Custom, Excise & Service Tax Tribunal
Bharat Jamnadas Jagda (A.No.C/84/11) vs Cc, Delhi on 30 May, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. COURT NO. IV Date of Hearing : 30.5.2011 Custom Stay No. 504-506 of 2011 in Custom Appeal No. 84-86 of 2011 and Misc. No. 91-93 of 2011 [Arising out of common Order-in-Original No. MIJM/ACE/10/2011 dated 31.1.2011 passed by the Commissioner of Customs, New Delhi] 1. Bharat Jamnadas Jagda (A.No.C/84/11) Appellants 2. Shri Mukesh Mahesh Kumar Kothari (A.No.C/85/11) 3. Sh. Mahesh Kumar Mool Chand Kothari (A.No.C/86/11) Vs. CC, Delhi Respondent
Appearance:
Appeared for Appellant : Shri Sanjay Agarwal, Advocate with Shri
Satish Pandey, Advocate
Appeared for Respondent : Shri Sonal Bajaj, SDR
Coram:
Honble Mrs. Archana Wadhwa, Member (Judicial)
Honble Shri Mathew John, Member (Technical)
Order No.dated.
Per Mathew John:
In this proceeding, three stay applications in three different appeals were filed filed by (1) Shri. Bharat Jamnadas Jagda proprietor of M/s Omkar Jewellers (ii) Mukesh Mahesh Kumar Kothari, Protrietor of M/s Orbit Gold and (iii) Shri Mahesh Kumar Mool Chand Kothari who was supposedly taking part in the impugned business of Shri Bharat Jamnadas Jagda. The three appeals arise from a common adjudication order, namely C. No. VIII (HQ)ACE/ADJ/21/ 2010 dated 28-01-2011 issued by Commissioner of Customs, Air Cargo (Exports), New Custom House, New Delhi.
2. This proceeding relates to seizure, made on 06-02-09, of gold bars, gold coins, gold jewellery and Indian Currency from the business premise of M/s Omkar Jewellers (a proprietorship concern of Shri Bharat Jamnadas Jagda) in New Delhi and M/s Orbit Gold (a proprietorship concern of Shri Mukesh Mahesh Kumar Kothari) in Mumbai.
3. The investigating agency has made out a case that the gold bars and coins were imported by two units working under Special Economic Zone under obligation to achieve net foreign exchange earnings and that the gold so imported was diverted to domestic tariff area in violation of the relevant legal provisions and that foreign exchange earnings were shown by export of overvalued metal scrap declaring it as gold jewellery. Also a case was made out that the seized jewellery was made from gold bars imported by two units namely M/s Ajit Exports and M/s Vee Ess Jewellers Pvt. Ltd. working in Noida, Special Economic Zone. So the goods were seized under the reasonable belief that the impugned goods were smuggled.
4. Gold and manufactures thereof are goods specified under section 123 of the Customs Act under which the person from whose custody the goods are seized has an onus to prove that the goods were imported complying with the import policy in force and after payment of appropriate customs duty. The Appellants were not able to discharge this burden on them to the satisfaction of the investigating officers.
5. There was also seizure of Indian Currency from these premises under the reasonable belief that such money was the sale proceeds of smuggled gold.
6. So the Appellants, among others including M/s Omkar Jewellers and M/s Orbit Gold were issued with a SCN asking them why the seized gold and gold jewellery allegedly smuggled in contravention of Para 4A.21 of the Foreign Trade Policy 2004-09, Para 4A.34 of Hand Book of Procedures for Import and Export (Volume 1), Rule 27 and 28 of the Special Economic Zone Rules 2006 read with section 111(a), 111(b), 111(d), 111(f), 111(i), 111(j) and 111(o) of Customs Act,1962 should not be confiscated. There was also a proposal to confiscate the seized Indian currency under section 121 of the Customs Act and imposition of penalties under different sections of the Customs Act.
7. On receipt of the Show Cause Notices Omkar Jewellers and another notice namely Orbit Gold paid the customs duties, allegedly not paid, along with interest thereon and penalty as prescribed under section 28(1A) of the Customs Act, hoping that such action will result in conclusion of all proceedings against them.
8. However the Customs authorities were of the view that the provisions under section 28(1A) of Customs Act will apply only in respect of proceedings in the matter of short levy of duty and will not result in conclusion of proceedings relating to violation of Import Trade Control and Rules relating to SEZ. The SCN so issued was adjudicated by the impugned order which resulted in imposition of penalty of Rs.5,13,49,081/- on Shri. Bharat Jamnadas Jagda under section 114AA of the Customs Act, Rs.92,58,000/- on Mukesh Mahesh Kumar Kothari under Section 112(a) of the Customs Act and Rs. 25,00,000/ on Mahesh Kumar Moolchand Kothari under section 112 (b) of the Customs Act.
9. The main argument of the applicant is that since stay has been granted for penalty imposed on M/s Omkar Jewellers and M/s Orbit Gold there is every case to grant stay against penalty imposed on Shri. Bharat Jamandas Jagda, the proprietor of Omkar Jewellers, Shri Mukesh Mahesh Kumar Kothari, Protrietor of M/s Orbit Gold. In the case of penalty on Mahesh Kumar Moolchand Kothari also the same argument is raised though he is strictly not a partner of M/s Omkar Jewellers or Orbit Gold.
10. Further, the Counsel for Appellants submit that the following amounts are already pre-deposited by the Appellants :-
(a)Bharat Jagda:Duty+Penalty (25% of Duty + Interest) =66,27,699 (Prop: Omkar Jewellers + Further pre-deposit=16,75,000 Total =83,02,699
(b)Mukesh Kothari:Duty+Penalty(25% of Duty+Interest = 4,89,544 (Prop: Orbit Gold) + Further Pre-deposit = 3,25,000 Total = 8,14,544
(c)Mukesh Kothari: Admittedly deposited during =1,00,00,000 investigations (As per para 30 of the impugned order)
11. The Ld. DR on the other hand argues that a very lenient order has been passed in the case of M/s Omkar Jewellers and Orbit Gold and similar order for the present Appellants also will lead to a situation where delaying tactics will be adopted by these Appellants and the collection of moneys due to the government will be delayed unduly
12. We have considered arguments on both sides.
13. This case involves evasion of customs duty as well as contravention of Import Regulations. The matter relating to duty evasion already stands settled under provisions of section 28(1A) of the Customs Act. What remains to be settled is the contravention of Import Regulations. We are prima facie of the view that the penalties imposed are far too excessive. Since the penalty imposed on M/s Omkar Jewellers and M/s Orbit Gold are already stayed we do not see why a separate treatment should be meted out to these persons acting behind M/s Omkar Jewellers and M/s Orbit Gold. Further the main offence is on the part of M/s Ajit Exports and M/s Vee Ess Jewellers Ltd.
14. So we grant waiver of penalties imposed on these three appellants for admission of their appeals. Further there shall be waiver on collection of such amount during the pendency of the Appeals. However, it is directed that Shri Mahesh Kumar Mool Chand Kothari shall not claim refund of Rs. One Crore claimed to be made by him during the investigation till final disposal of the Appeals.
15. Stay Applications and Misc. Applications are disposed of accordingly.
16. Further, the Appeals itself is posted for hearing on 22.7.2011.
(Pronounced in open Court) (Archana Wadhwa) Member (Judicial) (Mathew John) Member (Judicial) RM