Custom, Excise & Service Tax Tribunal
M/S. Transweigh (India) Ltd vs Commissioner Of Customs, Acc, Mumbai on 29 April, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.1
APPEAL NO.C/316/08
(Arising out of Order-in-Appeal No.136/2007 Misc. ACC dtd. 07.01.2008 passed by the Commissioner of Customs(Appeals), Airport, Mumbai )
For approval and signature:
Honble Mr.A.K.Srivastava, Member(Technical)
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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?
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M/s. Transweigh (India) Ltd.
:
Appellants
VS
Commissioner of Customs, ACC, Mumbai
Respondents
Appearance
Shri R.V.Shetty, Advocate for Appellants
Shri Manish Mohan, Authorized Representative (DR)
CORAM:
Mr.A.K.Srivastava, Member(Technical)
Date of hearing: 29/04/09
Date of decision : 04/05/09
ORDER NO.
Per : A.K.Srivastava
This appeal has been filed by M/s. Transweigh(India)Ltd, Mumbai against the Order-in-Appeal dated 07.01.2008 passed by the Commissioner of Customs(Appeals), C.S.I, Airport, Sahar, Mumbai. The Commissioner(Appeals), vide the impugned Order, has upheld the Order-in-Original dated 29.08.2007 passed by the Additional Commissioner of Customs, Mumbai by which he ordered confiscation of the goods valued at Rs. 6,07,664.57 found in excess under Section 111(m) of the Customs Act, 1962. However, he allowed the appellants to redeem the goods on payment of a fine of Rs. 1,80,000/- under Section 125 of the Customs Act, 1962 and on payment of applicable duty. He also imposed a penalty of Rs. 1,00,000/- on the appellants under Section 112(a) of the Customs Act, 1962.
2. Heard both the sides and perused the records.
3. The facts of the case are that the appellants filed a Bill of Entry No. 203424 dtd. 18.07.2007 for clearance of Electronic Components & Connectors. They submitted Invoice No.1782-B dtd.10.07.2007. The declared assessable value of the goods was Rs. 33,152.35. The Bill of Entry was assessed on second check basis. During examination, it was found that there was a discrepancy in the quantity. The Shed Appraiser reported that the quantity of goods actually found during examination vis-`-vis declared in the Bill of Entry, were as under:-
Sr.NO.
Description of Goods Declared Quantity Found Quantity Excess Quantity 1 Transformer 5 54 49 2 I.C. 10 250 240 3 I.C. 5 297 292 4 Capacitor 5 5
-5
Connector 5 590 585 6 Trimpot 98 98
-7
Connector 15 285 270 8 Connector 15 185 170
4. It was further alleged that the value of goods found in excess is Rs. 6,07,664.57 and the appellants appear to have mis-declared the quantity and value of the total goods to evade payment of customs duty. For such mis-declaration, the goods appeared to be liable to confiscation under Sec.111(m) of Customs Act, 1962 and the appellants liable to penalty under Section 112(a) of Customs Act, 1962.
5. The appellants submitted letter dated 30.07.2007 and 02.08.2007. In the letter, they have stated that due to error from the forwarding agent, the wrong Invoice No.1782B dtd. 10.07.2007 was submitted to Customs instead of the correct invoice No.1782B-R dtd. 30.07.2007. They submitted fresh Invoice No. 1782B-R dtd. 30.07.2007 for U.S.$ 17,718.64 towards the total goods found in the package. They have further stated that they do not want show cause notice and personal hearing and they were ready to pay additional duty for the excess goods. After this, the Additional Commissioner passed the impugned order as referred to above, which was upheld by the Commissioner(Appeals).
6. The appellants have contended that no show cause notice was issued in this case for imposing redemption fine and penalty and that the fine and penalty has been imposed ex-parte. I do not find merit in this argument of the appellants. Once they waived off the issue of the show cause notice and agreed to pay additional duty for the excess goods, they should have been prepared to face the penal consequences for the mis-declaration of the quantity and the value of the goods. Their request for waiver of show cause notice was not conditional in as much as they did not specifically mention that in case the Department is proposing to impose redemption fine and penalty, they will require show cause notice and will like to be heard. Once the quantity and the value of the impugned goods are mis-declared, the penal consequences are bound to follow. The ratio of the case law in the case of Chander J. Obhrai vs. Commissioner of Customs(Exports), Mumbai reported in 2009(233)ELT 112(Tri-Mumbai) cited by the appellants is not applicable because in that case the appellant therein did not waive off the issue of show cause notice and despite that, the penalty was imposed on him. In that context only, the Tribunal held that in the absence of show cause notice, the adjudication order cannot impose penalty. Hence, the facts are distinguishable.
7. The appellants have further submitted that the Bill of Entry quantity was shown in the beginning as per the Invoice No.1782B dated 10.7.2007. The correct Invoice No. is 1782B-R dated 30.07.2007. According to them, this happened only because of the mistake of the sender and there was no intention at all to submit a wrong invoice and claim the benefit or evade any duty. I am not inclined to accept the appellants pla. In this regard, I extract below the findings of the Commissioner(Appeals).
I have carefully gone through the facts of the case, grounds of appeal as well as submissions made at the time of personal hearing. It is observed from letter dt.30.07.2007 of the supplier that the invoice No.1782-B-R dtd.30.07.2007 was forwarded along with the said letter. Had there been a genuine error on the part of the forwarding agent, the date of invoice No.1782-B-R would have been prior to the date of dispatch or date of bill of entry. But the invoice No.1782-B-R is dt.30.07.2007 which means that the impugned invoice is issued after 20 days after the filing of bill of entry. It is obvious that this invoice is fabricated to avoid legal and penal action.
In view of the above, I see no reason to interfere with the order in original. The same is upheld and the appeal is rejected. I fully agree with the findings of the Commissioner(Appeals) as referred to above and reject the appellants contention.
8. It is the further submission of the appellants that mens rea is to be seen before imposing penalty and redemption fine and since they never intended to do anything wrong, it was only an unintentional mistake, which is pardonable. I do not agree with the contention of the appellants that it was genuine mistake because of the reasons indicated in para 7. It was a deliberate attempt to evade payment of duty. In any case, the element of mens rea is not required to be proved for imposition of penalty under Section 112(a) of the Customs Act, 1962 as has been held by the Honble Madras High Court in the case of Commissioner of Customs (Export), Chennai-1 vs Bansal Industries reported in 2007(207)ELT 346(Mad.)
9. The appellants have also relied upon the Tribunals decisions in the case of Woodman Industries vs. C.CEx, Patna [ 2004 (164) ELT 339 (Tri-Kolkata)] and Aditya Steel Industries vs. Commissioner [ 1996(84)ELT 229(T)] in which it has been held that penalty under Rule 26 of the Central Excise Rules, 2002 (Rule 209A of erstwhile Central Excise Rules, 1944) is imposable only on a person, and not on a firm. Their submission is that Section 112(a) of the Customs Act, 1962 also refers to Any person and since import has been made by M/s. Transweigh (India) Ltd, which are not a person, no penalty is imposable on them under Section 112(a) of the Customs Act, 1962. This contention of the appellants is also to be rejected outright. The ratio of these judgments, which have been delivered in altogether different context and situation relating to Central Excise matters, cannot be applied to a Customs Case, where charge of mis-declaration of the description and value of the goods stands established against the appellants, who have filed the Bill of Entry and by their acts of omission and commission, the appellants have rendered the goods liable to confiscation under Section 111(m) of the Customs Act, 1962 and rendered themselves liable to penal action under Section 112(a) of the Customs Act, 1962.
9.1. Further it is to be noted that the Honble Supreme Court in the case of Agarwal Trading Corporation and others vs. Assistant Collector of Customs, Calcutta and others [1983(13)ELT 1467(SC) in para 7 has held as under:-
7. The second contention that because the firm is not a legal entity, it cannot be a person within the meaning of Section 8 of the Foreign Exchange Regulation Act or of Section 167(3), (8) and (37) of the Sea Customs Act, is equally untenable. There is of course, no definition of person in either of these Acts but the definition in Section 2(42) of the General Clauses Act, 1897, or Section 2(3) of the Act of 1868 would be applicable to the said Acts in both of which person has been defined as including any company or association or body of individuals whether incorporated or not. It is of course contended that this definition does not apply to a firm which is not a natural person and has no legal existence, as such clauses (3), (8) and 37 of Section 167 of the Sea Customs Act are inapplicable to the appellant firm. In our view, the explanation to S.23-C clearly negatives this contention. In that a company for the purposes in that section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm means a partner in the firm. Thus according to the Supreme Court judgment, (supra), company or firm is a person. Therefore, the penalty has been rightly imposed on the appellants. The decisions of the Tribunal cited by the appellants are per incuriam and do not have precedential value.
10. I do not find any infirmity in the orders passed by the lower authorities below. The same are upheld and the appeal is rejected.
(Pronounced in court on 04.05.09 ) A.K.Srivastava Member(Technical) pv 6