Custom, Excise & Service Tax Tribunal
M/S Saccha Saudha Pedhi vs Commissioner Of Customs(Import), ... on 3 September, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. C/343, 475, 505, 506/08-MUM (Arising out of Order-in- Original No. 20/2008/CAC/CC/KS dated 12.02.2007 passed by the Commissioner of Customs (Adjn) Mumbai For approval and signature: Honble Mr. P.R. Chandrasekharan, Member(Technical) Honble Mr Ramesh Nair, Member(Judicial) ============================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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1. M/s Saccha Saudha Pedhi
:
Appellants
2. Shri Bhumish Shah
3. Shri Shivkumar Raghuvir Goyal
4. Shri Ashok Raghuvir Goyal
VS
Commissioner of Customs(Import), Mumbai
Respondent
Appearance
Shri S.N. Kantawala, Advocate for Sr No. 2
None for the Sr No. 1, 3 & 4 for the appellants
Shri A.K. Singh, Addl Commissioner (A.R.) for the Respondent
CORAM:
Honble Mr. P.R. Chandrasekharan, Member (Technical)
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 3/9/2014
Date of decision /2014
ORDER NO.
Per : Ramesh Nair
The appellants filed these four appeals against a common order-in-original No. 20/2008/CAC/CC/KS dated 12.02.2007 as /detailed in the chart below:-
Appeals against Order-in-Original No. CAO NO. 20/2008/CAC/CC/KS DATED 12.02.2007 Sr No. Appeal No. Appellant by Confirmed Amount 1 2 3 4 1 C/475/08-MUM M/s Saccha Soudha Pedhi (A) Redemption fine of Rs. 50,20,000/- under section 125 of the Customs Act 1962 Redemption fine Rs. 96,93,910/- under section 125 Custom duty Rs. 60,82,577/- under the Proviso to section 28 Penalty Rs. 60,82,577/- under the provisions of section 114 A (B) Redemption fine Rs. 4,04,530/- under section 125 Redemption fine Rs. 7,81,100/- under section 125 Custom duty Rs. 28,86,865/- under sec 28 Penalty Rs. 28,86,865/- under Sec 114A 2 C/505/08-MUM Shivkumar Raghuveer Goyal proprietor of M/s Saccha Soudha Pedhi (A) Penalty Rs. 10,00,000/- under section 112(a) (B) Penalty Rs. 6,00,000/- under section 112(a) 3 C/506/08-MUM Ashok Raghuveer Goyal (A) Penalty Rs. 7,50,000/- under section 112(a) (B) Penalty Rs. 5,00,000/- under section 112(a) 4 C/343/08-MUM Shri Bhumish Shah (A) Penalty Rs. 10,00,000/- under section 112(a) (B) Penalty Rs. 6,00,000/- under section 112(a) of The facts of the case is that the Appellant i.e. M/s. Saccha Soudha Pedhi is engaged in importing spices namely- Star Aniseeds, Cassia, White pepper, Zanzibar cloves, Madagascar Cloves etc. from M/s. IJIMASIA Pte. Ltd., Singapore and other foreign suppliers. Directorate of Revenue Intelligence, Mumbai Zonal Unit received an intelligence that the Appellant importing the said spices, has grossly undervalued the imported goods as compared to the price given in the circulars issued by the Directorate of Valuation, Custom Mumbai and also from the prices published in The Public Ledger (a weekly publication from London established since 1760). On the basis of this evidence, the DRI further expanded their investigation and searched the factory/ office premises of various importers, the premises of market brokers and indenting agents. During the investigation, premises of one Shri Bhumish Shah who is working as an agent for foreign supplier M/s. IJIMASIA Pte. Ltd., Singapore was searched from where some incriminating documents were recovered which contain information of price declared to custom as well as the actual price at which imported goods were purchased from foreign suppliers. Statements of various persons namely Shri Bhumish Shah, broker and indenting agent, Shri Ashok Raghveer Goyal, Manager and dealing person of the importer M/s Saccha Soudha Pedhi were recorded. On the scrutiny of the seized documents, the confessional statements of the above persons after confrontation with the incriminating documents, Show cause notice bearing No.DRI/MZU/D/25/SSP/2001 dated 01.09.2003 was issued to the Appellants proposing demand of differential custom duty on the elements of undervalued amount, confiscation of the goods undervalued, penalties upon the importer, Shri Shivkumar Raghuveer Goyal- Proprietor of M/s Saccha Soudha Pedhi, Shri Ashok Raghuveer Goyal- Manager and Shri Bhumish Shah.
2. In adjudication, the Ld. Commissioner after consideration of charges levelled in the show cause notice and representation made by the Appellants vide order-in-original dated 12.02.2008 held that the importer Appellant has undervalued the goods imported by him and consequently confirmed the demand of differential custom duty, imposed penalty corresponding to said differential duty, demanded interest on duty short paid, confiscated the goods though not available and imposed redemption fine. In the impugned order, the Ld. Commissioner also imposed penalties upon Shri Shivkumar Raghuveer Goyal, Shri Ashok Raghuveer Goyal and Shri Bhumish Shah under Section 112(a) of the Customs Act, 1962. Aggrieved with the above, the Appellants are before us.
3. Ld. Counsel Shri S.N. Kantawala appeared for the Appellant Shri Bhumish Shah, however none appeared for other three Appellants M/s Saccha Soudha Pedhi, Shri Shivkumar Raghuveer Goyal and Ashok Raghuveer Goyal. From the records and grounds of appeal, the submission of appellants is that the demand was confirmed in the impugned order only on the statement of Shri Bhumish Shah and Shri Ashok Raghuveer Goyal. Shri Ashok Raghuveer Goyal is neither a proprietor nor employee of the appellant therefore, reliance can not be placed on his statement. As regard this, Shri Ashok Raghuveer Goyal has clarified during cross examination. Shri Ashok R. Goyal could not have represented appellant firm accordingly his statement can not be used against appellant. That the Ld Commissioner heavily relied upon recovery of cash of Rs 1.02 crores from Mr Bhumish Shah, in this regard appellant submitted that recovery of this amount not relevant to undervaluation of the goods, whereas, in his statement Shri Bhumish Shah stated that this amount is sale proceed of the spices sold in Indian market on behalf of various parties. The Ld Commissioner relied upon fax messages received from foreign suppliers M/s Ijimasia Pte Ltd., Singapore and also market weekly and public ledger prices but Adjudicating Authority has not independently verified and substantiated by providing contemporaneous price of the impugned goods. Therefore it was pointed out various errors in investigation and submitted that due to which under valuation is not established. Therefore impugned order is not sustainable and deserves to be set aside.
4. Ld. Counsel appearing for the Appellant Shri Bhumish Shah further submit that Shri Shah is merely an indenting agent and getting 0.5% commission of value of imported goods and 1% commission towards sale of imported goods on behalf of importers in the domestic market which comes to very meagre amount, therefore, he submits that the penalty of Rs.16,00,000/- imposed is very harsh.
5. On the other hand the Ld Addl Commisisoner(A.R.) submits that entire case was made out on the basis of confessional statements of Shri Bhumish Shah and Ashok Raghuveer Goyal which were recorded on the basis of incriminating documents recovered from Shri Bhumish Shah and documents produced by Shri Ashok Raghuveer Goyal. The seazed documents clearly show the value to be declared before Custom Authority and value of the goods for the actual transaction with the foreign supplier, both the persons have categorically admitted undervaluation not only in their statement recorded from time to time but also on the basis of the mail correspondences between foreign supplier M/s Ijimasia Pte Ltd., and Shri Bhumish Shah. As regard to the deviation made from the statement by both the persons during cross examination, he submits that documents were recovered from Shri Bhumish Shah and other documents and information provided by Ashok Raghuveer Goyal and both of them have admitted undervaluation in their respective statements, therefore stand taken different from the fact stated in their statements after span of long time does not vitiate the statement recorded under section 108 of Customs Act. It is also fact on record that both the persons have never retracted their statements till the date of their cross examination therefore whatsoever different stand they have taken during the cross examination will not affect the material of fact stated in their statements. It is his submission that in this case the undervaluation has been established on the basis of various documentary evidence as well as confessionary statements, therefore the confirmation of demand, penalties, interest, confiscation and redemption fine is correct and legal and the same may be sustained.
6. We have carefully considered the records, grounds of appeal and the submissions made by both the sides. Undervaluation of various spices was unearthed after detail investigation and consequently confirmed by the Ld. Commissioner. In the investigation incriminating documents like correspondence of Shri Bhumish Shah with the foreign supplier M/s Ijimasia Pte Ltd., were relied upon, the said correspondences /documents clearly contains the detail of the price of spices to be declared for assessment bill of entry before custom and parallely there are documents which contains details of actual price on which the transaction between foreign supplier M/s Ijimasia Pte Ltd., and the appellant has taken place. In the statement of Shri Bhumish Shah, he has categorically stated that
(i) He was dealing in the brokerage of imported spices like Star Aniseeds, Cassia, White pepper, Zanzibar cloves, Madagascar Cloves, dry ginger etc. He was appointed as a indenting agent in Indian Market by M/s Ijimasia Pte Ltd. He also acted on behalf of various marketers including M/s Saccha Soudha Pedhi. He used to obtain daily quotation from M/s Ijimasia Pte Ltd., and convey to Indian buyers for which he receives commission of 1% of import value. On confrontation with incriminating documents Shri Bhumish Shah explained and confirmed that there had been difference between values declared to the customs at the time of clearance and actual prices at which goods were transacted and paid for.
(ii) Though the assignment of cloves purchased by importers at higher prices, the foreign shippers were obliged to the importers by issuing invoices of much lower values. He also confirmed the payment towards differential value between the invoice value and the actual value were paid by the importers to shippers. He also given the details of prices of cloves of Indonesia origin sold in Mumbai Market. He has stated that since June,2000 approximately 22 consignments had been indented through him to the firms namely M/s Saccha Soudha Pedhi Pune and other importers.
(iii) He stated that since June, 2000 importers had declared much lower price than the actual price that not a single consignment of clove indented and imported through him were at actual price.
(iv) The account in respect of the amount so collected were settled periodically; that the goods belonged to M/s Saccha Soudha Pedhi and others importers indented and imported through him from M/s Ijimasia Pte Ltd., has been sold in the market; that the sale proceeds of the goods were realized to the respective firm after receipt of the confirmation from M/s Ijimasia Pte Ltd., about receipt of their dues(i.e. repatriation of amount arising out the difference in the declared values and actual values) from the respective importers. On being specially shown the documents seized from his residence, he stated that said documents mainly comprise of material particulars of consignment indented and imported through him from M/s Ijimasia Pte Ltd., by various importers in Mumbai. Which contained details of the importers reference number, description of the goods, actual value and differential amount payable thereof etc; that the same was periodically faxed from M/s Ijimasia Pte Ltd., for the purpose of pursuing the importers for payment of differential value which had to be repatriated through non banking channel(havala etc.)
(v) All the consignments indented through him since the appointment as indenting agent of M/s Ijimasia Pte Ltd., were imported at undervalued prices.
(vi) Sale proceeds of consignments sold in the market were held back by him so as to pursue and expedite payments to M/s Ijimasia Pte Ltd.; that the Indian Currency amount Rs. 1.02 crore recovered from his residence on 16/03/2001 and the sale proceeds of goods held back by him for pursuing the payments to M/s Ijimasia Pte Ltd.; that out of total amount approximately Rs. 75-80 lakhs belong to M/s Saccha Soudha Pedhi; that he had no concern with the said amount of Rs 1.02 crore as the same was the amount accumulated out of sale proceed of spices of foreign origin belonging to various firms.
7. (i) On further investigation a statement of Shri Ashok Raghuveer Goyal presented himself as a manager of M/s Saccha Sauda Pedhi was recorded under section 108 of Customs Act 1962. He interalia stated that he has joined his brother Shri Shivkumar Raghuveer Goyal and managing the affairs of proprietary concern viz. M/s Saccha Soudha Pedhi, Pune; the said firm was engaged in import of various spices; that he was looking after all negotiations of imports and customs formalities and M/s Vasudev Ranchoddas were their clearing agent for the purpose of clearing their import.
(ii) That Shri Bhumish Shah was their indentor for importer of spices from M/s Ijimasia Pte Ltd., from whom several consignments of spices had been imported, that they were also importing from other suppliers like M/s Ismail and Ahmed Brothers (1922) Pte. Ltd., Singapore and M/s Al Rada, Dubai, Valton Forest, Turkey, International Trading Co., IMCO, Singapore, M/s Zafar Exports, Shri Lanka, Damatri Intl., Shrilanka Expo Lanka, Shri Lanka; that the actual price negotiated and transacted with the supplier in respect of consignments weighing 19176 kg net of Madagascar Cloves supplied by M/s Ismail and Mohmad Brothers(1992) Pte Ltd. Singapore and vide their invoice M/s SSP- 122/01 dated 12 /2/2001 $4925 PMT CIF, Mumbai against declare value of $ 2750 PMT CIF; that the actual price negotiated and transacted in respect of second consignment weighing 24690 supplied by M/s Ijimasia Pte Ltd., vide their invoice No. 646/2k-01 dated 14/02/2001 was US $5200 PMT CIF Mumbai against declare value of $2750 PMT CIF; that the actual price negotiated and transacted in respect of third consignment weighing 23890 kgs supplied by M/s Ijimasia Pte Ltd.,vide their invoice no. 681/2/k-01 dated 21/2/2001 was US$ 5200 PMT CIF Mumbai against declared value of $2625 PMT CIF; that the actual price negotiated and transacted in respect of fourth consignment weighing 10,000 kg l supplied M/s. Al Javi Traders(LLC) Dubai vide their invoice no 1482 dated 24/02/2001 was $ 5050 PMT CIF against declared value of $2650 PMT CIF.
(iii) Shri Ashok Raghuveer Goyal further stated that other importers were declaring lower prices to the custom authority, he had also declared lower price in order to face competition in the market.
(iv) That he admitted undervalue of the cloves of Madagascar and Zanzibar, Indonesia and Cameroon origin that he undertaken to pay custom duty on the difference in the actual value and value declared in the import documents. In respect of import of star aniseeds, Shri Ashok Raghuveer Goyal stated that during December 2000 to March 2001 they had imported six consignments of star aniseeds which were cleared by CHA M/s Ranchoddas & Company. He admitted that the said consignments were undervalued and had declared lesser price in the import documents. He has given details of declared rate and actual rate of the said six consignments. They undertaken to pay custom duty on the actual value instead of the value contained in the import documents declared at the time of clearance.
(v) There after M/s Saccha Soudha Pedhi, in pursuance to admitting undervaluation by Shri Ashok Raghuveer Goyal, voluntarily submitted demand draft worth Rs 10 lakhs towards differential duty.
8. On the basis of the statement as well as documents recovered from Shri Bhumish Shah, it was observed by the Ld Commissioner that the invoice prices in respect of six consignments of star aniseeds imported by M/s Saccha Soudha Pedhi in the range of US$ 1415 TO US$1550 per metric ton, where as the actual value contained in the said faxes were ranging from US$ 7150 to US$7700 per metric ton. Similarly, invoice price of consignment each of Cassia and white pepper was US $ 1050 AND US$3000 respectively. Whereas the actual value has contained in the fax message was US$ 1200 and US$3700 respectively.
9. From the above factual position that is based on confessionary statements of Shri Bhumish Shah and Shri Ashok Raghuveer Goyal and also the documents recovered from Shri Bhumish Shah which was accepted by him, it is clear that the appellant M/s Saccha Soudha Pedhi has undervalued the goods and evaded differential duty. As regard the stand taken by Shri Ashok Raghuveer Goyal at the time of cross examination that he is not authorized person, it is observed that the statement of Shri Ashok Raghuveer Goyal was recorded on 20 March 2001, whereas cross examination was conducted on 27/01/2006, that is after more than 5 years which is clearly afterthought. Shri Ashok Raghuveer Goyal was not prevented from retracting his statement immediately after recording his statement, therefore all his averments made during cross examination is clearly afterthought and statement given by him on 20 March 2001 hold good and the same was legally and correctly relied upon by Ld Adjudicating Authority. Moreover, he has provided various documents related to this case and categorically admitted undervaluation. He has in pursuance of his interrogation has also deposited Rs 10 lakhs toward duty. From the statement it is clear that he was actively involved in all the activities of the appellant M/s Saccha Soudha Pedhi therefore reliance of his confessionary statement cannot be disputed at all. Similarly as regard anything contrary to the statement of Shri Bhumish Shah submitted by him during cross examination after 5 years is also clearly afterthought and the same cannot be taken into account for the purpose of the defence of the appellant. Apart from admission of Shri Bhumish Shah and Shri Ashok Raghuveer Goyal in their statements and documentary evidence recovered from Shri Bhumish Shah the price of the goods indicated in the public ledger clearly suggests that the appellant has grossly undervalued the spices imported by them. As regards appellants plea in appeal that there is no reliance on price of contemporaneous import, we are of the view that once the witnesses admitted the undervaluation and accepted the actual price contained in the fax messages of foreign supplier, then the said admitted price become the transaction value. In such case there is no need to resort to price of contemporaneous import. In view of the above factual position and discussion thereupon we hold that the valuation of the goods determined by the Ld Adjudicating Authority is legal and correct and consequently the differential demand of custom duty on such value and corresponding interest and penalties imposed under section 114(a) of Customs Act,1962 is also upheld.
As regard confiscation of the goods and redemption fine of Rs 50,20,000/-, Rs 4,04,530/-, Rs 7,81,100/- and 96,93,910/- for redemption of goods, we are of the considered view that the confiscation is not sustainable for the reason that the goods were not available physically for confiscation. Confiscation of goods can only be made of physically available goods, if the same is seized and either lying under seizer or if provisionally released. In the present case goods are not available for redemption, hence the confiscation and redemption fine is bad in law. Our view is supported by following case laws:
2013 (290) E.L.T. 299 (Tri. - Ahmd.) INDU NISSAN OXO CHEMICAL INDUSTRIES Versus COMMR. OF CUS., KANDLA Para 10. - Another submission made by the learned Senior Counsel with which we find ourselves unable to disagree is that penalty cannot be imposed in lieu of redemption fine where the goods are not available for confiscation. This was the observation in the case of Universal Steel Agencies v. Commissioner of Customs, Kandla - 2001 (138) E.L.T. 360 (Tri.) and this decision has been followed in the case of Agro Impex v. Commissioner of Customs, Mumbai - 2003 (158) E.L.T. 705 (Tri.). This is another ground which supports the case of the assessee that no penalty could have been imposed in this case.
2012 (285) E.L.T. 109 (Tri. - Del.) DEE KAY EXPORTS Versus COMMISSIONER CUSTOMS, NEW DELHI Para 22 - We note that the adjudicating authority had confiscated goods which were not available for confiscation. Even the bond executed for another reason namely to wait for test reports, had been discharged prior to adjudication. So we hold that the confiscation of goods and consequent redemption fine to be notmaintainable.
2012 (278) E.L.T. 465 (Tri. - Ahmd.) COMMISSIONER OF C. EX., SURAT-II Versus MILLAT FIBRES Para 2. Revenues main contention was that the assessee, while obtaining re-warehousing licence and licence to manufacture, under bond under Sections 58 & 65 of Customs Act, 1962, have inter alia undertaken to observe all provisions of Customs Act, 1962, Central Excise Act, 1944 and rules made thereunder. Therefore, the said bond is available for enforcing and for recovery of any fine. Revenue again relied upon the Honble Apex Courts judgment supra, holding that the department can confiscate the goods even if not available physically. The basic issue in this case is that whether the goods can be confiscated if they are not seized. It is a fact that only seized goods are liable for confiscation and redemption fine can be imposed in lieu of such confiscation. Such goods can also be released provisionally on certain conditions. In this case, the goods were never seized neither available for seizure. If the goods are not seized, the question of confiscation of such goods does not arise and consequently there is no question of imposing redemption fine to release these goods. Obviously, fine is not imposable once the goods cannot be released. I, therefore, find that Revenues contention is devoid of any logic and law and not sustainable.
2011 (274) E.L.T. 369 (Tri. - Del.) S.S. WATCH INDUSTRIES Versus COMMISSIONER OF CUSTOMS (I), NEW DELHI 3.3 However, as regards the redemption fine imposed under Section 125 of the Act in respect of the goods held to be liable for confiscation but which are not available for confiscation, provisions of Section 125 are attracted only in the cases when either the goods are physically available for confiscation or the goods had been released rovisionally against the Bond and as per the terms of the conditions of the Bond, the person from whose possession/control the goods had been seized, is bound to produce the goods whenever called upon to do so. We are supported in this view from the judgment of Honble Punjab & Haryana High Court in case of Commissioner of Customs, Amritsar v. M/s. Raja Impex (P) Ltd. reported in [2008-TIOL-280-HC-P&H-CUS = 2008 (229) E.L.T. 185 (P & H)] wherein the Honble High Court held that when the goods are not available for confiscation for the reason that the same had been released unconditionally, the redemption fine under Section 125 could not be imposed, that Honble Supreme Courts judgment in case of Weston Electronic Components v. Commissioner of Customs, New Delhi reported in 2000 (115) E.L.T. 278 (S.C.) is applicable only in those cases where the goods had been released against a bond executed by the person from whose possession/control the goods had been seized and that when the goods have been released against a bond, the position is as if the goods were available. Same view has been taken by the Tribunal in the case of G.M. Exports v. Commissioner of Customs, Bangalore reported in 2008 (226) E.L.T. 571 (Tri.-Bang.). In this case, the goods held to be liable for confiscation in paras 116(ii), (iii) & (iv) of the impugned order are neither available for confiscation nor the same had been released provisionally against bond. Therefore, no redemption fine could be imposed under Section 125 of the Customs Act.
In view of our above discussion which is supported by above case laws, we set-aside the confiscation of goods and dropped the demand of redemption fine. Thus, the Appeal No. C/475/08-MUM filed by M/s Saccha Soudha Pedhi is partly allowed in the above terms.
Appeal No C/505/08/MUM This appeal was filed by Shri Shivkumar Raghuveer Goyal against imposition of penalty of Rs 16 lakhs under 112(a) of the Customs Act 1962. Shri Shivkumar Raghuveer Goyal is proprietor of M/s Saccha Soudha Pedhi and the appellant firm was fastened with the demand of custom duty as well as penalty under section 114(A) of the Customs Act 1962, therefore no separate penalty once again should be imposed upon the proprietor under section 112(a). The proprietor concern and the proprietor is one single entity, therefore, for the purpose of imposition of penalty, it can not be treated as two different persons. The following case laws support our aforesaid views -
2013 (287) E.L.T. 54 (P & H) VINOD KUMAR GUPTA Versus COMMISSIONER OF CENTRAL EXCISE
9. Having heard learned counsel for the parties, we are of the considered opinion that proprietorship firm or proprietor thereof cannot be treated as two different legal entities. Partnership firm is a firm in mercantile usage, however, penalty imposed on the proprietorship or partnership firms would mean penalty on the proprietor or partners thereof, therefore, imposition of penalties one on the proprietorship firm and second on the proprietor would amount to imposition of penalty twice, which cannot be sustained in the eyes of law.
2011 (270) E.L.T. 280 (Tri. - Mumbai) BIMAL KUMAR MEHRA Versus COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI
20. The learned counsel has argued against a separate penalty imposed on the appellant Mr. Bimal Kumar Mehra under Section 112 of the Act both at Mumbai and Chennai. This submission is true insofar as the Chennai case is concerned, wherein separate penalties under Section 112 of the Act were imposed on M/s. Global Art and Mr. Bimal Kumar Mehra (proprietor). The adjudicating authority could not have imposed two penalties of the same kind on the same person for the same offence. M/s. Global Art and Mr. Bimal Kumar Mehra represent the same person. Therefore, the penalty imposed on Mr. Bimal Kumar Mehra in the Chennai case is set aside.
2007 (215) E.L.T. 193 (Tri. - Del.) SAI TRADING CO.
Versus COMMISSIONER OF CUSTOMS, INDORE
7. As regards the appeals filed by the Revenue on the non-imposition of penalties on the individual by the adjudicating authority, we find that all these persons were either Proprietor or Partner of the firms which were indicted by the authority in the over valuation of the export of PVC shoes. It is settled law that the firm and the proprietor/partner are not different and hence once penalty is imposed on the firm, than the proprietor/partner need not be penalized again. In view of this settled law, the appeals filed by the Revenue for non-imposition penalties on the Proprietor/Partner of the firms are liable to be dismissed and are dismissed.
2006 (200) E.L.T. 303 (Tri. - Del.) R.K. INDUSTRIES Versus COMMISSIONER OF CUSTOMS, KOLKATA
5. Regarding the penalties imposed on the appellants in Appeal No. 590 and 591 it is recorded that the appellant Shri Jeewan Singh is the proprietor of the appellant company M/s. R.K. Industries. It is a settled law that penalty cannot be imposed on both, sole proprietor as well as on the firm. Catena of decisions have settled that simultaneous penalties cannot be imposed on both, the firm and the proprietor, since the proprietorship firm has no existence independent of proprietor and proprietorship firm is not a legal identity. Therefore, in view of the settle law penalty of Rs. 1 lakh imposed on the appellant M/s. R.K. Industries in Appeal No. C/590/05 is set aside.
In view of above settled position, we modify the order impugned by dropping the penalty of Rs 16 lakhs imposed upon Shri Shivkumar Raghuveer Goyal. Accordingly, the Appeal No C/505/08-MUM is allowed.
Appeal No. C/506/08 MUM This appeal was filed by Shri Ashok Raghuveer Goyal against imposition of penalty of Rs. 12,50,000/- under section 112(a) of Customs Act 1962. From our above discussion on the factual matrix, it is clearly coming out from records that Shri Ashok Raghuveer Goyal was actively involved in undervaluation of imported goods by M/s Saccha Soudha Pedhi and his categorical admission to this effect justifies the imposition of penalty under section 112(a) of Customs Act 1962.
As per section 112 it can be seen, penalty for the subject offence is prescribed is upto not exceeding the duty sought to be evaded or Rs. 5,000/- whichever is greater. In the present case the duty evaded is Rs. 68,82,577/- and Rs 28,86,865, however the penalty under section 112(a) was imposed only of Rs 12,50,000/- which appears to be reasonable, hence the same does not require any interference. We therefore uphold the penalty on Shri Ashok Raghuveer Goyal, accordingly the Appeal No C/506/08-MUM filed by him is dismissed.
Appeal No C/343/08-MUM This appeal was filed by Shri Bhumish Shah against imposition of penalty of Rs 16 lakhs under section 112(a) of Customs Act 1962. Shri Bhumish Shah was found as a Master mind on entire act of undervaluation done by M/s Saccha Soudha Pedhi. From his statement and documents recovered from him it has been established that he was key person as indenting agent to plan out the entire Modus operandi of undervaluation in respect of goods imported from M/s Ijimasia Pte Ltd., and other suppliers. Therefore penalty under section 112(a) was rightly imposed by the Ld Adjudicating Authority. As regard the submission of his Counsel that he was beneficiary of a meagre amount of 0.5 % as commission from M/s Ijimasia Pte Ltd. therefore the quantum of penalty imposed upon him is very harsh. We are of the considered view that the quantum of penalty under section 112(a) is not determined on the basis of quantum of benefits flows to the abetter of evasion of duty, whereas it is decided on the basis of nature of the act of offence one committed and corresponding to quantum to duty evaded. Therefore, we reject the submission of Counsel as regard quantum of penalty. We find that in view of huge amount of customs duty evasion, the penalty imposed upon Shri Bhumish Shah under section 112(a) is reasonable and justified which does not require any interference, hence the Appeal No. 343/08-MUM filed by Shri Bhumish Shah is dismissed.
All the above four appeals are disposed in the above terms.
(Pronounce in Court on ..) P.R. Chandrasekharan Member (Technical) Ramesh Nair Member (Judicial) sk 19