TMI Blog1999 (12) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... iamonds vide Invoice dated 5-3-1990 of M/s Diamond Ripple, New York, USA. The Bill of Entry was also accompanied by customs declaration signed by the Proprietor of M/s Pravinkumar Kothari Co. and Import Licence dated 13-7-1989. The parcel was opened for customs examination on 28-6-1990 when it was found that there were two lots of rough diamonds along with one invoice dated 6-3-1990 of M/s Diamond Ripple for US $ 1,57,975.04 equal to Rs. 29,18,791/-. The expert panel's opinion was obtained and they valued the goods at US $ 84741.26 equal to Rs. 1,46,371/-. The case was referred to SIIB for investigation since it was noticed that M/s Lemuir Express, couriers of the parcel had changed the value in House Air Way Bill unauthorisedly without the knowledge of the customs authorities and further due to very high difference in the value of the consignments. During investigations it was found that M/s Praveen Kumar Kothari Co. was a front company raised by Shri P.K. Shantilal Kothari and Shri M.C. Vakharia, and the de facto importer was Shri Vakharia. The Department was of the view that the importer attempted to import the consignment by over valuation of the same, thereby attempting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the importer to over value the consignment and helping the importer to remit excess foreign exchange out of India. He imposed a penalty of Rs. l lakh on the courier company; M/s Lemuir Express holding them liable to penalty for employing a shady character like Shri Thadani to the responsible post of Manager. 4. We have heard Shri N.C. Sogani, learned Consultant appearing for M/s Lemuir Express, Shri A.N. Haksar, learned Sr. Advocate for Shri H.M. Thadani and Shri R.S. Sangia, learned DR and perused the records. 5. From the evidence on record, it is clear that Shri M.C. Vakharia was indulging in frauds connected with invoice manipulation. He was the brain and finance behind the import deals in the name of Shri P.K. Kothari and Shri C.M. Seth and the adjudicating authority has, therefore, rightly held him responsible for omissions and commissions in connection with over invoicing of the imported rough diamonds covered in both consignments. M/s P.K. Kothari Co. and M/s Chandrakant Mangaldas Co. were clients of M/s Lemuir Express in which Shri H.M. Thadani was the Chief Executive, Diamond Courier Division. It is contended by Shri Thadani that since both the above mentioned firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments and attempt to remit excess amount of foreign exchange, we hold that penalty on the courier agency is not warranted in law and accordingly set aside the same. 7. The appeals are disposed of in the above terms. Sd/- (Jyoti Balasundaram) Member (J) 8. [Order per : C.N.B. Nair, Member (T)]. - I fully agree that the appeals of M/s. Lemuir Express merit acceptance and the penalties against them should be set aside. Further I am of the opinion that the appeals of Mr. Hiro Mulchand Thadani also merit acceptance. 9. The context of imposition of penalties is that M/s. Lemuir Express is a courier company and Mr. Hero Mulchand Thadani is its Chief Executive. Penalties have been imposed on both of them under Section 112(a) of the Customs Act, 1962 which relates to penalty for improper importation of goods and the Section reads as under :- (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act . 10. The cases relate to over-invoicing of imported diamond consignments. The evidence to support the charge of over-invoicing is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. There is nothing in the facts and evidence also which justifies penalty on Shri Thadani, separately from M/s. Lemuir Express. There is no dispute that M/s. Lemuir Express was receiving diamond consignments from New York. On the original Airway Bill, they entered the price advised by the sender. The amended value was also indicated by Mr. Thadani on the advice regarding error in indicating the value in the original Airway Bill by the importer/ importer's representative. Shri Thadani had also taken the normal care and precaution while dealing with the request for amendment, in as much as he insisted that the mistake in value must be corrected by supplier from abroad. Such advise also was received by M/s. Lemuir Express vide letter dated June 4, 1990 of Diamond Ripple New York, the sender of the goods. In this letter, it was stated that as under about the value :- that through oversight the declared value in the above HAWB Nos. was incorrect since they resembled to some other parcels. The declared value correctly has to be amended now as under :- 1. HAWB NO. 102662/5-3-1990 declared value now is US $ 58795.17 M/s. Praveenkumar Kothari Co. 2. HAWB No. 102663/5-3-1990 decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by Ld. Member (J) or penalty imposed on Shri Thadani requires to be set aside as proposed by Ld. Member (T)? . 14. I have heard Shri Arvind Kumar and Ms. Sujata Kurdukar, Ld. Advocates for Shree Hiro Mulchand Thadani and Shri R.S. Sangia, Ld. JDR for the Department. Ld. Counsel pleaded for acceptance of the view held by Ld. Member (T) while Ld. DR urged acceptance of the view taken by Ld. Member (J). 15. Brief facts relating to the said matter are as follows : By Order-in-Original passed by the Commissioner of Customs, Bombay various amounts of penalties were imposed under Section 112(a) of the Customs Act, 1962 on three noticees viz., (i) Shri Mahendra C. Vakharia (actual importer of the goods) - Rs. 5 lakhs (ii) Shri H.M. Thadani (Manager of Courier who brought the goods) - Rs. 1.5 lakhs and (iii) Lemuir Express (the Courier firm) - Rs. 1 lakh. All the above parties came up in Appeal before the Tribunal against the said penalties. The appeals were heard together by a Two-Member Bench on 23-2-1999. A difference of opinion arose between the Judicial and Technical Members. While the Hon'ble Judicial Member confirmed the penalty on Shri Thadani she reduced the quantum from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this the Commissioner had observed this would only compound his lapses as it very clearly indicates that he was withholding information from the Customs Authorities and forcing the clearing agent to act contrary to the provisions of the Customs House Agents Licencing Regulations. He was thereby acting to destroy the evidence against him and his client. For all these acts of omissions commissions on the part of Shri Thadani he is liable to be penalised in his personal capacity . 17. Upholding the findings of the Commissioner, Ld. Member (J) had in para 3 of the Misc. Order given the following findings against Shri Thadani : During the personal hearing before the adjudicating authority, Shri Thadani has admitted that he knew Shri Vakharia personally and used to deal with him frequently during the course of his business. This has not been disputed by Shri Thadani in the appeal filed before us. The plea of Shri Thadani that he acted in amending the value of the consignments due to ignorance is not acceptable for the reason that he is an old hand in the business of forwarding imports and exports of diamonds and further he has manipulated the value in the HAWB for the same perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 46(4) of the Customs Act, it was for the importer to present the Bill of Entry with a declaration as to the truth of the contents of the Bill of Entry and in support of the declaration, produce the invoices relating to the imported goods. The HAWB was not a Bill of Entry nor can it be equated with a Bill of Entry as a duty paying document. Therefore, even if any amendment had been made in the HAWB without prior permission of the Customs Authorities, it would not amount to an act of commission/omission rendering the goods liable to confiscation. Further, there was also no basis for coming to the conclusion that since Shri Thadani had known Shri M.C. Vakharia personally and dealt with him frequently during the course of his business, he (Shri Thadani) had any personal interest in helping the importer to mis-declare the value of the imported goods. This apart, the mistake to which Shri Thadani had admitted was not in relation to the mis-declaration of the value, but to the amendment he made to HAWB without prior permission of the Customs Authorities. The reason why he had requested the CHA not to disclose the amendments made by him in the HAWB was not because he wanted to help the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CHA not to show the amended HAWB to the Customs Authorities was due to apprehension of harassment at the hands of the authorities for making the amendments in the HAWB without prior approval of the Customs Authorities. I do not find any material on record to take the view that the appellant Shri Thadani had acted in a malafide manner by deliberately making a mis-statement about the value of the imported goods with a view to evade payment of customs duty. There is no evidence on record of any collusion between him and the importer for defrauding the Revenue or of a conspiracy to achieve such an objective. I am unable to read into Shri Thadani s instructions to CHA any malafide intention. In my view, the explanation given on behalf of the appellant that he gave the said instruction to the CHA more out of fear of harassment for not obtaining prior permission is quite plausible. 23. In the result, I am in agreement with the view taken by the Member (T) that the Appeal of Shri Hiro Mulchand Thadani merits acceptance and penalties imposed on him requires to be set aside. 24. The Difference of Opinion matter referred to me is disposed of in the above terms. Sd/- (A.C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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