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TMI Blog2011 (3) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... d a Director of M/s. Chardi Kalan and also the person who looked after the firm 'M/s. Kissan Mittar'. 1.2 All these appeals arise out of common order-in-original and involve demands of duty denying exemption under S. Nos. 76, 77 and 78 of Notification No. 11/97-Cus., dated 1-3-97 and imposition of penalties for mis-declaration and diversion of imported newsprint paper in violation of actual user condition. 1.3 As common issues are involved and the appeals are arising out of common order-in-original, these appeals are disposed of by this common order. 2. Heard both sides extensively. 3.1 Learned advocate, on behalf of the appellants submits that Gautam Traders is owned by Shri S.K. Gupta and he has imported paper falling under Chapter 4802. The goods imported in the name of M/s. Gautam Trades were allowed clearance extending the exemption under S.No. 78 of Notification No. 11/97. The condition for extending the benefit of the exemption notification is that the percentage of mechanical wood pulp should not be less than 70%. Subsequently in November, 1997, samples were drawn from the available stock and samples were sent to Indian Institute of Paper Technology ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaration and on the ground that imported newsprint paper stands diverted. Since mis-declaration and diversion are contested, no penalty should be sustained. 3.4 Alternatively, he also submits that Shri J.S. Dardi is proprietor of Educator and therefore, there shall be no separate penalty on Shri J.S. Dardi in addition to a penalty on Educator. 4.1 Learned SDR reiterating the findings and reasoning of the Commissioner, submits that it is Shri S.K. Gupta using the name of Gautam Traders, and other firms masterminded the entire imports. Though the goods were imported in the names of other firms, they were found and seized from the premises under the control of Shri S.K. Gupta only. He draws our attention to the reasoning adopted by the Commissioner to rely upon the CRCL in the case of Gautam Traders. He also draws our attention to the findings of the Commissioner as to why he disregarded the mismatch between the reel number and details in the bill of entiy and submits that he relied on the statement of Shri S.K. Gupta who confirmed the mis-declaration. 4.2 Learned SDR fairly concedes that there is no justification for separate penalty on M/s. Educator and Shri J.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner. However, he relied on the statement of Shri S.K. Gupta, to disregard the discrepancy in the samples reported. The dispute relates to contents of wood pulp in the newsprint. The opinion of the expert is to be preferred compared to a statement of person to the contrary. The samples have been drawn admittedly from wrong reels of paper which do not correspond to the Bills of Entries relating to import of paper on which demand has been made. This is a fatal mistake which cannot be condoned. Since the samples do not admittedly and undisputedly relate to the consignment covered by the Bills of Entry for which demand has been made, demand cannot be allowed to survive. For the same reasons the confiscation of the goods covered by the impugned bills of entry also cannot be sustained. 5.4 There is a demand of Rs. 1,76,539/- in respect of impugned import made by M/s. Suspense Kahania. The show cause notice stands issued to the appellants in 2000 along with reports which indicated the contents of mechanical wood pulp to be 65% according to which the paper could not be considered as newsprint. It has not been shown to us that they have asked for retest of samples. The claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to the officer who has recorded the statement. This confirmation of diversion is corroborated by the place of seizure of the imported goods which was different from the premises of the importers and also by the statements of various persons concerned. There is also admission about sale of the goods in the market and the collected cash being given to the importers or deposited in the accounts of the importers. Therefore, we do not find any valid reason to interfere with the finding of the Commissioner regarding diversions of imported goods for sale. We therefore, hold that there was diversion of part of the imported goods by the four importers, and Shri S.K. Gupta, partner of M/s. Gautam Traders and Shri J.S. Dardi have played crucial role in the said diversion. 6. We agree that no penalty should be separately imposed on Shri J.S. Dardi insofar as the same relate to imports in the name of M/s. Suspense Kahaniya which is proprietary concern of Shri J.S. Dardi. However, we find that he has played a crucial role in the diversion in his capacity as Director of M/s. Chardi Kalan and also in imports relating to M/s. Kissan Mittar. Therefore, these activities are not in his cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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