TMI Blog2010 (9) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... rading of computer parts, computer peripherals etc. and the co-applicant Shri Suresh Sanghvi is the Director of the Applicant Company. 2.1 The applicant filed B/E No. 37908 dated 5-9-03 for clearance of 418 computer cabinets with 60 power cord, 30 front panels etc. totally valued at US $ 4598/- equivalent to Rs. 2,19,895/- . On the basis of information, a team of Customs officers took up 100% examination of the consignment covered by the above B/E. This examination was carried out on 11-9-03 and it was found that, in addition to the declared goods, 398 mobile phones having market value of Rs. 23,88,000/- and 100 computer hard discs having market value of Rs. 12,00,000/- were concealed inside 233 computer cabinets (the declared goods). Investigations were carried out in this case and searches were carried out at various premises including the business premises of the applicant. A statement of the co-applicant was recorded u/s 108 of the Customs Act, 1962 wherein he, inter alia, stated to have cleared such consignments earlier also; that in all he had clandestinely cleared 700 mobile phones in two installments (in May 2003 and July 2003) by adopting similar method. However, later o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case, Customs duty involved on 700 smuggled mobile phones (which were not available for confiscation owing to its clandestine clearance in two installments, i.e. one in May, 2003 and another in July, 2003) is Rs. 4,06,224/-. The Applicant by not paying the Customs duty at the time of clearance, did derive financial accommodation in this case. Therefore, interest will have to be paid. Hence, we order the applicant to pay simple interest @ 10% p.a. from the date it was due till the duty is paid. The revenue shall calculate the interest due and adjust the same as mentioned in Para 6 under heading Customs duty . In case no balance is left the amount due should be intimated by the Revenue to the Applicant within 15 days of receipt of this order, who shall deposit the same within the next 15 days and report compliance to the Commission and the Revenue. For its good conduct in the proceedings we grant immunity from interest in excess of 10% p.a. Fine Penalty : The Bench observes that this is a clear case of smuggling of mobile phones/computer hard disc drives in the guise of import of computer cabinets, power cords and front panels etc. Same modus operandi has been adopted on three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst hearing was held on 1-4-2010. The ld. Advocate for the applicant appeared and strongly contested the redemption fine imposed on 700 mobile phones which were not available for confiscation under the Admission-cum-final order dated 4-5-06. He also prayed for immunity from fine, penalty and prosecution. Revenue was not represented by anybody. The Bench observed that response of the Revenue should also be heard in the matter. Record of proceedings was issued on 8-4-10 and forwarded to all concerned. 7. Second hearing was held on 7-5-10. The ld. Advocate appeared for the Applicant pointed out that the seized goods have been sold by the Revenue. He argued that there is an excess amount of Rs. 4,46,617/- after meeting the duty liability, godown charges and auction expenses considering the higher sale realization of Rs. 10,39,320/- as shown under para 5.1 of the Admission-cum-final order dated 4-5-06. The ld. Advocate argued that when the goods were sold by the Customs authorities, duty is factored in the price or in other words it becomes cum duty price. On a query by the Bench as to whether the applicant had deposited the past duty liability, the ld. Advocate replied that as there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asked to work out amount of godown charges and other expenses in respect of the goods which were auctioned. The Bench also demanded relevant details in support of the submission that the applicant was a habitual offender . The Bench further queried as to when the prosecution was launched in the present case and if so what was the present status. The Revenue s representative could not give satisfactory reply to any of the queries raised by the Bench. The Bench took strong objection to the callous attitude of the representative of the Revenue and directed concerned Commissioner of Customs to furnish all the relevant details within a week s time. The Bench also directed the ld. Advocate to work out the interest liability report. 9. In response to the Record of Proceedings dated 19-5-2010, the Commissioner of Customs (Import), Mumbai submitted his report vide his letter F. No. SG/Misc-151/DC/2003 SIIB(I) dated 31-5-2010. Submitting parawise response, Revenue strongly pleaded not to accede to the request of the applicant for grant of immunity from prosecution. Annexure C to the letter also showed Rs. 2,44,511/- to be recovered from the applicant. However, Revenue vide their letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e strongly pleaded that no immunity be granted to the applicant from fine, penalty and prosecution. 12. After considering the submissions made by both the sides, the Bench directed the Revenue to submit a revised statement for interest calculating the interest upto 4-5-06, the date of the earlier order. 13. As per the directions of the Bench, Revenue submitted written submission vide their letter F. No. SG/Misc-151/Dc/2003SIIB (I), dated 21-7-2010 along with fresh calculation chart showing interest liability only upto 4-5-06. The Revenue submitted that after adjusting the warehouse charges valuation charges/other expenses and simple interest @ 10% p.a. on two consignments of 350 mobile phones each against the balance sale proceeds of Rs. 4,46,617/-, an amount of Rs. 1,56,788/- is still recoverable from the applicant. 14. The applicant submitted their response to Revenue s submission vide their ld. Advocate letter Ref. No. SK/50/06/270/10, dated 23-7-10. The applicant admitted the balance payable amount of Rs. 1,56,788/- as demanded by the Revenue in their report and prayed for adjusting the same from Rs. 9 lacs already paid towards redemption fine and penalty and lying with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be recovered from the applicant is Rs. 1,56,788/- (Rs. 6,03,405/- minus Rs. 4,46,617/-). 16.2 The Revenue have strongly recommended for not granting immunity from prosecution to the applicant/co-applicant on the grounds that they are habitual offenders and had been implicated earlier in such cases. The applicant strongly protested the charge of being habitual offenders and submitted that Revenue had not produced any evidence/proof in this regard in their report, it is observed that apart from the offence cases covered in the subject SCN, Revenue has not pointed out a single case booked against the applicant either in the past or after issue of the present SCN dated 20-1-2004. Therefore, there appears considerable force in applicants contention in this regard and it has been kept in view while passing the order. 16.3 Regarding fine, it has been pleaded by the ld. Advocate for the applicant that as the 700 Mobile Phones were not available for confiscation as the same had been cleared in past, no redemption, fine can be imposed on the said goods, However, it is observed that for the goods which had been seized and disposed off by way of auction, the sale proceeds are available wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Bench observes that the applicant has attempted to smuggle the mobile phones/computer hard disk drives of substantive quantities with mala fide intention to evade the custom duty thereon by concealing them in the declared import consignments of computer cabinets, power cords and front panels etc., However, the applicant could not succeed because of timely action by the customs officials. The assessable values and the duties involved on the smuggled mobile phones/computer hard disk drives are shown below in the chart : 398 nos. Mobile Phones 100 nos. Hard disc drives. 700 nos. Mobile Phones Total Assessable Value (Rs.) 16,03,940.00 6,34,800.00 28,21,000.00 50,59,740.00 Market Value (Rs.) 23,88,000.00 12,00,000.00 31,50,000.00 67,38,000.00 Customs duty involved 2,30,967.36 3,61,736.16 4,06,224.00 9,98,927.42 The Bench is of the opinion that this is a fit case for not imposing fine in respect of 700 mobile phones cleared in past and not available for confiscation. However, fine is imposable on the goods which were seized ..... X X X X Extracts X X X X X X X X Extracts X X X X
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