Custom, Excise & Service Tax Tribunal
Mukherjee &Amp; Alliances India Pvt Ltd vs Kolkata(Port) on 17 December, 2019
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO.2
Customs Appeal No.75801 of 2018
(Arising out of Order-in-Original No.KOL/CUS/PORT/84/2017 dated 29 December
2017 passed by Commissioner of Customs(Port), Kolkata.)
M/s. Mukherjee & Alliances (India) Private Limited
(No.3, Old Court House Comer, 2nd Floor, Room No.3,
Kolkata-700001.)
...Appellant
VERSUS
Commissioner of Customs(Port), Kolkata
.....Respondent
(Customs House, 15/1, Strand Road, Kolkata-700001.) WITH
(i) Customs Appeal No.75802 of 2018 (Shri Tanmoy Bose, General Manager of M/s.Mukherjee & Alliances (India) Private Limited); (ii) Customs Appeal No.75803 of 2018 (Shri Malay Sarkar, Director of M/s.Mukherjee & Alliances (India) Private Limited); (iii) Customs Appeal No.75941 of 2018 (Shri Sreeprakash Tiwari); (iv) Customs Appeal No.76044 of 2018 (Shri Naresh Dutta); (v) Customs Appeal No.79276 of 2018 (Shri Pawan Kumar Ralli);
(Arising out of Order-in-Original No.KOL/CUS/PORT/84/2017 dated 29 December 2017 passed by Commissioner of Customs(Port), Kolkata.) APPEARANCE S/Shri Arijit Chakraborty, Prabir Bera, Debaditya Banerjee, Bharat Bhusan, Advocates for the Appellant (s) Shri S.Guha, Authorized Representative for the Respondent (s) CORAM: HON'BLE SHRI P. K.CHOUDHARY, MEMBER(JUDICIAL) HON'BLE SHRI BIJAY KUMAR, MEMBER(TECHNICAL) FINAL ORDER NO. 76911-76916/2019 DATE OF HEARING : 22 October 2019 DATE OF DECISION : 17/12/2019 2 Customs Appeal No.75801, 75802, 75803, 75941, 76044 & 79276 of 2018 P.K.CHOUDHARY :
These appeals have been filed against Order in Original No.KOL/CUS/PORT/84/2017 dated 29.12.2017, passed by The Commissioner of Customs (Port) , Kolkata.
2. On the basis of specific intelligence, DRI officers intercepted two containers lying at CWC, Container Freight Station Kolkata. The said containers were imported by M/s. Karan Overseas, Delhi and M/s. Geet Enterprises, Delhi. The goods declared in both the containers were 'Rice Cooker'. On examination, it was found that in front row 'Rice Cookers' were stacked. Behind the 'Rice Cookers', 'Cigarettes' of foreign origin were found. The goods found in the container were placed under seizure. The officers of DRI conducted detailed investigations, including recording of statement of various persons, forensic examination of seized mobile phones and examination of call details between the various persons concerned with the consignment in question.
3. After detailed investigations, show cause notice was issued wherein it is stated that the investigations revealed that one Shri Bhimendra Kumar Goyal was the mastermind of this smuggling racket, who had been detained under COFEPOSA, in the past. It was also revealed that Sh. Pawan Kumar Ralli, Sh. Naresh Dutta and Shri Sreeprakash Tiwary were aiding and abetting Shri Bhimendra Kumar Goyal, in these nefarious activities. It was also found that the CHA M/s. Mukerjee and Alliance had filed the said bills of entry without having original supporting documents, and also failed to verify the antecedents of their clients. Therefore, penalty was also proposed to be imposed on the said CHA firm, its Director Shri Malay Sarkar and its General Manager Shri Tanmay Bose. The notice was adjudicated by the impugned order whereby penalties were imposed upon various persons, including the appellants herein under Section 112 of the Customs Act, 1962.
3Customs Appeal No.75801, 75802, 75803, 75941, 76044 & 79276 of 2018
4. We have heard S/Shri Arijit Chakraborty, Debaditya Banerjee, Bharat Bhushan, Prabir Bera, Advocates for the appellants and Sh. S.Guha, Authorized Representative for the Revenue.
5. Shri Arijit Chakraborty, arguing for the CHA firm and its employees submitted that the department have failed to adduce any evidence in support of the allegation that they had any prior knowledge regarding misdeclaration of the imported goods, which is a necessary ingredient for imposition of penalty under Section 112. Shri Bharat Bhushan arguing for Shri Pawan Kumar Ralli, submitted that even if it is assumed that all the charges levelled in the Show Cause Notice are correct, then also the penalty of Rupees One Crore imposed is much beyond the maximum penalty impossible under Section 112. He elaborated that in case of prohibited goods maximum penalty impossible is equal to the value of goods and in case of dutiable goods, other than prohibited goods, maximum penalty impossible is Ten percent of the duty sought to be evaded. He submitted that goods in question cannot be termed as 'prohibited' merely for misdeclaration in the Bill of Entry for the purpose of Section
112. In support of his submissions he placed reliance on the judgment of Hon'ble High Court of Calcutta in Gopal Saha vs. Commissioner of Customs, 2016 (336) E.L.T. 230 (Cal.). Shri Bhushan further argued that the Customs Duty sought to be evaded is neither quantified in the Show Cause Notice, nor in the impugned order and hence, maximum penalty impossible is Rupees Five thousand only.
6. Shri S.Guha, learned Authorised Representative for the Revenue, justified the findings of the impugned order.
7. We have carefully considered the rival contentions and perused the appeal records.
8. As far as the case against the CHA firm M/s. Mukharjee & Alliance and its employees Shri Malay Sarkar and Shri Tanmay Bose is concerned, the learned Adjudicating Authority have stated that they filed bills of entry without having the original documents in their 4 Customs Appeal No.75801, 75802, 75803, 75941, 76044 & 79276 of 2018 possession, that they failed to verify the antecedents, identity and functioning of its clients by using independent, authentic documents data or information and have thus violated various provisions of CBLR, 2013. Penalty under Section 112 cannot be imposed for violation of CBLR, unless the ingredients for imposition of penalty under Section 112 are there. In this case, the learned Adjudicating Authority have not referred to any evidence to show that the said persons had any prior information about the mis-declaration of consignment in question. It is a settled law that penalty under Section 112 of the Customs Act, 1962 cannot be imposed unless the evidences are adduced to show prior knowledge of fraud and wrongful intent as held by this Tribunal in Lohia Travels & Cargo vs. Commissioner of Customs (Prev.) New Delhi, 2015 (330) E.L.T. 689 (Tri. - Del.). Therefore, we find that the imposition of penalty upon CHA firm M/s. Mukharjee & Alliance and its employees Shri Malay Sarkar and Shri Tanmay Bose is not justified and accordingly set-aside the same.
9. After perusing the case records, we have no hesitation to hold that Shri Pawan Kumar Ralli, Shri Naresh Dutta and Shri Sreepraksh Tiwary were complicit in this smuggling racket and hence liable for penalty under Section 112. But, the moot question is quantification of penalty. The provisions contained in Section 112 are as under.
"SECTION 112. Penalty for improper importation of goods, etc. -- Any person, -
(a) 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 111, or abets the doing or omission of such an act, or
(b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has 5 Customs Appeal No.75801, 75802, 75803, 75941, 76044 & 79276 of 2018 reason to believe are liable to confiscation under section 111, 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 the value of the goods or five thousand rupees], whichever is greater;
[(ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher :
Provided that where such duty as determined under sub- section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty- five per cent. of the penalty so determined;]
(iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty [not exceeding the difference between the declared value and the value thereof or five thousand rupees], whichever is the greater;
(iv) in the case of goods falling both under clauses (i) and (iii), to a penalty [not exceeding the value of the goods or the difference between the declared value and 6 Customs Appeal No.75801, 75802, 75803, 75941, 76044 & 79276 of 2018 the value thereof or five thousand rupees], whichever is the highest;
(v) in the case of goods falling both under clauses (ii) and (iii), to a penalty [not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest."
10. As per the aforesaid statutory provisions, the cases are divided in three categories for the purpose of computation of maximum penalty imposable. One of the categories is of those cases wherein the value declared is higher than the actual value of goods in question. In the instant case, the actual value of goods is found to be much higher than the value declared. Therefore, this category is not applicable. The second category is of prohibited goods. In the show cause notice, it is stated that Rule 11 of the Foreign Trade (Regulation) Rules, 1993 stipulates that on importation of goods, the owner shall state the true description in the Bill of Entry and the goods in question falls in the category of prohibited goods, by virtue of Section 111(d) of the Customs Act, 1962, renders the goods in question as prohibited. On the other hand, the appellant is contending that the goods cannot be termed as prohibited goods, for the purpose of Section 112, merely for mis-declaration in Bill of Entry. In support, the appellant is relying on Gopal Saha (supra) case, wherein the Hon'ble Calcutta High Court had held as under.
"14. There is a distinction between Section 111 and Section 112 of the Act. The former provides for confiscation of improperly imported goods and the latter prescribes the penalty for improper importation of goods. The judgments relied upon by the Union reveal a liberal construction of a provision in favour of the State to deal with the mischief for which the statute and the provision have been enacted. However, such construction may not 7 Customs Appeal No.75801, 75802, 75803, 75941, 76044 & 79276 of 2018 apply to a penalty as the cardinal rule for construing a penal provision is otherwise. It is possible for a provision providing for confiscation of goods to be liberally interpreted, but when a provision provides for punishment it has to be strictly construed.
15. The expression "goods in respect of which any prohibition is in force" in the context of Section 112 of the Act would imply goods which are prohibited from being imported and not goods which have been smuggled into the country in contravention of the procedure established by law for the import thereof. Thus, while the corresponding provision in Section 111 of the Act permits the confiscation of the goods on a broader construction of the relevant expression with reference to the definition of "prohibited goods"; the similar provision in Section 112 of the Act has to be strictly construed and confined to goods which are expressly prohibited from being imported into the country."
11. As per the aforesaid judgment of Hon'ble High Court, the goods in question cannot be termed as 'prohibited goods' merely for mis- declaration in the Bills of Entry, for the purpose of imposing penalty under Section 112. Now, the only category left is of dutiable goods other than prohibited goods. In this category, maximum penalty impossible in 10% of duty sought to be evaded or five thousand rupees, whichever is higher. The contention of appellant is that the duty sought to be evaded is quantified neither in the show cause notice, nor in the order in original and therefore, the maximum penalty impossible is Rs. Five thousand only. We have also carefully perused the show cause notice and impugned order and found that the Customs Duty sought to be evaded is nowhere quantified. Learned Authorized Representative for the Revenue also failed to help in this 8 Customs Appeal No.75801, 75802, 75803, 75941, 76044 & 79276 of 2018 regard. Now, therefore, maximum penalty impossible in the instant case is Rupees Five Thousand only. Accordingly, we reduce the penalty imposed upon Shri Pawan Kumar Ralli, Shri Naresh Dutta and Shri Sreepraksh Tiwary to Rs.5,000/- (Rupees Five Thousand only) each.
12. As a result, the appeals filed by M/s. Mukharjee & Alliance, Shri Malay Sarkar and Shri Tanmay Bose are allowed and the appeals filed by Shri Pawan Kumar Ralli, Shri Naresh Dutta and Shri Sreepraksh Tiwary are allowed to the extent indicated above. The consequential benefits, if any will follow as per law.
(Order pronounced in the open court on 17 December 2019.) SD/ (P.K.CHOUDHARY) MEMBER (JUDICIAL) SD/ (BIJAY KUMAR) MEMBER (TECHNICAL) sm