Custom, Excise & Service Tax Tribunal
M/S Siddhant Enterprises vs C.C., New Delhi on 21 January, 2014
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO.II, R,K, PURAM, NEW DELHI-110066
DIVISION BENCH
C/4084-4085/2012
(Arising out of OIA No. RT/ACE/220/2012 dated 11.10.2012 passed by Commissioner of Customs (Export) New Customs House IGI Airport, New Delhi)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordships wish to see the fair copy of the order?
seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Dated of Hearing: 04.6.2013
Date of pronouncement:21.01.2014
M/s Siddhant Enterprises Appellant
Shri Aditya Batra
Vs.
C.C., New Delhi Respondent
Appearance:
Present for the Appellant: Ms. Prabhjyoti Chadha, Advocate Present for the Respondent: Shri D. Singh, DR Coram: Honble Mrs. Archana Wadhwa, Judicial, Member Honble Mr. Manmohan Singh, Technical Member I. ORDER No. 577-578/2013 PER: MANMOHAN SINGH This is appeal against Commissioner (appeal)s order No. RT-ACE-220-2012 dated 11.10.2012 whereas demand of duty has been demanded on enhanced value of Rs.56,36,400/-. Goods have been confiscated with a option to redeem for Rs. 12,00,000/- (Rupees twelve lakhs) A personal penalty of Rs.3,00,000/- (Rupees three lakhs) on M/s Siddhant Enterprises and Rs.1,00,000/- (Rupees One lakh) on Shri Aditya Batra has also imposed.
2. Facts are briefly recapitulated Mr. Aditya Batra imported a consignment of 40,000 pieces of memory cards of STRONTIUM brand Micro SD Memory cards of 2GB capacity, made in Taiwan. The consignment was imported through EMS Speed Post parcel having tracking parcel having tracking No. EA 108-652-615-HK. In the Speed Post documents, accompanying the parcel, the contents of the parcel were declared as PERSONAL EFFECTS/CLOTHS/SEE INLAY having declared value of HKD 720. On examination, the contents were found to be 40,000 pieces of memory cards of STRONTIUM brand Micro SD Memory cards of 2GB capacity, made in Taiwan. Declared were B grade slow microprocessor unbranded made in China. Taking into account the contemporary price of the identical goods, the value of 40,000 memory cards worked out to Rs. 56,36,400/- involving customs duty of Rs. 5,27,342/-. In terms of the provisions of Section 82 of the Customs Act, 1962 the Speed Post receipt meant for Customs declaration, having tracking number EA108-652-615-HK and accompanying the parcel is to be treated as entry for the purpose of the Customs Act. The description and value of the parcel was mis-declared and accordingly the parcel was seized on 09.02.2012.
3. During the course of investigations Shri Aditya Batra initially submitted a photocopy of invoice dated 10.12.2011 while recording his statement on 07.02.2012. Later on, he submitted original copy said to be of the invoice vide letter dated 15.03.20212. In this invoice value of 40,000 memory cards has been shown as HKD-48000. In Indian rupees this works out to Rs. 3,26,400/- taking exchange rate at Rs.6.80 under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The value of the seized goods has been taken on the basis of identical goods i.e. STRONTIUM brand micro SD memory cards of 2GB capacity being imported during contemporary period. Value of the seized goods has been re-assessed to be Rs.56,36,400/- under Rule 4 of the Customs Valuatio9n (Determination of Value of Imported Goods) Rules, 2007.
4. Shri Aditya Batra on 07.02.2012 further stated that he was partner of M/s Siddhanth Enterprises, 236, Amar Market, 2nd Floor, Dariba Kalan, New Delhi-110006; that another partner of that firm was Ms. Yogesh Mathur; that he knew about the Speed Post parcel No. EA 108-652-615 HK which was in respect of consignment of 40000 pieces of Micro SD Memory Card (2GB) (unbaranded); that the consignment was purchased from HAINAN PEING HUA NATIONAL INDUSTRIES CO; that the order of purchase of that consignment was placed by him through telephone and email communication; that he paced the order with Ms. Lee of company HAINAN PEING HUA NATIONAL INDUTRIES CO; He had verbally instructed Ms. Lee to send the consignment in his firms name; that Ms. Lee sent the consignment in his personal name as that was not their normal mode of shipment; that 40000 piece of memory cards are not covered as Personnel Effects/Clothes; that the value and description of the contents of Speed Post parcel No. EA 108 652 615 HA have been mis-declared in the Customs declaration; that he admitted the charge of mis-declaration and was ready to pay whatever fine and penalty are imposed.
5. Shri Aditya Batra in his further statement dated 06.03.2012 tendered under Section 108 of the Customs Act, 1962 had stated that as per the invoice of the similar goods, shown to him the value per piece was Rs. 140.91 and that total value of the seized goods was Rs.56,36,400/- and that he agreed with the value of the seized goods was Rs. 56,36,400/-.
6. There is nothing on record to suggest that the statement were recorded by the SIIB officers by use of third degree method or under threat etc., and the statements are not even retracted, therefore they do not lose their evidentiary value in view of the above established law.
7. It is also found that in the Sped Post documents for customs purpose, the description of the contents of the parcel was declared as PERSONAL EFFECTS/CLOTHS/SEE INLAY having value of HKD 720. However, no personal effect/cloths were found in the parcel but the same was found to contain 40,000 pieces of STRONTIUM brand Micro SD memory cards (Made in Taiwan), each of 2 GB capacity. We also note that no documents pertaining to these memory cards were found in the parcel. Further a photocopy of the invoice, which was submitted by Shri Aditya Batra on 07.02.2012, reflected the description of goods as 40,000 pieces of Slow Micro Processor B grade (Unbranded Made in China) and total value as HKD 48,000. This invoice did not bear any serial number and the Suppliers name and address was mentioned as HAINAN PENG HUA NATIONAL INDUSTRIES CO., Unit 704, Tai Yau Building, Portland Street, Mongkok, Kin. However, the original invoice submitted subsequently by Shri Aditya Batra thought his letter dated 15.03.2012 reflect the invoice number as PO 09/40/11 dated 10.12.2011 and name of the of the supplier as PRIDE OASIS HK LTD., HAINAN PANG HUA NATIONAL INDUSTRIES CO., Unit 704, Tai Tak Building Kin Hong Kong. However we find that the name of the sender mentioned in the speed Post customs declaration is Imelda, C/Block C6, 4/F, Nathan Road, Tsimshtsui, Kowloon, Hong Kong. we also find that though the memory cards were found to be of STROTIUM brand made in Taiwan, the same have been mis-declared as slow Micro Processor B grade (Unbranded Made in China), in the copies of the invoices submitted by Shri Aditya Batra subsequently. Therefore even the second invoice (claimed to be original invoice) is not relevant to the impugned goods as it does not contain the true description of the goods and therefore the value mentioned therein cannot be taken as true and correct value.
8. Heard the both sides counsel of the advocate though agreed about receipt of parcel as personal effects as indicated as inlay and submitted this to be accepted on declaration under Section 82 of Customs Act, 1962. However regarding recovery of branded memory cards numbering 40,000 (Forty thousand only) which were declared as unbranded B grade, she did not submit any relevant document clarifying mis-declaration of brand and value. She only submitted that strontium brand found in the parcel is only inferior international brand. She also challenged arising of price by department based on contemporaries imports. Also requested for reduction of penalty.
9. On the other side, Revenue reiterated that it is clear case of mis-declaration with an attempt to smuggle branded memory cards Strontium in the guise of personal effects. Price declared is so law that it does not justify price of ever unbranded memory cards. Earlier they have declared HKD is only 720 H. dollars. However there was later revised to 4800 H dollars. But department on the basis of contemporaneous imports of Strontium brand memory card has revised price to Rs. 56,36,400/-. Actually this price along with mis-declaration has already been accepted by Mr. Batra.
10. It is observed from the perusal of Commissioner Customs Order-in-Original No. VII(HQ)10/ACE/Adj./40/2012/15492 dated 11.10.2012 that he has analyzed the whole issue very minutely and has arrived at very appropriate conclusion that appellant his misdeclared memory cards as unbranded and slow microprocessor B grade through these were found to be branded Strontium brand of higher value. Of course misdeclaration of value and Brand is admitted. Following extract clearly point out the findings establishing all the charges of misdeclaration, showing brands goods as unbranded goods and under valuation resulting in differential duty of Rs.5,27,342/- calculated based as contemporaneous imports of identical goods I find that based on intelligence that huge quantity of memory cards was being smuggled from Hong Kong to New Delhi through EMS Speed Post by mis-declaring its description, an EMS Speed Post Parcel having EMS tracking No. EA108-652-615-HK was detained and examined on 15.12.2011 and found to contain 40,000 pcs of Memory Cards. The consignee Mr. Batra (Shri Aditya Batra, Noticee 2), House No. 7, National Park, 1st Floor, Lajpat Nagar, New Delhi through his letter dated 16.12.2011 submitted that the parcel contained personnel effects, which were shipped by their shipper. The recovery of the memory cards is contrary to the declaration filed by Shri Aditya Batra, Noticee No. 2. It is noted that the memory cards were STRONTIUM brand of 2 GB capacity, whereas the same were declared as Slow Micro processor B grade (unbranded made in China) in the copy of the invoice submitted by Mr. Batra with his letter dated 16.12.2011 as well as during his statement tendered on 07.02.2012. I also find that the photocopies of the invoice submitted by Mr. Batra on both the occasions show the same of foreign supplier of these memory cards as Hainan Peing Hua National Industries Co.-Unit 704, Tai Yau Building, Portland street, Mongkok, Kin,whereas the original copy of the invoice submitted by Mr. Batra through his letter dated 15.02.2012 shows the suppliers name as Pride Oasis HK Ltd., Hainan Peng Hua National Industries Co., Unit 704, Tai Tak Building, Kin Hong Knog. This variation of the invoices has not been explained by the notices even in their reply to the show cause notice or at the time of personal hearing.
Para-24 I also find that the noticee, Shri Aditya Batra in his statement dated 07.02.2012 recorded under Section 108 of the Customs Act, 1962 had interlia stated that he was partner of M/s Siddhanth Enterprises, 236, Amar Market, 2nd Floor, Dariba Kalan, New Delhi-110006; that another partner of that firm was Ms. Yogesh Mathur; that their firm was formed by them nearly 2 years ago; that they were engaged in import and trading of electronic components and other commodities; that their firm was registered with Delhi VAT department with registration No. 07090352969; that he knew about the Speed Post parcel No. EA 108-652-615 HK which was in respect of consignment of 40000 pieces of Micro SD Memory Card (2GB) (unbaranded); that the consignment was purchased from HAINAN PEING HUA NATIONAL INDUSTRIES CO; that the order of purchase of that consignment was placed by him through telephone and email communication; that he paced the order with Ms. Lee of company HAINAN PEING HUA NATIONAL INDUTRIES CO; that some of their earlier imports were purchased through Ms. Lee who offered them memory cards this time;
Para 25. Shri Aditya Batra in his further statement dated 06.03.2012 tendered under Section 108 of the Customs Act, 1962 had stated that as per the invoice of the similar goods, shown to him the value per piece was Rs. 140.91 and that total value of the seized goods was Rs.56,36,400/- and that he agreed with the value.
Para 26. The statements of Shri Aditya Batra have evidentiary value as he was the active partner of the noticee firm M/s Siddhant Enterprises having overall control over the activities of the company which included contracting, negotiations with foreign supplier, arranging imports and further sale in the local market, documentation and payment to foreign suppliers. These statements are therefore reliable and have evidentiary value. Shri Aditya Batra has neither retracted his statements nor is it their case that the same were extracted under threat or coercion. There is no communication about the statement to be drawn under force/threat or coercion made to the undersigned. Thus Shri Aditya Batra stands by the said statements tendered being voluntary and truthful and they are valued piece of evidence.
Para 35. I also find that in the Speed Post documents for customs purpose, the description of the contents of the parcel was declared as PERSONAL EFFECTS/CLOTHS/SEE INLAY having value of HKD 720. However, no personal effect/cloths were found in the parcel but the same was found to contain 40,000 pieces of STRONTIUM brand Micro SD memory cards (Made in Taiwan), each of 2 GB capacity. I also note that no documents pertaining to these memory cards were found in the parcel. Further a photocopy of the invoice, which was submitted by Shri Aditya Batra on 07.02.2012, reflected the description of goods as 40,000 pieces of Slow Micro Processor B grade (Unbranded Made in China) and total value as HKD 48,000. This invoice did not bear any serial number and the Suppliers name and address was mentioned as HAINAN PENG HUA NATIONAL INDUSTRIES CO., Unit 704, Tai Yau Building, Portland Street, Mongkok, Kin. However, the original invoice submitted subsequently by Shri Aditya Batra thought his letter dated 15.03.2012 reflect the invoice number as PO 09/40/11 dated 10.12.2011 and name of the of the supplier as PRIDE OASIS HK LTD., HAINAN PANG HUA NATIONAL INDUSTRIES CO., Unit 704, Tai Tak Building Kin Hong Kong. However, I find that the name of the sender mentioned in the speed Post customs declaration is Imelda, C/Block C6, 4/F, Nathan Road, Tsimshtsui, Kowloon, Hong Kong. I also find that though the memory cards were found to be of STROTIUM brand made in Taiwan, the same have been mis-declared as slow Micro Processor B grade (Unbranded Made in China), in the copies of the invoices submitted by Shri Aditya Batra subsequently. Therefore even the second invoice (claimed to be original invoice) is not relevant to the impugned goods as it does not contain the true description of the goods and therefore the value mentioned therein cannot be taken as true and correct value. The total mis-declaration regarding description and value of the goods and the discrepancies found in the copy of the two invoices with regard to suppliers name and address and invoice number have not been explained by Mr. Aditya Batra, Partner of the firm and co-noticee in this case, and leave no doubt in my mind that the impugned parcel goods were mis-declared with regard to the description as well as value to evade appropriate customs duty. (emphasis supplied)
11. In view of above investigations and findings of the Commissioner, it is clearly established that 40,000 pcs Strontium Brand Micro SD Memory Cards of 2GB capacity made in Taiwan were fraudulently imported in the inlay of personal effect though a parcel by way of mis-declaration and under valuation. It also clearly comes out Shri Aditya Batra who is regular importer has tried to import Branded memory cards made in Taiwan in the guise of unbranded memory cards made in China. Mr. Aditya Batra has admitted in the statement recorded under Section 108 of Customs Act 1962 that he indulged in smuggling and was ready to pay the differential duty and penalty. It is also concluded that Strontium brand micro SD memory cards have been smuggled. Further department has been able to establish that there is huge under valuation. Earlier declared invoice value was HKD 720 only. But later on, it was declared as HKD 48000.00 @ HKD 1.20. However when the department was able to show identical imports of Strontium Brand micro SD memory cards, undervaluation was accepted by Shri Aditya Batra and assessable value was determined at Rs.56,36,400/-. It is also on record that invoice was manipulated to suit his design to hoodwink the Revenue to cause injury.
12. It also comes out that invoices which were furnished, were found fake. Shri Aditya Batra in his statement dated 06.3.2012 tendered under Section 108 of the Customs Act 1962, had admitted that as per the invoice of the similar goods shown to him, the value per piece was Rs.140.91 and that total value of the seized goods was Rs.56,36,400/- (Rupees fifty six lakh thirty six thousand four hundred only).
13. From the above stated investigations and facts on record, it clearly cames out that findings of the Commissioner of Customs are very elaborate and upto point clearly bringing out the truth. It is established that goods were illegally imported and liable for confiscation and imposition of penalty. Keeping in view overall factual matrix and results of investigations and clear admittance of the importer, Redemption fine of Rs.12,00,000/- (Rupees twelve lakh only) is adequate. A penalty of Rs.3,00,000/- (Rupees tree lakh only) on M/s Siddhant Enterprises is also justified due to involvement in illegal import and gross under valuation. A personal penalty of Rs.1,00,000/- (Rupees One lakh only) on Shri Aditya Bata is also justified.
14. In view of above, we endorse the findings arrived at by the Commissioner of Customs in his Order-in-Original No. VII(HQ)10/ACE/Adj./40/2012/15492 dated 11.10.2012.
Appeals filed by the appellants are set-aside.
(Pronounced in the open Court on )
(Archana Wadhwa) (Manmohan Singh)
Member (Judicial) Member (Technical)
K. Gupta
Per Ms. Archana Wadhwa
15. I have gone through the order proposed by my learned brother. I agree with the finding arrived at by him that the appeal is required to be rejected by upholding the charges of mis-declaration and under-valuation of imported goods and consequently the goods are required to be confiscated and penalties required to be imposed upon the importer M/s. Siddhant Enterprises.
16. However, I find that the total duty involved in the matter is to the tune of Rs. 5,27,342/-. The lower authorities have imposed redemption fine of Rs.12 lakhs which stand upheld by learned Member (Technical). The quantum of redemption fine is relatable to the margin of profit involved in the imported goods inasmuch as the same is meant for wiping outff the margin of profit. In the present case, I find that there is no inquiries as regards the margin of profit in respect of disputed goods, neither are their any finding on the same. The lower authorities has simplicitor imposed redemption fine of Rs. 12 lakhs, without any reference to the profit margin.
17. As I have already observed that the consignment is requirement to be confiscated with an option to impose redemption fine but I find that redemption fine of Rs.12 lakhs is much on the higher side. In the absence of any inquiry and finding on the margin of profit, I deem it fit to reduce redemption fine to Rs.6 lakhs keeping in view that duty involved in the total consignment on the enhanced value was Rs.5,27,342/- . As such, I reduce the redemption fine to Rs. 6 lakhs.
18. Further, inasmuch as the penalty has been imposed upon the partnership unit, who imported goods to the extent of Rs.3 lakhs, I am of the view that separate imposition of penalty of Rs. one lakh on the partner may not be justified. The same is accordingly set aside.
( Archana Wadhwa) Member(Judicial) Difference of opinion
i) Whether the redemption fine of Rs.12 lakh imposed by adjudicating authority, is required to be upheld, as observed by Member (Technical) OR the same is required to be reduced to Rs. 6 lakhs as held by Member (Judicial) ?
ii) Whether the penalty of Rs. One lakh is required to be imposed upon Shri Aditya Batra in addition to imposition of penalty on the importing partnership firm as held by Member (Technical) OR the penalty is required to be set aside on the said appellant Shri Aditya Batra, on the ground that partnership firm already stand penalized as held by Member (Judicial) ?
( Archana Wadhwa) Member(Judicial)
( Manmohan Singh ) Member(Technical)
ss
Date of hearing/decision : 03/01/14
Difference of Opinion
Per. Rakesh Kumar :-
19. The appellant firm M/s Siddhant Enterprises is a partnership firm and Shri Aditya Batra is one of the partners. Shri Aditya Batra imported a post parcel declared to be containing personal effects/clothes with declared value of 720 Hong Kong dollars. The declaration accompanying on the parcel also mentioned the words See Inlay in it. On examination, the contents of the parcel, the same were found to be 40,000 pieces of Strontium brand micro SD memory cards of 2GB capacity each made in Taiwan. Invoice accompanying the goods issued by M/s Hainan Peing Hua National Industries Co., Hong Kong to Shri Batra, mentioned the goods as Slow micro processors memory cards, B Grade (unbranded), made in China. The quantity of the goods was mentioned as 40,000 and the total value was mentioned as 48000 Hong Kong dollars. The value of the goods 40,000 pieces of memory card of 2GB each of Strontium brand, made in Taiwan was ascertained as about 56,36,800/- involving customs duty of Rs. 5,27,342/- as against the declared value of 720 Hong Kong dollar. Since, the declared description and value as mentioned in the accompanying customs declaration on the parcel was found to be false, after issue of show cause notice, the Commissioner vide order-in-original dated 11/10/12 ordered confiscation of the goods with option to be redeemed on payment of redemption fine of Rs. 12,00,000/-. The goods were confiscated under Section 111 (l) and 111 (m) of Customs Act, 1962. Beside this, while penalty of Rs. 3,00,000/- was imposed on M/s Siddhant Enterprises, under Section 112 (a) of Customs Act, 1962 penalty of Rs. 1,00,000/- was imposed on Shri Aditya Batra, partner of the appellant firm under Section 112 (b) of Customs Act, 1962. Against this order of the Commissioner, this appeal has been filed. This matter was heard on 04/06/13, Honble Member (Technical) in his order upheld the Commissioners order in toto. However, Honble Member (Judicial) in a separate order recorded by her, while upholding the confiscation of the goods under Section 111 (l) and 111 (m) and upholding the imposition of penalty under Section 112 (a) of Customs Act, 1962, reduced the redemption fine in lieu of confiscation to Rs. 6,00,000/- as there were no inquiries conducted about the margin of profit and also set aside the penalty of Rs. 1,00,000/- on Shri Aditya Batra imposed under Section 112 (b) on the ground that when penalty of Rs. 3,00,000/- has been imposed on the partnership firm, imposition of separate penalty of Rs. 1,00,000/- on the partner Shri Aditya Batra is not justified. Accordingly, the following points of reference have been referred to the undersigned for decision :-
(1) Whether the redemption fine of Rs. 12,00,000/- imposed by adjudicating authority, is required to be upheld, as observed by Member (Technical) OR the same is required to be reduced to Rs. 6,00,000/- as held by Member (Judicial) ?
(2) Whether the penalty of Rs. 1,00,000/- is required to be imposed upon Shri Aditya Batra in addition to imposition of penalty on the importing partnership firm as held by Member (Technical) OR the penalty is required to be set aside on the said appellant Shri Aditya Batra, on the ground that partnership firm already stand penalized, as held by Member (Judicial) ?
20. Heard both the sides on the points of difference.
21. Shri V.S. Negi, the learned Counsel for the appellant, pleaded that there is no justification for confiscation of the goods under Section 111 (l) and 111 (m) of Customs Act, 1962, as Clause (l) and (m) of Section 111 of Customs Act, 1962 are not attracted in case of import through post parcel, that in this regard he relies upon the judgments of the Tribunal in the cases of CC, Mumbai vs. M. Vasi reported in 2003 (151) E.L.T. 312 (Tri. Mumbai), Kuresh Laila vs. CC, Chennai reported in 2005 (189) E.L.T. 45 (Tri. Chennai) and Sandhya Jewellers vs. CC, Ahmedabad reported in 2013 (293) E.L.T. 412 (Tri. Ahmd.), wherein it had been held that the phrase entry made in this Act used under Section 111 (l) and 111 (m) only refers to entry made under Section 46 and the declaration made under Section 77 in respect of baggage and under Section 82 in respect of import through post parcel are not covered by the phrase entry made under this Act, which is applicable only to the bills of entry filed under Section 46 and, therefore, the provisions of Section 111 (l) and 111 (m) would not be applicable, that when confiscation of the goods has been ordered under Section 111 (l) and 111 (m), which are not attracted to this case, neither the goods are liable for confiscation nor any penalty is imposable, that the above judgments of the Tribunal have not been considered by either of the two Members and, hence, he intends to file an application for rectification of mistake apparent from record, that in any case, when there is no calculation of margin of profit, the redemption fine of Rs. 12,00,000/- is on much higher side and the same has been correctly reduced to Rs. 6,00,000/- by Honble Member (Judicial), that as regards penalty on Shri Aditya Batra under Section 112 (b), since Section 112 (b) of Customs Act is applicable in respect of persons who have acquired possession of or are in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any imported goods, which he knew or had reason to believe are liable for confiscation under Section 111 and since in this case, the goods have not even been released, as the importer has abandoned the goods and for this reason, Shri Aditya Batra cannot be said to be the person who had acquired possession of these goods or had dealt with them in any manner, the penalty under Clause (b) of Section 112 on his is not attracted at all.
22. Shri Rakesh Puri, the learned Departmental Representative, pleaded that the plea of the appellants counsel that there is mistake apparent from record in the order and that he intends to file an application for rectification of mistake apparent from record cannot be accepted, as no such application for rectification has been filed, that notwithstanding the judgments of the Tribunal cited by the learned Counsel for the appellant, the goods, in question, are liable for confiscation under clause (d) of Section 111 in as much as while Clause (d) of Section 111 provides for confiscation of any goods, which are imported or are attempted to be imported contrary to any prohibition imposed under this Act or any other law for the time being inforce, by Notification No. 78-CUS dated 02/4/38 as amended by Notification No. 151 dated 24th December 1938 and No. 44-CUS dated 26th July 1941 issued under Section 11 of the Customs Act, 1962, import of dutiable goods by letter, packet or post parcel is permissible only when such letter, packet or post parcel bears on front a declaration by the sender stating the nature, weight and value of the contents and the Commissioner of Customs is satisfied that the nature, weight and value of the contents of the letter, packet or post parcel has been correctly stated in the declaration, while in this case there is gross mis-declaration with regard to nature and value of the contents and, hence, in any case, the goods having been imported in contravention of the prohibition imposed under Section 11 would be liable for confiscation under Section 111(d), that in any case both the Members have upheld the confiscation of goods and imposition of penalty under Section 112 (a) on the importer firm and the point of difference is only on the quantum of redemption fine and imposition of penalty under Section 112 (b) on Shri Aditya Batra, that as regards quantum of redemption fine, he supports the order of Honble Member (Technical) as looking to gravity of the offence and value of the goods, redemption fine of Rs. 12,00,000/- is not excessive, that as regards penalty on Shri Aditya Batra, Tribunal in the case of CCE, Daman vs. Mohd. Amin A.S. Lakha reported in 2012 (275) E.L.T. 465 (Tri. Ahmd.), has held that penalty can be imposed on partnership firm as well as on the partners as the two penalties are different and that the Apex Court in the case of M/s Prakash Metal Works vs. CCE, Ahmedabad reported in 2007 TIOL 184 SC CX also upheld separate penalty on the partners as well as partnership firm. He, therefore, pleaded that imposition of separate penalty on Shri Aditya Batra under Section 112 (b) is justified.
23. I have considered the submissions from both the sides and perused the records.
24. As regards preliminary objection of the learned Counsel of the appellant that the hearing on the points of difference should be deferred, as there is a mistake apparent from the record in the orders recorded by both the Members, this objection cannot be accepted, as such an application has not been filed yet and no intimation had been given to the Registry that the appellant intend to file such an application. Moreover, notwithstanding the Tribunals judgment in the cases of CC, Mumbai vs. M. Vasi reported in 2003 (151) E.L.T. 312 (Tri. Mumbai), Kuresh Laila vs. CC, Chennai reported in 2005 (189) E.L.T. 45 (Tri. Chennai) and Sandhya Jewellers vs. CC, Ahmedabad reported in 2013 (293) E.L.T. 412 (Tri. Ahmd.), holding that the provisions of Section 111 (l) and 111 (m) are not applicable in respect of imports by post parcel, I find that under Notification issued by the Central Government under Section 11 of the Customs Act, 1962 import of dutiable goods through letter, packet or post parcel is restricted to the cases where such letter, packet or post parcel is accompanied by a declaration stating the nature, weight and value of its contents and such declaration is either enclosed therein or is pasted on to the parcel and the Commissioner of Customs is satisfied that the nature, weight and value of the contents of the letter, packet or post parcel had been correctly stated in the declaration. In this case, undisputedly the nature of the contents and the value has been grossly mis-declared and hence this import is in contravention of the prohibitions imposed by the Central Government under Section 111 and hence irrespective of the applicability of Clause (l) and (m) of Section 111, the goods would be liable for confiscation under Section 111 (d). Therefore, the appellants plea that neither the goods are liable for confiscation in view of the judgments of the Tribunal mentioned above nor penalty on the appellant firm or its partner would be attracted under Section 112 is without any merit.
25. Coming to the points of difference, the first point of difference is with regard to quantum of redemption fine. Quantum of redemption fine should be sufficiently high to neutralise to the entire margin of profit, as the basic principal is that no importer should be able to make profit by illicit imports. In this case while the Commissioner has imposed redemption fine of Rs. 12,00,000/- and the same has been upheld by Honble Member (Technical), Honble Member (Judicial) has reduced the fine to Rs. 6,00,000/-. No calculation of the margin of profit has been given by the Department and this is the ground on which the redemption fine has been reduced. Since, the redemption fine in lieu of confiscation is dependent upon the profit margin in respect of which there is no evidence, on the question of redemption fine, I agree with the decision of Honble Member (Judicial).
26. The second point of difference is with regard to penalty on Shri Aditya Batra under Section 112 (b), while Commissioner has imposed the penalty of Rs. 1,00,000/- on Shri Aditya Batra, partner of the importer firm under Section 112 (b) and this penalty has been upheld by Honble Member (Technical), Honble Member (Judicial) in her order has set aside the penalty on the ground that separate penalty on Shri Aditya Batra is not justified when penalty of Rs. 3,00,000/- on the partnership firm has been imposed under Section 112 (a). In my view, since penalty has been imposed on partnership firm under Section 112 (a), separate penalty on its partner Shri Aditya Batra would not be justified under Section 112 (a). Penalty under Section 112 (b) is attracted when in respect of any illicitly imported goods liable for confiscation under Section 111, any person acquires their possession or deals with them in the manner mentioned Clause (b) of Section 112. In this case, the goods imported had not even been cleared and, as such, there was no question of Shri Aditya Batra having acquired their possession or being concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or any other manner dealing with the imported goods. For this reason penalty under Section 112 (b) on Shri Aditya Batra is not justified. Thus, while penalty on Shri Aditya Batra is not imposable under Section 112 (b), penalty on him as imposed under Section 112 (a) is not justified when for the same offence penalty has been imposed under Section 112 (a) on M/s Siddhant Enterprises of which Shri Aditya Batra is a partner. Therefore, on this point also, I agree with Honble Member (Judicial).
27. In view of the above discussion, on both the points of difference, I agree with the decision of Honble Member (Judicial).
(Operative part of the order pronounced in the open court.) (Rakesh Kumar) Member (Technical) PK Final Order No.50140-50141/2014
28. In view of the majority order, the confiscation of imported goods is upheld. However, redemption fine is reduced from Rs. 12 lakhs to Rs. 6 lakhs. Penalty of Rs.3 lakhs imposed on the importing firm is however, upheld. Penalty of Rs. One lakh imposed on the appellants Shri Aditya Batra, partner however is set aside.
( Archana Wadhwa ) Member(Judicial)
( Manmohan Singh )
Member(Technical)
ss
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C/4084-4085/2012