Custom, Excise & Service Tax Tribunal
Lal Mahal Limited vs C.C.-Kandla on 31 March, 2017
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Case No Impugned Order Detail's Date of Impugned Order Passed By Appellant Respondent
C/4/2009-DB OIO-KDL/COMMR/42/2008 30/09/2008 Commissioner of CUSTOMS-KANDLA R K Industries C.C.-Kandla C/35/2009-DB OIO-KDL/COMMR/49/2008 26/11/2008 Commissioner of CUSTOMS-KANDLA Mahavir Foods C.C.-Kandla C/43/2012-DB OIO-KDL/COMMR/13/2011-12 26/12/2011 Commissioner of CUSTOMS-KANDLA C.C.-Kandla Balgopal Shipping & Logistics C/44/2012-DB OIO-KDL/COMMR/13/2011-12 26/12/2011 Commissioner of CUSTOMS-KANDLA Vivek Shukla C.C.-Kandla C/56/2012-DB OIO-KDL/COMMR/13/2011-12 26/12/2011 Commissioner of CUSTOMS-KANDLA Santosh Kumar C.C.-Kandla C/62/2012-DB OIO-KDL/COMMR/13/2011-12 26/12/2011 Commissioner of CUSTOMS-KANDLA Vipul Sharma C.C.-Kandla C/72/2012-DB OIO-KDL/COMMR/13/2011-12 26/12/2011 Commissioner of CUSTOMS-KANDLA Subh Labh Agencies C.C.-Kandla C / 12283 / 2013-DB OIO-KDL-COMMR-05-2013-14 18/04/2013 Commissioner of CUSTOMS-KANDLA S K K Agro Pvt Ltd C.C.-Kandla C / 12284 / 2013-DB OIO-KDL/COMMR/06/2013-14 18/04/2013 Commissioner of CUSTOMS-KANDLA Rice India Exports P Ltd C.C.-Kandla C / 12333 / 2013-DB OIO-KDL/COMMR/08/2013-14 18/04/2013 Commissioner of CUSTOMS-KANDLA Ganeshom Cereals Pvt Ltd C.C.-Kandla C / 12334 / 2013-DB OIO-KDL/COMMR/07/2013-14 18/04/2013 Commissioner of CUSTOMS-KANDLA Ganpati Foods C.C.-Kandla C / 12523 / 2013-DB OIO-KDL/COMMR/18/2013-14 23/05/2013 Commissioner of CUSTOMS-KANDLA Jindal Arya Impex Pvt Ltd C.C.-Kandla C / 12524 / 2013-DB OIO-KDL/COMMR/20/2013-14 23/05/2013 Commissioner of CUSTOMS-KANDLA United Foods Pvt Ltd C.C.-Kandla C / 12525 / 2013-DB OIO-KDL/COMMR/22/2013-14 23/05/2013 Commissioner of CUSTOMS-KANDLA Jindal Arya Impex Pvt Ltd C.C.-Kandla C / 12526 / 2013-DB OIO-KDL/COMMR/19/2013-14 23/05/2013 Commissioner of CUSTOMS-KANDLA Arya International C.C.-Kandla C / 12587 / 2013-DB OIO-KDL-COMMR-16-2013-14 09/05/2013 Commissioner of CUSTOMS-KANDLA Chamanlal Setia Exports Ltd C.C.-Kandla C / 12836 / 2013-DB OIO-KDL/COMMR/17/2013-14 09/05/2013 Commissioner of CUSTOMS-KANDLA Shree Mahavir International C.C.-Kandla C / 12848 / 2013-DB OIO-KDL-COMMR-14-2013-14 29/04/2013 Commissioner of CUSTOMS-KANDLA G D Overseas C.C.-Kandla C / 13065 / 2013-DB OIO-KDL-COMMR-24-2013-14 04/06/2013 Commissioner of CUSTOMS-KANDLA Lekh Raj Narinder Kumar C.C.-Kandla C / 13163 / 2013-DB OIO-KDL-COMMR-25-2013-14 04/06/2013 Commissioner of CUSTOMS-KANDLA Lal Mahal Limited C.C.-Kandla C / 13164 / 2013-DB OIO-KDL-COMMR-26-2013-14 04/06/2013 Commissioner of CUSTOMS-KANDLA Lal Mahal Limited C.C.-Kandla C / 13372 / 2013-DB OIA-452/2013/CUS/COMMR-A-/KDL 01/07/2013 Commissioner (Appeals) of CUSTOMS-KANDLA C.C.-Kandla Phoenix Comtrade Pvt Ltd C / 13373 / 2013-DB OIA-547/2013/CUS/COMMR-A-/KDL 27/07/2013 Commissioner (Appeals) of CUSTOMS-KANDLA C.C.-Kandla S K K Agro Pvt Ltd C / 14097 / 2013-DB OIA-547-2013-CUS-COMMR-A--KDL 25/07/2013 Commissioner (Appeals) of CUSTOMS-KANDLA S K K Agro Pvt Ltd C.C.-Kandla C/11677/2014-DB OIA-689-690/2013/CUS/COMMR-A-/KDL 02/12/2013 Commissioner (Appeals) of CUSTOMS-KANDLA Basic India Ltd C.C.-Kandla C/11890/2014-DB OIO-04/CHA/2013 03/01/2014 Commissioner of CUSTOMS-KANDLA Kunal Travels C.C.-Kandla C/12216/2014-DB OIO-KDL-COMMR-47-2013-14 17/01/2014 Commissioner of CUSTOMS-KANDLA Bharat Umraniya C.C.-Kandla C/12217/2014-DB OIO-KDL-COMMR-47-2013-14 17/01/2014 Commissioner of CUSTOMS-KANDLA Sunil Bhatia C.C.-Kandla C/13924/2014-DB OIA-KDL-CUSTM-000-APP-364-365-14-15 17/09/2014 Commissioner (Appeals) of CUSTOMS-KANDLA Basic India Ltd C.C.-Kandla C/13925/2014-DB OIA-KDL-CUSTM-000-APP-364-365-14-15 17/09/2014 Commissioner (Appeals) of CUSTOMS-KANDLA Basic India Ltd C.C.-Kandla C/10600/2015-DB OIA-MUN-CUSTM-000-APP-21-14-15 29/12/2014 Commissioner (Appeals) of CUSTOMS-MUNDRA C L International C.C.-Mundra C / 10846 / 2016-DB OIA-MUN-CUSTM-000-APP-307-15-16 28/01/2016 Commissioner (Appeals) of CUSTOMS-MUNDRA C.C.-Mundra Jaishree Exports Represented by:
For Appellant (s) : Shri Anand Nainawati, Shri P. D. Rachchh, Shri T. Damani, Advocates For Respondent (s): Shri J. Nagori, Authorised Representative CORAM:
Dr. D. M. Misra, Honble Member (Judicial) Mr. Raju, Honble Member (Technical) Date of Hearing: 28.03.2017 Date of Decision: 31.03.2017 Order No. Per: Mr. Raju Appeals have been filed against confiscation and imposition of penalty by exporters of Rice. All these exporters had claimed that while they were exporting Basmati Rice, Revenue had claimed that the rice being exported by them is not Basmati Rice. Consequently, samples of product and were sent for testing. The Report received from Testing Agency, like Basmati Export Development Foundation, declared that the sample of the product do not qualify as Basmati Rice in terms of the specification prescribed by DGFT for export of Basmati Rice. Consequently, the material exported against the test bond was held to be liable to confiscation. Since, the goods are allowed to be exported against the test bond redemption fine was imposed on the appellants and penalties under Section 114 (i) and Section 114 AA were also imposed. Aggrieved by the said order, the exporters are before Tribunal.
1.1 Appeal Numbers C/13372/2013, C/10846/2016, C/13373/2013 and C/43/2012 have been filed by Revenue against the orders of Commissioner against waiver of confiscation, inadequate penalty or non imposition of fines.
1.2 Following the appeals have been filed by the persons involved in the export of non-Basmati Rice by M/s Balgopal Shipping & Logistic against imposition of penalty.
C/44/2012 Vivek Shukla C.C.-Kandla C/56/2012 Santosh Kumar C.C.-Kandla C/62/2012 Vipul Sharma C.C.-Kandla C/72/2012 Subh Labh Agencies C.C.-Kandla Revenue has also filed appeal seeking enhancement of penalty.
1.3 Appeals No. C/11890/2014, C/12216/2014 and C/12217/2014 have been filed by Shri Bharat Umraniya, Shri Sunil Bhatia and Kunal Travels the Customs Broker against imposition of penalties against them in the case of exports of rice made by M/s Global Arya Impex.
1.4. In Appeal No. C/43/2002 Revenue has sought to increase the penalty imposed under Sections 114 (i) and 114 AA on the grounds that the value of goods exported was 2.24 crores, but, the penalties imposed are in the range of Rs. 60,000/- to Rs. 15,00,000/-. It has been argued that said penalties are meagre when compared with the maximum penalty can be imposed under Section 114 (i) and 114 AA. It has been argued that the value of goods declared by the exporter is Rs. 2.25 crores approximately. As per Section 114 AA the penalty not exceeding five times the value of the goods can be imposed. Similarly high penalty of upto Rs. 6.75 crores can be imposed under Section 114 of Customs Act, 1962. In this case, against the maximum penalty of Rs. 11.25 crores, very low penalties have been imposed on M/s. Balgopal Shipping & Logistics, Shri G. R. Dwivedi, Partner of M/s. BSL, Shri A. Rajesh Borker and others. Increase in penalty has been sought for Shri Vipul Sharma, Shri Santosh Kumar, Vivek Shukla and M/s Subh Labh Agencies also. While the review order covers all these persons, no separate appeals are filed for each of them individually. Shri Vivek Shukla, Shri Santosh Kumar, Shri Vipul Sharma and M/s Subh Labh Agencies have filed following appeals against imposition of penalty:-
C/44/2012 Vivek Shukla C.C.-Kandla C/56/2012 Santosh Kumar C.C.-Kandla C/62/2012 Vipul Sharma C.C.-Kandla C/72/2012 Subh Labh Agencies C.C.-Kandla
2. Ld. Counsel Shri P. D. Rachchh appeared for M/s. Jindal Arya Impex Pvt. Ltd., M/s. United Foods Pvt. Ltd and M/s Arya International. Ld. Counsel of these applicants argued that the product exported by them was described as Indian Pusa Basmati Steam Rice, or Indian 1121 Basmati Sella Rice. He argued that in the orders, it has been held that certain proportion of the export product was not basmati rice. He argued that since in the test reports, the proportion of rice found to be non basmati rice exceeded 20%, revenue held the goods to be prohibited and liable to confiscation. Ld. Counsel further argued that Notification No. 55 (RE-2008)/2004-2009 dated 05.11.2008 allows free export of Basmati Rice including Pusa Basmati 1121 (Dehusked), (Brown), semi-milled, milled both in either par-boiled or raw condition under export policy. He pointed out that the only restriction by description in the export of said product was grain of rice to be exported shall be more than 7 mm of length and ratio of length to breadth of the grain shall be more than 3.6. The said restriction was revised vide Notification No. 57/2009-2014 dated 17.08.2010 to reads as follows:-
Grain of the rice to be exported shall be more than 6.6.1 mm of length and ratio of length to breadth of the grain shall be more than 3.5. He pointed out that the said restriction no way mention that if the quantity of non-Basmati Rice exceeded 20%, the same would be prohibited. He further relied upon the decision of Tribunal in the case of Shree Jagdamba Agrico Export Pvt. Ltd. vs. Commissioner 2014 (307) ELT 764 (Tri.-Ahmd.) and M/s. Global Agro Impex vs. Commissioner of Customs, Noida 2013 (2900 ELT 717 (Tri.-Del.).
2.2 Ld. Counsel further argued that penalty under Section 114 AA has been imposed. He argued that the said penalty has been wrongly imposed as Section 114 AA can only be invoked when there is only a paper transaction and no real export. He argued that in the instant case there were actual export and not be a paper transaction and therefore Section 114 AA could not have been invoked. To support this argument he relied on Para 63 of the Report of Standing Committee On Finance (2005-2005) which reads as follows:-
63. The information furnished by the Ministry states as follows on the proposed provision: Section 114 provides for penalty for improper exportation of goods. However, there have been instances where export was on paper only and no goods had ever crossed the border. Such serious manipulators could escape penal action even when no goods were actually exported. The lacuna has an added dimension because of various export incentive schemes. To provide for penalty in such cases of false and incorrect declaration of material particulars and for giving false statements, declarations, etc. for the purpose of transaction of business under the Customs Act, it is proposed to provide expressly the power to levy penalty up to 5 times the value of goods. A new section 114 AA is proposed to be inserted after section 114A. 2.3. Ld. Counsel Shri Anand Nainawati appeared for Shri Chaman Lal Setia Exports (in appeal No. C/12587/2013) and G. D. Overseas ( in appeal No. C/12848/2013). Ld. Counsel reiterated the arguments of Shri P. D. Rachchh.
2.4 No one appeared for other exporters, or persons against where penalties have been imposed. However, it is seen that arguments of appeals are similar.
3. Ld. AR for the Revenue argued that the case is squarely covered by the decision of Honble High Court of Delhi in the case of Commissioner of Customs vs. Orion Enterprises 2015 (326) ELT 117 (Del.). He argued that the said decision deals with all the arguments raised by the appellants in this case. He further brought to our notice that Notification No. 68 dated 23.01.2003 has been issued in exercise of powers conferred by Section 17 of Export (Quality Control and Inspection) Act, 1963. The said notification describes what can be considering as Basmati Rice. He further brought to our attention that Notification No. 67 dated 23.01.2003 issued under Rule 11 of the Export (Quality Control and Inspection) Rules, 1964. He pointed that the said Notification prescribed as follows:-
4. Prohibits the export of Basmati Rice in the course of international trade, unless it conforms to the standard specifications applicable to it and is accompanied by a certificate of inspection issued by any of the Agencies established under section 7 of the Export (Quality Control and Inspection) Act, 1963 (22 of 1963) including its sub-offices located at various parts of the region. He pointed out that in the schedule to the said notification the upper limit of the Rice other than Basmati has been prescribed as 15%. He pointed out that in these cases the proportion of non-Basmati Rice was in excess of 20%. Thus in terms of this notification goods exported could not be considered as Basmati Rice. He therefore argued that in all these cases the Commissioner should have held goods liable to confiscation, imposed redemption fine and penalty.
3.1 Ld. AR further argued that Section 114 AA does not restricted itself to paper export only. He pointed out that the language of Section 114 AA is very vide and covers all kinds of cases.
4. We have gone to rival submission of both sides, we find that the Honble High Court of Delhi in the case of Orion Enterprises (supra) answers all the questions raised by the exporters regarding confiscation and imposition of penalty under Section 114 (i). In the said decision of Honble High Court has observed as follows:-
4.?Pursuant to the above order, samples were drawn on 10th March, 2011 and sent to the Regional Agmark Laboratory, Okhla, New Delhi (RAL). Two analytical reports, both dated 14th March 2011, were submitted by the RAL. The findings returned by the RAL in the said reports were as under :
1.?The sample does not conform to standards prescribed in Basmati Rice (Export) Grading and Marketing Rules, 1979 (hereafter the Basmati Rules).
2.?The sample conforms to the requirements of length and length/breadth ratio as per the Notification dated 5th November, 2008 of the Director General of Foreign Trade (DGFT).
5.?Since there was some ambiguity in the above report, the Commissioner of Customs (CoC) wrote a letter dated 15th March, 2013 to the RAL, New Delhi asking it to clarify, specifically in the light of the notification dated 5th November 2008, whether the product in question was Basmati (including Pusa Basmati 1121) or Non-Basmati Rice. In response to the above query the RAL, New Delhi sent a letter dated 16th March, 2011 in which it confirmed that both samples were not conforming to the Basmati Rules as they contained other rice in a proportion that exceeded 20% which was the maximum permitted under the said Rules. Secondly, the rice did not possess the natural fragrance in both raw and cooked stages. Hence, neither these samples could be considered as samples of Basmati Rice (RUD No. 3). As the respondent was permitted only to export Basmati Parboiled in terms of the certificate issued in its favour, and since export of non-Basmati Rice was prohibited under the Export Policy in terms of Notification No. 55 (RE-2008) 2004-2009, a show cause notice was issued to the respondent on 26th May, 2011 by the CoC.
12.?First, it requires to be noted that the Order-in-Original dated 21st October, 2011 of the Additional Commissioner of Customs refers to the fact that the certificate issued to the respondent for export mentions the commodity permitted to be exported as Basmati Parboiled 158248. The second important fact is that under the Export Policy in terms of the DGFT notification dated 5th November 2008, export of non-Basmati Rice is prohibited. The third factor is that in terms of the policy circular dated 30th September, 2008 again issued by the DGFT the Customs Department was to allow the export of Basmati Rice and Pusa 1121 non-Basmati Rice based on the parameters of the grain length, and grain length to breadth ratio. This circular made it clear that Customs may draw, redeem samples for testing to ascertain variety identification and send these samples for analysis to Agmark Analyst Centres. While the notification dated 16th September, 2008 did prescribe that the standard to be met as far as Basmati Rice meant for export was concerned was that the grain should be 7 mm in length and ratio of length to breadth of the grain shape should be more than 3.6 mm (which was later amended vide notification dated 17th August, 2010 to read more than 6.61 mm of length and a length to breadth ratio of more than 3.5 mm), the fact is that under the DGFT Circular dated 30th September, 2008 the samples were also to be sent for testing to the Agmark Laboratories. Combined with the fact that the notification dated 5th November, 2008 prohibited the export of non-Basmati Rice, this meant that the consignment had to also conform with the requirement of the Basmati Rice Rules. Schedule 2 to the Basmati Rice Rules specifies the maximum presence of other rice including red grain as 20%.
13.?Therefore, the contention of the respondent that the samples in question were required to conform only to the DGFT notification dated 5th November 2008 and only in terms of the length and length/breadth ratio as specified in said the DGFT notification is not acceptable. In the decision in Global Agro Impex (supra), the CESTAT did not have the benefit of noticing the DGFT circular dated 30th September, 2008 which permitted samples to be sent for analysis to Agmark Centres. It was in that context that the CESTAT declined to act on the Agmark Standards which conform to the standards prescribed under the Basmati Rice Rules. To that extent, the CESTAT, in the impugned order, by mechanically following the earlier decision in Global Agro Impex (supra) clearly committed an error. In the present case, the testing by the RAL was on the request of the respondent itself as is evident from the order dated 1st March, 2011 passed by this Court in Writ Civil Petition No. 953/2011. Learned counsel for the appellant is right in the submission that once there was a report of the RAL clearly stating that the samples did not conform to the requirements of the Basmati Rules inasmuch as the presence of other rice exceeded the maximum permissible limit of 20%, then the Customs Authority was bound by such report. This is consistent with the legal position as explained by the Supreme Court in Commissioner of Central Excise, Delhi and Commissioner of Central Excise, Mumbai v. Damnet Chemicals Private Ltd. (supra) which hold that test reports given by chemical examiners are binding upon the Department in the absence of other acceptable evidence produced by it.
14.?The contention of the respondent that the words other rice could mean other varieties of Basmati Rice is not borne out from the test reports in the present case. If the respondent wanted to show that the other rice found present to the consignment was also Basmati Rice then the burden was on the respondent to show that. As far as the Department is concerned, it was justified in proceeding on the strength of the test report that the presence of other rice, i.e. non-basmati rice, was more than the permissible maximum limit of 20%. Since the consignment was not entirely of Basmati Rice, it was not sufficient that the grains confirmed to the length and length/breath ratio prescribed for Basmati Rice in order to pass the test.
The above decision is squarely applicable to these cases. Moreover, we find that Notification No. 67 dated 23.01.2003 issued under Rule 11 of of Export (Quality Control and Inspection) prescribes as follows:-
4. Prohibits the export of Basmati Rice in the course of international trade, unless it conforms to the standard specifications applicable to it and is accompanied by a certificate of inspection issued by any of the Agencies established under section 7 of the Export (Quality Control and Inspection) Act, 1963 (22 of 1963) including its sub-offices located at various parts of the region. It is seen that in the schedule to the said notification also prescribes that the proportion of non-Basmati Rice in the export consignment should not exceed 15%. The Test Report obtained from the testing agencies clearly shows that the proportion of non-Basmati Rice in the export consignment was in excess of 20% and was found to be upto 90%. Thus, the prohibition in terms of Notification No. 67 dated 23.01.2003 clearly applies to all these consignments.
5. In view of above, we hold that in all these cases the proportion of non-Basmati Rice found in the samples exceeded 20%. The goods were exported against test bond and therefore the liability of confiscation and penalty under Section 114 (i) arises.
6. As far as penalty under Section 114 AA is concerned, the Section 114 AA of Customs Act, 1962 reads as under:-
SECTION [114AA. Penalty for use of false and incorrect material. - If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods.] It is seen that the scope of Section 114 AA is wide. Section 114 AA can be invoked to impose penalty against any person who knowingly and intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect or any material particular is liable to penalty. In the instant case, it is seen that the exporters have declared the goods being exported to be Basmati Rice whereas in terms of Notification 67/2003 dated 23.01.2003. The same do not qualify to be Basmati Rice. In some cases, the exporters have declared export consignment as Basmati Rice when proportion of non-Basmati Rice was found to be upto 90% of the total quantity. Thus, it is apparent that the exporters have deliberately misdeclared the product to avoid the prohibition under the policy. However, it is seen that the non-Basmati Rice found in the exporter varied from 23% to 90.2%. In view of above following appeals are dismissed.
C/4/2009 R K Industries C.C.-Kandla C/35/2009 Mahavir Foods C.C.-Kandla C / 12283 / 2013 S K K Agro Pvt Ltd C.C.-Kandla C / 12284 / 2013 Rice India Exports P Ltd C.C.-Kandla C / 12333 / 2013 Ganeshom Cereals Pvt Ltd C.C.-Kandla C / 12334 / 2013 Ganpati Foods C.C.-Kandla C / 12523 / 2013 Jindal Arya Impex Pvt Ltd C.C.-Kandla C / 12524 / 2013 United Foods Pvt Ltd C.C.-Kandla C / 12525 / 2013 Jindal Arya Impex Pvt Ltd C.C.-Kandla C / 12526 / 2013 Arya International C.C.-Kandla C /12587 2013 Chamanlal Setia Exports Ltd C.C.-Kandla C /12836/2013 Shree Mahavir International C.C.-Kandla C / 12848/2013 G D Overseas C.C.-Kandla C /13065/2013 Lekh Raj Narinder Kumar C.C.-Kandla C /13163/2013 Lal Mahal Limited C.C.-Kandla C /13164/2013 Lal Mahal Limited C.C.-Kandla C/11677/2014 Basic India Ltd C.C.-Kandla C/13924/2014 Basic India Ltd C.C.-Kandla C/13925/2014 Basic India Ltd C.C.-Kandla C/10600/2015 C L International C.C.-Mundra
7. As regards, Appeal No. C/43/2012 filed by the Revenue for enhancement of penalties imposed on M/s. BSL, Shri G. R. Dwivedi and Shri A. Rajesh under Section 114 (i) and 114 AA, It is seen that the penalty of Rs. 2.50 Lakhs each has been imposed against he maximum possible penalty of Rs. 6.75 Crore and Rs. 11.25 Crore respectively under Section 114 (i) and 114 AA respectively. On the same grounds, it has been argued that penalties imposed on Shri Vipul Sharma and Shri Vivek Shukla and Shri Santosh Kumar are very low. It has been argued that the Commissioner has not given any grounds for imposing such low penalties. Shri Vipul Sharma, Shri Vivek Shukla and Shri Santosh Kumar and M/s. Subh Labh Agencies are in appeal against the penalties imposed against them under Section 114 (i) and 114 AA. However, Revenue has not challenged the quantum of redemption fine imposed in the said case. We find that while imposing the penalties Commissioner has not given any reasoning as to why the penalties imposed are low as compared to the maximum penalty that can be imposed. It is seen that the Commissioner has clearly held that these peoples were involved in the illegal export and were in knowledge of the facts. We find that there is no discussion on the reasons for imposition of low penalties. In view of above, the orders of imposition of penalties on Shri Vivek Shukla, Shri Vipul Sharma and Shri Santosh Kumar is set-aside and matter remanded to Adjudicating Authority. The Revenue Appeal No. C/43/2012 is allowed by way of remand to the Adjudicating Authority to examine the issue of quantum of penalty imposed on these persons. In case of M/s Subh Labh Agencies, Revenue has not challenged the quantum of penalty imposed. From the impugned order, it is seen that the penalty of Rs. 50,000/- has been imposed under Section 114 and 114 AA on M/s. Subh Labh Agencies. Commissioner has discussed the role of M/s. Subh Labh Agencies in Para 22.7 of the impugned order. We agree with the observations. We find that the penalty on M/s. Subh Labh Agencies has been rightly imposed. Therefore, the appeal of M/s. Subh Labh Agencies is dismissed. In view of above appeal C/43/2012 is allowed by way of remand. Appeal of M/s. Subh Labh Agencies is dismissed. Appeals of Shri Vivek Shukla, Shri Santosh Kumar and Shri Vipul Sharma are allowed by way of remand.
8. Appeals No. C/11890/2014, C/12216/2014 and C/12217/2014 have been filed by M/s. Kunal Travels and Sunil Bhatia proprietor of M/s. Kunal Travels. M/s. Kunal Travels is a customs broker. In all these cases, it is seen from the grounds of appeal that they have challenged the imposition of penalty on the ground that it is not been established that they had knowledge of the fact that non-Basmati Rice was being misdeclared as Basmati Rice. From the impugned order, Para 41 it is seen that the penalties have been imposed on the following grounds:-
In view of the discussion above in nut shell I find that Shri Bharat H Umraniya, Manager of CHA firm M/s Kunal Travels (Cargo) was deliberately not disclosed the facts of the department officers which established that he was actively associated in the said attempted illicit export of Non-Basmati Rice. Shri Bharat Umraniya has admitted in his statement dated 30.07.2010 that he was aware about the presence of said 12 containers of the said exporter in the CFS and hides the said facts from the DRI officers on the insistence of Shri Prateek and Subhash Jindal and the said fact was also confirmed by Shri Prateek Jindal, Director of the export company in his statement dated 16.08.2010. I also find that Shri Bharat was fully aware that the export documents including SDF declaration was signed by employee of M/s Global Arya Impex Pvt. Ltd. At Gandhidham as PRATEEK which forged. I am, therefore, convinced that the complicity of the CHA firm and its employee in the attempted export of non-basmati rice is established. I also observed that, the Customs House Agent is a very important person for customers and the act of appointment f Custom House Agent is an act of faithe by the department in him, if however, he becomes a party to the fraud it would be in fitness of things to impose penalty in order to curb such tendencies. Since they have not performed their duties lawfully, I hold them liable to penalties. I accordingly hold that they are liable to penalty under Section 114 (i) and Section 114 AA of the Customs Act, 1962. It is seen that in the grounds of appeal these facts had not been denied. In absence of any denial of facts, it is not possible to grant any relief relating to these appellants. Accordingly, these appeals are dismissed.
9. In case of S. K. K. Agro Pvt. Ltd, both Revenue as well as exporter are in appeal vide appeals number C/13373/2013 and C/14097/2013. It is seen that the exporter is in appeal against imposition of penalty under Section 114 and 114 AA. The Revenue is in appeal against non imposition of fine and non confiscation of the goods. We find that the issue is squarely covered by the decision of the Honble High Court of Delhi in the case of Orion Enterprises (supra). Thus, the appeal of S. K. K Agro Pvt. Ltd is dismissed and Revenues appeal is allowed by way of remand.
10. In case of C/13372/2013 relating to Phoenix Comtrade Pvt Ltd and Appeal No. C/10846/2016 in case of Jaishree Exports. Revenue is in appeal against failure of Commissioner to confiscate the goods and to impose redemption fine. In case of Jaishree Exports, Revenue is also in appeal for non imposition of penalties under Section 114 and 114 AA. In view of the decision of Honble High Court in the case of Orion Enterprises (supra), the appeal of Revenue is allowed by way of remand.
(Order pronounced on 31.03.2017) (D. M. Misra) (Raju) Member (Judicial) Member (Technical) G.Y. ??
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C/4,35/2009,C/43-44,56,62,72/2012,C/12283-12284,12333-12334,12523-12526,12587, 12836,12848,13065,13163-13164,13372, 13373,14097/2013,C/11677, 11890,12216-12217,13924-13925/2014,C/10600/2015, C/10846/2016 14