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(iv) I also hold JPFL liable to penalty under Section 112(b) as they have been associated directly have been the ultimate beneficiaries. I, therefore, impose penalty amounting to Rs. 50,00,000 (Rupees fifty lacs only) under Section 112(a) of the Customs Act on JPFL."

Appeal No. 152 filed by M/s. Consolidated Photo & Finvest Ltd. is against Clauses (i), (ii) and (iii) of the above order. Appeal No. 151 filed by M/s. Jindal Photo Films Ltd. is against Clause (iv) of the above order.

2. M/s. Consolidated Photo & Finvest Ltd. (CPFL, for short) are a Public Limited Company engaged in trading activities. M/s. Jindal Photo Films Ltd. (JPFL, for short) are also a Public Limited Company having both trading and manufacturing activities. Both the companies have their corporate offices in the same premises at New Delhi. The manufacturing unit of JPFL is engaged in the conversion into finished products, of Jumbo Rolls (Bulk Rolls) of various kinds of photographic films and papers imported from M/s. FUJI Photo Film Co., Ltd., Japan (hereinafter referred to as 'FUJI'). It is situate at Silvassa within the Union Territory of Dadra & Nagar Haveli. On 6th June, 1998, CPFL opened a Branch Office in the factory premises of JPFL at Silvassa and subsequently obtained Import Export Code Number from the Customs authorities. The Branch Office was also got registered with the Sales Tax Department of Dadra & Nagar Haveli under Section 12 of the Dadra and Nagar Haveli Sales Tax Regulations 1978 (hereinafter referred to as 'DNHST Regulations' or 'the Regulations') w.e.f. 17th June, 1998. CPFL and JPFL are sister concerns. During the period of dispute, one Shri B.R. Gupta was Director (Imports) of JPFL as well as Authorised Signatory of CPFL. He used to pursue the Purchase Orders placed on FUJI by JPFL for import of Jumbo Rolls of photographic films and papers. He used to advise the foreign supplier as to what quantities of Jumbo Rolls, covered by JPFL's Purchase Orders, should be separately consigned to JPFL and CPFL. As per his oral advice, FUJI used to issue separate Proforma Invoices to the two companies. Insofar as the imports made by CPFL were concerned, they used to open Letters of Credit in favour of FUJI and, on the basis thereof, FUJI used to send the goods and negotiate Bills of Lading, Insurance documents, Invoices, etc. through bankers. CPFL used to obtain these documents from the Bank by making payment for the goods on the basis of the shipping documents of FUJI. Thereafter, CPFL used to file Bills of Entry at Nhava Sheva (Mumbai) for customs clearance of the goods. After taking delivery of the goods, against payment of customs duty as assessed by the authorities, the goods were transported to Silvassa where they were sold to JPFL under Sale Invoices. CPFL imported Jumbo Rolls of various kinds of photographic films & paper from FUJI (Japan) in the above modus operandi during the period of dispute (18th Sept., 1998 to 30th June, 1999). The goods were cleared without payment of Special Additional Duty (SAD) by claiming the benefit of exemption Notification Nos. 56/98-Cus dated 1.8.98 and 22/99-Cus dated 28.2.99. The claims was in terms of Sl. No. 12 in the Table annexed to Notification No. 56/98 ibid and Sl. No. 5 in the Table annexed to Notification No. 22/99 ibid for the relevant periods. The entries at Sl. No. 12 under Notification No. 56/98 and Sl. No. 5 under Notification No. 22/99 were identically worded. The entry at Sl. No. 12 ibid reads as under: