Customs, Excise and Gold Tribunal - Calcutta
Glory Research Association vs Commr. Of Cus. (Airport) on 4 October, 2002
Equivalent citations: 2003(87)ECC131, 2003(153)ELT348(TRI-KOLKATA)
ORDER
Archana Wadhwa, Member (J).
1. All the three appeals are being disposed of by a common order as they arise out of the same impugned order of Commissioner of Customs (Airport), Kolkata, vide which the goods imported by M/s. Glory Research Association have been confiscated with an option to them to redeem the same on payment of redemption fine of Rs. 4.00 lakh (Rupees four lakh). Duty of Rs. 5,48,056.00 (Rupees five lakh forty-eight thousand fifty-six) has been confirmed against them, along with imposition of personal penalty of identical amount. In addition, penalty of Rs. 50,000.00 (Rupees fifty thousand) each has been imposed on the other two appellants - Ms. Sipra Ghosh and Shri Sanjoy Ghosh.
2. As per facts on record, M/s. Glory Research Association (hereinafter referred to as GRA) imported Beta-Cam-Edit Set Up, by claiming exemption under the provisions of Notification No. 152/94-Cus., dated 13-7-94. The goods were cleared after filing two bills of entry dated 19-11-2000 and 12-1-2001. As a result of intelligence received by Customs Officers from M/s. United Bank of India regarding the fraudulent activities of the appellants, the Revenue Officers conducted further investigations. As a result of investigations conducted it was found that Ms. Sipra Ghosh and Shri Sanjoy Ghosh were having a running concern under the name and style of M/s. Glory Enterprise - which was engaged in the activities of advertisement in various media as well as making of Serials. The said M/s. Glory Enterprises borrowed a loan of Rs. 5,37,800.00 (Rupees five lakh thirty-seven thousand eight hundred) from M/s. United Bank of India of Barasat Branch for the purposes of setting up a commercial project of Beta-Cam-Edit Unit. After adding margin money given by Ms. Sipra Ghosh, the Pay Order for Rs. 7,17,067.00 (Rupees seven lakh seventeen thousand sixty-seven) was forwarded in favour of M/s. New Video Ltd. for the purposes of importation of the said goods. M/s.
Glory Enterprise after removing the Forwarding Memo of the Pay Order, gave the Pay Order to the Indenting Agent, M/s. New Video Ltd. who are the authorised Sales Representative of M/s. Sony Corporation of Hong Kong. Thereafter, M/s. Sony Corporation were placed with a confirmed Order by Ms. Sipra Ghosh for the supply of the goods in question with direction that the same be supplied to M/s. GRA. They also instructed M/s. New Video Ltd. to transfer the amount given by the Bank to the credit of G.R.A. During the course of investigations, the Revenue Authorities also found out that GRA was not working for the promotion of deaf, dumb and blind, as it was made out to be and the address given by the said firm was found to be a vacant plot. The Officers also found that the goods have been under-valued and the entire scene was created by the two appellants, Shri Sanjoy Ghosh and Ms. Sipra Ghosh - who are brother and sister in relation for the purpose of importation of the goods in question and to avail the benefit of the Notification No. 152/94-Cus.
3. Before proceeding ahead, we would like to refer here to the conditions of the Notification No. 152/94-Cus. which permits importation of certain goods free of duty, subject to fulfilment of the conditions which are reproduced below :-
(i) The goods are imported by an institution (including a registered co-operative Society) for the blind and the deaf;
(ii) The goods are bona fide gifts to or purchased out of donations received abroad in foreign exchange by such institute;
(iii) Where any such institution is scheduled to begin to function only after the importation of the said goods, the exemption shall not apply in respect of the goods imported by that institution, unless an undertaking in writing is given by the President or the Secretary of that institution that it will begin to function within a period of six months or such extended period as Asstt. Commissioner of Customs or Deputy Commissioner of Customs may on sufficient cause being shown, allow in this behalf, from the date of importation of the goods;
(iv) Where the said goods have been purchased out of donations received abroad in foreign exchange the institution have been permitted to maintain an account abroad by the R.B.I., for the purpose of receiving funds donated overseas.
4. The allegations for the violation of the conditions of the said notification, are made against M/s. GRA on the ground that GRA is not a charitable organisation working for the blind and the deaf; that the goods imported by GRA do not qualify as a bona fide gift; that the goods have not been purchased out of donations received abroad in foreign exchange; that there was mis-declaration with regard to the valuation of the imported goods and the importers have attempted to get the benefit of Notification No. 152/94.
5. As regards the charitable status of GRA, the said appellants have produced certificate dated 27-10-99 under Registration of Societies (West Bengal) Act, 1965. It is not disputed that there is no address given on the said certificate. It has been claimed by GRA that they are working from Baishali, Bamangachi, P.S. Barasat, Dist. North 24 - Paraganas. The Customs Officers on their spot verification, have found that the premises is only a vacant plot and even that land was mortgaged to the Bank against the loan raised by M/s. Glory Enterprise. The above fact is corroborated by the reports given by the Bank Authorities. The jurisdictional Panchayat Pradhan of Choto Jagulia has also confirmed that no organisation under the name and style of GRA is working for the blind and deaf persons on the given address. Shri Sanjoy Ghosh in one of his statements recorded during the interrogation, has admitted that GRA has not done any work towards the upliftment of the deaf and blind, prior to that date. They have not produced any evidence to show any of the activities of the GRA for the welfare of the deaf and blind. As such, in our views, the Commissioner has rightly concluded that the said M/s. GRA cannot be held to be a bona fide charitable organisation in spite of their registration with the District Authorities. As such, violation of condition Nos. (i) and (iii) of the Notification, is established.
5. As regards the violation of condition No. (ii), we find that the intensive investigation conducted by the Revenue Authorities has resulted in emergence of the conclusive evidence, as discussed by the Commissioner in his impugned Order; that the goods were neither bonafide gifts to M/s. GRA nor has been purchased out of donations received abroad in foreign exchange by such institute. The appellants' contention that the goods are a gift from Ms. Sipra Ghosh who is Assistant General Secretary of M/s. GRA. The facts on record clearly reveal that Ms. Sipra Ghosh has taken the loan from Bank in the name of M/s. Glory Enterprise and has fraudulently, after removing the covering letter of the Bank, forwarded the same to M/s. New Video Ltd, with direction to transfer the capital in the name of M/s. GRA thereby showing as if it was a gift from her to M/s. GRA. Apart from the fact that Ms. Sipra Ghosh was working as an Assistant General Secretary of M/s. GRA and could not have made a gift from herself, it is established that she has fraudulently obtained the loan from Bank in the name of M/s. Glory Enterprise and has shown the same as if it was a gift from her to M/s. GRA. As such, we find that the conclusion arrived at by the authorities below that the goods in question were not a bona fide gift to a charitable institution, working for the blind and deaf, cannot be faulted with. The entire scenario reveals the scheme adopted by the brother and sister's team for importation of Beta-Cam-Edit Set Up Unit by taking the benefit of Notification which was otherwise not due to them.
6. As regards the under-valuation, the adjudicating authority in Para 26 of his Order has observed that the invoice produced by the appellants showing the value of the goods, was never issued by M/s. Sony Corporation, Hong Kong. The original sets of the two invoices issued by M/s. Sony showing the higher value of US $ 1275.00 and US $ 962.00 as against the US $ 275.00 and US $ 162.00 claimed by the importers, have been obtained by the Revenue from M/s. New Video Ltd. They have also filed an affidavit while forwarding the said invoices to the Revenue. M/s. New Video Ltd. who is the indenting agent for M/s. Sony Corporation, have denied that their principal had ever issued any document showing the under-invoiced particulars of the goods. As such, we are of the view that the value claimed by the importers had been rightly rejected by the authorities below. The Commissioner has also observed that instead of meeting the allegation as regards the under-valuation, the appellants have tried to shift the responsibility of under-invoicing to the CHA, the indenting agent and the suppliers, whereas the record clearly shows otherwise.
7. In view of the foregoing discussions, we find no justification in interfering in the Order passed by the Assistant Commissioner, Calcutta.
8. As regards penalties imposed on the other two appellants - Ms. Sipra Ghosh and Shri Sanjoy Ghosh, the Commissioner has discussed the fraudulent means adopted by the two appellants. Some of the fraudulent activities carried out by the said two persons was that whereas the Partnership Deed of M/s. Glory Enterprise showed Shri Sanjoy Ghosh as son of Shri Sudhangshu Kr. Ghosh, the agreement made by Ms. Sipra Ghosh on the Court Paper dated 28-8-2000 stating the impugned goods as a gift of the Secretary of M/s. GRA, Shri Sanjoy Ghosh, has been shown as a son of Shri Krishna Kumar Ghosh. It is also seen that cheque issued by M/s. West Bengal State Handloom Co-operative Societies Ltd. in favour of M/s. Glory Enterprise, has been favoured to M/s. GRA. Shri Sanjoy Ghosh has been fraudulently representing himself in two different names as Shri Sujoy Ghosh, son of Shri Sudhangshu Kr. Ghosh of Barasat and Shri Sanjoy Ghosh, son of Shri Krishna Kumar Ghosh of Baishali.
9. The Managing Committee of M/s. GRA also shows different addresses of different family members of Shri Sanjoy Ghosh and Ms. Sipra Ghosh. The invoice for the goods in question was fake and showed manipulated prices of Edit Control Unit and Colour Monitor reflecting upon the fraudulent activities of the appellants. As such, we are of the view that imposition of personal penalty of Rs. 50,000,00 (Rupees fifty thousand), on each of the said two appellants is called for.
In view of the foregoing, we do not find any merits in the appeals and reject the same.