Customs, Excise and Gold Tribunal - Mumbai
Ankit International, Devanti Overseas ... vs Commissioner Of Customs on 11 March, 2005
Equivalent citations: 2005(187)ELT472(TRI-MUMBAI)
ORDER Moheb Ali M., Member (T)
Appeal Nos. 881 to 883/04
1. These appeals arose out of the order No. 53/2004 dated 17/06/2004 of the Commissioner of Customs (Adj.), Mumbai. In the impugned order the Commissioner demanded duty of Rs. 9,89,012/- from M/s Ankit International under Section 28 imposed an equal amount of penalty under Section 114A, duty of Rs. 10,07,258/- from M/s Devanti Overseas with an equal amount of penalty and imposed a penalty of Rs. 1,50,000/- on one Mr. Nilesh V. Joshi. The last named is the proprietor of the above mentioned firms who imported the offending goods. The Commissioner also confiscated the goods imported by the two firms and imposed appropriate redemption fines. Hence, these appeals.
2. The offending goods are bearings. The above mentioned firms filed Bills of Entry to clear the goods claiming exemption under Notification No. 149/95 dated 19/09/95 as amended. Investigations by DRI Officers revealed that the advance licence produced for claiming duty free clearance under the above said Notification was a duplicate issued in lieu of the original, which was stated to have been lost. Investigations also revealed that the duplicate licence was manipulated to import more quantities of bearings than what was allowed in the original licence. The goods became offending as they were sought to be cleared under an advance licence, which was not valid. The appellants before us in whose name the Bills of Entry were filed, have disowned the goods and do not wish to redeem them as they are not the owners, according to them.
3. The Ld. Advocate, Shri S.R. Dixit for the appellant firms pleaded that his client Shri Nilesh V. Joshi is the Proprietor of the firms M/s Ankit International and M/s Devanti Overseas; that the Proprietor merely signed some blank papers given to him by the real importers of the goods; that he disowned the goods imported in the names of the firms; that the investigations clearly revealed that the two firms were only created by Shri M.H. Vora and Ashwin Shantilal Mehta; that his client was in no way connected with the fraud perpetuated by these persons; that the investigations carried out did not reveal the complicity of Mr. Nilesh Joshi; that the real importers induced Mr. Nilesh Joshi to obtain IE Code Numbers from the office of the Joint DGFT without ever disclosing as to what they intend to import; that penalties cannot be imposed on proprietary firms which are represented by Proprietors and that the penalty imposed on the Proprietor is not warranted as he was in no way connected with the imports.
4. The Ld. DR, Shri K.K. Srivastava argued that the appellant firms were the importers in the eyes of law and since the firms imported goods which are liable to confiscation under Section 111 of the Customs Act, penalties are imposable; that the importers cannot claim innocence as they have failed to take any precautions before signing the blank papers; that the conduct of the appellant Mr. Nilesh Shah is not that of a normal and prudent man; that only because the fraud is detected the appellant is claiming innocence; that the fact that the appellant disowned the goods has no relevance to the issue of liability to penalty and that the Commissioner has rightly imposed penalties on the firms and their Proprietor, Mr. Nilesh Joshi.
5. We have considered the rival submissions. The appellants' plead that penalty cannot be imposed on proprietary firms as the Proprietors are the persons responsible for all the action done on behalf of the firms. It is an admitted fact that the imports have been made in the names of proprietary firms. Mr. Nilesh Joshi is the Proprietor of both the firms. The Commissioner imposed a penalty on him under Section 114A. In view of the settled legal position in regard to the liability of proprietary firm to penal action, we set aside the penalties imposed on M/s Ankit International & M/s Devanti Overseas.
6. In regard to penalty imposed on Mr. Nilesh Joshi, we observe that he is the person who caused the import of goods liable to confiscation. It is true that he has nothing to do with the fraud of manipulation of advance licence under which goods are imported. But his conduct is signing the blank papers, obtaining IE Code from DGFT and signing the declaration in the Bills of Entry strongly suggest that he has not acted as a prudent man. His complicity, however indirectly, exists. We are unable to agree with the appellants' plea that no penalty is imposable on him. Some leniency is however called for. Having regard to the financial position of the appellant and his role in this whole affair, we reduce the penalty imposed on Mr. Nilesh Joshi to Rs. 75,000/- (Rupees Seventy five thousand only). Since the appellants did not contest the liability of the goods to confiscation under Section 111 (m) and (d), we uphold this part of the order of the Commissioner. Demand for duty on the imported goods is confirmed.
7. Appeals of M/s Ankit International and M/s Devanti Overseas against penalties allowed. Appeal of Mr. Nilesh Joshi is partly allowed by reducing the penalty to Rs. 75,000/-.
Appeal Nos. C/879, 880 & 878/04
8. Same facts emerge in these appeals except that M/s Ankit International did not import any goods, M/s Devanti Overseas however did. The Commissioner confiscated the bearings sought to be cleared under various Bills of Entry filed by M/s Devanti Overseas and imposed a fine of Rs. 1,64,000/- and imposed penalties on the two firms and their Proprietor, Mr. Nishes Joshi.
9. For the same reasons given by us while deciding appeal Nos. 881, 882 & 883, we set aside the penalties on the firms, uphold the confiscation and penalty on Mr. Nilesh Joshi but reduce the same to Rs. 2,50,000/-.
10. Subject to these modifications the order of the Commissioner is upheld in so far as the present appellants are concerned.
(Operative part pronounced in the Court)