Customs, Excise and Gold Tribunal - Mumbai
Munjani Brothers And Ors. vs Commissioner Of Customs on 1 February, 2004
ORDER S.S. Sekhon, Member (T)
1. Heard both sides and considered the stay applications and it is found that:
(a) 5 Bills of Entry filed by M/s Vijaybhav, M/s Deepali Exports and M/s Pushpak Impex for import of diamonds worth Rs. 5,68,09,916/-. Same were ordered to be confiscated, penalties were imposed on the proprietors and the proprietary concerns under Section 112 (a) of the Customs Act, 1962 on the grounds that the licences produced for the clearances of the subject goods were forged and the clearances were not required to be permitted and this attempt to clear such diamonds on these forged licences would call for confiscation of the said goods as clearance of diamonds were permissible only on valid transferred REP licences required to be produced. Since no such valid licences were produced, the goods were ordered to be confiscated and consequential penalties were imposed.
(b) Since the goods have been confiscated and no redemption fine has been ordered and the goods are in the custody of the department and prima facie penalties on the proprietary concerns and the proprietors cannot be upheld, and penalty under Section 112 (a) of the Customs Act on the dealers/purchasers of the alleged forged licences as imposed on M/s Kiran Exports, Munjani Brothers & M/s D.S. Brothers is prima facie not called for. This is found to be a fit case to order waiver of the pre deposits of the penalties required and stay recovery thereof. Since the goods have been absolutely confiscated and are in the custody of the department, duty liabilities have not been worked out, and no orders as regards the duties are therefore passed.
2. The value of the goods involved and the penalties imposed are covered by the instructions issued by the President of CESTAT for early hearing. Therefore, the oral request made by the learned Joint C.D.R. for an early hearing of the case, is granted. The matter kept for hearing on 25.3.2004.
Krishna Kumar, Member (Judicial)
1. It is seen from the impugned order that rough diamonds imported by M/s Vijaybhav on the strength of 29 forged licences collectively valued at Rs. 1,44,39,89,912/- which were liable for confiscation under Section 111 (d) of the Customs Act, 1962 could not be confiscated because the same were not available for confiscation. The Commissioner has in this regard imposed a penalty of Rs. 70 lakhs only on M/s Vijaybhav. Thus it may be seen that looking to the value of the rough diamonds as mentioned above which is Rs. 1,44,39,89,912/-, the imposition of penalty of Rs. 70 lakhs on M/s Vijaybhav is not even 1% of the value of the rough diamonds. Therefore, I do not find any justification for waiver of the same. In my opinion the entire penalty of Rs. 70 lakhs is required to be deposited by M/s Vijaybhav.
2. As regards M/s Deepali Exports, it is seen that the rough diamonds imported on the strength of 28 forged licences valued at Rs. 1,57,62,25,055/- are not available for confiscation. As such the Commissioner has imposed a penalty of Rs. 1 Crore on Deepali Exports. Again it is seen that the penalty of Rs. 1 Crore is less than 1% of the value of the rough diamonds imported on the strength of forged licences. Therefore, I do not find any justification for waiver of the same and in my opinion the same must be pre-deposited by M/s Deepali Exports.
3. It is further seen that the rough diamonds valued at Rs. 13,99,96,773/- were imported by M/s Vaibhav Exports on the strength of 4 forged licences, were not available for confiscation and as such the Commissioner has imposed the penalty of Rs. 80 lakhs on M/s Vaibhav Exports under Section 112 (a) of the Customs Act, 1962. In my opinion, this penalty also being hardly around 6% of the value of the rough diamonds is required to be pre-deposited by M/s vaibhav Exports.
4. As regards M/s Pushpak Impex it is seen that they have imported rough diamonds valued at Rs. 12,02,65,343/- on the strength of 4 forged licences. The goods were not available for confiscation. The Commissioner has imposed a penalty of Rs. 1 Crore on M/s Pushpak Impex under Section 112 (a) of the CUSTOMS Act, 1962. This penalty also being less than 10% of the value of the rough diamonds, I do not see any justification for waiver thereof and as such in my opinion the same is required to be pre-deposited. It is seen that a penalty of Rs. 5 lakhs has been imposed on Shri Gyanchand Jain who is the proprietor of M/s Vijaybhav and a penalty of Rs. 5 lakhs has been imposed on Shri Rajesh Jain who is proprietor of M/s Deepali Exports. Since the penalties have already been imposed on the proprietary concern, I do not see any justification for imposition of penalty on the individual proprietors of the said firms. Therefore, penalty on Shri Rajesh Jain and Gyanchand Jain is required to be dispensed with. It is also seen that a penalty of Rs. 1 Crore has been imposed on Shri Hiralal Jain who is the proprietor of M/s Vaibhav Exports. Since the penalty of Rs. 80 lakhs has been imposed on the proprietary concern, in my view the penalty of Rs. 1 Crore imposed on the individual proprietor may be dispensed with. Further as regards, the penalty of Rs. 1 Crore imposed on Shri Kamlesh Khicha, proprietor of M/s Pushpak Impex, I find that since the penalty has been imposed on the proprietary concern, the penalty imposed on the individual proprietor Shri Kamlesh Khicha of Rs. 1 Crore is required to be dispensed with.
5. It will be pertinent to mention that the High Court of Judicature at Bombay, in Writ Petition No. 39 of 2004 titled M/s Sophisticated Marbles & Granite Industries, have inter alia observed that the importers who are importing goods without licence and seek to validate this import by obtaining subsequent licence or licences cannot be allowed to take advantage of their own wrong.
6. Therefore, subject to the above, I agree for waiver of pre-deposit on others as recorded in the order of the learned Member, (Technical). In case, the provisions of pre-deposit are not invoked in such cases, I am afraid they may remain , confined only to the Statute Book.
Appeals C/Stay-2153 to C-S-2160/03 Mom in Appeal C/831 to 838/03 Mum The matters were heard on 11.2.2004 and the orders prepared and referred to learned Member (Judicial) for consideration on 3.3.2004. Files along with the proposed order has been received back to day (i.e. on 19.4.2004). From the order enclosed at page 4& 5, it appears that there is a difference of opinion and the question of the difference has not been framed by the learned Member (Judicial). The same may kindly be framed and send at an early date.
Krishna Kumar, Member (J) "Whether in view of the facts and circumstances of the case when the goods are in the custody of the department, the pre-deposit of penalty is not called for as recorded by the Ld. Member (Technical) or the pre-deposit of part of penalty being hardly 1% in the case of M/s. Vijaybhav and M/s. Deepali Exports and approximately 6% in the case of M/s. Vaibhav Exports and approximately 10% in the case of M/s. Pushpak Impex as recorded by Member (J), in view of the order of High Court of Judicature at Bombay in Writ Petition No. 39 of 2004 is required to be deposited."
Jyoti Balasundaram, Member (J)
1. Heard both sides on the difference of opinion of the referring Bench. In the case of M/s. Munjani Brothers and M/s. Deepali Exports, although rough diamonds imported on the strength of 29 licences collectively valued at over Rs. 1.44 crores and rough diamonds imported on the strength of 28 licences valued at over Rs. 1.57 crores respectively, were not available for confiscation as they had already been cleared, the fact remains that rough diamonds valued at over Rs. 59.26 lakhs and Rs. 75.41 lakhs imported by M/s.Vijaybhav and rough diamonds valued at over Rs. 2 crores imported by M/s. Deepali Exports have been absolutely confiscated. In this view of the matter, I concur with the order proposed by the Ld. Member (Technical) regarding waiver of pre-deposit and stay of recovery of the penalties imposed on the above two persons. As regards M/s. Vaibhav Exports and M/s. Pushpak Impex, noting the uncontroverted plea that all their bank accounts stand frozen and the uncontroverted plea that both the proprietary concerns are facing acute financial hardship and do not possess any moveable or immoveable properties, as seen from the affidavits of the proprietors of the above two, I concur with the order proposed by the Ld. Member (Technical).
2. I therefore, agree with the Ld. Member (Technical) that this is a fit case for waiver of pre-deposit and stay of recovery of the penalties.
3. The file is returned to the original Bench for passing majority order.
Applications CStay-2153 to C/2160, 1648, 1715,1857/03 in Appeals C/831 to 838, 629, 634 & 721/03 Mum In Munjani Brothers and Ors. v. CC, Airport Mumbai.
FINAL ORDER In view of the opinion expressed by Ld Member (Judicial) Ms Jyoti Balasundaram, these stay applications are to be allowed in terms of the findings of Member (Technical) Shri S.S. Sekhon hereinabove.