Customs, Excise and Gold Tribunal - Delhi
Patel Widecom India Ltd. vs Commr. Of Cus. (Icd) on 14 May, 2004
Equivalent citations: 2004(170)ELT16(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. The above captioned appeals have been directed against the common impugned order-in-original vide which the Commissioner of Customs has affirmed duty of Rs. 6,61,717/-, Rs. 9609/- and Rs. 4,77,588/- under the Customs Act with interest and also imposed penalty of Rs. 2.5 lakhs under Section 112(a) of the Customs Act and Rs. 3 lakhs under Rule 209-A of the Central Excise Rules against the company appellant No. 1. He has also imposed separate penalty of Rs. 75,000/- under Section 112(a) of the Customs Act and Rs. 1 lakh under Rule 209A of the Central Excise Rules on its Director appellant No 2.
2. The learned Counsel has contended that duty has been wrongly confirmed against the appellants as part of the goods i.e. 4 out of 11 Scanners allegedly removed by the company appellant No. 1 for the purpose of demonstration after following the due procedure, were brought back to the factory and this aspect has been wrongly ignored by the Commissioner. He has also contended that goods allegedly cleared in the DTA by the appellants were manufactured from the indigenous material and not imported and as such, the duty under the Customs Act could not be confirmed. Regarding the penalty, the Counsel has contended that the same has been wrongly imposed against both the appellants. There was no intention on their part to evade the duty. The appellant No. 2 had even no role to play in the removal of the goods from the factory premises and as such, penalty on him under Rule 209A has been wrongly imposed. No proper opportunity of hearing was also afforded to the appellants. The impugned order, according to the Counsel, deserves to be set aside,
3. On the other hand/the learned SDR has reiterated the correctness of the impugned order.
4.1 We have heard both the sides and considered the submissions. The facts are not much in dispute. The company appellant No. 1 obtained letter of approval from the Ministry of Commerce under LOA dated 12-7-1994 for setting up unit for manufacture and export of wide scanners and plotters in NOIDA Export Processors Zone. The company accordingly set up the manufacturing unit at NEPZ as per the provisions of Exim Policy. Thereafter, the company in terms of the provisions of Exim Policy (Paras 9.12 and 9.17) read with exemption Notification No. 126/94-C.E. and No. 133/94-Cus. obtained permission from time to time for removal of manufactured goods for display as well as for repair, subcontracting, testing etc. but it revealed on checking of their goods outward register that they had cleared 11 numbers of scanners for the purpose of display/demonstration but the same were never received back in their factory. Rather they were disposed of by them in D.T.A. Similarly, the goods imported/procured duty free and sent for sub-contracting, repair, testing were also disposed of by them in contravention of the Exim Policy and the above said exemption notifications. All these allegations were very candidly admitted by appellant No. 2 in a statement recorded on 17-12-93. Therefore, the plea of the appellants that 4 out of 11 scanners were received back in the factory had been rightly rejected by the adjudicating authority.
4.2 We also find that the appellants even did not file reply to the show cause notice in spite of ample opportunity afforded to them. The memo sent to them by registered post for filing reply was received by them with the remarks "Refused to accept." Therefore, the argument of the Counsel that proper opportunity of hearing was not afforded to the appellants, cannot be accepted. In fact, the appellants avoided, for the reasons best known to them, to controvert the allegations made in the show cause notice. They cannot be allowed to take advantage on their own and seek quashing of the impugned order on the ground of violation of rules of natural justice. Moreover, the Director of the Company Shri Narinder Randhawa, Manager Export and Import, of the company, had admitted in his statement the disposal of the goods in the DTA after taking out from the factory on the pretext of demonstration and repair purposes. His admission is sufficient to saddle the company appellant No. 1 with the duty and penalty under the Customs Act as well as Central Excise Act.
5. There is also no tangile evidence to substantiate the argument of the Counsel that the goods cleared in the DTA were manufactured from the indigenous material. Even appellant No. 2 in his statement did not state so.
6. In the light of discussion made above, we do not find any illegality in the impugned order confirming the duty as detailed therein under the Central Excise as well as Customs Act against the company appellant No. 1. However, the penalty imposed on the company, keeping into facts and circumstances of the case, deserves to be reduced and we accordingly reduce the penalty to Rs. 60,000/- under the Central Excise Act and Rs. 50,000/- under the Customs Act.
7. But the imposition of penalty against appellant No. 2 in our view, is not sustainable for want of evidence to prove of having in any manner, direct hand in the removal of the goods from the factory premises for demonstration, repair, etc. purposes. The day to day affairs of the company were looked after by Shri Narinder Randhawa, Manager Export and Import under whose nose, the goods were manufactured and disposed of in the DTA as admitted by him. Therefore, penalty against appellant No. 2 is set aside in toto.
8. Consequently, the impugned order regarding confirmation of duty under the Customs and Central Excise Act against the company appellant No. 1 is upheld while in respect of penalty under both these Acts against the same is modified to the extent detailed above. However, against appellant No. 2, the impugned order is set aside. Therefore, both the appeals of the appellants stand disposed of accordingly.