2007 (1) TMI 302 - AT - Customs

Summary

Issues Involved:
1. Jurisdiction of the adjudicating authority.
2. Imposition of penalties u/s 114(i) and 114(iii) of the Customs Act, 1962.
3. Non-supply of relied upon documents.
4. Financial hardship claimed by the applicants.

Summary:

1. Jurisdiction of the Adjudicating Authority:
The applicants contended that the Commissioner who adjudicated the case was not competent as the show cause notice was initially answerable to the Commissioner of Customs (P) Bombay, and later changed to Commissioner Air Cargo without a notification u/s 4 of the Customs Act, 1962. The Tribunal, however, held that the Commissioner of Customs Air Cargo is duly notified and competent to adjudicate, citing the Supreme Court decision in Pahwa Chemicals Pvt. Ltd. v. Commissioner of Central Excise, which overrides the Tribunal's earlier decision in Consolidated Enterprises. The plea of jurisdiction was not upheld as no prejudice was caused to the applicants by the change of adjudicating authority.

2. Imposition of Penalties u/s 114(i) and 114(iii) of the Customs Act, 1962:
The applicants argued that penalties could not be imposed as the show cause notice did not ask why the goods should not be held liable to confiscation. The Tribunal found that the show cause notice and the Commissioner's order clearly stated that the applicants committed acts rendering the goods liable to confiscation. Therefore, the imposition of penalties was upheld.

3. Non-Supply of Relied Upon Documents:
The applicants claimed denial of natural justice due to non-supply of documents, specifically 167 invoices. The Tribunal noted that the Commissioner had held these invoices were supplied in 2000 and were not contested for five years. Hence, the plea of non-supply of documents was not accepted.

4. Financial Hardship:
The applicants claimed financial hardship, stating they were out of business since 2000 and had no income. However, they failed to produce documentary evidence like Income-tax Returns and Profit and Loss Account. The Tribunal directed M/s. Quality Apparels Export Pvt. Ltd. to pre-deposit Rs. 1 crore and the four directors to pre-deposit Rs. 20 lakhs each within 12 weeks, failing which the appeal would be dismissed.

Additional Considerations:
The Tribunal found sufficient evidence of mis-declaration and export of rags to claim unauthorized drawback. The plea of financial hardship was not substantiated with evidence. Shri N.P. George was granted waiver of pre-deposit as there was no material showing his conscious knowledge of mis-declaration.

Compliance:
Compliance to be reported on 4-4-2007.