In response, CONCOR sent a letter dated 28.02.2015 intimating that the container was found without customs seals and with only a red colour private seal without any seal number.
12. Learned authorized representative appearing for the department submitted that the goods had not left the customs area within which the custodian of the goods was CONCOR.
13. It is not disputed that the goods were handed over in the container by the shipping line to CONCOR and during examination of goods by the customs the responsibility for presenting the goods for examination rests on the custodian which in this case was CONCOR.
14. Elaborating on the chain of custody of the goods, learned authorized representative submitted that the exporter hands the goods over to the shipping line. The master of the goods of the 12 shipping line issues a Bill of Lading acknowledging receipt of the goods said to be in the container. Thereafter, the Bill of Lading is sent by the exporter to the importer with which it can claim the goods. The Bill of Lading is the document of title. The shipping line which takes responsibility for the goods hands over the goods to the custodian of the customs premises such as the CONCOR. This exchange takes place under a document known as the Equipment Interchange Received (EIR). In this case the undisputed fact is that this container was handed over by the shipping line to CONCOR. Thereafter, the responsibility of the goods lies with CONCOR and it does not shift to the customs even if the goods have to be examined.
15. Once the importer files the Bill of Entry, pays duty and obtains an order permitting clearance of goods for home consumption from customs, he can obtain the goods from the custodian showing the Bill of Entry (with clearance from the customs), the Bill of Lading and the delivery order issued by the shipping line.
16. It is only in cases where the goods are seized by the customs that the custody of the goods switches to the customs. However, in case the goods are within the customs area, the practice is for the customs to seize the goods and hand over the custody back to the custodian who will be required to keep them in safe custody until further orders. If the seized goods are confiscated, they become the property of the Central Government and will, 13 accordingly, be disposed of. If they are released either unconditionally or on redemption fine, the custodian will have to hand over the goods to the importer. In this case the goods are lost while they were in the custody of the CONCOR. The fact that the seizure was done after three months after the examination makes no difference to the case because even if the goods were not seized, the custody will continue to be with the custodian CONCOR. After the goods were seized on 23.03.2015, a letter was immediately sent to CONCOR intimating about the seizure, and asking it to keep the goods in safe custody. At no point of time had the goods left the custody of CONCOR. Therefore, the responsibility for safe custody of the goods lies with CONCOR.
17. Therefore, CONCOR was liable to pay the duty under section 45 for the goods lost. Since part of duty was already paid, the demand was made confirmed only to the extent of duty not paid or short paid. He also asserts that the penalty under section 117 was correctly imposed on CONCOR.
18. We have considered the submissions with respect to this appeal on both sides.
19. The undisputed facts of the case are that the container was handed over by the shipping line to ICD TKD and the seal was intact at that time. The goods which are imported and are in the customs area shall remain in the custody of the custodian approved by the Commissioner of Customs until they are cleared for home consumption or for warehousing or transhipment. It is the 14 responsibility of the custodian to keep a record of such goods and send a copy thereof to the proper officer and not permit such goods to be removed from the customs area or otherwise dealt with except under and in accordance with the permission in writing of the proper officer. In this case the container, along with imported goods was in the custody of the custodian, namely, CONCOR. Until the goods are cleared for home consumption, warehousing or for transshipment by the proper officer, it is the responsibility of the custodian to keep them safely. After the proper officer clears the goods the custodian is required to hand them over to the importer for home consumption or to the concerned person or to the transshipment or for warehousing. In the case of transshipment or warehousing, the goods move under bond.
20. Duty of customs is levied on the goods imported into India at the rates specified in the schedules of the Customs Tariff Act, 1975. It needs to be pointed out that the charge of the customs duty is on the goods and not on any person. Consequently, once the goods change hands so will the liability to pay customs duty. The charge of customs duty applies even to goods belonging to the Government as it applies to goods not belonging to the Government. Section 12 of the Customs Act, the charging section, is reproduced below:
"12. Dutiable goods.
(1)Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under Section 13, for " Indian 15 Tariff Act, 1934 (32 of 1934)" , or any other law for the time being in force, on goods imported into, or exported from, India.
(2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government."
21. It is for this reason that if goods are imported the importer is liable to pay duty as it is he who owns the goods. If the goods are confiscated, the title passes on to the Central Government and the duty is recoverable from the sale proceeds of the confiscated goods. If the goods are allowed to be redeemed after confiscation after paying the fine under section 125, the title of the confiscated goods goes back to the importer and, therefore, in terms of section 125 (2), the importer has to pay the duty in addition to the redemption fine.
22. The owner of any imported goods may, at any time, before their clearance for home consumption relinquish its title to the goods and thereupon he shall not be liable to pay the duty thereon as per section 23 (2). In short, the liability to pay duty travels along with the imported goods.
23. The question which arises is if the goods get lost while they are in the custody of the custodian before they are cleared for home consumption, who is liable to pay duty? As per section 45 (3) the custodian is liable to pay duty if any good are pilfered after unloading thereof in the customs area while in the custody of the custodian.
24. Section 45 reads as follows:
16
" (1) Save as otherwise provided in any law for the time being in force, all imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the 1[Principal Commissioner of Customs or Commissioner of Customs] until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII.
(2) The person having custody of any imported goods in a customs area, whether under the provisions of sub-
section (1) or under any law for the time being in force,--
(a) shall keep a record of such goods and send a copy thereof to the proper officer;
(b) shall not permit such goods to be removed from the customs area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer or in such manner as may be prescribed. (3) Notwithstanding anything contained in any law for the time being in force, if any imported goods are pilferred after unloading thereof in a customs area while in the custody of a person referred to in sub- section (1), that person shall be liable to pay duty on such goods at the rate prevailing on the date of delivery of an 4[arrival manifest or import manifest] or, as the case may be, an import report to the proper officer under section 30 for the arrival of the conveyance in which the said goods were carried."
(emphasis supplied)
25. In this case it is undisputed that the goods were lost while they were in the custody of the custodian. It is true that after finding the discrepancies in the declaration on 24.11.2014 the officer of customs took time and seized them only by seizure memo dated 23.02.2015 under section 110. He also sealed the container with container customs seal numbers 227393 and 227394. He handed over the goods along with sealed container to CONCOR on 24.02.2015. There is nothing on record to show that the customs officers had taken the goods out of the customs area. There is also nothing on record to show that anybody else was permitted to and 17 had taken the goods from customs area. With reference to a letter dated 24.02.2015 the custodian found on 28.2.2015 that the container seal was broken and there was a private seal in red colour without any seal number. On opening, they found the goods were lost. Clearly, there is no scope of any interpretation in this chain of events except that the goods were pilfered while they were in the custody of the custodian CONCOR. Therefore, we find that in terms of section 45 (3), the CONCOR had to pay customs duty. Since part of the duty was already paid by the importer only the differential duty was demanded from CONCOR in the impugned order. We, therefore, find infirmity in the impugned order in so far as the confirmation of demand of duty under section 45 (iii) on CONCOR is concerned.
26. As far as the imposition of penalty under section 117 is concerned, we find that this section is a residual provision for imposition of penalty and it reads as follows:
"117. Penalties for contravention, etc., not expressly mentioned.
- Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a penalty not exceeding one lakh rupees."
27. Clearly, there is violation of section 45 by the CONCOR inasmuch as it had not taken proper care of the goods in its custody and as a result they were pilfered. The value of the goods 18 which were pilfered is Rs. 5,93,25,481/-. Considering this amount, we find that penalty of Rs. 1 Lakh imposed on CONCOR under section 117 is fair and reasonable and calls for no interference. Customs Appeal No. 51911 of 2018 filed by Shri Bhalinder Singh
28. Shri Bhalinder Singh is assailing penalty of Rs. 20 lakhs under section 112(a) and Rs. 10 lakhs under section 114 AA imposed upon him.
29. Learned counsel for the appellant made the following submissions;
(a) B S Mann, the Proprietary firm, is licensed as a Customs Broker. Shri B S Mann duly obtained all the KYC documents and verified the credentials of the importer and its address before the filing Bill of Entry which is the subject matter of this appeal. Shri B S Mann had previously filed four Bills of Entry to clear consignments for radiators for tractors on behalf of the same importer and these Bills of Entry were assessed and cleared;
(b) In November, 2014 the representative of M/s Nomita International inquired from the appellant about clearance of consignment of glass beads and also showed samples of the goods to be imported. The appellant appraised Shri Rohit Sharma, the Manager of M/s Nomita International about the classification and 19 other formalities were to clear the glass beads and prepared the Bill of Entry. Before the consignment was cleared, the officers of SIIB investigated the matter and found that 90% of the goods were glass chatons instead of glass beads as declared. Shri Mann filed the Bill of Entry based on the import documents supplied by the importer and had no prior knowledge of the presence of glass chatons. The appellant knew that Shri Lalit kumar was the proprietor of the M/s Nomita International, the importer. But he was not aware of any mis-declaration and, therefore, he had performed his responsibility under customs Brokers licensing regulations diligently.
(c) Regarding the department contention that Shri Atal Bhushan Bhatt the appellant's permanant employee who, in his statements, confirmed that samples of glass chatons were shown to him by the importer prior to file the Bills of Entry, he submitted that the department cannot fasten a case against Shri Mann only on the statement of Shri Bhatt without any corroborative evidence.
(d) It is pertinent to mention that the customs officers never took the statement of Shri Lalit Kumar, proprietor of the importer firm despite the fact that he was available in Tihar Jail during the relevant period on an attempt to murder charge.
20
(e) The appellant's only association with the impugned goods was to the extent of filing of a Bill of Entry on the basis of the documents produced by the importer and any mis-declaration in the documents rendering the goods to liable to confiscation should not render the appellant liable to penalty under section 112(a).
(f) Penalty under section 114 AA also cannot be imposed upon the appellant because prior knowledge or intention is required to impose penalty under section 114 AA and Shri Mann had no such knowledge.
30. On behalf of the Department, learned authorized representative for the revenue made the following submissions;
(a) During the relevant period Shri Atal Bhushan Bhatt, was the Marketing Manager of Shri B S Mann, CHA, whose statement were recorded on 20.11.2014 under section 108. This statement has not been retracted by Shri Bhatt till date. He confirmed in his statement and that the sample of glass beads was shown to him and that he was aware of the undeclared item i.e., glass chatons and that he was a "G" card holder of Shri B S Mann. Shri B S Mann, the "F" card holder, made his statement on 21.11.2014 in which he confirmed the sample of imported goods were shown before the 21 import and that these samples were handed over to Shri Bhatt which are glass chatons.
(b) During the relevant period Shri Lalit Kumar the proprietor of the importer was in Jail in connection with an attempt to murder charge on 15.11.2014 even before the Bill of Entry was filed on 18.11.2014.
(c) Shri Bhatt was the employee of Shri B S Mann, and, therefore, during the relevant period Shri B S Mann is liable for any action or inaction by Shri Bhatt in his capacity as the representative of Shri B S Mann.
(d) On request of Shri B S Mann, Shri Atal Bhushan Bhatt was cross-examined before the Commissioner on 04.01.2017. During the cross-examination he confirmed that he had a forwarding agency with a name of LCL Ship Logistics and he also bring clients to Shri B S Mann and that he was introduced the owner of M/s Nomita International through Shri Ashok Garg and that he had provided the invoice, packing list and bill of lading from Shri Rohit Sharma, the Manager of M/s Nomita International and that he had also shown samples provided to him by Shri Rohit Sharma and then description of which was glass beads and that he did not know whether the same actually glass beads or glass chatons.
31. We have considered the submissions on both sides with respect to the appeal filed by Shri B S Mann. 22
32. The facts of the case are clear Shri Atal Bhushan Bhatt was the Manager of Shri B S Mann during the relevant period and in that capacity he had obtained the documents pertaining to the importer of the disputed consignment and also saw the samples of the goods which are actually being imported. During cross examination by Shri B S Mann, before the Commissioner he confirmed that he had received the samples of the goods imported through Shri Rohit Sharma and that he had shown them to Shri B S Mann. Under such circumstances, it cannot be said that either Shri Bhatt or Shri B S Mann was not aware of the goods which were being actually imported. On examination by the SIIB the goods which are imported were found to be the glass chatons while the Bill of Entry was filed for the importer glass beads was of the invoice and packing list all showed the glass beads. In fact, 90% of the imported goods were glass chatons. This is not a case where the CHA had, merely based on the documents produced by the importer, filed the Bill of Entry. Had such been the case then the CHA would have had no responsibility as to the actual contends of the goods. In this case, the importer is not in the business of importing the glass beads or glass chatons and was indeed a regular importer of radiators for tractors. This consignment was different and the importer had provided samples of the goods to be imported to Shri Bhatt who was the Manager of Shri B S Mann. In turn, Shri Bhatt had shown those samples to Shri Mann. In this factual matrix we find no reason to believe that Shri Mann had innocently filed the Bill of Entry with a wrong declaration. Both Shri 23 Mann and his Manager were fully aware of actual goods being imported and had filed Bills of Entry with the wrong description.
33. Therefore, the goods were correctly held to be liable for confiscation under section 111 (l)and (n) of the Customs Act. However, before the goods could be confiscated they were pilfered after their seizure while in the custody of the CONCOR. The Commissioner had, therefore, not imposed any redemption fine. Penalty under section 112 (a) can be imposed on any person who, in relation to a goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act. In this case, the glass chatons were imported and having seen the samples even after the import Shri B S Mann and through his employees filed a Bill of Entry for glass beads. In fact, 90% of the goods were glass chatons. We, therefore, find that Shri B S Mann was correctly held liable to penalty under section 112(a).
34. Penalty under section 114AA can be imposed if any person knowingly or intentionally makes, signs or uses or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material fact in the transaction of any business for the purpose of this Act. The maximum penalty imposable is five times the value of the goods. The value of the goods in this case was Rs. 5,92,25,481/-. Shri B S Mann, through his employees, filed the Bill of Entry mis-declaring the nature of goods having first obtained samples of the goods even before filing the Bill of Entry. As is clear from the cross-examination by Shri B S 24 Mann, Manager of Shri Bhatt that not only he but also Shri B S Mann, himself had seen the samples before filing the Bill of Entry. We, therefore, have no hesitation in finding that the Bill of Entry filed knowingly mis-declaring the nature of goods.
35. In view of above, we find that the penalty under section 114 AA imposed on Shri B S Mann needs to be sustained. In view of above, we uphold the impugned order in so far as it pertains Shri B S Mann and reject his appeal.
Customs Appeal No. 52193 of 2018 filed by Shri Rohit Sharma.
36. This appeal is filed by Shri Rohit Sharma assailing the penalty of Rs. 5,00,000/- under section 112 (a) and Rs. 52,000/- under section 114 AA imposed upon him. During investigation Shri Rohit Sharma appeared before the Superintendent (SIIB) of Customs and tendered his statement on 21.11.2014 in which he stated that he was working as the Manager with M/s Nomita International, the importer, and looked after the work of import and other work such as sale of radiators at auto market, Haryana, that he fully aware of both the recovery of undeclared glass chatons by the customs authorities and that they belong to M/s Nomita International. He had given all the documents related to the import of above goods to Shri Bhatt which were given to him by Shri Lalit Kumar, the owner of M/s Nomita International. He said that was not getting any salary from the proprietor Shri Lalit Kumar's but he was working for him on commission basis. Shri Lalit Kumar's residence 25 was searched and nothing incriminating was found. From this statement and the statement of others and the investigation it is clear that Shri Rohit Sharma was aware of the mis-declaration of the import consignment and was also aware of the nature of the sample and further that he was actually participated in getting the mis-declared goods cleared from customs.
37. Accordingly, the SCN was issued to him also. In reply, Shri Rohit Sharma sent written replies on 23.03.2016 and 21.04.2016 and had appeared for personal hearing on 24.01.2016 through his advocate Shri Vipin Yadav. The defense of Shri Rohit Sharma as follows:
i. That he had no knowledge of the goods in question imported under the Bill of Entry but he was induced/coerced by Shri Atal Bhushan Bhatt to say before the Superintendent that he was working with M/s Nomita International as its manager. That he had neither any role in the import nor any knowledge of the goods which were imported and that he had subsequently severed all connections with Shri Bhatt.
ii. He was the employee of Shri Bhatt and was working for him since November, 2014 and was looking after the transportation of goods. Shri Bhatt was in the business of transportation and logistics and was also working for Customs Broker Shri B S Mann as his employee. 26 iii. His responsibility was confined to arrange transportation on daily basis containers to transport imported goods to godowns for which purpose he would keep a personal diary regarding movements of all vehicles. He worked for Shri Bhatt since November, 2014. On 20.11.2019 he went to the office of Shri Bhatt to report about his work when Shri Bhatt informed him about M/s Nomita International and forced him to represent him as a manager of M/s Nomita International before the Customs authorities "as the owner of M/s Nomita International was not in India and somebody had to represent him for the customs authorities". Although he had objected to the proposals, Shri Bhatt pressurized him into making the presentation and giving the false statement before the Superintendent of customs.
38. On behalf of the appellant the following submissions sent in writing by his counsel.
(a) No one has come on record that the appellant had knowledge about the discrepancies of the goods imported in the Bill of Entry and the only averment was that the was fully aware about the recovery of undeclared glass chatons by the customs authorities;
(b) Even if the statement is accepted as true, it does not prove that he was aware of the mis-declaration; 27
(c) Shri Rohit Sharma was, in fact, working as transport in-charge for Shri Bhatt in his freight forwarder firm M/s LCL shipping Logistics. Shri Bhatt uses the CHA licence of Shri B S Maan to clear the goods. The personal diary maintained by Shri Rohit Sharma recorded his day-to-day work with Shri Bhatt on whose insistence he made statement that he was a manager of M/s Nomita International. The statement was voluntary and he was forced him to make the statement by Shri Bhatt. In fact, he was not even paid salary for one month because of the altercation with Shri Bhatt in this case.
(d) These facts were presented before the adjudicating authority in defense reply but were not accepted by him. There is no finding with respect to the personal diary maintained by Shri Rohit Sharma in the impugned order by the adjudicating authority.
(e) During the relevant time the owner of M/s Nomita International was in jail;
(f) Shri Rohit Sharma neither signed nor filed any documents what so ever for clearance of the consignments and even implicated by his co-noticee Shri Bhatt. Therefore, the penalty imposed on Shri Rohit Sharma may be set aside and the appeal may be allowed.
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39. Learned authorized representative appearing for the department supports the findings of the impugned order and asserts that it calls for no interference what so ever.
40. We have considered the submissions on both sides in this appeal and perused the records.
41. Admittedly, Shri Rohit Sharma made a categorical statement under section 108 of the Customs Act before the Superintendent that he was the Manager of M/s Nomita International and that he had obtained the documents related to the import from owner of M/s Nomita International and handed them to Shri Bhatt for further processing and filing the Bill of Entry, and that he aware of the undeclared chatons which were seized by the customs authorities. This statement was made on 21.11.2014 and has not been retracted. All the material facts which were indicated in the statement such as the address of M/s Nomita International and the nature of its business matched with the facts available on record. We, therefore, find no reason to believe that the statement was made incorrectly or and under pressure or coercion. We also find that there was no retraction of the statement since November, 2014 until the issue of the show cause notice more than a year later. Any person who makes a statement under threat or coercion retracts it once the threat or coercion is removed. In this case, the appellant claims that he had left the service of Shri Bhatt in November, 2014 itself. That being the case, there was no scope for Shri Bhatt to exert any pressure on the appellant after that date. 29
42. Learned counsel for the appellant also submitted that the appellant had a diary in which he had records of the transportation details carried out by him. We, however, find that those details are not relevant to the facts in question as the dispute is regarding the mis-declaration in the Bill of Entry which according to both the CHA and the appellant, was prepared on the basis of the information provided by the appellant to the CHA.
43. Such being the case, we find no reason to interfere with the impugned order. The impugned order is upheld and the appeal is rejected in so far as Shri Rohit Sharma is concerned.
44. All the three appeals are dismissed and the impugned order is upheld.
[Order pronounced on 26.02.2024 ] (JUSTICE DILIP GUPTA) PRESIDENT (P. V. SUBBA RAO) MEMBER ( TECHNICAL ) Tejo