Customs, Excise and Gold Tribunal - Mumbai
Ispat Industries Ltd., Om Tapadia, R. ... vs Commissioner Of Central Excise & ... on 8 May, 2001
ORDER
Gowri Shankar, Member (Technical)
1. The appeals are taken up for disposal with consent of both sides after waiving deposit.
2. These five appeals by Ispat Industries Ltd., the importer and four of its employees, are against the order of the Commissioner confirming the additional duty of customs demanded on spares for the hot strip mill imported by it, and imposing penalties under Section 112 of the Customs Act, 1962 on it, and on its four employees.
3. Ispat Industries manufactured hot briquetted iron and hot roll steel in its factory at Dolvi.The manufacturer engaged in supply of finished product not only in the domestic market but also export.It was therefore granted permission for a bonded warehouse in its factory.The duty in question has been demanded on the ground that the goods were removed from the bonded warehouse without paying the additional duty of customs that was payable on them, the basic duty of customs being exempted in terms of notification 111/95.
4. The representative of the appellant does not deny the removal of the goods without payment of additional duty, but says that there is no evasion of duty. Failure to pay the duty before removing the goods from the bonded warehouse was not with mention to evade duty. the appellant would in any case be entailed to modvat credit of the additional duty which was payable.The Commissioner himself has gone noted at great length the absence of mala fides on the part of the appellant. He thereafter imposed penalty equal to the duty on the manufacturer and penalties on the other four without advancing any reason.While accepting the liability to penalty on the company and its employees, he submits that considerable leniency is called for. He also says that a fine of Rs. 15 lakhs fixed for redeeming the goods without payment of duty ordered to be confiscated under clause (j) of section 111 of the Act.The departmental representative falls back upon the order of the Commissioner.
5. There can be no doubt that the goods were removed by the appellant's employees without payment of duty, as a conscious and deliberate act. The statements of various employees confirms this fact. Negoi, the mangers stores, in his two statements has admitted that although he was aware that the goods should not be removed from the bonded warehouse without payment of customs duty, they were so removed under the instruction of G.P. Setya.Deputy General Manager stores.G.P. Setya in turn accepts that the ex-bond bill of entry which he refers to as "green copy" because of its colour showing payment of duty had not been received and blames the illegal removal on Om Tapadia, vice president and R.Ganesh. R.R.Kashyap, the manager of the Central warehousing Corporation which ran the bonded warehouse has admitted the failure to pay duty.Om Tapadia and R.Ganesh, General Manager accept the removal without payment of duty.
6. The order of the Commissioner makes somewhat curious reading.He accepts that the importer had presented four ex-bond bill of entry of the goods of which three have been assessed to duty and one remained to be assessed.He says.
"Therefore the chances that the impugned goods could have escaped payment of appropriate duty did not arise.Also they had sufficient balance in their PLA ... Moreover, immediately after payment of appropriate duty on the impugned goods, they were entitled to avail modvat credit of the same in their RG23C Pt-II account and utilise the same towards payment of duty on clearances of their finished product. In view of the above facts I am of the view that clandestine removal of goods would not have helped the assessee in any manner, on the other hand, the company had everything to loose by way of various penal action under the Customs Law. Further more, it is also a fact that the impugned goods were not diverted or sold elsewhere but were used in the plant itself for the manufacture of the goods meant for expert."
Thereafter he goes not to say that say that the "the assessee is liable to penalty and confiscation of the impugned goods, the said penalty and confiscation is sufficient deterrent for their inappropriate conduct in removing the impugned goods the payment of duty due thereon."
7. There is, clearly, a contradiction in these findings with regard to penalty.The Commissioner's view, contained in that part of the order that we have reproduced above, that there was no incentive to evade duty, does not support penalty of the high order that he has imposed.The representative of the appellant also tells us on instruction from his client that the proposal which was initiated by for cancelling a boned warehouse licence due to the acts of the appellant was given up because the authorities felt that the acts in question were not grave warrant cancellation. At the same time,we are mindful of the fact that there has been a deliberate and conscious decision, evidently taken by Tapadia and communicated to and acted upon by the other officials, to remove the goods without payment of duty. The fact that there would ultimately be no loss of revenue is no answer.On such logic, the action of an assessee in paying a lesser duty in a year, and making up for it in the next year and would not be illegal. Having regard to the facts and submissions made before us we are of the view that penalty imposed on the company requires reduction.
8. Accordingly, we reduce penalty on the company from Rs. 43 lakhs to Rs. 4.5 lakhs and redemption fine from 15 lakhs to Rs. 3 lakhs but confirm the penalties imposed upon Om Tapadia, R. Ganesh, G.P. Setya and R.P. Neogi.
9. Appeal C/1044/2000 allowed in part. Other four appeals dismissed.