TMI Blog2008 (10) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Naresh Juneja in Cus. Appeal Case No. CDM-126/2005 claimed seized goods valued at Rs. 27,07,516/-, for which an option to redeem the same was given on payment of Redemption Fine amounting to Rs. 7.5 lakhs only (Rupees seven lakhs fifty thousand only) along with appropriate duty. (3) M/s. J.C.I. Chemicals India (P) Ltd. in Customs Appeal Case No. CDM-125/2005 Ltd. and its Director Shri T.P. Ghosh in Customs Appeal Case No. CDM-127/2005 claimed seized goods valued at Rs. 8,14,800/- for which an option to redeem the same was given on payment of Redemption Fine amounting to Rs. 2.5 lakhs (Rupees two lakhs fifty thousand only) along with appropriate duty. (4) Shri Naresh Juneja in Cus. Appeal Case No. CDM-126/2005 Director of M/s. Juneja Chemical Industries (P) Ltd. and Shri T.P. Ghosh, Director of M/s. Juneja Chemicals India (P) Ltd. in Cus. Appeal Case No. CDM-127/2005 were held to be guilty of illicit import and made liable to Personal Penalty under Section 112(a) and (b) of the Customs Act, 1962. (5) Shri Naresh Juneja in Cus. Appeal Case No. CDM-125/2005 was found to be kingpin and the main perpetrator of the syndicate involved in defrauding the exchequer, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in Falta Special Economic Zone having their Head Office in Gitanjali Building, 8B, Middleton Street, 9th Floor, Suite 9F, Kolkata, and such chemicals were dumped in the godown premises of first Appellant M/s. Juneja Chemical Industries P. Ltd. at 5, Matheshwaouala Road, Kolkata - 46. Search to different premises located at different places was done on 23-3-04, 24-3-04 25-3-04 by the Investigating Officers on the basis of Search Authorisation and various persons were examined under summon on different dates to ascertain character of the transaction and also to examine duty liability under Customs Act, 1962 (hereinafter referred to as the Act ) as well as to find whether there was any violation of law. 3.2 The search team found 2296 drums and 308 bags of leather chemicals in the searched premises and believing that to be of foreign origin and having been illegally removed from Falta Special Economic Zone, they viewed that such goods were liable to be confiscated. Accordingly, seizure of such goods was made. However, finding difficult to remove such goods for custody, an order was passed on 25-3-04 under Section 110 of the Act, giving custody of such goods to the 3rd Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the result as (1) Light brown colorless liquid containing amide type of organic product in aqueous medium and (2) White thick liquid containing polyoxythelene type of compound in aqueous medium collectively valued at Rs. 2,52,000/- ; (ii) 3 drums of 150 kg. each of SOFT 2395/60/FE (Sulphonated Fish Oil) with markings Batch-186 dt. 2-9-03 Excel Technoligie, to Nirvik Exports, Falta SEZ, Made In Italy, collectively valued at Rs. 27,000/- were not covered by any legal duty payment documents, (iii) 2 drums of 45 kg each of COVER N-10 (Casein Binder) with the foreign markings value at Rs. 11,700/- were not covered by licit duty payment documents as claimed by Mr. Juneja. (iv) 3 drums of 30 kg each of Binder IK 611, valued at Rs.9,450/- were not covered by licit duty payment documents as claimed by Mr. Juneja. (v) 1 drum of Primax IP 52 N (Resin binder) weighing 50 kg valued at Rs. 5,750/- was not covered by licit duty payment documents as claimed by Mr. Juneja. (vi) 24 drums of SF-288 of foreign origin containing Sulphonated Fish Oil, valued at Rs. 1,72,800/- were not covered by the duty payment documents as submitted by Mr. Juneja because of weight differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , after release of Indian goods on 2-6-04) is claimed by Mr. Juneja to have been imported by M/s. Devi Chemicals and purchased by Juneja Chemical Indus. Pvt. Ltd. vide Devi Chemical s Bill No. D/42/03-04 dt. 27-8-03. But Mr. S.K. Sachdeva of M/s. Devi Chemical Enterprise Pvt. Ltd. failed to provide legible copy of Bill of entry under which consignment covering above drum was cleared on payment of duty by M/s. Devi Chemicals. Thus subject one drum valued Rs. 6500/- is not covered by any licit duty payment documents. (B) Basis for 88 (35 + 25 + 28) drums appearing in page 23 of O-I-O questioned to 1st Appellant were : (i) 35 drums containing sulphonated fish oil SF - 288 of foreign origin as admitted by Mr. Naresh Juneja himself, valued Rs. 2,52,000/- were not covered by duty payment documents submitted by Mr. Naresh Juneja. (ii) 25 drums valued at Rs. 1,80,000/- containing Sulphonated Fish Oil SF - 288 were also of foreign origin for which no duty payment documents have been submitted. (iii) 28 drums valued Rs. 2,01,600/- were not covered by duty payment documents submitted by Mr. Naresh Juneja. (C) Basis for 182 (38 + 89 + 55) drums appearing in page 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt documents. (viii) 4 drums valued at Rs. 17,000/- were not covered by licit duty payment documents. (ix) 3 drums valued at Rs. 18,750/- were not covered by licit duty payment documents. (x) 3 drums valued at Rs. 15,000/- were not covered by licit duty payment documents. (xi) 1 drum valued at Rs. 3900/- was not covered by licit duty payment documents. Basis of 21 drums questioned was as under : (i) 3 drums bearing markings Fenasia Overseas Pvt. Ltd. valued at Rs. 22,500/- were not covered by any licit duty payment documents. (ii) 4 drums bearing markings Fenasia Overseas Pvt. Ltd. valued at Rs. 25,000/- were not covered by any licit duty payment documents. (iii) 10 drums valued at Rs. 65,000/- are clearly not covered by submitted bill and any other duty payment documents showing import by Fenasia Overseas Pvt. Ltd. whose markings were there on those drums. (iv) 3 drums valued at Rs. 12,750/- were not covered by any licit duty payment documents. (v) 1 drum valued at Rs. 6250/- was not covered by any licit duty payment documents. Basis of 6 drums questioned as under : Mr. T.P. Ghosh, the 4th Appellant failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gning documents like debit vouchers relating to M/s. Juneja Chemical Industries Pvt. Ltd., in which he had no concern either as a owner or as a partner. In his statement dated 17-6-04 recorded under Section 108 of the Act, he stated that since he was sitting in the same office, on request of Shri Naresh Juneja, the 3rd Appellant, he had signed those documents. (B) Mr. Shyamal Ghosh of M/s. S.G. International revealed that he had never seen the goods which were purportedly sold to M/s. Juneja Chemical Industries Pvt. Ltd. under various invoices. They neither had any godown nor maintained any stock register. He could not inform as to from whom the chemicals were purchased and where the goods were delivered. Shri Shyamal Ghosh also had admitted in his statement that he was the directors of M/s. T.J. Commercial and M/s. S.F. Overseas Pvt. Ltd. (C) Mr. R.N. Mitra, proprietor of M/s. R.M. International had confirmed that he had no godown. He had not maintained any stock register. He merely supplied the goods asking different parties to supply the goods directly to the buyer. He had never seen the goods and only issued the challans and invoices. He was not even aware about the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. Shri Falguni Mukherjee, also a Director of M/s. T. J. Commercial failed to state whether any payment was received from M/s. T. J. Commercial to whom the goods were sold by M/s. S. S. Enterprise. Whether any payment was made by M/s. Juneja Chemical Industries Pvt. Ltd. to whom the goods were resold by M/s. T. J. Commercial remained in mystry. Shri Falguni Mukherjee failed to show whether goods under invoice No. 1007 actually reached the Matheswartala Road godown of M/s. Juneja Chemical Industries Pvt. Ltd. as the challans submitted by him show that only goods under invoice No. 1008 reached Matheswartala godown. (I) M/s. S. S. Enterprise was found to be non-existent. M/s. S. S. Enterprises existed only for the purpose of generating documents. Shri Naresh Juneja was the man behind the functioning of all the companies involved. 7.1 Ld. Counsels, Dr. Samir Chakraborty and Shri Hasmukh Kundalia, appearing for the Appellants vehemently objected the assessment and argued the matter in length as well as filed a written submission. Occurrence of events on different dates was explained in following date chart : Relevant list of Dates March 25, 2004 : Officers of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oad, Kolkata 700046 (where the seized goods were detained) by the representatives of the respondents and the appellants. Joint inspection reports submitted to the Commissioner at pages 210 to 215 and 216 to 220. The joint inspection was directed by the Commissioner on the ground that inventory of the seized goods was erroneous inasmuch as the appellant had contended that number of drums, gross weight and net weight of the drums and origin of goods were not correctly recorded in the inventory and due to the said errors in the inventory, allegations were made in the show-cause notice that goods did not tally with the documents submitted by the appellant. February 7, 2005 : Personal hearing granted by the Commissioner at which appellant s representative appeared and made submissions and filed written notes of submission . July 28, 2005 : Appellants received order dated July 19, 2005 and impugned order passed by the Commissioner. 7.2 Dr. Samir Chakraborty, ld. Counsel for the Appellant argued as under : (A) In passing the order of adjudication, the Commissioner misconceived relevant provisions of the Customs Act, 1962 and misconstructed the well settled principles of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Cal.); (iii) Rang Birangi Sarees (P) Ltd. v. Commr. of Customs - 2007 (219) E.L.T. 574 (T-Kol.); (iv) Naveed Ahmed Khan v. Commr. of Customs - 2005 (182) E.L.T. 494 (T). (D) Prior to the issuance of the impugned show cause notice 1149 drums out of the said 2296 drums were released on June 2, 2004, and subsequently thereafter, 698 drums and 58 bags were released by the Commissioner vide her Order F. No. S-43-17/2004 dated November 18, 2004. Significantly, the said 698 drums included 258 drums which were procured through DTA sale from M/s. Nirvik Export Pvt. Ltd., Falta SEZ and for which the Commissioner in her findings given the Order dated November 18, 2004 clearly stated that the said goods were supported by DTA procurement documents. In the premises, specific information on the basis of which, the search was conducted in the said godown premises of the appellant, was without any basis or foundation. The very premises with which the instant proceedings were initiated, therefore, no longer survived. From the Inventory of the seized/detained goods, it would be seen that the alleged DTA component thereof is contained under Item No. 1(a) only. From the order dated Nove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the goods are smuggled was on the Department and not on the Appellant. The Appellant had submitted documents as regards local purchase of the said goods. However, the Commissioner chose to ignore this relevant fact and materials. (H) In respect of the goods belonging to JCICI, the purported findings in the impugned order are in utter disregard of the materials on record and are contrary to law. (I) The Commissioner perfunctorily, by merely referring to the decisions of the Hon ble Supreme Court in the case of Kanungo Co. v. Collector of Customs - 1983 (13) E.L.T. 1486 (S.C.), D. Bhoormull s case - 1983 (13) E.L.T. 1546 (S.C.) and ABC Roadways v. Commissioner of Customs - 2002 (142) E.L.T. 186 (T), none of which have any application whatsoever to the present case, rejected in a sentence containing incorrect reasoning, the large number of decisions propositionwise submitted by the Appellant s representative during the course of personal hearing. Realising that these decisions if dealt with would make it impossible for the Commissioner to purport to sustain a wrongful and illegal show cause notice, the Commissioner has adopted this perverse and arbitrary method which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... patently erroneous findings as contained in the said order. (M) In respect of imported goods, retail dealers cannot be expected to produce proof of their legal import or payment of duty. (N) The Commissioner has also wrongfully and legally failed and neglected to deal with the Appellant s contentions as regards the arbitrary and deliberate overvaluation of the goods in the show-cause notice. The Appellant disputed the valuation of the goods and requested for evidence on the basis of which the alleged valuation had been done. Though the Commissioner has recorded the Appellant s submission in this respect, she failed to deal with Appellant s contention on valuation of the said goods and give her findings in this respect in gross violation of principle of natural justice. The Commissioner has failed to appreciate that valuation of the imported goods had to be done under Section 14 of the Customs, 1962 read with Customs Valuation Rules, 1988. It has been held by Apex Court as well as various judicial forums that the valuation of imported goods is to be done in accordance with law and not by other method not known in law. However, the said order would show that this settled lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 1983 (12) E.L.T. 322 (Mad.), imposition of penalty under both clauses of Section 112(a) (b) simultaneously on a person, which are different and which require different condition precedent being satisfied, is erroneous and unsustainable. The imposition of penalties upon Mr. Naresh Juneja and Mr. T.P. Ghosh, therefore, on this ground also is untenable and unsustainable. 8. Both the JDRs appearing for Revenue supported order of adjudication and stressed that finding of the ld. Adjudicating Authority was proper on the basis of materials on record and that does not call for interference. They prayed for confirming the assessment stating that elaborate exercise was made in the order of adjudication to exhibit the case of Revenue with full proof. Enquiry made has well established contravention of law made by the Appellants. Their mischief having been brought to record, they are to be penalized and order of adjudication need not be interfered. 9.1 Heard both sides and perused the case records. Dr. Chakraborty, ld. Advocate for all Appellants had principal grievance that they were dealt to the detriment of justice. He brought to our notice the manner how the Appellants were dealt. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . But clear findings and conclusion should have been depicted in order in relation to each and every drum questioned which was subject matter of show-cause notice. Similarly, the bags in question which appeared in page 11 12 of order of adjudication needed rigorous scrutiny for each quantity with the material evidence on record. So, also valuation of each questioned goods should have been dealt. Similarly, appellant s grievance about loss of quality and quantity of goods in the process of litigation remained unanswered. 9.4 Basis for levy of penalty and redemption fine was challenged by the ld. Counsel on the ground that the same was not disclosed to them. It is legal necessity that a person proposed to be dealt under law should not be dealt behind his back or left in dark. But should get reasonable opportunity to know the basis how he is proposed to be dealt so as to enable him to lead defence/evidence. Ld. Counsel s pleading that the adjudication has gone beyond show-cause notice also calls for scrutiny for various grievances raised by Appellants in their submissions in the course of hearing before us. 10.1 Grievance of the Appellant that Revenue has failed to discharge bur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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