Custom, Excise & Service Tax Tribunal
S Jayakumar vs Commissioner Of Customs on 15 May, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: C/21016/2016-SM [Arising out of Order-in-Appeal No. 415/2015-16 dated 30/03/2016 passed by Commissioner of CUSTOMS, COCHIN.] S Jayakumar Managing Director, M/s. Ace Finepack Pvt. Ltd., Pullepady Junction, Chittor Road COCHIN - 35 KERALA Appellant(s) Versus Commissioner of Customs Cochin-Cus. CUSTOM HOUSE COCHIN - 682009 KERALA Respondent(s)
Appearance:
Mr. BABY M.A. ADVOCATE FAIZEL CHAMBERS, PULLEPPADY CROSS ROAD COCHIN - 35 KERALA For the Appellant Mr. K. T. Pakshirajan, AR For the Respondent Date of Hearing: 15/05/2017 Date of Decision: 15/05/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20695 / 2017 Per : S.S GARG The present appeal is directed against the impugned order dated 30.3.2016 passed by the Commissioner of Customs (A) whereby the Commissioner (A) has rejected the appeal of the appellant and upheld the Order-in-Original.
2. Briefly the facts of the case are that on the basis of intelligence gathered by Special Intelligence and Investigation Branch (SIIB), the original authority formed an opinion that M/s. Flomic Freight Services Pvt. Ltd., (Freight Forwarders) along with M/s. International Freight System, Custom House Brokers had indulged in freight fraud whereby they had facilitated evasion of duty on the freight component in the value of the goods imported by M/s. Ace Fine Pack Pvt. Ltd., resulting in considerable loss of revenue to the department. According to the Revenue, appellant had wilfully manipulated House Bills of Lading showing the terms of import as freight pre-paid against the actual terms of freight collect with the assistance of the freight forwarders and custom house brokers and the corresponding freight charges were paid by them in India. This fact has been admitted by the importer, who remitted the differential duty along with interest and penalty equal to 25% of the duty as per Section 28 (6) of the Customs Act, 1962. After following the due process of law, a penalty of Rs.5,000/- was imposed on the appellant, Director of M/s. Ace Fine Pack Pvt. Ltd. under Section 114AA of the Customs Act, 1962 vide order dated 21.7.2015 for his willful involvement in the evasion of duty by fabrication of import documents.
3. I have heard both the parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same is passed contrary to the Circular No.11/2016-Cus. dated 15.3.2016 issued by the CBEC. He further submitted that as per Section 28(6)(i) of the Customs Act, 1962, if the importer accepted the duty and paid interest along with penalty equal to 25% of the duty within one month from the date of issue of notice, then the proceedings in respect of all other persons to whom the notice is issued shall be deemed conclusive as to the matters stated therein. The said provision is even extended in Finance Act, 2015 also. He further submitted that in the present case, the importer i.e., appellant firm accepted the liability and paid the entire duties in accordance with the law and therefore, the imposition of penalty on the Director to the extent of Rs.5,000/- is not warranted. He further submitted that as per the Circular No.11/2016-Cus. dated 15.3.2016, it is provided that the duty with interest and penalty has been paid in full, then, proceedings in respect of such person or other persons to whom the notice is served under sub-section (1) of Section 4, shall, without prejudice to the provisions of Section 135, 135A and 140 be deemed to be conclusive as to the matters stated therein. Learned counsel submitted that vide Order-in-Original passed by the Additional Commissioner of Customs, it has been admitted that the importer had already paid the differential duty, interest and penalty equal to 25% of the duty specified in the notice under provision 28(5) of the Customs Act, 1962 and therefore, the Additional Commissioner has not passed any order for confiscation of the goods and has only imposed a penalty of Rs.5,000/- on the appellant who is the Director of the importer company.
5. After considering the submission of both the parties and perusal of the material on record, I find that Circular No.11/2016 dated 15.3.2016, the Board has clarified that if the duty is paid along with interest and penalty equal to 25% of the duty specified in the notice, then the proceedings against the importer as well as against the co-noticee shall stand concluded. In view of this, the impugned order is not sustainable. Therefore, I allow the appeal of the appellant and set aside the penalty imposed on the appellant.
(Operative portion of the Order was pronounced in Open Court on 15/05/2017.) S.S GARG JUDICIAL MEMBER rv 4