Custom, Excise & Service Tax Tribunal
Shri. Mohit Lamba vs Commissioner Of Customs (Import), ... on 4 January, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. I
APPEAL NO. C/147, 148, 257/02 Mum
(Arising out of Order-in-Original No. CAO. No. 406/2001/CAC/CC/A.S.S. dt. 29.11.01 passed by the Commissioner of Customs (Import), Mumbai).
For approval and signature:
Honble Ms. Jyoti Balasundaram, Vice President
and
Honble Shri. A.K. Srivastava, Member (Technical)
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?
Shri. Mohit Lamba
:
Appellant
Shri Surinder Khosla
Shri Jay Prakash Kamat
Versus
Commissioner of Customs (Import), Mumbai
Respondent
Appearance Ms Kiran Doiphode, Advocate for Appellant Shri B.K. Singh, Jt. CDR for Respondents CORAM:
Ms. Jyoti Balasundaram, Vice President Shri. A.K. Srivastava, Member (Technical) Date of Hearing : 04.01.08 Date of Decision :..
ORDER NO.
Per : Shri. A.K. Srivastava, M (T) These three appeals arise out of a common Order-in-Original No. 406/01/CAC/ASS dated 29.11.2001 passed by the Commissioner of Customs (Adjudication), Mumbai as regards the imposition of penalty under Section 112 of the Customs Act, 1962 as under:-
a. Rs.10 lakhs upon the appellant Shri. Mohit Lamba (Appeal No. C/147/02-Mum). b. Rs.10 lakhs upon the appellant Shri Surinder Khosla (Appeal No. C/148/02-Mum). c. Rs. 2 lakhs on the appellant Shri Jai Prakash Kamat (Appeal No. C/257/02-Mum).
2. The facts in the present case are that based on investigations conducted by the DRI, New Delhi it was revealed that the appellants in collusion with each other as well as several other persons arraigned in the impugned order had floated one firm by name M/s. Tilak Overseas Exports Pvt. Ltd. 24, Pragati Complex, Idgah Road, Delhi-6 wherein the appellant Shri Mohit Lamba was one of the Directors. This company had obtained 12 advance licenses for import of 731.325 Mts. Of polypropylene & 542.750 Mts of Polystyre on which they availed of the Customs Notification 204/92 dated 19.5.92 and cleared them duty free by availing the benefit of exemption to the extent of Rs.2,74,46,104.00 payable on the said imports and such plastics to be used as raw material for which the firm was also allotted an export import code by the DGFT bearing No.0594009073 dated 30.5.94. After the import of the raw materials, these persons then sold off the material in the market without fulfilling the export obligation through one Shri. Rajeev Khandelwal the owner of M/s. Pan Asia Group, having offices at Delhi and Mumbai.
3. The admitted roles of the above three persons in the disposal of the raw material are outlined at Para No. 26, page No.48 of the notice. The details are as under:
a. Shri Ravinder Kumar & Shri Rajinder Kumar, both licensed Directors of the firm had applied for the duty free advance with the sole purpose and intention of disposing off the imported duty free material in the local market without using the same in the manufacture and export of the goods in violation of the conditions of the duty exemption scheme and the relevant Customs Notifications.
b. Shri Manoj Kumar & Shri Devendar Kumar in association with Shri. Rajeev Khandelwal got the goods imported and cleared duty free after which the same were sold in the local market.
c. Shri Rajeev Khandelwal, a Mumbai Businessman associated himself with S/Shri Manoj Kumar & Devendar Kumar in the procurement of advance licenses issued in the name of the firm and together with his subordinate Shri Jai Prakash Kamat got the goods cleared duty free after getting them purchased on high sea sale basis from various importers known to him & disposed off the goods in local market without fulfillment of the export obligation.
d. S/Shri Jai Prakash Kamat & Surinder Khosla had failed to take reasonable care and act in a prudent manner as they had the knowledge that imports had been effected by the firm under the 12 advance licenses availing the benefit of Notification 204/92 dated 19.5.92.
e. Directors S/Shri Ravinder Kumar, Rajinder Kumar & Mohit Lamba also assisted the above persons in perpetuating the offence by signing the documents as Director whenever required for filing application for grant of advance license, for endorsing the documents required for obtaining the clearances of the goods etc. It is pertinent to mention that it was only due to these three persons that the entire fraud was perpetrated.
f. In addition to d above, Shri Surinder Khosla also rendered full support to the said persons as he was the person who provided space for office of the said firm to the bank authorities, in obtaining CA Certificate by introducing these persons to the CA and also rendered his support and actively participated in introducing Manoj Kumar and Devendar Kumar to Shri Rajeev Khandelwal and by getting his relative Shri. Mohit Lamba appointed as Director thus facilitating the day to day work of the said firm at Mumbai from where the goods were imported.
4. Ms Kiran Doiphode, Advocate appeared for S/Shri Surinder Khosla & Mohit Lamba, while no one appeared for Shri Jai Prakash Kamat nor did Jai Prakash Kamat appear in person, when the matter was called out. We find that there is no adjournment request made by the said Shri Jai Prakash Kamat. Ms Kiran Doiphode drew our attention to the ratio of the decision of the CESTAT in Shri Rajeev Khandelwal vs. Commissioner of Customs (Imports) dated 21.6.2002 and stated that on the basis of this decision where the appellant Shri Rajeev Khandelwal is one of the co-noticee in the impugned notice as welll as in the impugned order and by which the Tribunal has set aside the order of imposition of penalty on Shri Khandelwal and submitted that the issue being identical to the case of Shi Khandelwal, in her clients case, the penalties are liable to be set aside. On the other hand, Shri B.K. Singh, ld. Jt. CDR reiterated the findings of the Commissioner in the order and held that the ratio of the decision in Shri Khandelwal case was distinguishable on facts since it was the specific role of each of the persons that was required to be delved into for the purpose of the imposition of penalty and each fact was different as can be seen from the order. He, therefore, requested that the appeals be dismissed on merits.
5. We have heard both sides. We find that the actual case against the firm has not been contested by the appellants in the appeal before us. We thus hold that as far as the goods are concerned, there is no dispute on the diversion of the same in the open market by the firm and on which admittedly no export obligation has been fulfilled on the 12 advance licenses procured by the Importer and as such the charge of non-fulfillment of export obligation is established.
6. This means, we are now required to examine the role of these persons who are charged under the Customs Act, 1962 for the imposition of penalty for various contraventions as set out in the impugned order.
7. We shall first examine the Tribunal Order dated 21.6.2002 passed in case of appellant Shri. Khandelwal. Here we find that the Tribunal has based its decision on the charge made against Khandelwal. In that, it was merely mentioned that Shri Manoj Kumar had handed over the licenses to Shri Khandelwal and beyond that there is no evidence on record to prove that Shri. Khandelwal had in any manner dealt with the goods at the time of clearances or at the time of taking to the market or selling them.
8. However, in the present case, none of these three persons have been able to rebut the charge made as stated in the Notice and before the adjudicating authority except for making general submissions that they were not concerned with the goods in question nor were they aware that the goods were liable to confiscation. Mere denial is not enough and is required to be backed by strong counter evidence. We could not find any such evidence, when we went through the whole case records. We are, therefore, in full agreement with the findings of the Commissioner that they were concerned with the goods in question. We also are at pains to note that the extent of fraud committed at the time of the diversion of the raw materials by flouting all the Rules and Regulations is gigantic. The full benefit of advance licences obtained by fraud and misdeclaration is not only reaped by the firm but by these three appellants too, whose roles in the diversion have come out very clearly. The extent of mens rea is also established from the conduct of these persons that each of these appellants were all along aware of the fact that the goods were meant for fulfillment of the export obligation and yet for the sake of their own greed agreed to become instrumental in diverting the entire consignment to local market thus reaping the benefit of the ill-gotton money by diversion. In fact, the evidences as gathered in the investigations reveal the extent to which one of the Directors was Shri Mohit Lamba with the intention to defraud the Revenue. The Commissioner has clearly brought out the role played by these three people, while imposing penalty on each of them.
9. The Commissioner of Customs, Mumbai has imposed penalty of Rs.10,00,000/- under Section 112 on Shri Mohit Lamba under his Order-in-Original No. 406/2001. As Director of the firm, he had full knowledge aout the entire misrepresentation and misdeclaration made in regard to Import / Export under the impugned advance licences. He signed many documents relating to applications for grant of advancelicences, opening of bank account, for signing of contract, endorsement of documents etc. He allowed the other Directors and persons to misrepresent the fact before DGFT and Custom authorities. He participated in the clearance of the goods imported under against advance licence and selling in the market. He is the person who has done or omitted to do acts and / or omissions which have rendered the imported goods under the impugned advance licences liable to confiscation under Section 111(o) of the Act. We, therefore, uphold the penalty of Rs.10,00,000/- imposed on Shri Lamba. We do not see any infirmity in the order of the Commissioner. The penalty imposed on him is upheld.
10. Next is the role of the appellant Shri Surinder Khosla. We find that at the material time, he had rendered full support to the said persons by providing office space for the said firm, facilitated in opening of bank account by introducing the firm to the bank authorities, obtained CA Certificate by introducing these persons to the CA and also rendered his support. He knew the other persons Shri Manoj Kumar and Shri Devender Kumar and got his relative Shri Mohit Lamba appointed as Director, thus facilitating the day to day work of the said firm at Mumbai from where the goods were imported. We also find that Shri Surinder Khosla had failed to take reasonable care and act in a prudent manner as he had the knowledge that imports had been effected by the firm under the 12 advance licenses availing the benefit of the notification 204/92 dated 19.5.92. Thus, he is the person who has done or omitted to do acts and/or omissions, which have rendered the imported goods under the impugned advanced licences liable to confiscation under Section 111(o) of the Act. We, therefore, uphold the penalty of Rs.10,00,000/- imposed on Surinder Khosla. We do not see any infirmity in the order of the Commissioner. The penalty imposed on him is upheld.
11. We now take up the role of appellant Shri Jai Prakash Kamat. We also find that he was the main person in getting the goods cleared and after clearance of the same from Customs through a known CHA he disposed them off in the market by preparing documentation & facilitation of the import and thus not fulfilling the export obligation by working with Shri Manoj Kumar and Shri Devender Kumar. Here also, we agree with the findings of the Commissioner that Shri Jai Prakash Kamat had failed to take reasonable care and act in a prudent manner as he had the knowledge that imports had been effected by the firm under the 12 advance licenses availing the benefit of the notification 204/92 dated 19.5.92. Thus, he is the person who has done or omitted to do acts and / or omissions, which have rendered the imported goods under the impugned advance licences liable to confiscation under Section 111(o) of the Act. We, therefore, uphold the penalty of Rs.2,00,000/- imposed on Shri. Jai Prakash Kamat.
12. In view of the above, we do not see any infirmity in the order of the Commissioner. The penalties imposed on each of the appellants are hereby upheld. The appeals filed by the appellants are rejected.
(Pronounced in Court on )
(Jyoti Balasundaram)
Vice President
(A.K. Srivastava)
Member (Technical)
nsk
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