Custom, Excise & Service Tax Tribunal
Shri Munilal Mehra vs Commissioner Of Customs ... on 8 June, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/1393 and 1394/02 Mum
(Arising out of Orders-in-Original No. 18/BND/CC/DRI/NCH/2002 dated 13.3.2002 and 18/BND/CC/DRI/NCH/2002 dated 18.3.2002 passed by the Commissioner of Customs (Adj.), New Delhi)
For approval and signature:
Honble Shri. B.S.V. Murthy, Member (Technical)
and
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 : Yes
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
Shri Munilal Mehra
:
Appellant
Versus
Commissioner of Customs (Adjudication)
Respondent
New Delhi Appearance Shri Manish Mohan, SDR for Appellant Shri Anil Balani, Advocate for Respondents CORAM:
Shri. B.S.V. Murthy, Member (Technical) Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 08.06.10 Date of Decision : 08.06.10 ORDER NO.
Per : B.S.V. Murthy Penalty of Rs.1 lakh each has been imposed on the appellant in the two impugned orders under Section 112 of Customs Act, 1962 on the ground that he had abetted in the disposal of raw silks imported into India on the basis of Advance License contrary to the terms of license by opening an account in the name of fictitious firm and obtaining the bank draft and sending the same.
2. Shri Anil Balani, learned Advocate on behalf of the appellant submitted that the appellant had not dealt with the goods which are liable to confiscation nor he had assisted the importation in rendering the goods liable to confiscation. Therefore, he submits that penalty cannot be sustained. Further he also relied upon the following two decisions of the Tribunal in support of the contention that no penalty can be imposed when a person had not dealt with the goods:-
(a) Munilal Mehra vs. CC (Adj.) - 2008 (226) ELT 102 (Tri.-Mum.)
(b) Jiwraj Srinivas Rathi vs CC (adj.) - 2008 (228) ELT 415 (Tri.-Mum.) 2.1 He also submitted that in case of Shri Munilal Mehra, cited by him, the issue was same and only the importation was of a different consignment. The case of Shri Jiwraj Srinivas Rathi who has also arising from the same sort of facts and the account in both the above cases was opened in the name of M/s Tirupathy Silks.
3. On the other hand the learned DR submitted that the decision cited by the learned Advocate have to be treated as per incurium in view of the fact that the decisions of the Tribunal cited by the learned Advocate did not take into consideration the decision of the Honble Supreme Court in the case of Sachindananda Banerji vs. Sitaram Agarwala - 1999 (110) ELT 0292 (SC). Further he also submits that the Tribunal in the case of Dr. Writers Food Products Pvt. Ltd. 2009 (06) LCX 0076 considered Sachindananda Banerji case and took a different view from the view taken by the Larger Bench in the case of Steel Tubes India 2006 (10) LCX0280. In view of the fact that the decision of the Honble Supreme Court is against the appellant, the decisions cited by the learned Advocate cannot be taken into consideration. However he also submits that the Tribunal in Mumbai had also followed the decision of the Supreme Court and of the Tribunal in the case of Nasik Strips Pvt. Ltd. and 5 Others vide Order No. A/88 to 93/10/SMB/C-IV dated 10.02.2010. He also relies upon the decision of the Honble High Court of Madras in the case of CC (Exports), Chennai vs. Bansal Industries 2006(09) LC0013 in support of his contention holding that mens-rea is not required for imposition of penalty under Section 112 of the Customs Act, 1962.
4. We have considered the submissions made by both the sides.
5. The learned Advocate vehemently argued and submitted that of the decision of the Honble Supreme Court cited by the learned DR would not be applicable to the present case in view of the fact that the appellant was not concerned with the importation of the goods. He had also drawn our attention to the statement of the importer who had stated that he had fulfilled all the export obligations and therefore the disposal of raw silk imported in the domestic market was as per law which was only found to be false on subsequent investigation. Therefore, the appellant who had no means of investigation could not have known that the goods were disposed of illegally. He also submitted that the appellant was of 70 years old and unemployed and all he had done was just to open an account in the name of non-existent firm, obtaining demand draft and send it to Delhi. It was his submission that it cannot be said that the appellant had rendered the goods liable to confiscation or abetted in the disposal of the goods by opening an account. As rightly submitted by the learned DR, the earlier decision of the Tribunal in the case of the appellant cannot be taken into account in view of the fact that the decision of the Honble Supreme Court was not brought to the notice at the time. Further we have to also take the note of the fact that the Tribunal in the case of Dr. Writers Food Products Pvt. Ltd. case has taken different decision from the decision taken by the Larger Bench. Under these circumstances we are quite clear that the precedent decision of the Tribunal cited by the learned Advocate cannot be applied to the present case even though the facts are same and the issue is covered by the decisions cited by the learned Advocate. The next question that arises is whether we can say that the appellant had dealt with the goods since it is not the case of the department also that he had not played a role in illegal import and rendered the goods liable to confiscation. In fact goods have been disposed of in violation of the terms of License and therefore the issue that we are dealing with, in this case, is basically one of disposal of goods contrary to law.
6. The Honble Supreme Court in the case of Sachindananda Banerji had observed in para 30 as follows:-
Therefore when a person enters into some kind of transaction or attempts to enter into some kind of transaction with respect to prohibited goods and it is clear that the act is done with some kind of prior arrangement or agreement, it must be held that such a person is concerned in dealing with prohibited goods. The fact that the act stopped at an attempt to purchase as in the present case when the police intervened does not in any way mean that Sitaram was not concerned in dealing with the smuggled good. The evidence shows that there must have been a previous arrangement with the Chinese accused to purchase the smuggled gold. Sitaram went to the appointed place and met the Chinese accused surreptitiously and had a large sum of money with him to pay for the gold. He had sat down with the Chinese accused in the taxi and there is no doubt that if the taxi had not been stopped, the transaction for the purchase of the smuggled gold would have gone through.
7. We feel that in this case these observations can be applied. If illegal disposal of goods imported under Advance Licence Scheme was not detected by the Department importer and other, would have got away with evasion of huge customs duty. In our view this case is worse than the one that was before the Honble Supreme Court in the case of Sachindananda Banerji. In that case, the person was in the process of purchasing the goods and before he could purchase the goods, transaction was interrupted whereas in this case goods were sold by Shri Javed Alam and sale proceeds were deposited into a bank for which purpose the appellant opened an account in the name of fictitious firm and assisted in transferring the sale proceeds to Delhi. Thus the appellant has actively concerned in dealing with the prohibited goods by assisting in depositing the sale proceeds in the bank account. It was also contended that the sale proceeds are liable to confiscation only under Section 121 of Customs Act, 1962 and therefore Section 112 is not attracted. Here we are not concerned with the sale proceeds but the moment the goods were sold contrary to the terms of licence, they become liable to confiscation under Section 111(O) of the Customs Act, 1962. Hence, person who is concerned or dealt with in any manner liable to penalty under Section 112 of the Customs Act, 1962. Therefore, the appellant is liable to penalty under Section 112 of the Customs Act, 1962. Further it is settled law that mens-rea is not required for the purpose of imposition of penalty and we find that the decision of Honble High Court of Madras in the case of CC (Export), Chennai vs Bansal Industries 2006 (09) LCX0013 is applicable. In any case, in this case it cannot be said that mens-rea was not present. In his statement the appellant had clearly stated that he was aware that raw silk was being disposed of illegally and not only he opened a bank account in the name of fictitious firm and he has also stated that he received remuneration of Rs.15,000/- to Rs.20,000/- per month.
8. In view of the above discussion, we do not find any merit in the appeals. Further, taking note of the fact that the period in which the transactions took place is about six months and during the period as admitted by the appellant he had received remuneration of Rs.1.2 lakhs and taking note of the fact that he is old and unemployed etc. we consider it appropriate that some reduction in penalty is warranted. Accordingly, we reduce the penalty to Rs.50,000/- in case of Appeal No. 1393/02 and Rs.10,000/- in case of Appeal No. 1394/02.
(Pronounced in open Court) (Ashok Jindal) Member (Judicial) (B.S.V. Murthy) Member (Technical) nsk 7