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2022 (9) TMI 227 - AT - CustomsNon-imposition of penalty under section 112 of CA - bogus firms used for sending advance remittances to counter-balance undervalued imports in the name of other firms - it is alleged that IEC holders and persons who helped in obtaining multiple IECs for use by others were not made parties to show cause notice despite being directly involved and being the beneficiaries - enhancement of value of goods - legality of Voluntary deposit - duty demand from appellants, valid or not - evidence on record to establish that K R Express, Shri Joginder Kumar and Shri Surinder Singh had prior knowledge that the impugned goods were undervalued or not - Confiscation - penalty - HELD THAT:- During the relevant period there was no concept of beneficial owner as there was only one importer in respect to the goods. Admittedly in this case, the bill of entry was filed with M/s Samay International as the importer. The bills of lading, IGM etc., were in the name of M/s Samay International and the duty was assessed in the name of M/s Samay International and it was paid in the name of M/s Samay International. However, subsequent statements of Shri Pradeep Kumar, Shri Surinder Kumar, Shri Joginder Kumar and the owner of M/s Samay International show that duty was paid in cash by Shri Pradeep Kumar to K R Express who deposited it through TR-6 challans in the name of M/s Samay International. Shri Anil Kumar the proprietor of M/s Samay International claimed that he had no knowledge of the imports. It is not found that either Shri Surinder Kumar or Shri Joginder Kumar or K R Express have held themselves to being the ‘importers’. Shri Anil Kumar, the IEC holder, has consistently maintained that he had nothing to do with the imports. Thus, in this case, according to all the documents such as Bill of Entry, Bill of Lading, invoice, IGM, the importer is M/s Samay International. According to statement of Shri Pradeep Kumar, he was the importer. Further, according to another statement of Shri Pradeep Kumar, Shri Joginder Kumar and Shri Surinder Kumar are also the importers being equal beneficiaries in the imports - Commissioner has not followed the required process and hence the statements are not relevant, let alone admissible in this case. This becomes even more important in this case because of the contradictions between the statements of Shri Pradeep Kumar on the one hand and Shri Joginder Kumar and Shri Surinder Kumar on the other. Since the statements are not relevant, the importer is the one which all the documents state to be the importer viz, M/s Samay International. Demand of differential duty - HELD THAT:- It can be recovered if duty is not levied, short levied or erroneously refunded, from the person chargeable to duty. In this case the goods were in the name of M/s Samay International which is the importer according to all the documents. Therefore, differential duty, if any, can be demanded from it only. The duty was originally also paid in the name of M/s Samay International - It is evident from the order that the goods have been confiscated under Section 111 (d) and section 111(m) by the Commissioner but since the goods were not available fine in view of confiscation was not imposed. As may be seen duties of customs are charged on the goods imported into or exported to India and this charge will apply to all goods belonging to Government as they apply to all goods not belonging to Government. This applies not only where goods were imported by the Government but also to cases where title of the goods gets transferred to the Government for any reason - It is a matter of practice when the goods which were confiscated are subsequently auctioned or sold by the Government the sale proceeds of such goods are taken as cum-duty price and the amount of duty is calculated backwards and to that extent it is credited to the consolidated fund of India as customs duties and the rest as sale proceeds of the goods. The differential duty has been demanded in this case from the customs broker, KR Express and Shri Pradeep Kumar along with interest - As per the documents, M/s Samay International is the importer. The statements made before the officer by various persons have not been subjected to Section 138 B and hence are not relevant. Redemption of the value itself - HELD THAT:- It is true that if there is a reason to doubt the transaction values, they can be rejected and then valuation has to be done sequentially as per the Valuation Rules. In this case rule 9 of the Valuation Rules has been adopted ignoring the previous rules and without discussing the as to why the previous rules are not applicable. Further, the statements of Shri Pradeep Kumar, based on which the value was re- determined, is not relevant as the procedure under Section 138 B was not followed. The values indicated in the show cause notice were lowest values of the similar goods imported at that time. It is also found that NIDB data was equally available to the assessing officers at that time. The goods, having been assessed and cleared during the period by the assessing officer, there are no sufficient reason to enhance the value as per impugned order. At any rate, since it is found that the importer, as per the documents was M/s Samay International and the statements before officer to the contrary were not relevant in view of section 138 B, the demand of duty under section 28, if any, has to be made on the importer. The importer is not a noticee in this case. The enhancement of value and determination of duty is not sustainable. Consequently the penalties imposed upon the appellants are also not sustainable - As per all the relevant documents, M/s Samay International is the importer and the statements contradicting this are not relevant in view of section 138B - Differential duty can only be demanded from the importer and not from others - the term “beneficial owner” has been defined in the Customs Act and the term “importer” was enlarged to include “beneficial owner” only from 2017 and not during the relevant period. If the goods are confiscated and are either not allowed to be redeemed or are not redeemed despite an offer, the goods vest in the Central Government and the duty liability similarly vests in the Central Government. However, in this case, even the confiscation itself is not sustainable as the allegation of under-valuation itself is not sustainable - penalties imposed on all are not sustainable and need to be set aside - Commissioner is correct in refraining from imposition of penalties under section 112 of the Customs Act on Shri Joginder Kumar and Shri Surinder Kumar. Appeal disposed off.
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