Custom, Excise & Service Tax Tribunal
Pradeep Dhond vs Mumbai on 24 January, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: C/533/2012
[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 Shri P.R. Chandrasekharan, Member (Technical)
Honble Shri Anil Choudhary, Member (Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Pradeep Dhond
Appellant
Vs
Commissioner of Customs (Exports)
Mumbai
Respondent
Appearance:
Shri Ravi M Hirani, Advocate for the appellant Shri K.S. Mishra, Addl. Commissioner (AR) for the respondent CORAM:
Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) Date of hearing: 24/01/2013 Date of Pronouncement: 05/02/2013 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
The appeal is directed against Order-in-Original CAO No. 13/2012/CAC/CC/BKS dated 19-3-2012 passed by the Commissioner of Customs (Adjudication), New Custom House, Mumbai.
2. The facts relevant to the case are as follows. Acting on intelligence, the Directorate of Revenue Intelligence (DRI in short) intercepted a tempo at the Air Cargo Complex, Sahar, Mumbai. Examination of the cargo and the documents covering the cargo indicated that 80 drums supposedly of lead acetate were consigned by M/s KLM Exports India, New Delhi to Hernandes Mendoza Reyes, Mexico. Contents of the drums were tested with a field testing kit and 28 drums weighing 441 kg. tested positive for Amphetamine. The 28 drums along with 52 drums of cover cargo of lead acetate weighing 842.400 kgs. were seized along with the tempo under a Panchnama dated 12-6-08 under the provisions of NDPS Act.
2.1. As a follow up action, the premises at 39, Roni Machado Compound, Sahar Village, Andheri (East), Mumbai-99 was also searched which resulted in recovery of 65 kgs. of white powder which when tested with the field testing kit tested positive for amphetamine. Nine bags totally containing 225 kgs of fine crystalline powder and 2 bags containing 100 kgs of white crystalline powder were also found in the said premises. They did not test positive for any narcotic substance. In addition 14 cartons of medicines which were supposed to be used as cover cargo for the offending goods were also found in the said premises. All the above goods were seized under the provisions of NDPS Act under a panchnama dated 12/13-6-08. At the time of search, S/Shri. Pradeep Dhond, Ankush Mohite, Sateesh Parab and Ajay P Singh were found in the said premises. Inquiries revealed that Sri. Pradeep Dhond had taken the said premises on rental basis and the goods belonged to him. Ankush Mohite was an employee of Mr. Dhond. Sateesh Parab was the CHA whose services were used for exporting the goods and Sri. Ajay P Singh was the owner of the tempo intercepted at the Air Cargo Complex.
2.2. Enquiries made revealed that some of the goods belonging to Mr. Pradeep Dhond were also lying in the transporters premises at Jayant Apartment, Andheri East, Mumbai and the same premises were searched which resulted in recovery of 9 bags of white powder weighing 317.600 kgs which tested positive for Amphetamine.
2.3. Statement of Mr. Dhond was recorded under section 67 of the NDPS Act on 13-6-08. Mr. Dhond inter alia stated that the goods intercepted at the Air Cargo complex were packed and dispatched from his office premises and his friend Mr. S.P.Bahl had procured an order for supply of 2000 kgs. of lead acetate from a party in Mexico and had asked him to arrange for part of the consignment. Accordingly he had arranged for lead acetate which was packed in 52 drums and the balance material packed in 28 drums were arranged by S.P. Bahl. Sri. Dhond also stated that he used the IEC code of M/s KLM Exports India for the purposes of export and the said firm belonged to Mr. Sanjay Malik based in Delhi. Statements of Ankush Mohite, Ajay P Singh and Anil Mishra (driver of the tempo) were recorded under the NDPS Act wherein they confirmed that Mr. Pradeep Dhond had asked them to collect the consignment supplied by Mr. Bahl and also instructed the driver of the tempo to handover the tempo to another person Ramlal at Haji Ali who would then take the tempo to an unknown destination and get the goods loaded in it and drive it back to the spot where they had to collect the tempo along with the cargo and bring the same to Andheri. Statement of Satish Parab, the CHA and his employee Deepak Ghodeshwar were recorded wherein they had admitted to their role in the attempted export of the seized consignment.
2.4. Samples drawn at the time of seizures were sent to Dy. Chief Chemist, Mumbai and test reports in respect of 31 samples of the total 41 samples received indicated that the goods purported to be amphetamine were norephidrine hydrochloride. With regard to balance 10 samples, the identity could not be established and therefore, they were sent to CFSL, Hyderabad and the report received from CFSL revealed that they were Amphetaminil and the samples sized from the transporters godown were identified as ethyl amphetamine and phenyl propanolamide. The above goods did not attract the provisions of NDPS Act.
2.5. Since the goods seized did not attract the provisions of the NDPS Act and since they were mis-declared as Lead Acetate and sought to be exported, they were re-seized under the provisions of the Customs Act, 1962 vide panchnama dated 10-12-08. Summons were issued to S/Shri. Pradeep Dhond and S.P.Bahl for investigations under the Customs Act but they did not respond to the summons. Statement of Mr. Satish Parab was recorded under the provisions of the Customs Act wherein he confirmed the receipt of the goods under seizure along with export invoice for export to Mexico which were to be handed over to KLM Airlines. He also confirmed that the IEC code mentioned in the documents were that of M/s KLM Exports India , Delhi. He also confirmed his role in arranging for the tempo belonging to Mr. Ajay P Singh on 8-6-08 and sending Ankush Mohite, employee of Pradeep Dhond along with tempo driver Anil Mishra to fetch the goods and packing/repacking the goods received from S.P.Bahl and Pradeep Dhond and preparing the export documents by signing the documents on behalf of Pradeep Dhond and bringing the goods to Air Cargo Complex, Sahar for export. Mr. Ankush Mohite, employee of Pradeep Dhond, Mr. Anil Mishra, the driver of the tempo, Mr. Ajay P Singh, owner of the tempo in their statements recorded under the provisions of the Customs Act corroborated the facts stated by Satish Parab. Mr. Deepak Ghodeshwar, employee of M/s Ultramarine P. Ltd., the CHA, Mr. Satyanarayan Ramnihor Asst. Manager of the CHA firm confirmed the filing of shipping bill No. 6835102 dated 11-6-08 electronically in respect of the consignment seized at the ACC, Sahar and issue of Airway Bill by KLM Airlines for the cargo meant for export. This was re-confirmed by Mr. James D Souza, Manager of KLM Royal Dutch Airlines in his statement recorded under the Customs Act. Statement of Sri. Sanjay Malik of KLM Exports Ltd was recorded in which he confirmed that though he knew Mr. Pradeep Dhond, he had never exported any consignment along with Mr. Dhond and his IEC code has been fraudulently used by Mr. Dhond in the above case.
2.6. The investigation conducted revealed that Mr. Pradeep Dhond and S.P. Bahl conspired to procure and send a huge quantity of norephedrine, ethyl amphetamine, phenyl propanolamine and amphetaminil to Mexico by mis-declaring the same as Lead Acetate. Norephedrine is a precursor for the manufacture of Amphetamine which is a psychotropic substance. Pradeep Dhond though in possession of a IEC code in the name of his firm M/s Silverpoint Overseas (India) fraudulently used the IEC code of M/s KLM Exports India without their knowledge for smuggling out mis-declared consignment. Mr. Dhond prepared the invoice mis-declaring the cargo and used the services of Satish Parab and attempted to get the goods smuggled out of India. The sample of Caverta 100 seized from his premises was found to be spurious. The lead acetate, oxalic acid and the medicines were also to be used as cover cargo for sending mis-declared goods abroad. Both Mr. Dhond and Mr. Bahl refused to co-operate with the investigation.
2.7. On conclusion of the investigation a show cause notice dated 11-12-2008 was issued to Mr. Pradeep Dhond and Mr. S.P.Bahl proposing to
(a) confiscate 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/- seized at the Air Cargo Complex on 12-6-08 under the provisions of section 113(d) and 113(i) of the Customs Act read with section 7 of the Foreign Trade (Development &Regulation) Act, 1992 and rules 12 and 14 of the Foreign Trade (Regulations) Rules, 1993;
(b) impose penalty under section 114 and 114AA of the Customs Act. 1962;
(c) confiscate 222.700 kgs. of norephedrine hydrochloride and 94.700 kgs of ethyl amphetamine and phenyl propanolamine valued at Rs. 79,35,000/- seized from the transporters godown at Jaywant Apartment, Sahar on 13-6-08 and 65 kgs. 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/- seized from the office premises of Mr. Pradeep Dhond on 12/13-6-08 under section 113(d) read with section 7 of FTDR Act read with rules 7 &12 of Foreign Trade (Regulations) Rules, 1993; and
(d) impose penalty under section 114/114A of the Customs Act.
2.8. The case was adjudicated vide the impugned order and the goods were confiscated under section 113(d) and 113(i) in respect of the goods mentioned at clause (a) of para 2.7 above and under section 113(d) in respect of goods mentioned at clause (c) of the preceding para. However, option to redeem the goods were given on payment of fine of Rs.28,08,900/- and Rs.24,58,900/- respectively. A penalty of Rs. 11,23,560/- was imposed under section 114(i) and Rs.5,61,780/- under section 114AA in respect of the goods seized at the ACC, Sahar and a penalty of Rs.9,83,560/- was imposed under section 114(i) in respect of the goods seized at the Transporters godown and office premises of Mr. Pradeep Dhond, on Mr. Pradeep Dhond apart from equivalent amounts of penalties on Mr. S.P.Bahl.
3. The ld. Counsel for the appellant did not dispute the allegations in the show cause notice nor the findings given by the adjudicating authority. However, he pleaded for leniency in the matter of imposition of fine and penalty and sought for reduction in the same. However, in the appeal memorandum, it is alleged that principles of natural justice was violated in as much as cross examination of the witnesses was denied by the adjudicating authority and there is no clinching evidence against the appellant, Mr. Pradeep Dhond.
4. The ld. Addl. Commissioner (AR) appearing for the Revenue re-iterates the findings of the adjudicating authority and prays for upholding of the impugned order.
5. We have carefully considered the rival submissions.
5.1. It will be relevant to peruse the provisions invoked for confiscation Section 113 reads as follows:-
113. The following goods shall be liable to confiscation:
(a)
(d) any goods attempted to be exported or brought within the limits of any customs area for the purposes of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force;
(i) any goods entered for exportation which do not correspond in respect of value or in any material particular with the entry made under this Act or in the case of baggage with the declaration made under section 77;
.. 5.2. As far as the goods seized at the Air Cargo Complex, Sahar is concerned, the appellant Mr. Pradeep Dhond had declared the goods as 1360 kgs. of Lead Acetate Commercial Grade with an FOB value of Rs.3,81,017.60. However the goods were found to be116.400 kgs. of Amphetaminil, 320.600 kgs. of norephedrine hydrochloride totally valued at Rs.1,10,25000/- and 842.400 kgs of Lead Acetate valued at Rs.2,10,600/-. Thus there is clear mis-declaration of both the description and value of the goods. Therefore, the provisions of 113 (i) of the Customs Act is clearly attracted. Secondly the goods were sought to be exported using the IEC code of M/s. KLM Exports India without their knowledge. Thus violation of section 7 of FTDR Act and Rules 12and 14 of Foreign Trade (Regulations) Rules, 1993 is also established. The goods were brought within the customs area for the purpose of being exported. Thus the provisions of section 113(d) are also attracted. Therefore, the confiscation of the goods is justified. Consequently penalty under section 114 and 114AA are also attracted.
5.3. As regards the quantum of fine, it works out to 25% of the value of the goods seized and the penalty imposed is 10% of the value under section 114 and 5% of the value under section 114AA. Considering the gravity of the offence, we do not find the quantum of fine and penalty imposed as unreasonable or harsh. Accordingly we uphold the same.
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.
5.5. As regards the denial of cross examination of witnesses, we find that the ld. Adjudicating authority has dealt with this matter quite extensively. The allegation against the appellant has been very clearly established by the export documents seized, test reports on the nature of the goods, the statements of Satish Parab, the person who organized for the clearance of goods for export, Ankush Mohite, employee of the appellant, Ajay P. Singh, the transporter, officers of the CHA firm and the Airlines through whom the cargo was sought to be exported. None of these statements have been retracted and all of them along with the documents seized clearly establish the charge against the appellant Sri. Pradeep Dhond. Therefore, we do not find any merit in the appellants contention in this regard. These evidences available on record are sufficient to prove the charge against the appellant.
6. To sum up we uphold the confiscation of the goods seized at the Air Cargo Complex, Mumbai on 12-6-08 under sections 113(d) and (i) of the Customs Act and the imposition 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 Sri. Pradeep Dhond and consequential imposition of fine and penalty as unsustainable in law.
7. The appeals are disposed of in the above terms.
(Pronounced in Court on 05/02/2013) (Anil Choudhary) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as 13