Custom, Excise & Service Tax Tribunal
Shri S.K. Miglani vs Commissioner Of Customs (Preventive), ... on 16 November, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO. C/527/2008 & C/611/2008 (Arising out of Order-in-Appeal No. 106,107 /2008/MCH/Addl.Gr.VB/07-08 passed by the Commissioner of Customs (Appeals) Mumbai-I For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) ============================================================
1. Whether Press Reporters may be allowed to see : No
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 : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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Shri S.K. Miglani
:
Appellants
Shri S.M. Garg
VS
Commissioner of Customs (Preventive), Mumbai.
Respondents
Appearance
Shri Ashok K. Singh, Advocate &
Shri Harsh Khanna, Advocate for Appellants
Shri V.K. Singh, SDR Authorized Representative
CORAM:
Shri Ashok Jindal, Member (Judicial)
Date of hearing : 16/11/2010
Date of pronouncement : 09/12/2010
ORDER NO.
Per : Ashok Jindal, Member (Judicial)
By this impugned order, the penalty of Rs.1,00,000/- each has been imposed on the appellants under Section 112 (b) of the Customs Act,1962.
2. The facts of the case are as under:-
The Central Intelligence Unit of Mumbai Custom House had taken up a case of substitution of examined packages with non-examined packages, more specifically, the substitution of new imported cars with old and junk cars from Unaccompanied Baggage containers lying at the docks.
In one such case, a container CRXU 1068739, arriving from Dubai per M.V. Express Dhaulagiri 114, under IGM No. 3209/278 dated 07.10.99 (Item No. 276) was taken up for investigation. The container was said to have one car Toyota Land Cruiser, Chasis No. HDJ-1010-0013354, consigned to one Ganpat Genu Parte, Jaiphal Wadi, Tardeo, Mumbai. The Bill of Lading was issued by M/s. Sunmarine Shipping Services LLC. Investigations revealed that Ganpat Genu Parte was not available at the given address nor at his native place in Satara. On Examination of the said container on 11.08.2000, one Toyoto DX car with Chassis No. EE-80-5012760 was found. The said car valued at Rs. 1,70,000/- CIF and Rs. 3,40,000/- MV was seized under Panchanama.
The investigation regarding the import and substitution of manifested car Toyota Land Cruiser was taken up by the CIU alongwith the Police Authorities of Yellow Gate Police Station. During the course of further investigations and interrogation the consignee, Ganpat Genu Parte it was revealed that he had worked in Dubai as embroidery worker for three years and had returned to India on termination of his employment; that he had handed over his passport to one Faiz, who was running a travel agency, M/s. New Grace Travels & Tours Ltd; that the criminal conspiracy was hatched and operated by various persons viz. Pramod Mankar, Assistant Shed supdt. MBPT, Stanley Fernandes, a carpenter, Shaukat, Bhagwan Sawle, Loader, Anil Wadgama, Faiz Irfan Shaikh; that they would drive-in low value vehicles into the docks, break open the containers and substitute them with new ones from the container and drive out high value new imported cars from the containers/docks on the basis of the forged accompanying documents and sell these high value cars to members of public. The above manifested Toyoto Land Cruiser was ultimately traced with Shri V.N. Teneja, Manager, M/s. Mc Dowell & Co., New Delhi. This car valued at Rs.14,00,000/- CIF and Rs.30,00,000/- MV was also seized under Panchanama. Investigation revealed that the said car was purchased by Shri Taneja for Rs.38,00,000/- from Shri S.M. Garg, who had purchased it from Mrs. Dhillon for Rs. 28,00,000/-, through Shri S. K. Miglani, who had facilitated the transactions as a professional broker at a fee of Rs.10,00,000/- i.e. the difference between the purchase and sale price of Shri S.M. Garg.
The case was adjudicated, wherein the car, Toyoto Land Cruiser was confiscated u/s 111(d) and (l) of the Customs Act, 1962 and penalty of Rs.1,00,000/- was imposed each on Shri S.M. Garg and Shri S.K. Miglani alongwith other members of the conspiracy, u/s 112(a) of the Customs Act, 1962. Shri S.M. Garg, the appellant has filed this appeal for setting aside the order of penalty.
3. The learned Advocates for the appellants submitted that role of the one of the appellant namely Shri S.K. Miglani was of broker and the appellant Shri S.M. Garg was the second buyer of the impugned vehicle. In this case, the vehicle was purchased by Shri S.M. Garg through Shri S.K. Miglani from one Mrs. Dhillon, who was the registered owner of the vehicle. No statement of Mrs. Dhillon was recorded in the entire proceedings, the only allegation against the appellant is that Shri Miglani dealt with the impugned vehicle for sale to Shri S.K. Garg for Rs. 28 lakhs, which was later on sold to M/s. Mc Dowell & Co. at a higher price of Rs.37,90,000/-. On the presumption that the appellants are known that the vehicle is the tainted one the penalties have been imposed, no corroborative evidence has been brought on record by the department. As there is no statement of Mrs. Dhillon under which circumstances she sold the vehicle at Rs.28 lakhs to Mr. S.M. Garg, the penalty on presumptions cannot be imposed. Moreover, in the case of penalties on M/s. Mc Dowell & Co., and their, manager Shri V.N. Taneja has been dropped on the ground that they are the bona fide purchasers of the vehicle. In the absence of any specific allegation with corroborative evidence, penalty on the appellant cannot be imposed. To support his contention he placed reliance on Radha Kishan Bhatia Vs. UOI reported in 2004 (178) ELT 8 (S.C.) and Bal Krishan Vs. Collector of Customs New Delhi reported in 1994 (70) ELT 638 (Tribunal).
4. On the other hand, the learned DR submitted that it is no doubt that appellant Mr.Miglani is a broker, who deals in the sale and purchase of imported car and is also known of the market price of the vehicle at the relevant time. As the market price of the vehicle is more than Rs.40 lakh, which he has been able to procure from Mrs. Dhillon for Rs. 28 lakhs and helped Shri S.M. Garg to purchase the vehicle for Rs. 28 lakhs, the activity of dealing of vehicle at lower rates creates doubts on the act of the appellants that why they have dealt with vehicle at very lower price and sold to M/s. Mac Dowell & Co. Ltd., for a higher price, which is equivalent to the market price. In these circumstances, the appellants cannot be said to the bona fide purchasers of the vehicle hence, the lower authorities has rightly imposed the penalty on the appellants.
5. Heard and considered.
6. In the facts and circumstances of the case, I find that in this case the penalty have been imposed on the appellants only on the ground that they have dealt with the vehicle, which was having a market price of more than Rs.40 lakhs and the same was purchase for Rs. 28 lakhs. There is no statement on record of Mrs. Dhillon, who can tell whether it was known to the appellants that the vehicle is a tainted one. Mere on the presumption of that the appellants might be having knowledge of the tainted vehicle, penalty cannot be imposed. Reliance made by the lower authorities in the case of Chicago Pneumatic India Ltd. Vs. Commissioner of Customs, Mumbai reported in 2003 (156) ELT 384 (Tri. Mumbai) is of no help to the Revenue. In fact, in that case the actual user (importer) gave wrong classification in spite of correct description available in the purchase order and in the case of Sachidananda Banerjee, A.C.C,, Calcutta vs. Sitaram Agarwala reported in 1999 (110) ELT 292 (S.C.) is also of no help as the facts of the said case are some how dependent from the case. The case law cited by the learned Advocate in the case of Bal Krishan (supra) wherein Larger Bench of this Tribunal has held that the penalty is mainly depending upon the personal involvement of the person concerned in that legal importation. Sufficient evidence was not brought on record to show that the appellant was connived with or abetted the person who were involved or played any role in obtaining bogus No Objection Certificate or registration while transferring the vehicle into his name. Under these circumstances, the benefit of doubt has to be given to the appellant and penalty was set aside. In the case of Radha Kishan Bhatia (supra) the Honble High Court has held that the person who gets the possession after importation, even if with knowledge of their smuggled character, ipso facto cannot be said to be so concerned. In this case, it is clear from the facts that the appellants were not involved in any activity of importation or registration of the vehicle at the first time that is when the vehicle was registered in the name of Mrs. Dhillon. The appellants have dealt with vehicle after duly verification from the police records and registration authority. The department also failed to bring any corroborative evidence on record that the appellants were having the knowledge that vehicle is a tainted one. On mere presumptions penalty cannot be imposed. Accordingly, I do not find any merit in the impugned order the same is set aside by allowing the appeals of the appellants (Pronounced in court on 9/12/2010 (Ashok Jindal) Member (Judicial) Sm 5