Customs, Excise and Gold Tribunal - Ahmedabad
Associated Plastics And Rayons vs Commr. Of C. Ex. And Customs on 15 November, 2006
ORDER C.N.B. Nair, Member (T)
1. These four appeals are directed against the same Order in Appeal. Accordingly, they are taken up together and remain disposed of under this common order.
2. The first appellant, M/s. Associated Plastics and Rayons is an EOU which had imported raw materials Viscose Filament Rayon Yarn without payment of Customs duty. It was legally obliged to use the said yarn only for the purpose of export production. All the same, it sold 6870 kgs. of the imported yarn valued about Rs. 14 lakhs to M/s. Navpad Textile Industries, Surat.
3. When the yarn in question was being transported, it was intercepted by the Customs authorities on 8-7-03. Subsequently, in adjudication proceedings, the consignment along with tempo in which the yarn was being transported, was confiscated. A penalty equal to the duty on the yarn was imposed on M/s. Associated Plastics and Rayons. The seized goods were confiscated and its redemption allowed on payment of a fine of 25% of the value of the confiscated goods. The owner of the tempo was also given an opportunity to redeem the tempo on payment of fine. Penalties were imposed on two employees of Associated Plastics and Rayons and purchasers of the yarn. These orders were upheld in the first appeal. The present appeals are directed against those orders.
4. The submission of the learned Counsel for M/s. Associated Plastics and Rayons is that the appellant had discharged duty liability on 14-5-04, before the issue of a corrigendum dated 27-7-2004 to the show cause notice of 1-1-2004. The submission is that this must be treated as a case of payment of duty before issue of show cause notice and no penalty can be imposed in view of the decision of the Larger Bench of this Tribunal in the case of Al-Falah (Exports) v. C.C.E., Surat I 2006 (198) E.L.T. 343 : 2006 (74) RLT 342. It is also the appellant's contention that the redemption fine of 25% of the value of the confiscated goods is excessive. A further contention is that the tempo used for transport was not liable for confiscation in view of the provision of Section 115(2).
5. Learned SDR would point out that the corrigendum dated 27-7-2004 only changed the authority for adjudication; that the show cause notice remains issued in January 2004 itself and therefore, the Commissioner was right in holding that the judgment in the case of Al-Falah (Exports) has no application. He would also point out that redemption fine of 25% cannot be treated as excessive and no relief is warranted. In regard to tempo, the contention is that no appeal can lie from the present appellant (Associated Plastics and Rayons) inasmuch as the tempo was not owned by the appellant. It is also being pointed out that, in adjudication, an option was granted to redeem the tempo to the owner of tempo and not to the present appellant.
6. Learned SDR is right in his contention that in the present case, duty liability was not discharged before the issue of show cause notice and therefore, this is not a fit case for waiver of penalty. All the same, it is to be noted that this Tribunal held in the aforesaid judgment that penalty amount under Section 114A is not mandatory. In the present case, the appellant has discharged duty liability well before adjudication of the case. Taking that and other aspects into account, the penalty is reduced to 50% of the duty liability. However, no relief is called for in relation to the redemption fine on the goods as 25% of the value as fine cannot be treated as excessive. As pointed out by the learned SDR appellant M/s. Associated Plastics & Rayons has no locus standi in regard to the tempo. It belonged to another person namely, Shri Salimkhan Pathan who was given an opportunity to redeem the same by the adjudicating authority. Further, Shri Pathan had filed an appeal before the Commissioner and that appeal was allowed in regard to penalty. He has not chosen to file any appeal before this Tribunal in regard to confiscation of the tempo. Therefore, the order of confiscation in regard to tempo has become final and the present appellant has no standing to challenge the same. The appeal of M/s. Associated Plastics and Rayons is ordered in these terms.
7. Now, I come to the appeals filed by Shri Amin Chandrakant Bhailalbhai and Shri Gautam Upadhyay. These two persons are employees of M/s. Associated Plastics and Rayons. They were clerks in the employment of the EOU and they were carrying out the instruction of their employer. They are not autonomous individuals who have played any part on their own volition in the evasion of duty. No penalty was justified on them. Accordingly, their appeals are allowed.
8. M/s. Navpad Textile Industries is merely a consignee of the confiscated goods. There is nothing on record to show that they were aware of the offending, non-duty paid nature of the goods. Therefore, no penalty was justified on them. Accordingly, their appeal is also allowed.
9. All the appeals are ordered in the above terms.
(Dictated and pronounced in open Court)