TMI Blog2008 (12) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... as Desai who also acted as a broker and got a premium of Rs. 1.5 lakhs in cash for selling the said licences as his commission. The Show Cause Notice was accordingly issued to all concerned including Shri Champaklal Prabhudas Desai who is the appellant before us. The role of Shri Champaklal Prabhudas Desai is that he acted as a broker for the sale of licence which he knew was non-transferable and could not be sold and there by associating himself with the illegal sale of the advance licence abetted the sale of goods which were imported against the licence in violation of conditions of Notification 30/97 dated 1-4-97 and there by rendered himself liable for penal action under Section 112(a) of the Customs Act, 1962. 2. The learned advocate for the appellant submits that he is not licence broker and is not engaged in any import export business and has not directly dealt with Shri Ravi Mittal but has only helped his friend who was bed ridden to complete the transaction which Shri Mahesh Ganatra his friend has undertaken. For this act he got Rs. 25,000/- as his commission and not Rs. 1.5 Lakh as stated in the order. He has no knowledge that the licence could not be transferred until ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly admitted to his involvement and had also deposited an amount of Rs. 11 lakhs towards duty evaded. In a conspiracy case, liability is common and not restricted to the bit role played by each conspirator. Such partitioning of responsibility and guilty go against the legal provision for dealing with conspiracy cases. It is also of no consequence whether penalty has been imposed under sub-section (b) or (a) of Section 112 . Incidentally, it may be mentioned in this case also Shri Mahesh Ganatra, broker was also involved on whom also penalty on similar grounds was imposed and who is one of the noticees in the present case who has introduced to Shri Ravi Mittal by Shri Champaklal Prabhudas Desai. The other decision cited by the appellants is not relevant as it relates to imposition of penalty for violation of import policy where as in the present case penalty is being imposed for evasion of duty under Customs Law. The liability to penalty is therefore upheld. However looking into the facts of the case that the appellant has received a paltry sum of Rs. 25,000/- as his commission we reduce the penalty from Rs. 5 lakh to Rs. 50,000/- only. 5. The appeal is disposed of in above terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant was aware that the advance licence, unless they are transferred by the licensing authority, cannot be traded. It was in these circumstances, the Tribunal held that the licence broker had violated the provisions of the Customs Act. It was also observed that the appellant s involvement was clearly with the evasion of duty and not as a licence broker. It was in these circumstances that the penalty was upheld. 9. However, in the instant case, I find that the appellant is not a licence broker. The allegations against him are only to the extent of introduction of the broker with the prospective buyer of the licence. It is also noted it is not the revenue s case that the advance licences were not transferable. The revenue s case against the main party is that such advance licences were procured by him by adopting fraudulent means. No evidence has been placed on record as to whether the appellants were aware of such fraudulent status of the licence, neither is he expected to go into question at the time of arranging the sale of the same. As such, the fact that he got commission out of the licence sale is also not, by itself, relevant for the purposes of imposition of penalty u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to error on the part of the Department. The learned D.R. has not submitted any clarification in this regard. 15. I also find that the impugned Order-in-Original was passed by the Adjudicating Commissioner in respect of three others namely, S/Shri Shashi Bhusan, Ravi Mittal and Mahesh Ganatra in addition to the present Appellant. Neither side could clarify as to whether any Appeal has been filed by Shri Shashi Bhusan, Proprietor of M/s. Efficient Exports. However, from a copy of the Stay Order No. CI/2027-31/WZB/2002 dated 23-7-2002, waiver of pre-deposit of penalty was allowed in respect of S/Shri Ravi Mittal, Mahesh Ganatra and Champaklal P. Desai by a Bench comprising of Hon ble Judicial Member, Ms. Jyoti Balasundaram and Hon ble Technical Member, Shri J.H. Joglekar. The case file also contains a copy of the Order No. A-440-441/WZB/06 dated 17-5-06 passed by the Hon ble Vice President, Ms. Jyoti Balasundaram and Hon ble Technical Member, Shri K.K. Agarwal holding that Shri Mahesh Ganatra has expired on 20-3-06 and hence, the Appeal filed by him abates. In the course of hearing on 30-9-08, the Registry has made available a copy of the Order No. A-355-356/WZB/06 dated 4-4-06 pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned Licence, which was obtained fraudulently, had an Actual User Condition, the same could not have been transferred. The learned DR states that the impugned Advance Licence has been cancelled ab initio by the DGFT, but he is unable to show a copy of the Cancellation Order and to state the date when it was actually cancelled. On a query from the Bench, the learned DR states that the import took place on 20-11-97, whereas a request has been made by the DRI Authorities for cancellation of the Licence on 25-2-98. As such, it appears that on the date of import, the impugned Licence was valid. The learned DR states that in the statement dated 4-2-98, the Appellant, Shri Desai has categorically stated that the impugned Licence was non-transferrable and that sale of the same was illegal; that he arranged to sell the Licence by Shri Mahesh Ganatra to Shri Ravi Mittal; and that he received an amount of Rs. 1.50 lakh for arranging the sale of the Licence. The learned D.R. states that this statement is not retracted and hence, the same is admissible as evidence. He further states that the subsequent assertion that the Appellant acted only on behalf of one Mahendra Bhai and in considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a regular dealer of import licences; he was only helping his sick friend, Mahendra Bhai when he got involved in the sale of the licence; the Department has not enquired into the role of Mahendra Bhai who was named by Shri Ravi Mittal and significantly, the Appellant was not named by Shri Ravi Mittal in his statement; and there is also no evidence that the Appellant helped in obtaining the impugned Licence fraudulently as was the case with Shri Ganatra, the main licence broker. Hence, I am of the view that when Shri Ravi Mittal, the purchaser of the impugned Licence and the de facto importer has been totally exonerated by the Tribunal, the present Appellant who only acted as a sub-broker cannot be visited with a penalty. Hence, I agree with the finding of the Hon ble Judicial Member that the Appeal of the Appellant requires to be allowed but for the reasons stated above. (Pronounced in the open court on 16-10-2008) Sd/- (Chittaranjan Satapathy) Technical Member FINAL ORDER 22. In view of the majority order, the appeal is allowed by setting aside the penalty imposed upon the appellant. (Pronounced in Court on 12-12-2008) Sd/- K.K. Agarwal M ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
