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TMI Blog2011 (6) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.4 Appeal No. C/342/2006 is by Shri Ratinder Pal Singh Bhatia @ Roampy Bhatia against the penalty of Rs. 10 lakhs (Rs.5 lakhs under Section 114 and Rs.5 lakhs under Section 112 of the Customs Act). 1.5 All these four appeals arise out of common order of the Commissioner No.16/2006 dated 27.2.2006 and therefore, they are being disposed of by this common order. 2. Heard both sides extensively on 11.5.2011. On behalf of the appellants and department written submissions dated 16.5.2011 stand filed. Further, on behalf of the appellants 16.5.2011 rejoinder dated 17.5.2011 to written filed by department submissions stands filed. 3. The relevant facts, in brief, are as follow:- a) M/s Classic ITM filed two shipping bills dated 7.7.98 at ICD Tuglakabad for export of CD ROMs 23,000 in number declaring value of US $18 per piece and total FOB value as Rs. 1,76,90,840/-. The foreign buyer was shown as M/s. Wise General Trading Sharjah (hereinafter referred to as WGT) but the consignments were consigned to M/s. Land Mark Exim, Hong Kong. Subsequent to export, on application to DGFT authorities, a DEPB scrip dated 27.11.98 was issued for a sum of Rs. 24, 15,000/-. The DEPB scrips were tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 114 of the Customs Act. iii) I impose a penalty of Rs.10 Lakhs on Shri Alimudin Rafi Ahmad under Section 114 of the Customs Act. iv) I impose a penalty of Rs.5 lakhs on Shri Abdul Salam under Section 114 of the Customs Act. v) I impose a penalty of Rs. 5 lakh on Shri Ratinder Pal Singh Bhatia under Section 114 of the Customs Act. vi) I impose a penalty of Rs.5 lakh on Shri Pankaj Soni under Section 114 of the Customs Act. vii) I confirm the demand of Rs.27,70,000/- under Section 28(1) of the Customs Act against M/s. Classic ITM, Delhi. viii) I impose a penalty of Rs.10 lakh on M/s. Classic ITM Delhi under Section 112 of the Customs Act. ix) I impose a penalty of Rs.5 lakh on Shri Alimuddin Rafi Ahmad under Section 112 of the Customs Act. x) I impose a penalty of Rs.5 lakhs on Shri Abdul Salam under Section 112 of the Customs Act. xi) I also order the goods imported vide Bill of Entry mentioned in para 4.3 are liable for confiscation under Section 111 (o) of the Customs Act and I impose a fine of Rs. Seven Lakhs. I also order the recovery of interest under Section 28AB of the Customs Act. xii) Total amount of Rs. 10 Lakhs deposited by M/s. Classic ITM is orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed importer and hence are liable to pay the duty. b) In support of the above submissions he relied on the decision of the Hon'ble High Court of Gujarat in the case of Suresh DHansiram Agarwal vs. UOI reported as 2005 (183) ELT 424 (Guj) and the decision of the Hon'ble High Court of Andhra Pradesh in the case of Sravani Impex P. Ltd. vs. Addl. Director. General DRI Chennai reported as 2010 (252) ELT 19 (A.P). c) As per Section 114 of the Customs Act, any person 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 113, or abets the doing or omission of such an act, shall be liable for penal action. d) Shri Ratinder Pal Singh Bhatia and Shri Alimuddin Rafi Ahmad are liable to penal action under Section 114 of the Customs Act, 1962 as they have abetted the commission of various offences by M/s. Classic ITM, New Delhi. e) As per Section 113 (d) any goods exported contrary to any prohibition imposed under the Customs Act or any other for the time being in force shall be liable to confiscation. 5.2 Sub-section (1) of Section 11 of the Foreign Trade (Development and Regulation) Act, 1992 stip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of Classic ITM, as per the evidence given by Shri Ratinder pal Singh Bhatia and Shri Pankaj Soni. Bankers cheque of Rs.1 crore 15 lakh was deposited in the bank account of Harkishan Overseas and cash amounting to Rs.1,11,50,000 was withdrawn on the same day, and handed over to Shri Rajesh Sharma of M/s. Classic ITM as stated by Shri Pankaj Soni, name sake proprietor of Harkishan Overseas. In view of the above, the claim that the goods were supplied by Harkishan Overseas and that too at Rs.612/- per CD cannot be trusted. Further, undisputedly Harkishan Overseas had no copy right to manufacture or distribute the impugned CD-Roms. 6.3 Overseas inquires did not show the buyer as a genuine party. The investigation revealed that the said buyer WGT was not registered with Sharjah Chamber Authority and telephone numbers given in the letter head were found to be under disconnection. 6.4 For the purpose of claiming export benefits, it is upon the exporter to prove that the conditions governing the grant of benefits are satisfied by them. Undisputedly, DEPB benefits can not exceed 50% 'the present market value'. In the present case, the appellants claim that the purchase price was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med and Shri Ratinder Pal Singh Bhatia. 8.3. Though Abdul Salam as partner of Classic ITM has also played a role in rendering goods liable for confiscation, since M/s. Classic ITM as a partnership concern is held liable to penalty, no separate penalty is warranted and justified on Shri Abdul Salam. The decision of the Hon'ble Supreme Court in the case of Prakash Metal Works vs. CCE Ahmedabad is not on the point whether separate penalties could be imposed on the partnership firm and partners as the Tribunal#s order against which the appeal has been filed did not raise such an issue. On the other hand, the decision of the Hon'ble High Court of Bombay in the case of CCE vs. Jupiter Exports reported 2007 (213) ELT 641 has clearly held that when partnership firm is penalised, separate penalties cannot be imposed. On this ground the penalty, Shri Abdul Salam on partner under Section 114 cannot be sustained. 9.1 Classic ITM having resorted to over declaration of value at the time of export and applied for DEPB scrips and were issued with DEPB scrips in their names. The DEPB scrips basically permitted Classic ITM to import duty free. In other words, in view of the export made, they acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscation. c) The Classic ITM by presenting documents relating to inflated exports got DEPB scrips issued and transferred the said DEPB scrips for monetary consideration to third parties to enable duty free imports. Since the DEPB scrips are cancelled, the imported goods are to be held liable for confiscation. d) The action and omission on the part of Classic ITM laid the foundation for evasion of customs duty on the imported goods using DEPB scrips issued in their name and rendered the imported goods liable for confiscation and therefore, they are liable to a penalty under Section 112 of the Customs Act. e) There is no direct role attributable to Shri Alimuddin Rafi Ahmad, Shri Abdul Salam and Shri Ratinder Pal Singh Bhatia in making the imported goods liable for confiscation and therefore, penalty on them cannot be sustained under Section 112 of the Customs Act. f) The duty demand cannot be enforced on the original licence holder namely, Classic ITM in view of the decision of the Tribunal in the case of Dharam Exports vs. CCE, Neva Sheva reported as 2005 (192) ELT 502. 12. In view of the above, the appeals are disposed of as follows:- a) The decision of the Commissioner that ..... 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