Custom, Excise & Service Tax Tribunal
Shri Naveen Mehta vs Commissioner Of Customs (Port), ... on 6 October, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.C/75463/2014
(Arising out of Order-in-Appeal No.05/Cus(Apprg.)/Kol(P)/2014 dated 13.01.2014 passed by the Commissioner of Customs (Appeals), Kolkata)
FOR APPROVAL AND SIGNATURE
Honble Shri P.K.Choudhary, Member (Judicial)
Shri Naveen Mehta
Applicant (s)/Appellant (s)
Vs.
Commissioner of Customs (Port), Kolkata
Respondent (s)
Appearance:
Shri Arijit Chakraborty, Advocate for the Appellant (s) Shri K.C.Jena, ADC(AR) for the Respondent (s) CORAM:
Honble Shri P.K.Choudhary, Member (Judicial) Date of Hearing:-06.10.2016 Date of Pronouncement: 08.11.2016 ORDER NO.FO/A/76150/2016 Per Shri P.K.Choudhary
1. In the present case penalties have been imposed upon the appellant under Section 112(a) and 114AA of the Customs Act, 1962. Shri Arijit Chakraborty, Advocate appeared on behalf of the appellant and submits that the appellant had acted as the purchase agent to M/s. Bharti Glass Company for importing of different glass materials from the country of China. The appellant had contacted the foreign exporters at China and introduced them with the proprietor of M/s. Bharti Glass Company. The negotiation of purchase and import of glass materials by M/s. Bharti Glass Company were made by him as per instruction of Shri Banwarilal Ganeriwala, proprietor of M/s. Bharti Glass Company. Ld.Counsel further submits that in all the occasions, the appellant used to make correspondences with the foreign exporters on behalf of the importer in India. However, all such correspondences were in accordance with the instruction of the importer, who was doing the business ultimately. The appellant had no interest in the entire business of M/s. Bharti Glass Company in importation of the said goods except his commission as an agent.
2. On 13.06.2008 a search was conducted at his office premises by the officers of Directorate of Revenue Intelligence, Kolkata. During the course of search, the officers had seized several documents from the appellants office premises. The Central Processing Unit of his office computer was also seized under the said search list. Subsequently, investigation was caused with M/s. Bharti Glass Company also and statement was recorded from him in relation to the said documents pertaining to the import of M/s. Bharti Glass Company.
3. During the recording of the appellants statement, he was confronted with the seized documents including print out copies of e-mail correspondences by him on behalf of the M/s. Bharti Glass Company. He had categorically submitted that the documents so seized from his office computer are reflecting the actual price of the imported goods. The appellant submitted that duplicate invoices were arranged from the foreign suppliers showing lower value in accordance to the request of the importer. He had categorically submitted that the Indian importer had asked for the duplicate proforma invoices from the foreign supplier showing lower value, which he had to arrange for the sake of business and he had no knowledge regarding the use of such proforma invoices.
4. Ld. Counsel further submits that the Lower Appellate Authority had observed that the appellant had no direct role in customs clearance and did not sign any customs paper. Accordingly, the Lower Appellate Authority had reduced the quantum of the penalties imposed. Ld. Adjudicating Authority held that ignorance of law cannot be an excuse. It is submitted that the appellant had never pleaded any ignorance of law before the Adjudicating Authority. What was pleaded by the appellant were the facts and the ignorance of the intention of the importer. Hence, the question of ignorance of law of the appellant does not and cannot arise in this respect. It is further submitted that under Section 112(a) of the Customs Act, 1962 it is mandatory for the person upon whom penalty have been imposed to do or omitted to do any act which act or omission rendered the goods liable to confiscation under Section 111 or to abate such doing or omission. The act of arranging separate invoices in no way renders goods liable for confiscation under Section 111 of the Customs Act, 1962. The question of confiscation of the said goods under Section 111 ibid cannot arise due to the undervaluation or mis-declaration with respect to value made by the importer at the time of importation of the goods. Ld. Counsel further submits that under Section 114AA penalty is imposable upon the appellant if he knowingly or intentionally makes, signs or used or causes to be made signed or used in declaration, statement or documents which is false or incorrect in any material particular in the transaction of any business for the purpose of this Act. From the very beginning it has been duly submitted that the appellant had no knowledge with respect to separate sets of invoices, he had only arranged for the same for the foreign supplier as per instruction of the importer. Further the appellant had neither made, signed, used or causes to do any such declaration/statement or documents which is false or incorrect in any material particular. It is the importer and/or his authorized person, who had made signed and used or causes to do so with respect to the import of the said goods. Hence, the provisions of Section 114AA is not applicable upon the appellant. Ld. Counsel for the appellant submitted that there is no merit in the impugned order and accordingly the same is liable to be set aside.
5. Ld. AR submits that Sri Naveen Mehta had accepted the fact of duplicate set of invoices and it was he who had arranged the duplicate invoices from the foreign suppliers to facilitate the mis-declaration of value on the part of the importer which made the subject goods liable to confiscation under Section 111 (m) of the Customs Act, 1962. Therefore, for his acts and/or involvement in obtaining parallel/duplicate invoices used for under-declaration of value and involvement otherwise in transactions over and above the declared invoice value, thereby also abetting the doings and omissions on the part of the importer in rendering the subject goods liable to confiscation and accordingly, rendered himself liable for penalty under Section 112(a) and under Section 114 AA of Act.
6. Heard both sides and perused the case records.
7. I find that the lower authority in the impugned order had imposed a combined penalty under Section 112(a) and Section 114(AA) of the Customs Act, 1962. Section 112(a) reads as follows: -
Section 112. Penalty for improper importation of goods, etc.- Any person,- SECTION 112?(a). who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or
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Section 114AA reads as follows:-
SECTION 114AA. Penalty for use of false and incorrect material .-If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods.
8. On perusal of the above legal provisions, I find that the Section 114AA is applicable to an importer who uses incorrect or false materials in the transaction of the business, whereas Section 112(a) deals with abatement.
In the present case, it is already an admitted fact that the appellant is an agent on commission basis between the foreign supplier and the Indian importer, and he himself is not an importer per se. Therefore, I find that the penalty under Section 114AA is not imposable since the appellant cannot be brought under the category of person who are liable to penalty. Therefore, I set aside the penalty imposed under Section 114AA of the Customs Act, 1962.
9. The Commissioner (Appeals) has already recorded the fact that the appellant had no direct role in the customs clearance and did not signed any customs paper and had arranged duplicate invoice for lower value for importer without knowing the actual intention of the importer. But the offence committed by the appellant is punishable under Section 112(a) of the Customs Act, 1962 and since ignorance of law and/or being unaware of the intention of the importer is not a ground of excuse, I impose a penalty of Rs.50,000/- under Section 112(a) and direct the Adjudicating Authority to appropriate the amount, paid by the appellant, towards the same. Appeal is partly allowed in the above terms.
(Order Pronounced in the Open Court on 08.11.2016.) S/d. (P.K.Choudhary) MEMBER (JUDICIAL) ss 1 Appeal No.C/75463/14