Custom, Excise & Service Tax Tribunal
Shri S. P. Bahl vs Commissioner Of Customs(Import), ... on 12 September, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/531/2012-MUM
{Arising out of Order-in- Original No. 13/2012/CAC/CC/BKS dated 19/03/2012 passed by the Commissioner of Customs (Adjn) Mumbai}
For approval and signature:
Honble Mr. P.R. Chandrasekharan, Member (Technical)
Honble Mr Ramesh Nair, 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 :
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 S. P. Bahl
:
Appellant
VS
Commissioner of Customs(Import), Mumbai
:
Respondent
Appearance
Shri Sultan Khan, Advocate for the Appellant
Shri S. Nathan, Dy Commissioner (A.R.) for the Respondent
CORAM:
Honble Mr. P.R. Chandrasekharan, Member (Technical)
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 12/9/2014
Date of decision: /2014
ORDER NO.
Per: Ramesh Nair
The appellant filed this appeal against order-in-original CAO No.13/2012/CAC/CC/BKS dated 19.03.2012 passed by the Commissioner of Customs (Adjudication), New Custom House, Mumbai wherein the Ld. Commissioner, amongst others, has imposed penalties of Rs.11,23,560/- under Section 114(i) and Rs.5,61,780/- under Section 114AA of the Custom Act, 1962 upon the Appellant.
2. The facts of the case is that one Shri Pradeep Dhond has procured and sent a huge quantity of Norphedrine, Ethyl Amphetamine, Phenyl Propanolamine and Amphetaminil to Mexico by mis-declaring the same as Lead Acetate. During investigation the DRI officers seized the goods - 116.400 Kgs of Amphetaminil and 324.600 Kgs of Norephedrine Hydrochloride valued at Rs.1,10,25,000/- and 842.400 Kgs of Lead Acetate valued at Rs.2,10,600/- at Air Cargo Complex on 12.06.08. The officers also seized goods 222.700 kgs of Norephedrine Hydrochloride and 94.700 kgs of Ethyl Amphetamine and Phenyl Propanolamine valued at Rs.79,35,000/- from the transporters godown at Jaywant Apartment, Sahar on 13.06.08. Seizure was also made of goods 65Kgs of Norephedrine Hydrochloride valued at Rs. 16,25,000/-, 100 kgs of oxalic acid valued at Rs.6500/-, 225 kgs of lead acetate valued at Rs.56,250/- and medicines valued at Rs.2,12,850/- from the office premises of Mr. Pradeep Dhond on 12/13.06.08. A show cause notice dated 11.12.2008 was issued to Shri Pradeep Dhond and Shri S. P. Bahl proposing the confiscation of the aforesaid seized goods under section 113(d) read with section 7 of FTDR Act read with Rules 7 & 12 of Foreign Trade (Regulations) Rules, 1993. Penalties were also proposed to be imposed upon Shri Pradeep Dhond and Shri S.P. Bahl (present appellant) under section 114(i) and 114AA of the Customs Act,1962. In adjudication, the Ld. Commissioner has confiscated the aforesaid goods, imposed redemption fine and imposed penalties of equal amounts on both Shri Pradeep Dhond and Shri S.P.Bahl under section 114(i) and 114AA. Hence the Appellant Shri S.P.Bahl is before us against the imposition of penalty of Rs.11,23,500/- under Section 114(i) and Rs.9,83,560/-. The penalties were imposed towards the confiscation of the goods at three places. The Appellant was made noticee on the sole statement of Shri Pradeep Dhond wherein he implicated the Appellant. As per his statement Shri S. P. Bahl has supplied the lead acetate to him which was attempted to be exported by using IEC of some other firm namely KLM Exports India. Shri Pradeep Dhond stated that although he had arranged to get the material supplied by Shri S. P. Bahl collected he claimed ignorance of the place from where it was loaded on to the tempo which transported it to his (Dhond) office premises and the transporters godown. Thus on the basis of statement of Shri Pradeep Dhond, the charge was lavelled on the Appellant and consequently penalties were imposed.
3. Ld. Counsel for the Appellant made following submissions:
3.1. That the Appellant was implicated only on the statement of Shri Pradeep Dhond which was recorded at his back; The said statement was retracted by Shri Pradeep Dhond and the same can not be used to penalise the Appellant. The statement of Shri Dhond was recorded under section 67 of the NDPS Act, 1985 which cannot be considered as a statement under Section 108 of the Customs Act, 1962, hence the same can not be used against him. The Ld. Counsel submit that it is not correct to say in the impugned order that Summons under Section 67 of the NDPS Act, 1985 was issued to Shri Satya Prakash Bahl, however he did not respond to the same, on visit DRI officers at his known addresses did not find him and thus statement of Shri S.P.Bahl could not be recorded. It is his submission that after search of the residence of the Appellant, he submitted a letter dated 07.07.2008 in the office of the DRI and obtained acknowledgement thereof wherein he not only clarified his position but denied the entire allegation made by Shri Dhond against him as regard involvement of export of mis-declared goods. He also offered his presence to the DRI officers, if required by DRI. However the DRI neither summoned him nor recorded his statement thereafter. The counsel also relied upon the following judgments on the issue whether statement recorded under NDPS Act can be considered as statement under section 108 of Customs Act, 1962:
i. Shahid Khan and Etc. Etc. Vs. Director Of Revenue Intelligence, Hyderabad. At High Court of Andhra Pradesh Criminal Appeals Nos.1683, 1684, 1689 and 1768 of 2000 (Against order of Metropolitan Sessions Judge, Hyderabad in S.C.No. 164 of 1995) Equal citations 2001 (107) CRLJ 3183 AP = 2001(1) ALD(Cri) ii. Kanhaiyalal Vs.Union Of India in Appeal (crl.) 788 of 2005 in Supreme Court.
3.2. The Ld. Counsel also submits that the Goods seized in Custom area is only liable to confiscation, however the goods seized outside customs area and found in domestic territory is not liable to confiscation. It is his submission that the Appellant is not involved in the movement of goods in the customs area attempted to be exported, accordingly no case of violation of any customs provision is established against the appellant, hence he prayed to drop the penalties imposed.
4. The Ld. Deputy Commissioner (AR) appearing for the Revenue reiterates the findings of the Adjudicating Authority. He also submits that in an appeal No.C/533/2012 filed by Shri Pradeep Dhond against the common impugned order dt. 19.03.2012, this Honble Tribunal vide order No.A/300/13/CSTB/C-I dated 08.02.2013 upheld the penalty imposed upon Shri Pradeep Dhond. Accordingly, the penalty imposed upon the present appellant also deserves to be maintained.
5. We have carefully considered the submissions made by both the sides.
6. Before deciding that the penalties imposed upon the appellant is legal and correct or otherwise, it is necessary to analyse the role of the appellant in the present case. It was observed that the entire case of mis-declaration and consequential confiscation of goods attempted to be exported, was made out on the statement of Shri. Pradeep Dhond. It has come out from the investigation and records that Shri Pradeep Dhond is the exporter of misdeclared goods. However the role of the appellant Shri S.P.Bahl is that he has supplied Lead Acetate to Shri Pradeep Dhond but the said goods were delivered in domestic area and not in custom area. After the Appellant sold the goods to Shri Pradeep Dhond, the title of the goods transferred to Shri Pradeep Dhond and the Appellant thereafter was not concerned with the said goods. The penalties upon the appellant were imposed under section 114(i) and 114AA of the Customs Act,1962 which is reproduced below:
SECTION 114.?Penalty for attempt to export goods improperly, etc. Any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 113, or abets the doing or omission of such an act, shall be liable, -
(i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding three times the value of the goods as declared by the exporter or the value as determined under this Act, whichever is the greater;
SECTION [114AA.?Penalty for use of false and incorrect material. - If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods.
7. From the perusal of the above sections, it can be seen that penalty under section 114(i) can be imposed on the person whose act renders the goods liable for confiscation. In the present case the role of the appellant, that too as per the statement of Shri Pradeep Dhond is that the appellant supplied the goods only in domestic area i.e. out of custom area. It is undisputed position that during the movement of goods outside customs area can not be liable to confiscation. Therefore, even if it is accepted that the appellant has supplied the goods to Shri Pradeep Dhond but at a place outside customs area, the said goods, is not liable to confiscation. Hence, the penalty upon the Appellant is not sustainable.
8. The penalty under section 114AA can be imposed if a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of the Customs Act. On careful perusal of the records, it is observed that investigation could not brought any document prepared by the appellant or signed by him relevant to the export of goods. As discussed above the export was made by Shri Pradeep Dhond and the appellant was not found to be involved in export of goods though the goods was supplied by him to Shri.Pradeep Dhond outside customs area.
9. On careful reading of this Tribunals order dated 08.02.2013 in case of Shri Pradeep Dhond, it is noticed that this Bench has taken view that the goods found outside customs area, is not liable for confiscation and accordingly the confiscation was dropped. The relevant paras of the said order is reproduced below:
5.4 Regarding the goods seized at the transporters premises and the office premises of the appellant confiscation has been proposed under section 113(d). For confiscation under the said section, either there should be an attempt to export the goods or the goods should have been brought within the customs area for the purposes of export. Both these conditions are not satisfied in respect of these goods. Therefore we set aside the confiscation,imposition of fine and penalty in respect of these goods as unsustainable in law.
6. To sum up we uphold the confiscation of the goods seized at the Air Cargo Complexe, Mumbai on 12.6.08 under section 113(d) and (i) of the Customs Act and the impostion of fine and penalty under section 125 and sections 114 and 114AA of the Customs Act. We set aside the confiscation of the goods seized at the premises of the transporter Mr. Ajay P. Singh and the office premises of Shri. Pradeep Dhond and consequential imposition of fine and penalty as unsustainable in law.
10. Following the said order, we are of the view that, since the role of the appellant is only to supply the goods to Shri Pradeep Dhond outside the customs area, and therefore the said goods is not liable to confiscation, no penalty should have been imposed upon the appellant either under section 114(i) or under section 114AA of the Customs Act, 1962.
11. It is also noticed that the charges against the Appellant were framed solely on the basis of the statement of Shri Pradeep Dhond, whereas the appellant has not concurred with the said statement as per his letter dated 07.07.2008, rather he made himself available before the DRI for further enquiry, but DRI did not record his statement. We are of the view that a person can not be penalised only on the basis of a say of some other person without any corroboration. It is necessary on the part of the investigating agency to make a person confronted with the statement of other person if the same is likely to be used against him, which was not done in this case.
12. In view of our above detailed discussions, we find, the penalties imposed upon the appellant are unsustainable. Therefore the Appeal is allowed with the consequential relief, if any.
(Pronounce in Court on ..) P.R. Chandrasekharan Member (Technical) Ramesh Nair Member (Judicial) 10