TMI Blog2011 (6) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.27,70,000/-, imposition of penalties of Rs.20 lakhs (Rs.10 lakhs under Section 114 Rs.10 lakhs under Section 112) and redemption fine of Rs.10.5 lakhs on goods held liable for confiscation. 1.2 Appeal No. C/327/2006 is by Alimuddin Rafi Ahmed, proprietor of M/s. LML International against imposition of penalty of Rs. 15 lakhs (10 lakhs under Section 114 and Rs.5,00,000/- under Section 112 of the Customs Act) . 1.3 Appeal No. C/328/2006 is by Abdul Salam, Partner of Classic ITM against imposition of penalty of Rs.10 lakhs (Rs.5 lakhs under Section 14 and Rs.5 lakhs under Section 112 of the Customs Act). 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 98 vide their order dated 10.9.01. e) A show cause notice dated 28.3.2002, was issued to the above appellants and others including the importer who used the DEPB scrips. Commissioner, while dropping the proceedings initiated by the show cause notice against the importer namely M/s.Electrolux Kelvinator India Ltd. passed the following order against the other noticees: i) I order confiscation of 23,000 pcs of CD ROMs under Section 1213(d) of the Customs Act. Since the goods are not available for confiscation. I impose a redemption fine of Rs.3.5 lakhs. ii) I impose a penalty of Rs.10 Lakhs on M/s. Classic ITM Delhi 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been upheld by the Supreme Court, it was submitted that in the Tribunal's order which was under challenge before the Hon'ble SC (order No. C-II/23739 /49 west /2001 dated 30.10.01) the issue regarding the separate penalties on the firm and the partners was not raised. In support of their claim, they produced copy of unreported orders of the Tribunal in the case of the Prakash Metal Works. 5.1 Learned SDR supporting the order of the Commissioner made the following submissions: a) As per the conditions No. (i) and (ii) of para 2 of the Notification number 34/97 Cus dated 7.4.1997 as amended, M/s. Classic ITM as DEPB Licence holder are the 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 omis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms Act can be imposed even where the goods are not available for confiscation. 6.1 We have carefully considered the submissions from both sides including the written submissions and perused the records. 6.2 The claim of main appellant, M/s. Classic ITM that they have purchased the CD Roms from Harkishan Overseas is clearly proved to be false. The evidence show that the firm Harkishan Overseas was floated in the name of an ordinary employee working in the showroom of relative of Shri Roampy Bhatia. The bank account of said Harkishan Overseas has been found to have been used mainly for the purpose of discounting the cheques and pay orders received in 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. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In fact he was actually involved in the day to day activities of M/s. Classic ITM. It is also noticed that Shri Ratinder Pal Singh Bhatia was also fully concerned in procuring export orders, procuring purchase invoices at inflated price from M/s. Harkishan overseas and concerned himself in routing the cheques and pay order received in the name of Classic ITM discounted using Harkishan Overseas with a view to conceal the source and the actual purchase price and to show higher purchase price of CDs and therefore, rendered the export goods liable for confiscation . Therefore, penalties under Section 114 of the Customs Act are warranted on Shri Alimuddin Rafi Ahmed 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the DEPB benefits to the tune of Rs.24 lakhs obtained fraudulently, the penalties imposed on them under Section 114 and Section 112 of the Customs Act are not considered excessive. 11 In view of the above, the following emerges:- a) The source of procurement of CD roms were deliberately concealed to enable showing a higher purchase price and exported by declaring highly inflated value to claim undue benefit of DEPB credits. The goods so exported are to be held liable for confiscation. b) M/s. Classic ITM, Shri Alimuddin Rafi Ahmad and Shri Ratinder Pal Singh Bhatia and Shri Abdul Salam by their action and omissions rendered the exported goods liable for confiscation. 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 conf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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