Customs, Excise and Gold Tribunal - Tamil Nadu
Atixt Computers (P) Ltd., Pravesh ... vs Commissioner Of Customs, Chennai on 31 October, 2001
Equivalent citations: 2002(80)ECC150, 2003(155)ELT119(TRI-CHENNAI)
JUDGMENT
S.L. Peeran All these appeals arise from Order-in-Original No. 168/93 dated 13.12.94 by which the Commissioner has passed the final order as follows:-
::: ORDER :::
In the light of the above,
1. I confiscate the goods under Section 111(d), (1) and (m) of the Customs Act, 1962. I order enhancement of the value of the consignment to Rs. 35,36,150/- (Rupees Thirty five lakhs thirty six thousand one hundred and fifty only) as against the declared value of Rs. 1,89,989/- (Rupees One lakh eighty nine thousand nine hundred and eighty nine only). I however allow the goods to be redeemed on payment of a fine of Rs. 30,00,000/- (Rupees Thirty lakhs) only. On redemption, the goods shall be cleared on payment of appropriate duty thereon, deducting the duty already paid.
2. I impose a penalty of Rs. 15,00,000/- (Rupees Fifteen lakhs only) on Shri A.B. Mehta under Section 112(a) of the Customs At, 1962.
3. I impose a penalty of Rs. 5,00,000/- (Rupees Five lakhs only) on Shri Pravesh Chabra under Section 112(a) of the Customs Act, 1962.
4. I impose a penalty of Rs. 5,00,000/- (Rupees Five lakhs only) on M/s Atixt Computers India (Pvt.) Ltd., Bombay under Section 112(a) of the Customs Act, 1962.
5. No separate penalty is imposed on M/s G.S. Trading Company, Bombay, as penalty has been imposed on the proprietor viz., Shri A.B. Mehta.
2. The findings recorded by the Commissioner in para 5 of his order is extracted below:-
5. I have considered the above submissions. In so far as the mens-rea is concerned, it is a fact on record that B/E No. 33586 dated 10.8.93 has been filed by M/s. G.S. Trading Co., through their Clearing Agents M/s. Skylift Cargo (P) Ltd., declaring 260 pcs. PCBs 300 boxes Floppy diskettes, 40 pcs. Floppy Drives, all declared to contain in 40 cartons. They have also filed declaration as to the truthfulness of the contents in the B/E duly signed by Shri A.B. Mehta. Similarly, the B/L No. 33589 dated 10.08.93 has been filed by M/s Atixt Computers (India) Pvt. Ltd., through their Clearing Agents M/s Skylift Cargo (P) Ltd., declaring 200 pcs. PCBs, 330 Pcs. Floppy Diskettes and 40 pcs. Floppy Drives all declared to contain in 41 packages. There is a declaration in the B/E as to the truthfulness of the contents in the B/E duly signed by Shri Pravesh Chabra, Director of the Company. However, when the goods were being taken out after clearance, they were intercepted by the Intelligence Officers on 10.08.93. On 11.08.93 detailed examination of the goods found in the 81 packages covered by both the Bs/E, was carried out in the presence of independent witnesses, Sri A.B. Mehta and the representative of the Clearing Agents. The examination thus carried out revealed the contents which are listed in Annexure "A" and "B" to the mahazar dated 11.08.93. Accordingly, the packages were found to contain floppy diskettes, floppy drives, mother boards, cordless phones, reading glasses, I.Cs, as per the details given in the said annexures attached to the mahazar. In his statement dated 10.08.93, Sri A.B. Mehta has admitted that no packing list was filed alongwith the Bs/E at the time of clearance of the goods. Similarly, Sri J. Vijayakumar, Clearing Clerk of M/s Skylift Cargo (P) Ltd., has in his statement dated 10.08.93 stated that he was not supplied with the packing list by the importers; whereas the Bs/E filed for clearance of PCBs, floppy diskettes and floppy drives, the consignments were found to contain apart from the above, cordless phones, reading glasses, mother boards and I.Cs. Their quantity also varied. Thus, the declaration filed about the truthfulness of the contents in the Bs/E is found to be totally incorrect. As per Section 46(4) of the Customs Act, 1962, the importer is required to file and subscribe tot he declaration as to the truth of the contents in the B.E. Obviously in this case, the declaration thus filed, has been found to be false. Even until now, no import licence has been submitted for the clearance of the said goods, even though in the written submission it is said that the importer had a special import licence and that he could import goods to the tune of Rs. 80 lakhs. Unless it is offered for acceptance, it cannot be said that the goods are covered by any import licence. Accordingly, the goods are liable for confiscation under Section 111(d) & (m) of the Customs Act, 1962. In as much as the goods are found to be more in quantity than what is declared in the B/E and some of the goods are not even covered with the declaration in the B/E and taking into account the value of all the goods in the consignment, mis-declaration with reference to the description of the goods, quantity and the value, stands established and therefore these goods are liable for confiscation under Section 111(m) of the Customs Act, 1962. Even though an attempt has been made to explain the discrepancy stating that the supplier had wrongly sent the goods by relying on a fax-cum-letter dated 12.08.93, I am unable to accept this for the following reasons. Both the consignments have been shipped by air on 02.08.93 as is found from the airway bills in question, whereas the supplier's fax is dated 12.08.93. This is from M/s Vastraco Pvt. Ltd., Singapore. Even assuming that this fax dated 12.08.93 of M/s. Vastraco Pvt. Ltd., is genuine, there is no similar confirmation from M/s. Mira Pvt. Ltd., Singapore, who have supplied 40 packages imported by M/s. G.S. Trading Co. Even the fax dated 12.08.93 is in response to a telephonic talk followed by a fax message of Shri A.B. Mehta. It can be anybody's guess as to the genuineness of the fax message dated 12.08.93 of M/s Vastraco Pvt. Ltd. Further as per the statement dated 10.08.93 of Shri A.B. Mehta he has placed orders when he visited Singapore. There is no document like quotation, proforma invoice, placement of order, (SIC) of L/C and so on which are normally found in any of the genuine commercial transaction. There is further evidence to show that Shri A.B. Mehta has sent a fax on 12.02.93 to M/s Taiwan Telecom requesting for supplying of 15 pcs. of mother boards into the fax machine cartons alongwith the fax machine. Further in his statement dated 11.08.93 Shri A.B. Mehta has clearly admitted that he had asked the suppliers to put extra quantity of floppy diskettes and requested them not to mention the same in the invoice and other documents. The above admission of Shri A.B. Mehta alongwith his earlier fax dated 12.02.93, though not relevant to this consignment, clearly shows the modus-operandi adopted by the importers. The importers had attempted to clear the goods by mis-declaration of the quantity, description and consequently the value. Once the consignments were intercepted and the importers found themselves in a tight sport, they had arranged for the explanation as though the goods were supplied due to mix-up at the supplier's end; that the supplier was only too willing to come up with such an explanation stands to reason because as seen from the statement dated 02.09.93 in reply to question No. 10 Shri A.B. Mehta stated that their main business interest was with M/s Vastraco Pvt. Ltd., and Mira Pvt. Ltd., and that they (M/s. Vastraco Pvt. Ltd. and Mira Pvt. Ltd.) were also having business interest with them (importers). There is, therefore, no wonder M/s Vastraco Pvt. Ltd., gave an accommodative message as though the goods were sent by mistake. It is relevant to point out here that once the so called mistake came to light, the importer has not sought any amendment of the B/E nor has made any request for re=export of the goods, nor is there any evident to show that the importers having taken any legal steps on the supplier for the so called wrong despatch of the goods, which has resulted in the present proceedings. I therefore conclude that the importers have attempted to clear all the goods by resorting to mis-declaration of the quantity and description of the goods and therefore the mens-rea is fully established. For the reason given above I do not accept the explanation that the goods were sent due to mix-up. I have also given the relevancy of the mutuality of business interest between the supplier and the importers in my findings above. With regard to the next contention that the goods having been allowed clearance under Section 47 of the Customs Act, 1962 no preceding can be initiated without setting aside the above order of clearance; the learned Advocate relied upon a judgement of the South Regional Bench, CEGAT, referred to above. However, I do not agree with this contention because the clearance is allowed based on faith that the importer's declaration is correct. I have already held in my earlier findings that the declaration filed in the B/E are totally false. Therefore, the subject clearance allowed by the proper officer believing the declaration made in the Bs/E cannot stand in the way of taking action as per the law once it came to light that the declarations are false. But even otherwise as has been held by the Madras High Court in 1991 (56) ELT 705 (Mad) which has been followed in a judgement by CEGAT in their order 1994 (73) ELT 317 (Tribunal), there is no bar in initiating action as herein, even in respect of goods allowed clearance under Section 47 of the Customs Act, 1962. I therefore do no find any legal infirmities in the proceedings initiated.
3. Ld. Counsel Shri Satish Sundar arguing on behalf of all the appellants challenged the findings which has been noted supra. The main ground of attack on the above finding is that (a) the supplier had mixed up the goods and by mistake had sent the goods as against the one ordered by them. (b) There was no mens rea on their part in filing the declaration in terms of the bill of entries. There is no mis-declaration with an intent to evade duty or to show that the goods were being cleared by them to defraud the Revenue. (c) Ld. Counsel points out that although the appellants had given statements at the time of investigation, but had not filed their replies to the show cause notice, however the counsel had filed written submissions before the hearing. They had also sought for cross-examination of the investigating officers. All the pleas raised by them has been duly recorded in the order. (d) Ld. Counsel submits that they had the licence for the goods which had been imported and there is no finding in the order that the appellants were clearing the goods in violation of the Import-Export Policy. The charge was with regard to the mis-declaration and evasion of duty which they have denied. He also points out from the order that the only evidence relied by the Commissioner was the fax sent by A.B. Mehta on 12.2.93 to M/s. Taiwan Telecom requesting for supply of 15 pieces of mother boards in the fax machine cartons along with the fax machine. However, this has no connection with the imported goods and the Commissioner has merely drawn inference with regard to the modus operandi adopted by the importers on the basis of this fax message. He submits that evidence has to be relied in each case independently and what has transpired in another matter cannot be looked into. He further submits that although there were statements dated 11.8.93 of A.B. Mehta admitting that he had asked the supplier to put extra quantity of floppy diskettes and requested them not to mention the same in the invoice and other documents and although A.B. Mehta has not resiled from these statements, but yet that statement itself cannot be a ground to reject their defence taken up pertaining to mixing up of the goods. He relies on the letter dated 12.8.93 and 19.8.93 sent by the supplier informing them about the mix up in the goods. The letter dated 12.8.93 is at page 16 of the paperbook which is a reply sent to A.B. Mehta on the queries raised by A.B. Mehta. The letter clearly seeks excuse for gross mix up in the materials. Ld. Counsel a query from the bench admitted that these letters were received by them on A.B. Mehta's seeking clarification from the supplier only after the case was detected and after the statements were recorded.
4. Ld. Counsel on a specific query from the bench clearly submits that the appellants had not raised the question of valuation of the goods under seizure. But his plea is that the penalty cannot be imposed in this case and it is too excessive. He submits that even otherwise, as the appellants have not indulged in the act of mis-declaration, the penalty is required to be tuned down considerably, as the appellants are not regular smugglers and not indulging in such activity. This is a genuine case of mix up and as such, for apparent mis declaration found out to be not correct, hence there can be only a nominal penalty. He submits that appellants are not in a position to pay the amount and the bench has also considered their hardship and had directed them to pre deposit only a nominal amount. He refers to the statement of A.B. Mehta wherein Shri Mehta has denied his involvement in the mis-declaration and his clear statement was that he was not award of the contents of the consignment. Ld. Counsel further submits that the appellant A.B. Mehta had been released on bail without the strong opposition from the department and submits that this is a fact to show that there was no serious involvement of A.B. Mehta in the charge of mis-declaration of goods. He seeks for setting aside the impugned order on the various grounds taken up in the appeal.
5. Ld. SDR submits that this is an open and (SIC) case for the following reasons:
The appellants did not have import licence for the cartons which were opened and Mahazar made. The appellants had filed the bill of entries and clearing the goods - 260 PCBs, Floppy drives and floppy diskettes in terms of the declaration made in the bill of entry. After the appellants paid the duty and at the time when the goods were cleared, on specific information, the officers intercepted the consignment and it was opened and Mahazar was drawn. There is no challenge to the correctness of the Mahazar or the description of the goods. The only defence is that the supplier had mixed up the goods. he submits that the two letters of the supplier which have been filed subsequently were obtained by the appellants only after the investigation was completed. The suppliers also did not come forward to claim the goods on the grounds of mix up. He points out that the Commissioner has given a very clear and categorical finding as to how there was a mens rea on the part of the appellants who mis-declared the goods and defrauded the Revenue. They have not filed the packing list which would have disclosed what the goods are in the containers and cartons thereby the inference drawn by the Commissioner that the declaration was not in tune with the goods received has been established. The burden has shifted on the importers which has not been discharged by them. The appellants have not filed their replies to the show cause notice and they took the stand of mix up only before the Commissioner through their counsel and the same has not been established by any clinching evidence. he submits that penalty imposed is on the basis of the proved contravention. The Commissioner, in terms of Rule 112(A) could have imposed penalty 5 times value of the goods. The goods have been valued at Rs. 35,36,150/- against the declared value of Rs. 1,89,989/-. Had the goods not been intercepted then, the Revenue would have lost more than 40 lakhs in the matter. Therefore, the penalty imposed in the present case is very nominal and it does not call for any reduction or interference in the impugned order.
6. On a careful consideration of the submissions made by both the sides and on perusal of the entire evidence on record, we are satisfied that the order passed by the Commissioner is legal, valid and sustainable for the following reasons:-
At the outset, appellants have not resiled from the statements recorded by the investigating authorities. The appellants also have not filed replies to the show cause notice contesting the contents of the containers which have been meticulously drawn up in the Mahazar. The value of the goods drawn in the mahazar has also not been contested. The apparent mis-declaration in terms of the bill of entries filed and the goods found on seizure had not been contested. The only plea raised is that the supplier had wrongly supplied the goods. They rely on two letters of the supplier which is on record. On a careful consideration of the both the letters, we notice that these letters have been obtained by Shri A.B. Mehta only after the packings & cartons were seized and Mahazar was drawn. The letter itself discloses that he supplier is answering to the query raised by A.B. Mehta and he regrets for having made the supplies. However the clinching point which is against the appellants in the case is that they have not filed the packing list and the Commissioner has after due analyses of the evidence on record has clearly over-ruled their oral pleas pertaining to the defence raised. ld. Commissioner has clearly noted that in the absence of the packing list which was required to have examined by them before filing the bill of entries. The conclusion is that appellants were fully aware of the goods which have been imported. Ld. Commissioner has drawn conclusion on the basis of statement dated 11.8.93 by A.B. Mehta who has clearly admitted that he had asked the supplier to put extra quantity of floppy diskettes and requested the supplier not to mention the same in the invoice and other documents. Ld. Commissioner has merely drawn further sustenance from the fax message dated 12.8.93 wherein A.B. Mehta has requested the supplier for supplying 15 nos. of PCBs of mother boards in the fax machine cartons along with the fax machines. This indicates the modus operandi adopted by the importers in getting the goods in this manner. This aspect of the matter has not been challenged by the appellants stating that there was no such fax message sent by the m or that they have not indulged in such an activity. The clear admission of A.B. Mehta and the fact that he has not filed replies to the show cause notice and he has not discharged his burden clearly establishes the case of the Revenue in the matter. The appellants only plea is pertaining to mix up of goods and that they were not award of the contents of the goods. This has been clearly answered by the Ld. Commissioner in his order. The Commissioner has drawn his inference on the appellants failure to file the packing list along with the bill of entries and also with regard to the other circumstantial evidence and documentary evidence and admissions by which the appellants have clearly admitted their connivance in the matter in getting the goods other than what had been declared. The appellants have not challenged the valuation which has been adopted in the matter and the duty which is required to have been paid. Mere fact that appellants have not redeemed the goods will not call for a finding to the effect that appellants had not booked the goods which are (SIC) in the bill of entries. Further, the argument raised by Ld. Counsel that the Ld. Magistrate had granted him bail will have no bearing on the findings arrived at the Commissioner with regard to the mis-declaration and undervaluation of the goods. In view of a very weak defence raised and that too in orally before the Commissioner, we do not find any infirmity in the order. Ld. Commissioner has given detailed finding on each of the points and we have extracted the same and we find that the order is legal, sustainable and correct.
7. With regard to the counsel's plea for reduction of penalty on the ground that it is excessive we notice that in this matter, appellants have declared the value at Rs. 1,89,989/- as against the value of the consignment of Rs. 35,356,150/-. It has been brought in the order itself that the total Revenue loss would have been more than 40 lakhs. In a circumstances like this, we notice that it does not call for any leniency as appellants have indulged in such an activity in an earlier occasion also which has been detected on investigation. Therefore, in view of the charged proved in the matter and penalty imposed is in deference to the offence committed and the penalty and being not more than the value of the goods, it does not call for any interference from our side. There is no merit in these appeals and hence the appeals are rejected.
(Pronounced & dictated in open Court)