Custom, Excise & Service Tax Tribunal
Shri P.D. Manjrekar vs Commissioner Of Customs (Ep) Mumbai on 8 February, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. APPEAL NO. C/218/07 & C/389/07 (Arising out of Order-in-Original No. CAO/12/2007/CAC/CC/KAP dt. 2.2.2007 passed by the Commissioner of Customs (EP) Mumbai For approval and signature: Hon'ble Shri M. V. Ravindran, Member (Judicial) ============================================================
1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy : of the Order? 4. Whether Order is to be circulated to the Departmental : authorities? ============================================================= Shri P.D. Manjrekar : Appellant Shri G.T. Jadhav VS Commissioner of Customs (EP) Mumbai Respondent Appearance Shri S.N. Kantawala Advocate & Miss. Shilpa Balani, Advocate for Appellant Shri S.N. Prasad, Authorized Representative (SDR) CORAM: Shri M. V. Ravindran, Member (Judicial) Date of decision 08/02/2008 ORDER NO.................................................... Per : Shri M. V. Ravindran, Member (Judicial)
These two appeals are directed against the Order-in-Original No. CAO/12/2007/CAC/CC/KAP dt. 2.2.2007.
2. Heard both sides and perused the records.
3. The appeals are filed against the imposition of penalty of Rs. 5 lakhs on both the appellants under the provisions of Section 114(iii) of the Customs Act, 1962. The case of the department is that M/s. M.W. Impex had over invoiced the goods sought to be exported. It is the case of the Revenue that both the appellants herein aided and abetted the exporters in overvaluation due to which the exporter claimed ineligible higher duty drawback.
4. I find that in respect of the very same appellant's herein, the Division Bench of the Tribunal in the case of P.D. Manjrekar and Others Vs. CC, Mumbai as reported at [2007 (78) RLT 769 (CESTAT-Mum.)] and [2007 (83) RLT 113 (CESTAT-Mum.)] has set aside the penalties imposed on the appellants under the provisions of Section 114 (iii) of the Central Excise Act, 1944 I may read the same.
"We find that on the same set of statements of the appellants herein, where they acted for one M/s. Pawan Impex, the Tribunal, vide its order No. A/831-833/WZB/2006/C-I dated 30.8.2006 (in appeals filed by the present two appellants as well as one Shri S.C. Dubey), set aside the penalties of Rs.5.00 lakhs and Rs.2.00 lakhs imposed upon Shri Manjrekar and Shri Jadhav respectively, holding as under:-
"5. .... we find that the penalties have been essentially imposed upon the said appellants under Section 114 on the finding of the aiding and abetting the exporting firm in procuring the fraudulent higher drawback. However, the various reasons discussed by the adjudicating authority, as detailed above, only indicate that there may be some procedural infractions or violations of CHA regulations but do not reflect upon the fact that all these persons were aware of the incorrect quantity or value declared by the export firm. Tribunal in the case of Ashok Jaiswar & Anr. vs. CC, New Delhi 2006 (75) RLT 225, by referring to the precedent decision, has held that mere failure by the Customs House Agent to carry out his duty in accordance with law, by itself, is not sufficient ground to impose personal penalty upon them, unless there is evidence to show that the failure was on account of malafide intentions. As we have already observed that procedural deviation, by itself may invite some actions against the said persons under other laws, but does not reflect upon the knowledge and consent of the said persons so as to invite penal action under Section 114 of the Customs Act. As such, by extending benefit of doubt, we set aside the personal penalty imposed upon the appellants and allow their appeals with consequential relief to them."
Although valiant efforts were made by the learned SDR to try and establish that knowledge of over-invoicing was available with the appellants herein, and relying upon the decision of the Hon'ble Delhi High Court in Satish Gupta vs. UOI 2007 (212) ELT 178, and they were, therefore, liable to penalty under Section 114(iii), we find that the evidence relied upon by the Commissioner in the case of Pawan Impex is no different from the evidence in the present case. The Delhi High Court's decision cited by the learned SDR is distinguishable for the reason that, in that case the Tribunal's finding that Satish Gupta had knowledge of over-invoicing was upheld by the High Court, while in the present case no such knowledge has been brought out by the department. Therefore, the ratio of the Tribunal's order cited supra is applicable on all fours to the facts of the present case and following the same, we set aside the penalties and allow the appeals.
From the above-reproduced portion of the order of the Division Bench I find that the issue is squarely covered in favour of the appellants herein. It is undisputed that the current proceedings are result of the investigations undertaken in the above case involving the same appellants and same set of facts.
5. Accordingly, respectfully following the judgement of Division Bench, the impugned order to the extent it imposes penalty on the current appellants under the provisions of Section 114(iii) of the Customs Act, 1962, liable to be set aside and I do so.
6. The appeals are allowed with consequential relief, if any.
(M. V. Ravindran) Member (Judicial) Sm 4