Customs, Excise and Gold Tribunal - Bangalore
Ajay Paul vs Commissioner Of Customs on 17 November, 2004
Equivalent citations: 2005(182)ELT417(TRI-BANG)
ORDER S.L. Peeran, Member (J)
1. All these three appeals arise from a common OIO No. 11/99/Commr/Adjn dated 28-01-2000 imposing penalty on the appellant company M/s. Anne's Collection Pvt. Ltd. (ACPL) of Rs. 5,00,000/- and another Rs. 5,00,000/- imposed on Shri Ajay Pal, Managing Director of the appellant company. There is a penalty of Rs. 2,00,000/- on Ms. Merenla Tzudy, Assistant Designer. There is also a penalty of Rs. 1,00,000/- on Shri Jivraj Rathi of M/s. Finesse Prints for having purchased the Silk Yam imported duty free under DEEC scheme by M/s. ACPL, the appellant Company. The duty has been confirmed in the matter but it is not stated on whom the same would be recovered. The duty confirmed is on the imported fabric printing machine, imported under EPCG scheme by the appellants availing concessional rate of duty. However, the said machine was found to have been sold to one M/s. Finesse Prints, Bangalore. The same has been granted redemption on payment of fine of Rs. 2,00,000/-. The purchaser, M/s. Finesse Prints, Bangalore have been imposed with a penalty of Rs. 75,000/-. The imported Mulberry Silk which was sold in the market to M/s. Digvijay Silk Traders, Bangalore have been imposed with a penalty of Rs. 1,00,000/- and 81.96 Kgs. of Mulberry Raw Silk detained at the premises of M/s. Digvijay Silk Traders was directed to be confiscated but granted redemption on payment of fine of Rs. 81,000/-. M/s. Finesse Prints, Bangalore and M/s. Digvijay Silk Traders, Bangalore have not filed their appeals.
2. We have heard the learned Advocate Shri Laxminarayana for the appellants M/s. ACPL, its Managing Director and Ms. Merenla Tzudy. The learned Counsel's submission is that although there are demands made by M/s. APCL pertaining to sale of the machinery which had been imported under the EPCG Scheme, but the evidence in terms of minutes of the meeting of the Board of Directors of the Appellant company disclosed that the imported machine had been shifted to another Directors place who was knowing M/s. Finesse Prints, Bangalore. M/s. Finesse Prints had admitted in their statements that they had purchased the machinery under an invoice and paid the same consideration by cheques but it was not correct as the amounts paid by M/s. Finesse Prints was towards the share capital. He submits that in the circumstances, the imposition of penalty on the company and Managing Director is not justified. He further pointed out that no role was played by Ms. Merenla Tzudy, Assistant Designer. She was only an employee of M/s. ACPL and had not committed or rebutted Ajay Pal in selling the silk yarn and, therefore, imposition of penalty of Rs. 2,00,000/- on her is totally unjustified. He has not admitted about the role nor there was any inculcatory statement of Ajay Pal involving her in the matter. He pointed out that the Commissioner also wrongly come to a conclusion that Ms. Merenla Tzudy had admitted in her statements that she had only stated about the raw silk yarn sold by the company in open market. She had not admitted any of her roles in procuring the apparatus for sale or playing any role in the sale, but had only mentioned about the sale done by the company in which she has no role. Therefore, she prayed for setting aside the penalties in the matter. The learned Counsel submitted that the imported machinery was seized from M/s. Finesse Prints and they had paid the duty, penalty and fine and redeemed the goods. Therefore, the demand of duty and encashment of bank guarantee towards the duly from the appellant is not justified as it amounts to double payment and prayed for a direction to the Commissioner to refund the excess amounts collected from the appellant towards duly.
3. The learned JDR pointed out to the admissions made by Ajay Pal with regard to the sale of the machine. The statements of Jivraj Rathi, Managing Partner, M/s. Finesse Prints were also recorded who admitted having purchased the imported machine under an invoice and paid the sale price. Therefore, the contention of the appellant that the money was paid towards share capital is totally uncorroborated and has been rightly rejected. He submits that as the appellants had shown the imported mulberry silk yarn and also had sold the imported machinery, therefore, the penalty imposed on the company and its Managing Director is justified. He also pointed out that Ms. Merenla Tzudy made admissions about the sale of mulberry silk yarn in the market and therefore, she was to be penalized for having abetted in the offence.
4. We have carefully considered the submissions made by both sides and have perused the records. We notice from the Commissioner's order that the appellants had made a representation to DGFT, New Delhi, by their letter dated 12-03-1998, seeking permission to transfer the imported machinery to M/s. Finesse Prints. JDGFT had rejected their request and, therefore, the appellants had sold the machinery under invoice No. MC/0401 dated 21-04-1998 for a sum of Rs. 26,76,406/- in violation of the conditions laid down in para 5.4 of Chapter 5 of Handbook of Procedures 1997-2002 which prohibits the transfer, sale or otherwise of disposal of the imported goods within a period of 5 years from the date of import, except with the prior permission of DGFT. Ajay Pal also in his statement clearly admitted about the sale of the imported mulberry silk yarn in the open market to M/s. Digvijay Silk Traders. The same was also seized and confiscated. Therefore, on merits, the appellants do not have a case. The appellants contention that they had received an amount of Rs. 26,76,406/- towards the share amount from M/s. Finesse Prints, Bangalore is totally uncorroborated and has been rightly rejected. M/s. Finesse Prints have admitted having purchased the machinery and it was detained in their premises. Therefore, the confiscation of the machinery and imposition of duty, penalty and fine is required to be upheld. However, the plea taken by the Consultant that M/s. Finesse Prints had already paid the duty and penalty imposed on them and, therefore, the encashment of bank guarantee furnished by the appellants and collection of duty amount from them is not justified, is a matter which has to be reconsidered by the Commissioner, as there is no such finding given on that point. In case the excess duty has been collected from the appellants and also the same having been collected from M/s. Finesse prints, then the matter has to be re-looked and the excess duty payments, if any, is required to be returned to the appellants. In so far as the penalty is concerned, the company, has been imposed with a penalty of Rs. 5,00,000/- for violation of various provisions of law. We had taken all the extenuating points and we find that the differential duty was only Rs. 4,65,642/- in the matter. As the duty, penalty and fine has been paid by M/s. Finesse Prints in the matter and penalty has also been imposed on M/s. Digvijay Silk Traders for purchasing the imported mulberry raw silk against the provisions of law, we are of the considered opinion that penalty of Rs. 5,00,000/- imposed on the appellant company is required to be reduced to Rs. 2,00,000/-. The penalty on the Managing Director Ajay Pal is also required to be reduced to Rs. 1,00,000/-. In so far as the penalty on Ms. Merenla Tzudy, Assistant Designer in the appellant company is concerned, we find from the statement that she has mentioned about the raw silk being sold by the company against the provisions of law but she has not admitted that she has connived with Ajay Pal in the sale and defended from the said sale and played any role in the violation of law. She has only mentioned about the sale done by Ajay Pal. Her statements corroborate the offences committed by Ajay Pal and penalty on Ajay Pal and the Company is sustainable as noticed from the statement of Ms. Merenla Tzudy. However, there is no sufficient corroboration from the statement of Ajay Pal, Managing Director, to involve Ms. Merenla Tzudy in the sale of the imported mulberry silk or the machinery in the open market. Ms. Merenla Tzudy cannot be said to have accepted or connived with Ajay Pal in sale of the imported machinery or mulberry silk. She had only mentioned about the Mulberry silk having been sold by the company and Ajay Pal. By such statements, it cannot be said that she has connived with Ajay Pal and has found purchasers for the raw silk. She is only an Assistant Designer in the appellant's company. We do not find sufficient cause to hold that she has actively assisted in connivance with Ajay Pal in committing the offence. Hence, we grant benefit of doubt to Ms. Merenla Tzudy and allow her appeal by setting aside the penalty of Rs. 2,00,000/- imposed on her. The appeals of the Company, Managing Director Ajay Pal is partly allowed by reducing the penalty as stated above.