Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs M/S Kailashpati Chemicals & Mineral ... on 21 November, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT - I
Appeal No.C/109, 110, 114, 116, 133, 148, 225, 146, 223/2012
(Application No.C/S/822, 823, 842, 844, 884, 925, 1162, 916, 1140 /2012)
Arising out of: OIO No.KDL/COMMR/22/2011-12, dt.29.03.2012
Passed by: Commissioner of Customs, Kandla
For approval and signature:
Mr.M.V. Ravindran, Honble Member (Judicial)
Mr. B.S.V. Murthy, Honble Member (Technical)
1. Whether Press Reporters may be allowed to see the No
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 of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellants: Represented by:
M/s Kailashpati Chemicals & Mineral Inds.
Shri Pradeep Jain, Adv.
Shri Sumerpuri Goswami
-do-
M/s Indian Potash Ltd.
Shri S. Suriyanarayanan, Adv.
Shri Pravin Saraf
Shri R. Subramanya, Adv.
M/s Kumar & Brothers
-do-
Shri Vijay Singh Gohil
Shri H.D. Dave, Adv.
Shri Shantilal Mali
Shri P.V. Sheth, Adv.
Shri Ashok Kumar Agarwal
Shri R. Subramanya, Adv.
M/s Classic Freight Forwarders
Shri Z.B. Nagarkar, Sr.Consultant
Respondent: Represented by:
CC Kandla Shri K. Sivakumar, Addl.Commr.(A.R.) CORAM:
MR.M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) MR. B.S.V. MURTHY, HONBLE MEMBER (TECHNICAL) Date of Hearing/Decision:21.11.12 ORDER No. /WZB/AHD/2012, dt.21.11.12 Per: M.V. Ravindran:
By this common order, we are proposing to dispose the following stay petitions which are filed for waiver of pre-deposit of the amounts of penalties against each applicant. SN Name of the appellant Penalty under Section 112(b) of Customs Act, 1962 Penalty under Section 114(i) of Customs Act, 1962 1 M/s Kailashpati Chemicals & Mineral Ind Rs.25 lakhs Rs.25 lakhs 2 Shri Sumerpuri Goswami Rs.25 lakhs Rs.25 lakhs 3 M/s Indian Potash Ltd. Duty of Rs.62,39,145/- with interest and equal amount of penalty.4
Shri Pravin Saraf Rs.50 akhs Rs.50 akhs 5 M/s Kumar & Brothers Rs.25 lakhs Rs.25 lakhs 6 Shri Vijay Singh Gohil Rs.25 lakhs Rs.25 lakhs 7 Shri Shantilal Mali Rs.25 lakhs Rs.25 lakhs 8 Shri Ashok Kumar Agarwal Rs.50 akhs Rs.50 lakhs 9 M/s Classic Freight Forwarders Rs.5 lakhs Rs.5 lakhs
2. All the above said duty liability, interest thereof and penalties have been imposed by the adjudicating authority on the appellant as hereinabove stated on the ground that all these appellants were engaged in abetting diversion of Muriate of Potash (hereinafter referred to as MOP) which was imported at concessional rate of duty for use as fertilizer or in the manufacture of composite fertilizer.
3. Shri S. Suriyanarayan, ld.Advocate appearing on behalf of M/s Indian Potash Ltd would submit that M/s Indian Potash Ltd. is a registered importer with the Ministry of Fertilizers. It is his submission that they are authorized to import fertilizers and distribute the same to various dealers who are registered under the Fertilizers Act. It is his submission that the appellant herein had discharged his duty by recording and accounting for the entire quantity of fertilizer imported by him in proper books to be maintained in accordance with the provisions of Fertilizers Act. It is his submission that the implementation of such requirement under the Fertilizers Act is with the State Government authorities. He would submit that the dealers who are appointed for purchase of fertilizers from the appellant herein would do so after proper authorization. It is his submission that duty cast on M/s Indian Potash Ltd is over once he sells the goods to dealer who are authorized. It is his submission that the confirmation of demand along with interest and imposition of penalty on the appellant is incorrect.
4. Shri R. Subramanya, ld.Advocate appearing on behalf of M/s Kumar & Brothers would submit that the appellant herein in this case are the registered dealers of fertilizers. It is his submission that they are registered with the State Government and are required to procure the same from registered importer of fertilizers and in this case they are M/s Indian Potash Ltd. He would bring to our notice the fact that they had maintained proper record as required under Fertilizer Control Act and submit that there cannot be any penalty imposed on them.
5. Shri R. Subramanya, ld.Advocate is appearing other appellants viz.Shri Pravin Saraf and Shri Ashok Kumar Agarwal also. It is his submission that the adjudicating authority has not brought on record any act, collusion or omission on behalf of these two appellants in respect of current consignment of MOP being sought to be exported as industrial salt. It is his submission that in any case, the penalty under Section 112(b) of Customs Act, 1962 is not imposable. As the goods were sought to be exported and not imported as the import was done by M/s Indian Potash Ltd.
6. Shri Pradeep Jain, ld.Advocate appearing on behalf of M/s Kailashpati Chemicals & Mineral Industries and Shri Sumerpuri Goswami, would submit that the penalties which have been imposed on these two appellants are incorrect. It is his submission that M/s Kailashpati Chemicals & Mineral Industries has Central Excise registered premises and the said premises were registered at behest of Shri Ashok Kumar Agarwal of Sirohi. It is his submission that since the appellant had an IEC code and Shri Ashok Kumar Agarwal of Sirohi directed them and requested for utilization of such IEC code and registered factory premises for the purpose of exportation of the goods and for utilizing such a facility, they were given an amount as consideration by Shri Ashok Kumar Agarwal. It is his submission that none of the persons of appellant M/s M/s Kailashpati Chemicals & Mineral Industries were aware what is being loaded into containers and what is going for export. It is his submission that in any case, penalty under Section 112(b) will not survive and penalty under Section 114(i) should also be waived as the appellant herein is a small person and does not have any mean of remuneration. It is his submission that the same argument will hold good for Shri Sumerpuri Goswami also.
7. Ld.Counsel Shri H.D. Dave appearing on behalf of Shri Vijay Singh Gohil would submit that the said appellant is a partner of M/s Jay Bhavani Roadlines. It is his submission that the appellant herein was only engaged for vehicles to be given which he did so and he has been penalized under Sections 112(b) and 114(i) of Customs Act, 1962. It is his submission that the there is no role attributed to the appellant for the purpose of imposition of penalty under the provisions of Customs Act, 1962. He submits that he had only given the vehicles to one Shri Shantilal Mali and he has retracted statement. He would read the findings recorded by the adjudicating authority.
8. Ld.Advocate Shri P.V. Sheth, appearing on behalf of Shri Shantilal Mali would submit that Shri Shantilal Mali was not given a proper personal hearing by the adjudicating authority. He would submit that the adjudicating authority had recorded that advocate on record (i.e. he himself) has asked for an adjournment on personal ground which was denied to them by the adjudicating authority and it is his submission he should be given a further chance of appearing before adjudicating authority and come to conclusion based upon the evidences that may be produced.
9. Shri Z.B. Nagarkar, Sr.Consultant appearing on behalf of M/s Classic Freight Forwarders would submit that the appellant herein is nothing but a CHA. It is his submission that as a CHA, his duty to file the documents was done properly and all the authorizations were received in proper form. It is his submission that the authorization given by M/s Kailashpati Chemicals & Mineral Industries were produced and it is his submission that this authorization act as a CHA in filing shipping bills and Bill of Lading is not disputed by said M/s Kailashpati Chemicals & Mineral Industries or by the assessee. It is his submission that the finding of the adjudicating authority that one of their employees had lent his name for a consideration of Rs.200 per container for the export is an issue for which they have already removed the employee and said act was done by the employee on his personal capacity.
10. Ld.D.R. submits that all the appellants herein have played some role or other in trying to defraud the Revenue by exporting MOP which is a fertilizer in the guise of industrial salt. It is his submission that the role played by each of them needs to be appreciated from the evidences on record, which indicate that the every individual had some role or other to play.
11. We have considered the submissions made at length from all sides and perused the records. At the outset, the allegations in the Show Cause Notice as well as confirmation of demand on M/s Indian Potash Ltd, prima facie, seems to be incorrect as M/s Indian Potash Ltd has produced records of proper accounting of imported fertilizers in their record and sale thereof to the persons who are authorized to deal in such kind of goods i.e. fertilizers. We find that in an identical case in respect of very same assessee, this Tribunal as early as 1991, had held in their favour as to that the benefit of notification which does not have post importation condition compliance, cannot be invoked against them for confirmation of demand as well as imposition of penalty. Accordingly, we are of the view that M/s Indian Potash Limited has made out a prima facie case for waiver of pre-deposit of the amounts involved.
12. As regards the case of Shri Shantilal Mali, we find that the adjudicating authority has recorded in his Order-in-Original that Advocate Shri P.V. Sheth & Co. sought an adjournment for hearing of 17.02.2012 to March 2012. The reasons given by the adjudicating authority for not granting adjournment seems to be very sketchy and frivolous. In our view, if the advocate appearing on behalf of Shri Shantilal Mali seeks an adjournment, the least that could have been done as an adjudicating authority is to accommodate the request of ld.Counsel and grant another personal hearing. In our view, all the records produced by ld.Counsel before us cannot be gone into by us at this stage as they have to be appreciated by adjudicating authority. In view of this, we allow the applications for waiver of pre-deposit of the amounts of penalties imposed on Shri Shantilal Mali and take up the appeal itself for disposal and set aside the impugned order to the extent it has imposed penalties on Shri Shantilal Mali (in Appeal No.C/148/2012) with a direction to adjudicating authority to reconsider his case after following the principles of natural justice. Ld.Counsel undertakes to co-operate with the adjudicating authority as and when personal hearing is granted to them.
13. In sum, the appeal of Shri Shantilal Mali is allowed by way of remand to the adjudicating authority. We make it clear that we have not expressed any opinion on the merits of his case and are keeping all issues open. The views expressed by us in the stay orders of other appellants are in respect of those appellants only.
14. As regards other appellants, we find that the penalties imposed on other appellants under Section 112(b) of Customs Act, 1962 will not arise as the issue in all these cases is regarding improper export of MOP in the guise of industrial salt. Prima facie, to that extent, all the other appellants have made out a case for waiver of pre-deposit of amount of penalties imposed by the adjudicating authority under Section 112(b) of Customs Act, 1962. Accordingly, the Stay Petitions for waiver of pre-deposit of penalties under Section 112(b) of Customs Act, 1962 are allowed and recoveries thereof are stayed till the disposal of appeals.
15. As regards penalty imposed by the adjudicating authority under Section 114(i) of Customs Act, 1962 on various appellants, we find that:-
i) M/s Kumar & Brothers and M/s Classic Freight Forwarders both of them have, prima facie, convinced us that penalty cannot be imposed on them for the reason that M/s Kumar & Brothers have produced records as to the proper clearances made by them to the registered sub-dealers for sale of fertilizers procured by them from M/s Indian Potash Limited.
ii) As regards the penalty imposed on M/s Classic Freight Forwarders, we find from record that M/s Classic Freight Forwarders has taken all the proper precautions regarding filing of authorization. They would not know what is stuffed in the containers as the documents indicated consignment as consisting of industrial salt for export. Accordingly, the applicant M/s Classic Freight Forwarders has made out a case for the waiver of pre-deposit of the amount of penalty imposed under Section 114(i) of Customs Act, 1962 by the adjudicating authority.
iii) As regards the penalties imposed under Section 114(i) of Customs Act, 1962 on others, we find that the roles played by each appellant needs to be appreciated from the evidences on record. It is seen from the Order-in-Original that the adjudicating authority has recorded findings which indicate that these appellants had a definite role in trying to export MOP in the guise of industrial salt. In our view, these evidences and defences put forth by the following applicants needs to be appreciated in detail, which can be done only at the time of final disposal of the appeals.
In our view, they have not made out the case for complete waiver of the pre-deposit of the amounts involved.
16. Accordingly we direct the following appellants to deposit the amount indicated against each by 23.01.2013.
SN Name of the applicant Amount 1 M/s Kailashpati Chemicals & Mineral Industries Rs.50,000 Rupees Fifty Thousands only 2 Shri Sumerpuri Goswami Rs.50,000 Rupees Fifty Thousands only 3 Shri Pravin Saraf Rs.3 lakhs Rupees Three lakhs only 4 Shri Vijay Singh Gohil Rs.1 lakh Rupees one lakh only 5 Shri Ashok Kumar Agarwal of Sirohi Rs.2 lakhs Rupees Two lakhs only
17. Subject to such compliance being reported, the applications for waiver of pre-deposit of balance amounts of penalties under Sections 114(i) of Customs Act, 1962 are allowed and recovery thereof stayed till the disposal of appeals.
18. All the Stay Petitions are disposed of as indicated hereinabove.
(Operative portion of the order pronounced in Court)
(B.S.V. Murthy) (M.V. Ravindran)
Member (Technical) Member (Judicial)
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