Customs, Excise and Gold Tribunal - Bangalore
K. Krishnakumar, M/S Kay Kay Exports, ... vs The Commissioner Of Customs, Cochin on 7 August, 2001
Equivalent citations: 2001(133)ELT320(TRI-BANG)
ORDER
Shri G.A. Brahma Deva
1. This appeal arises out of and is directed against the Order in Original dated 14.1.1999 passed by the Commissioner of Customs, Cochin.
2. By impugned Order the Commissioner was of the view there was an attempt to import the second hand machinery in violation of the import Policy 1997-2002. Accordingly he held that the goods were attempted to be imported in violation of policy and goods are liable for confiscation under Section 111 (d) of the Customs Act 1962. Apart from ordering for absolute confiscation of the impugned goods he imposed penalty of Rs.1 lakh under Section 112(a) of the Customs Act 1962. The appellant has come in appeal on questioning the penalty under Section 112(a) of the Act on the ground that neither he was importer nor in any way connected with the importation of the said goods.
3. Shri Kumaraswamy, learned Consultant, appearing for the appellant submitted that no evidence was brought on record to show that there was any attempt on the part of the appellants either in importing the goods or placing the orders or making the payment for importation of the said goods. He said that when the appellant has gone abroad to meet the buyers, Mr.Albert Backer, he was taken to the factory of the supplier for introduction and inducing him to book the goods. But straightaway he declined the offer due to financial constraints. After a lapse of sufficient time he was informed that the goods were sent to him. On knowing that goods were wrongly sent, he informed the suppliers 'not to ship the goods'. The department has made out a case against him on the sole ground that there was an attempt on the part of the appellant to find out prospective buyers/importers to clear the goods and accordingly implicated him as there was an attempt on his part to import the goods in imposing the penalty. Shri Kumuraswamy empathetically argued that the appellant was snot in possession of any document relating to goods nor in any way connected with the importation of the impugned goods. Mere exploring the possibility of clearing the consignment at he instance of the suppliers/buyers that itself will not infringe any provisions of the Act and accordingly there was no justification to impose penalty under Section 112 of the Act. In support of his contention he referred to the following decisions:-
"1. 1992(57) E.L.T. 23 (Madras)-M/s Vijayaraj Vs. Collector of Customs
2. 1993 (42) ECC 166 (Madras)- Union of India & Others Vs. Raja Agencies
3. 1993 (42) ECC 168 (Madras)- M/s Raja Agencies Vs. Union of India and Others.
4. 1998 (102) E.L.T.-Court Room Highlights Page No.154."
4. On the other hand, Shri Thomas appearing for the Revenue justified the action of the Department in imposing the penalty. He drew my attention to the findings of the Commissioner in imposing the penalty and read the relevant finding portion which is as under:-
"From the statement dated 25.3.98 of Shri Krishnakumar, it is clear that he attempted to find a prospective buyer for the imported goods. This is in clear violation of the Import Policy mentioned above. Morever the correspondence recovered from M/s Kay Kay Exports reveal that an attempt was contemplated to make the payment for the imported plant unauthorisedly out of the amount due on account of the exported Yellow clams sent from India by Mr. Krishnakumar to Mr.Albert of M/s Forconsur. Moreover, Mr. Krishnakumar in his fax message dat ed 23.3.98 addressed to Mr.Albert, after mentioning the documents required for clearance has stated "The Customs Duty to totalling to about 50% of the invoice value. As such the invoice value should be made lower to the tune of something like U.S.$ 22 to 25,000." This shows an attempt to under in voice to evade Customs duty. With the evidence available on record, I cannot hold that Shri Krishnakumar is innocent.He has made an attempt to import the second hand machinery for sale in violation of the Import Policy Provisions stated in the earlier paragraphs. After finding it difficult to clear the goods, he says he is not the importer. In this case, from the facts on record, I have no hesitation in holding that he goods were attempted to be imported in violation of the Import Policy 1997-2002. Hence, the goods are liable for confiscation under section 111 (d) of the Customs Act, 1962. Shri Krishnakumar is liable to penalty under section 112(a) of Customs Act, 1962. Under resection 112 of Customs Act, 1962, the leviability of penalty is not restricted to importer alone. Any person whose net of omission or commission renders the goods liable for confiscation is liable for penalty under section 112 of Customs Act, 1962. Hence t he contention that he is not the importer as per Customs Act, 1962 is not at all relevant. As regards M/s Marteen Past Sea Foods, Netherlands and Mr.Albert Backer, Netherlands, no grounds have beenmade in the investigation to render them liable for penalty under the Customs Act, 1962. Therefore, I drop further proceedings against them."
5. I have considered the arrival submissions and pursue the case law.It is settled position that penalty should not be imposed for the sake of levy. Penalty is not a source of revenue. Imposition of penalty depends upon facts and circumstances of each case.In the case of Union of India V/s Sampath. Raj Dugar reported in 1992 (58) E.L.T. 163, Supreme Court held that in case importer is not paying for the goods and abandoned them the exporter continues to be the owner of the goods and entitled to ask for the re-export unless proved to be a party to fraud or unless payment of the price of the goods stands guaranteed to him by virtue of letter of credit or otherwise. In the case of Raja Agencies V/s Union of India and others reported in 1993 (42) ECC 166 Madras High Court ad held that it is settled law that no establish a charge it is not only necessary to prove the existence of mens rea but also that deliberation must be proved beyond all reasonable doubt. It was clearly held by the High Court that imposition of penalty requires deliberate action and knowledge. This view was upheld by the Supreme Court while dismissing the appeal filed by the Department as reported in E.L.T. Volume 102 under Court Room Highlights at Page A-154. Further the Madras Court in the case of Vijaya Raj V/s Collector of Customs reported in 1992(57) E.L.T page 23 observed that the importer refused to retire the documents there was no intention to import the goods. In that case, the goods were shipped to India from Brazil on a contract and letters of credit had also been opened. On arrival the importer refused to retire the documents and also refused to clear the goods. In other words he has not filed any Bill of Entry or any other documents for clearance of the goods. On arrival of the goods the importer refused to retire the documents and also refused to clear the goods. It was therefore sought to be re-exported to Singapore. The Court observed that the facts of the case clearly disclosed that though the goods had arrived at the Madras Port there was absolutely no intention to import the goods. Supreme Court in the case of Akbare Badruddin Jiwani V/s Collector of Customs [1990 (47) E.L.T 161 (S.C).] held that the burden lies on the Customs Department to show that the appellant has acted dishonestly or contumaciously or with a deliberate or distinct object of breaching the law.
6. In view of the above observations it is clear to attract penalty intention should be coupled with the positive action. Mere intention of import the goods itself is not sufficient to impose penalty. The Department has made out a case only on the ground that the there was an attempt to find a prospective buyer for the imported goods. As can be seen from the records nothing incriminating evidence was found against the appellant to implicate has involvement in importing the goods. Nothing was brought on record to show that there was an attempt on the part of the appellant either in importing the goods or making payment towards importation. In the facts and circumstances having not found any incriminating document against the appellant and further more goods have been abandoned by him I do not find any justification to impose penalty. Accordingly, I set aside the penalty imposed on the cappellant. In the result the appeal is allowed.
7. Operative portion of this order was already pronounced in open court on conclusion of the hearing on 7.8.2001.