Custom, Excise & Service Tax Tribunal
T.R. Bhoopalan vs Commissioner Of Customs on 30 November, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.C/41613/2016, C/41614/2016, C/41615/2016
[Arising out of Order-in-Appeal C.Cus.I No.238 to 240/2016 dt. 26.5.2016 passed by the Commissioner of Customs (Appeals-I), Chennai]
1. T.R. Bhoopalan
2. G. Devasai International
3. Ritesh
Appellant
Versus
Commissioner of Customs,
Chennai-VII Respondent
Appearance:
Shri A.K. Jayaraj, Advocate For the Appellant Shri R. Subramaniyan, AC (AR) For the Respondent CORAM:
Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of hearing/decision : 30.11.2016 FINAL ORDER No.42350-42352/2016 All the three appeals being connected with the same impugned order, they are being taken up together for common disposal.
2. The facts of the case are that "Glass Chatons" were imported as Artificial Stones for "Imitation Jewellery" and the value thereof was found to be very low. After investigation, show cause notice dt. 23.6.2011 was issued inter alia proposing rejection of transaction value, demand of differential duty of Rs.5,60,481/- and imposition of penalties on Shri Uttam Chand Sawal Chand Jain, M/s.Devasai International, Shri M.Ritesh, Shri T.R. Bhoopalan and M/s.Santon Shipping Services. Subsequently, the said Shri Uttam Chand Jain approached the Settlement Commission seeking settlement of his case. The case was against Shri Uttam Chand Jain was settled by Honble Settlement Commission vide Final Order No.20/2013-Cus. dt. 16.7.2013. However, the Commission also ruled that adjudicating authority is free to proceed against other co-noticees to the show cause notice in accordance with law. Accordingly, Adjudicating Authority passed an order dt. 16.2.2016 wherein inter alia penalties under Section 112 (a), 114A and 114AA of the Customs Act, 1962 were imposed on the appellants herein. On appeal, Commissioner (Appeals) vide impugned order dt. 26.5.2016 reduced the penalties imposed on individuals as follows :-
(1) On M/s.G.Devasai International Penalty under Section 114AA was reduced to Rs.30,000/-. (2) Penalty on Shri T.R. Bhoopalan and Shri M.Ritesh under Section 112 (a) was reduced to R.15,000/- each. (3) Penalty under Section 114AA on Shri T.R. Bhoopalan and Shri M.Ritesh was reduced to Rs.15,000/- each.
Aggrieved, the three appellants are before this forum. M/s.Santon Shipping Services is not in appeal before this forum.
3. Today when the matter came up for hearing, Ld. Advocate Shri A.K. Jayaraj, appearing for appellants, drew my attention to Tribunals decision in the case of S.K. Colombolowala Vs CC (Import), Mumbai - 2007 (220) ELT 492 (Tri.-Mumbai) wherein it has been held inter alia that while the provisions of K.V.S. scheme and those relating to settlement of cases under the Customs Act are not completely identical, the underlying objective in both the schemes is similar and hence cases of co-noticees come to an end once the order of settlement is passed in respect of the person who filed application before the Settlement Commission.
3.1 He also submitted that in respect of M/s.G.Devasai International, the said appellant had only lent his IE code which enabled the said Shri Uttam Chand Jain to import the goods for a monetary consideration of Rs.3000/-. In respect of Shri T.R. Bhoopalan, the said person had only filed Bill of Entry and handled the documents related thereto. In respect of Shri M.Ritesh, the said person only acted as middlemen at Chennai for Shri Uttam Chand Jain and solicited for obtaining signature of T.R.Bhoopalan from original IEC holder for importing and clearing the goods, actually belonging to Jain.
4. For these reasons, Ld. Advocate submitted that penalties imposed on these three persons cannot sustain and should be set aside.
5. On the other hand, Ld.A.R Shri R. Subramaniyan, AC on behalf of Revenue submitted that all the aforesaid appellants had not only actively abetted but also connived in the offence committed by Shri Uttam Chand Jain and hence plea for waiver or reduction in penalties does not have merit and appeals should be dismissed.
6. Heard both sides and gone through the facts of the case. The Tribunals decision in the case of S.K. Colombolowala (supra) relied upon by learned advocate has put forth the ratio that proceeding against the co-noticeee comes to an end once the matter concerning the main person has been settled by Honble Settlement Commission. However, in the instant case, the Honble Settlement Commission themselves have, in its order, clearly elucidated that adjudicating authority was free to proceed against other co-noticees in the SCN. This part of the order of Settlement Commission has attained finality since the same has not been challenged or stay thereof was obtained from the competent forum. This being the case, I do not find any legal imbalance in adjudication of the matter relating to co-noticees who are the appellants herein.
7. Coming to the appeal of M/s.G. Devasai International and T.R. Bhoopalan, I note that in the impugned order Commissioner (Appeals) has already reduced the penalties to considerable extent as indicated herein above. I do not find any reason for further interference in respect of the penalties imposed on M/s.Devasai International and Shri T.R. Bhoopalan. They are fair and just with respect to the roles played out by them in the entire matter and also the findings with regard to the said persons.
8. However, with respect to the penalties under Section 112 (a) and Section 114AA imposed on Shri M.Ritesh, I find that the same requires a revisit. The role of Shri Ritesh, as concluded by the adjudicating authority in para-45 of the OIO, is only as a middleman. While the said paragraph does mention that he has also involved himself in the clearance of the goods, there is no allegation that the said appellant has in any way put his hand or signed any of the Customs documents. This being the case, and especially, considering that the main player in the entire matter has already settled his case with the Settlement Commission. The other penalties on M/s.G.Devasai International and Shri T.R. Bhoopalan have also been considerably reduced by the lower appellate authority. The department has also not filed appeal either against the order of the original authority or against the impugned order. In these circumstances, I set aside penalties under Section 112 (a) and Section 114AA of the Customs Act imposed on Shri M.Ritesh. Other than this, I do not find any reason to interfere further with the impugned order.
9. Accordingly, appeal filed by M/s.G.Devasai International (C/41614/2016) and Shri T.R. Bhoopalan (C/41613/2016) are dismissed. Appeal filed by Shri M.Ritesh (C/41615/2016) is allowed.
Appeals are disposed in the above terms (Dictated and pronounced in open court) (MADHU MOHAN DAMODHAR) MEMBER (TECHNICAL) gs 4