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2024 (4) TMI 1100 - CESTAT NEW DELHISmuggling - Prohibited goods - confiscation of cigarettes containers concealed in HDPE granules - Penalty u/s 112 (a) &(b) and 114AA - seeking return of the goods or return of the market value of the goods - Validity of SCN issued by DRI - demand duty - HELD THAT:- The cigarettes were not mentioned in the Bill of Entry or Bill of Lading and therefore, were also not in the Import General Manifest (IGM) filed by the Shipping Line. The Shipping Line files the IGM based on the Bills of Lading and the goods which the containers are “said to contain” because the Shipping Line has no way of knowing what is actually in the containers. What was declared by the appellants was HDPE granules and the cigarettes were not declared. Therefore, the cigarettes were squarely covered by section 111(f) and are liable to confiscation under that clause. They have also not been indicated in the Bill of Entry and therefore, they are also liable to confiscation u/s 111(l). They do not correspond to the declaration made in the Bill of Entry and therefore, they are also liable to confiscation u/s 111(m). Therefore, the confiscation of the cigarettes under sections 111(f), (l) and (m) need to be upheld. Since the cigarettes are prohibited goods and are certainly harmful to the society being not as per the statutory requirement of health warnings in India, the Commissioner was correct in absolutely confiscating them and not giving an option of redemption. HDPE granules imported and declared were used to conceal the cigarettes smuggled in the containers. Therefore, they are liable to confiscation u/s 119. However, as they are not prohibited goods, the Commissioner gave an option of redemption u/s 125. We find this part of the order to be fair and balanced requiring no interference. The cigarettes were liable to confiscation and therefore all persons whose acts or omissions rendered them liable to confiscation are liable to penalty u/s 112. Ajay, Parshottam and Gagan are admittedly, and even according to the appeals filed before us, are the importers of the goods (both the cigarettes and the HDPE granules). Therefore, penalties on them u/s 112 need to be upheld. The quantum of penalty imposed is also proportionate to their offence. Section 112 provides for a penalty not exceeding the value of the prohibited goods. The value of the cigarettes was Rs. 1,22, 03,500/- and the penalty imposed on Ajay, Parshottam and Gagan was Rs. 15,00,000/- each which is only about 12% of the value of the prohibited goods. Considering the gravity of the offence of smuggling such large quantity of cigarettes which would cause great damage to the health of the people, we find that the quantum of penalty was very balanced and certainly not excessive. As far as the CHA, M/s. Guha Sarkar and Co. and its employee Shri Sunil Dixit are concerned, they filed the benami Bill of Entry at the behest of Ajay, Parshottam and Gagan in the name of R S Imports and Exports thereby facilitating the smuggling of the cigarettes. Therefore, they are squarely covered by section 112. A perusal of the appeal of these two appellants before us shows that they played an active part and it is not that the Bills of Entry were filed carelessly. Both Guha Sarkar and Co and Sunil Dixit have prayed for the goods to be released and return of the goods- essentially the same as the prayer of Ajay, Parshottam and Gagan. It is not their case that they had nothing to do with the imports and their failing was merely carelessly filing the Bill of Entry. The penalty of Rs. 5,00,000/- each imposed on Guha Sarkar and Co. and on Sunil Dixit in the impugned order u/s 112 is quite mild considering their role and the gravity of the offence. This does not call for any interference or reduction. Penalty u/s 114AA can be imposed if any person knowingly and willingly makes a wrong declaration. Ajay, Parshottam and Gagan as the admittedly de-facto importers and S Guha Sarkar & Co. and Sunil as the CHA and its employee have deliberately filed the Bill of Entry in the name of R S Import & Export when the actual importers were Ajay, Parshottam and Gagan. They have also not declared the true nature of the goods imported and smuggled in cigarettes. We have no hesitation in holding that all the five appellants are squarely covered by section 114AA. The maximum penalty imposable under this section is five times the value of the goods. The value of the smuggled cigarettes was Rs.1,22,03,500/- and the penalties imposed on Ajay, Parshottam and Gagan under this section is Rs. 20,00,000/- each and the penalty imposed on Guha Sarkar and Co. and Sunil Dixit is Rs. 5,00,000/-. We find these penalties to be balanced considering the gravity of the offence. These also call for no interference. Thus, we uphold the impugned order insofar as these five appellants are concerned and dismiss all five appeals.
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