Customs, Excise and Gold Tribunal - Bangalore
Big Bags India Pvt. Ltd. (Bbipl) And Ors. vs The Commissioner Of Customs on 3 August, 2007
Equivalent citations: 2007(123)ECC204, 2007(149)ECR204(TRI.-BANGALORE)
ORDER T.K. Jayaraman, Member (T)
1. These appeals have been filed against Order-in-Original No. 24/2005 dated 16.12.2005 passed by the Commissioner of Customs, Bangalore.
2. The main appellant M/s. Big Bags India Pvt. Ltd. is a 100% EOU. The DRI officers received information that the appellant was diverting duty free raw materials to the local market from their bonded premises. The DRI officers intercepted two vehicles and found that imported LLDPE Plastic Granules were being diverted to M/s. Chakrapani Vyapar Pvt. Ltd. The goods were seized. The DRI conducted very detailed investigation against the appellants. Prima facie, cases were made out against the appellants. The Revenue proceeded against the appellants. The Adjudicating Authority completed the proceedings and passed the impugned order. A brief summary of the order is set out in the tabular column given below.
Appeal No. Appellant Respondent Order-in-Original No. Duty/ Penalty Representative for the appellant C/37/2006 M/s. Big Bags India Pvt. Ltd.
CC, Bangalore OIO No. 24/2005 dated 16.12.2005 Customs Duty of Rs. 21,71,073/-; Excise Duty of Rs.
19,24,942/-& Penalty of Rs. 6/- lakh under Customs Act under Rs. 12/-lakh Central Excise Shri K.S. Ravi Shankar, Advocate C/38/2006 Smt. Rekha Ravish Kamath, Managing Director, BBIPL
-do-
-do-
Penalty of Rs. 2/- lakh
-do-
C/39/2006 Mr. Ravish Kamath, Chief Executive Officer
-do-
-do-
Penalty of Rs. 5/- lakh
-do-
C/47/2006 Suresh Kumar Ramsisaria, Director of M/s.
Chakrapani Vyapar Pvt. Ltd.
-do-
-do-
Penalty of Rs. 1/-lakh Shri B.N. Gururaj, Advocate C/31/2006 Syed Raqumuddin, Owner of the truck No. KA 18 4554
-do-
-do-
Fine of Rs. 30,000/-
-do-
C/42/2006 Narayan Prasad Yadav, Owner of the truck No. KA 21 2884
-do-
-do-
Fine of Rs. 30,000/-
-do-
The Adjudicating Authority confiscated the 11,000 kg of imported duty free plastic granules under Sections 111(o) and Section 111(j) of the Customs Act, 1962. A redemption fine of Rs. 1,50,000/- was imposed under Section 125 of the Customs Act, 1962. The total quantity of 1,31,500 kg of imported duty free plastic granules were held to be liable to confiscation under Sections 111(o) and 111(j) of the Customs Act, 1962. It was held that the appellants are not entitled for the benefit of duty exemption under Notification No. 52/2003 Cus. dt. 31.3.2003 on the above mentioned plastic granules imported duty free and diverted into the domestic market unauthorizedly. Appropriate customs duty was demanded as per the above table. Similarly 2,40,410 kg of plastic granules and 13,978 kg of master batches were held liable for confiscation under Rule 25 of the Central Excise Rules, 2002. It was also held that the appellants are not entitled for the benefit of the Notification No. 22/2003 CE dt.31.3.2003 on the above mentioned goods for violation of the said Notification. Interest on the duty demanded (both Customs and Excise) was demanded under the relevant provisions. A penalty of Rs. 6,00,000/-was imposed on M/s. Big Bags India Pvt. Ltd. under Section 112(a) of the Customs Act, 1962. A penalty of Rs. 12,00,000/- was imposed on them under Rule 25 of the Central Excise Rules, 2002. Both the trucks which were intercepted were confiscated with an option to redeem them on payment of a fine of Rs. 30,000/- each under Section 125 of the Customs Act, 1962. A penalty of Rs. 5,00,000/- was imposed on Shri Ravish Kamath, Chief Executive Officer of M/s. Big Bags India Pvt. Ltd. under Section 112(a) of Customs Act/Rule 25 of the Central Excise Rules. A penalty of Rs. 2,00,000/- was imposed on Smt. Rekha Ravish Kamath, Managing Director of the appellant unit under Section 112(a) of the Customs Act/Rule 25 of the Central Excise Rules. A penalty of Rs. 1,00,000/- was imposed on Suresh Kumar Ramsisaria, Proprietor of M/s. Shyam Textiles and Director of M/s. Chakrapani Vyapar Ltd. under Section 112(b) of the Customs Act/Rule 25 of the Central Excise Rules. The appellants strongly challenge the impugned order.
3. S/Shri K.S. Ravi Shankar and B.N. Gururaj, learned advocates appeared for the appellants. The following points were urged.
(i) The CBEC Circular No. 122/95-Cus. dated 28.11.1995 requires that on issues relating to interpretation of statutory provisions or the scope of Notification, the matter should be referred to CBEC. In the present case, the issue involved is the eligibility of the appellant to the benefit of exemption Notification No. 52/2003 Cus. dated 31.3.2003 and also Notification No. 22/2003-CE. Other interpretations of statutory provisions related to private bonded warehouse were also involved. Therefore, it was the duty of the learned Respondent to refer to the Board for further clarification before issuing the Show Cause Notice and saddling the appellant with the demand. The following case laws were relied on to hold that before taking an action the Development Commissioner should have been consulted.
a. Vishal Footwear Ltd. v. CC .
b. ABN Granites v. CC c. Transparent Technologies Pvt. Ltd. v. CCE d. T. Gayathri Reddy v. CC e. Verifone India Pvt. Ltd. v. CC 2005 (192) ELT 327 (T)
(ii) The DRI referred the matter to the Development Commissioner, CSEZ. The Development Commissioner issued a noticed dated 30.9.2004 and did not issue any order giving an adverse finding against the appellants.
(iii) The appellant has already fulfilled the export obligation for the relevant period. Therefore, the Development Commissioner has given in principle approval to the appellant for exiting from the EOU scheme and de-bond their unit. This would not have happened if the allegations of the DRI were found to be true by the CSEZ and had CSEZ adversely adjudicated the Show Cause Notice dated 30.9.2004.
(iv) The Board's Circulars are binding on the statutory authorities as held the following cases.
a. K.P. Varghese v. ITO b. Ranadey Micronutrients v. CCE .
c. CCE v. Dhiren Chemical Industries
(v) The Respondent has ignored Board's Circular dated 28.11.995 and demanded various duties without waiting for the Development Commissioner to adjudicate the case and without referring the matter to CBEC. Therefore, the impugned order is bereft of merit.
(vi) Section 28 of the Customs Act 1962 is not applicable as there was no non-levy or short levy or erroneous refund of Customs duty. The goods in question had already been imported under final assessment and duly bonded in the EOU. The question of raising a demand under Section 28 could not have arisen at all, as the assessment had been completed and were not on provisional basis.
(vii) Section 11A of Central Excise Act is not applicable at all to the demand of excise duties of Rs. 19,24,982/- as the appellant was not the manufacturer of plastic granules and master batches but had purchased the same from other manufacturers under duty exemption and bonded the goods.
(viii) This is a case where two statutory authorities of Govt. of India have taken different views. The customs holding that the appellant is not entitled for the exemption and the CSEZ having permitted the appellant to exit and de-bond from the EOU scheme.
(ix) The action of the Respondent is not in accordance with the decision of the Tribunal rendered in the case of Vista Pharmaceuticals v. CC 2007 (141) ECR 202 (T).
(x) The Show Cause Notice has ignored the inward receipts of materials and has taken only outward entries.
(xi) The Revenue cannot be permitted to view a document in a one-sided manner but should appreciate the same in totality. If the Revenue had taken into consideration the inwards column of the register, it would be apparent that the worksheets of the Show Cause Notice are based on arbitrary mathematical models having ignored inward receipts of material and taken only outwards entries. In the inwards in kg in "Material In and Out Register" shows a total of 3,80,376 kgs. This figure has been totally ignored by the department and the investigations which vitiates the worksheets to the Show Cause Notice in their entirety.
(xii) According to the appellant, the quantum of stock as per books was 2,19,689.93 kg. The stock purportedly made out by DRI being 2,90,505.80 kg. There should have been an excess stock of 70,815.87 kg and there would have not been any shortage of stock. This has not been appreciated by the Respondent.
(xiii) The Respondent has erred in holding against the appellant merely because the department at one stage refused job work permission. Removal of goods under documents such as Annexure-II, Form 39C, delivery challans, etc., shows that the goods were accounted for and removed by the appellant. The copies of the document are available at page 386 to 438 of Volume - 2. There has been at best only a procedural violation, which could have entailed a penalty but not a demand under Section 28.
(xiv) Demand for interest and various provisions do not survive, since interest is an accessory to duty and duty demand itself does not survive in law. Reliance is placed on Apex Court's decision in Prathiba Processors v. UOI .
4. Shri B.N. Gururaj, Advocate who appeared on behalf of Shri Suresh Kumar Ramsisaria made the following submissions on his behalf.
(i) Consolidated penalty under Section 112(b) of the Customs Act, 1962 and Rule 173Q of the Central Excise Rules, 1944. Rule 173Q applies only to manufacturers of excisable goods. Since appellant is not a manufacturer, provisions are inapplicable.
(ii) Ingredients of both the provisions are different. Consolidated penalty is bad in law. Reliance is placed on Milapchand CESTAT Kawadia v. CC & Central Excise and Jay Yushin Ltd. v. CCE 2002 (147) ELT 743 (T).
(iii) Plastic granules are not notified under Section 123. Imported granules are freely available in the market. Hence, not expected to know the non-duty paid nature of imported granules. Burden of proof not discharged by appellant.
(iv) No confiscation of appellant's goods. Confiscation ordered to be redeemed by Big Bags.
(v) Appellant merely lender of granules to Big Bags for commission. They are in no way connected with the business of the Big Bags.
(vi) Big Bags had DTA unit, EOU and Exporting Company but the appellant did not know nor he was expected to know from which stock the impugned granules were issued. Presumption of guilt against the appellant is without any basis.
(vii) Hence, penalty of Rs. 1/- lakh is unsustainable and is liable to be set aside.
4.1 Shri B.N. Gururaj, Advocate who appeared on behalf of Shri Sri Syed Raqumuddin and Sri Narayan Prasad Yadav made the following submissions on his behalf.
(i) In both the cases, drivers engaged for transporting the impugned goods from Big Bags without the knowledge of their owners. The depositions of drivers' show that they were picked up at tempo stand or through intermediary and neither of them knew what kind of goods they were required to transport.
(ii) In both the cases, the drivers of seized vehicles have not been impleaded. Only owners have been impleaded. Since owners were not present at the time of engaging the vehicles or loading of goods or movement of vehicles, they did not possess the guilty knowledge that the goods were contraband.
(iii) The drivers also did not have guilty knowledge of nature of goods. In the first appellant's case, the tempo was hired from tempo stand at SJP Road, Bangalore. In the second appellant's case, one of the intermediary parties engaged the vehicle and instructed the driver to proceed to Big Bags. Neither person could have known the non-duty paid nature of plastic granules.
(iv) When neither owner nor driver had the guilty knowledge, the Commissioner was wrong in ordering confiscation of vehicles. Burden of proof not discharged by the Revenue.
(v) Appellants rely on ratio of Upendra Singh v. CC when the drivers do not have guilty knowledge, then confiscation and penalty are liable to be set aside.
(vi) Vehicles released provisionally and bank guarantees encashed. Appellants pray for setting aside the confiscation of vehicles ordered under Section 115 and consequential relief of refund of redemption fine of Rs. 30,000/- each.
5. The learned JDR urged that there is enough evidence to show that the appellants cleared the duty free imported goods and also the goods obtained free of Central Excise duty without using the same in terms of the respective exemption Notifications. The materials obtained in terms of the exemption Notifications should be used only in the manufacture of goods, which have to be exported. Diversion of such goods to local market is a serious violation of the Customs Act as well as the EXIM Policy. He stated that the Commissioner has examined the entire issue in depth and has demanded, duty. He requested the Bench to confirm the impugned order.
6. We have gone through the records of the case carefully. The appellant unit is a 100% EOU having a private bonded warehouse. They are entitled to get duty free goods both imported and indigenous in terms of Notification No. 53/97 Cus. dated 03.06.97 as amended in Notification No. 52/2003-Cus. dated 31.3.2003 and Central Excise Notification No. 22/03-CE dated 31.3.2003. In terms of the above Notifications, the goods obtained duty free should be used in the manufacture of goods, which are to be exported. However, on 4.9.2004, the DRI officers intercepted two trucks carrying 11,000 kgs of imported duty free LLDPE granules being diverted to M/s. Chakrapani Vyapar Pvt. Ltd. Investigations revealed that these goods are actually imported by the appellant company in terms of Notification No. 52/03. Further investigations revealed that in all, a total quantity of 1,37,500 kgs of plastic granules imported duty free and 2,42,410 kgs of plastic granules and 13,978 kgs of master batches procured without payment of Central Excise duty were diverted by the appellant. Show Cause Notices were issued to all the appellants based on the investigations, the documentary evidences and statements of the concerned persons. The fact that the goods have been diverted is not in doubt and it is also not disputed. Various explanations have been given to justify the diversion.
6.1 Shri K.S. Ravi Shankar, learned advocate who argued the case stated that in order to meet the urgent export obligations, the appellant had to procure locally the raw materials. As and when the imported duty free materials are obtained, they would return the materials borrowed. According to him, this was done to meet the exigencies. He emphasized the point that the appellant unit had fulfilled the export obligations and even the Development Commissioner had allowed the unit to exit from the EOU scheme. He said while demanding duty, the Adjudicating Authority has not taken into account the receipt of the raw materials. Further he submitted that on the basis of the DRI investigation, the Development Commissioner issued a Show Cause Notice and the same is still pending. In view of these submissions, he urged that the demand of duty is not sustainable.
6.2 The Adjudicating Authority has examined all the points raised by the appellants thoroughly and he has given very detailed findings. Removal of duty free goods has been confirmed by Shri Ravish Kamath, CEO of the appellant firm. Shri H.N. Ananth Kumar, Manager (Excise & Customs) has also confirmed the removals. There is no allegation that the above statements have been given under duress.
6.3 On going through the records, we find that the diversion of duty free material is not a one-time affair to tide-over some difficult situation. The diversions have been taking place very regularly, that too without any permission from the department. When the goods are obtained duty free in terms of Exemption Notifications, then the conditions of exemption Notifications have to be strictly complied with. The explanation that they borrowed some material locally and only in order to return the borrowed material, they had to remove the duty free materials from their warehouse cannot be accepted. There is a very clear case of non-fulfillment of conditions of exemption Notifications and unauthorized removal. The impugned goods are liable for confiscation under Section 111(o) of the Customs Act. The fact that the appellants had fulfilled their export obligation cannot lessen the gravity of the offence. There is no excuse for using materials other than those obtained in terms of the exemption Notifications to fulfill the export obligations. The very same materials, which have been obtained duty free, should be used in the manufacture of the goods to be exported. Any unauthorized removal as in the present case is violation of the conditions of the Exemption Notifications and invites suitable action to demand duty. There is further violation of Section 71 of the Customs Act, 1962, which provides that "no warehoused goods shall be taken out of a warehouse except on clearance for home consumption or re-exportation, or for removal to another warehouse or as otherwise provided by the Act." The contention of the appellant that the Development Commissioner had not yet completed the proceedings initiated against the appellants on the basis of DRI investigation is no ground for the Customs to refrain from taking any action for the violation of the conditions of the exemption notifications. There is voluminous evidence such as material in and out register, the invoices and Form 39C recovered from the two trucks upon interception, Annexure-II Challans, the statements of various customers, employees of the firm and the statement of the CEO of the company to prove the Revenue's case.
6.4 The appellants have contended that the Section 28 of the Customs Act, 1962 is not applicable as there was no non-levy or short-levy or erroneous refund of Customs duty. On going through the order, we find that the Adjudicating Authority while demanding Customs duty has invoked Condition No. 3(d)(I)(ii) of the Notification No. 52/2003 Cus. dated 31.3.2003 as amended read with Section 72 (d) of the Customs Act, 1962. Similarly, while demanding the Central Excise duty the Adjudicating Authority has invoked Condition No. (4) (a) (ii) of Notification No. 22/2003- Central Excise dated 31.3.2003 as amended. The point is that the goods obtained duty free have been diverted. In terms of the relevant provisions of the exemption notifications, the appellants are liable to discharge the duty. Hence, the question of time bar also does not arise. In view of these things, the objection that Section 28/Section 11A have been invoked in the Show Cause Notice is not a very strong ground for setting aside the demand. There are many rulings which hold that invoking an incorrect provision of law would not vitiate a Show Cause Notice and demand. It is also to be borne in mind that the Adjudicating Authority in his order has correctly invoked the provisions of the Notifications. Further when the goods obtained duty free are bonded in the bonded warehouse, diversions to domestic market unauthorizedly is also violation of the provisions of the Customs Act and duty is demandable under Section 72(d) of the Customs Act, which the Adjudicating Authority has correctly invoked. To make the matters very clear, we are reproducing the relevant portion of Section 72 of the Customs Act.
SECTION 72. Goods improperly removed from warehouse, etc. - (1) In any of the following cases, that is to say_
(a)...
(b)...
(c)...
(d) Where any goods in respect of which a bond has been executed under (Section 59) and which have not been cleared for home consumption or exportation are not only duly accounted for to the satisfaction of the proper officer, the proper officer may demand, and the owner of such goods shall forthwith pay, the full amount of duty chargeable on account of such goods together with all penalties, rent, interest and other charges payable in respect of such goods.
6.5 Further we reproduce the relevant provisions of the Notifications under which the duties have been demanded.
Condition No. (4)(a)(ii) of Notification No. 22/2003-Central Excise dated 31.3.2003 (4) the user industry executes a bond with the Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise or Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, (hereinafter referred to as the said officer) in the prescribed form and for such sum as may be specified by the said officer for the proper account of the receipt, storage and utilization of such goods, to achieve positive Net Foreign exchange Earning and comply with the conditions stipulated in this notification and the Export and Import Policy, and binding itself to pay on demand,-
(a) an amount equal to duty leviable on the goods and interest at the rate specified in the notification of the Government of India, Ministry of Finance, Department of Revenue issued under Section 11AB of Central Excise Act, 1944 (1 of 1944) from the date of duty free procurement of the said goods till the date of payment of such duty, if -
(i) ...
(ii) in the case of goods other than capital goods, such goods as are not proved to the satisfaction of the said officer to have been used in connection with the production or packaging of goods for export out of India or cleared for home consumption within a period of three years from the date of procurement thereof or within such extended period as the said officer may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow;
Condition No. 3(d)(I)(ii) of the Notification No. 52/2003 Cus. dated 31.3.2003 (3) The unit executes a bond in such form and for such sum and with such authority, as may be specified by the said officer, binding himself,-
(b) ...
(c) ...
(d) to pay on demand-
(I) an amount equal to duty leviable on the goods and interest at a rate as specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) issued under Section 28AB of the said Customs Act on the said duty from the date of duty free import of the said goods till the date of payment of such duty, if -
(i) ...
(ii) in the case of goods other than capital goods, such goods as are not proved to the satisfaction of the said officer to have been used in connection with the production or packaging of goods for export out of India or cleared for home consumption within a period of three years from the date of import or procurement thereof or within such extended period as the said officer may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow;
6.6 We do not agree with the contention of the learned advocate that in a matter like this that the Customs Department should consult the Development Commissioner for initiating action in accordance with Board's Circular on the subject. The Board's Circular does not require the Commissioner to consult the Development Commissioner for all types of violations. On the contrary, the Board Circular dated 28.11.1995 in Para 2 clarifies that "Board desires that in view of Circular No. 21/95 Cus. dated 10.3.1995 prompt action should be taken for issue of Show Cause Notices against units indulging in gross violations of law like illicit removal / non accountal / disappearance of goods and the like". Only in issues like the nonfulfillment of export obligation, action has to be initiated in consultation with Development Commissioner. The learned Commissioner in Para 83 of the impugned order has dealt with this issue. This is not a case for initiating action for non-fulfillment of export obligations.
6.7 The case laws relied on by the learned advocate for the appellants' deals with non-fulfillment of export obligations and the consequent demand of duty. In such cases, it has been held that the department cannot initiate punitive action without consulting the Development Commissioner in accordance with the Board's Circulars. So, the reliance on Board's Circular as well as the case laws are misplaced. The allegation is on diversion of duty free raw materials and contravention of Customs and Excise Notifications and EXIM Policy. We agree with the Adjudicating Authority that in such cases, there is no need for the Customs Department to consult the Development Commissioner. The appellants contended that the Adjudicating Authority while arriving at the duty liability has taken only the removals and has not taken the receipts of raw materials into the unit. On going through the available records, we, find that the inward and outward figures do not match. One thing is clear that what has been removed is the duty free material. To the extent that these materials have been diverted and not used in the manufacture of goods meant for export, there is violation of conditions of exemption Notifications and the appellant is liable to discharge the duty liability which is equal to the duty foregone by the government. The department is not bound to assume that the goods received are of the same type and quality as the goods diverted. Therefore, we cannot fault with the Adjudicating Authority for not giving any allowance for the goods received into the factory and shown in the "In and Out Register".
6.8 It is also been contended that Central Excise duty can be demanded only from the manufacturer and not on the buyers. This contention is also baseless as the appellants in the present case obtained the goods duty free in terms of the Central Excise Notification and did not use the same in the manufacture of goods to be exported but diverted it to the domestic area. In such cases the appellants are liable to pay the duty demanded in terms of the said Notifications.
6.9 The appellant has furnished the details of raw materials procured/imported/local (duty free) for the period between September 2001 and 4th September 2004 to show that when the DRI visited their premises, they had excess stock. In our view this point is not relevant. There is categorical evidence to show that the duty free materials were diverted. In the impugned order, duty has been demanded on such diverted material. The fact that some materials were borrowed from others and in order to return, the imported goods / duty free indigenous goods were diverted, has not been accepted by the Adjudicating Authority. We are also in agreement with the Adjudicating Authority on this point. He was right in ignoring the inward receipt.
6.10 In fine, we confirm all the duties demanded by the Adjudicating Authority. We also uphold the demand of interest under the relevant provisions of law. The confiscation of the seized materials is upheld.
6.10.1 Now let us deal with the various penalties imposed by the Adjudicating Authority. As the goods obtained duty free are held liable to confiscation, penalty under Section 112(a) is imposable on the appellant company. Similarly, penalty is imposable under Rule 25 of the Central Excise Rules also. The Adjudicating Authority has given a finding that the diversions of the duty free raw materials from the bonded premises were committed with full knowledge and consciousness and at the specific instructions of the top management. He has also referred to the statements of the employees of the noticee company including the Director, Managing Director and Chief Executive Officer. In Para 97 of the impugned order, the Adjudicating Authority has dealt with the role of Shri Ravish Kamath, the CEO of the firm. He has admitted to the diversion of the goods. He has also admitted to the removal of duty free raw materials for job work without the permission from the department. Shri Ravish Kamath has admitted that the clearances were effected from EOU premises but the Annexure-II challans were issued from their other units so as to project that no duty free materials were removed from the EOU. Shri Ravish Kamath's statement stands corroborated by that of Shri V.H. Kulkarni, Works Manager who received instructions from Shri Ravish Kamath. Shri H.N. Ananthkumar, Manager (Excise and Customs) has also corroborated the above facts. In these circumstances, we have no other option but to uphold' the imposition of penalty on Shri Ravish Kamath, CEO.
6.10.2 As regards the penalty on Smt. Rekha Ravish Kamath, the Commissioner has recorded in Para 99 that there is no direct involvement of her in the day-to-day transactions of the company, yet he has held that in terms of the Board's resolution dated 6.9.2004 as Managing Director, the decisions taken by Shri Ravish Kamath is biding on her. In our view, the penalty on Smt. Rekha Ravish Kamath is not warranted as there is no clear finding that she was involved in the day-to-day affairs of the company.
6.10.3 As regards the penalty on Shri Suresh Kumar Ramsisaria, Proprietor of M/s. Shyam Textiles and Director of M/s. Chakrapani Vypar Ltd. under Section 112(b) of the Customs Act/Rule 25 of the Central Excise Rules, the learned Commissioner has given his findings in 107 to 109 of the impugned order. It is on record that for the transport of the imported goods of the appellant, Shri Suresh Kumar Ramsisaria had fabricated the documents because the invoice was raised in the name of M/s. Chakrapani Vypar Ltd. and Form 39C in the name of M/s. Shyam textiles, even though the goods were removed from the bonded warehouse of M/s. Big Bags India. He has also extracted from the statement of Shri Suresh Kumar Ramsisaria to establish that he had indeed knowledge of the fact of receiving duty free materials from the appellant unit. In these circumstances, the Commissioner has held that penalty is imposable on him under Section 112(b) of the Customs Act read with Rule 25 of the Central Excise Rules, 2002. The conclusion of the Commissioner is reasonable and we do not have any strong grounds to set aside the same. Thus, we hold that penalty is imposable on Shri Suresh Kumar Ramsisaria.
6.10.4 With regard to confiscation of the two trucks, the learned Commissioner has dealt with these issues in Paras 100 to 106 of the impugned order. He has brought out the evidence to establish that both the drivers had knowledge regarding the goods diverted from the appellants units and the fact that they were unauthorized removers. Relying on the decision of the Hon'ble High Court of Delhi in the case of Vishwanath Gupta v. CEGAT , he has held that even when the person incharge of the conveyance has knowledge about the nature of the goods transported being unauthorized, the conveyance will be held liable for confiscation even though the owner may not have any knowledge. We agree with the finding of the Commissioner. The trucks were released provisionally to the owners on execution of the bond. Hence, once the trucks are liable for confiscation, the redemption fine can be levied even when the goods had already been released on execution of the bond. In terms of the bond, the owners of the vehicles are bound to honour payment of fine and penalty. But in the present case, mercifully no penalties have been imposed on the owners.
6.10.5 Having regard to the facts and circumstances of the case, we modify the fines / penalties in the following manner.
(i) The redemption fine in respect of the seized goods is reduced from Rs. 1,50,000/- to Rs. 60,000/-.
(ii) The redemption fines in respect of trucks seized is reduced from Rs. 30,000/-to Rs. 5,000/-.
(iii) The penalty of Rs. 6,00,000/- imposed under Section 112 (a) of the Customs Act, 1962 is quite reasonable. Similarly penalty of Rs. 12,00,000/- imposed under Rule 25 of the Central Excise Rule, 2002.
(iv) The penalty on Shri Ravish Kamath, CEO is reduced from Rs. 5,00,000/- to Rs. 1,00,000/-.
(v) The penalty of Rs. 2,00,000/- imposed on Smt. Rekha Ravish Kamath, Managing Director is set aside.
(vi) The penalty on Shri Suresh Kumar Ramsisaria is reduced from Rs. 1,00,000/- to Rs. 10,000/-.
Thus, the appeals are disposed of on the above manner.
(Pronounced in open Court on 3 Aug 2007)