TMI Blog2011 (4) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... attempt to evade Customs duty by so organizing the imports as to avert direct responsibility for defrauding the Revenue. The Bench therefore holds that in view of gross misdeclaration of the contents and the value of goods in BDFs, the imported goods have been rendered liable for confiscation and the two applicants have also rendered themselves liable to penalty for their act of omission and commission committed in relation to the imported goods. Redemption fine and penalty reduced and immunity granted from in excess amount fixed for this purpose. Full immunity granted from prosecution. - - - 48-49/2011/CUS/RKT - Dated:- 13-4-2011 - S/Shri H.O. Tewari, M. Dwivedi and N. Sasidharan, JJ. REPRESENTED BY: S/Shri Sujay N. Kantawala, Advocate and Mahadeo Londhe, Legal Assistant, for the Assessee. S/Shri D.M. Advani, S.H. Hatangadi, S.I.Os. and G. Shiva Shankar, I.O., DRIs, for the Department. [Order]. This order disposes of two applications filed under Section 127B of the Customs Act, 1962 (in short the Act ) by the following persons : S. No. Name of the Applicant Date of filing Application Duty Demanded in the SCN dt. 9-11- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 129 packages weighing 6473 Kgs. The value of items was declared as Rs. 38,500/- which was enhanced to Rs. 70,000/- by the Customs Authorities. A Customs duty of Rs. 18,386/- paid vide DR No. 977091 dated 23-11-2009. Out-of-Charge of the said consignment was also obtained on 23-11-2009. The said consignment was examined by the Revenue on 1-12-2009 and 2-12-2009. The examination revealed that the said consignment of 129 packages consisted of 108 HDPE bags/Potlas and 21 packages of wooden crates. The said 108 bags had names and addresses of different consignors of UK and different consignees in India. Examination of 21 wooden crates revealed that the same contained brand new high value furniture, glassware, chandeliers parts and other household goods imported from UK. The total value of the goods contained in the Potlas was ascertained to be Rs. 3,15,975/- CIF. The value of the goods contained in the 21 wooden crates was estimated at Rs. 68,33,000/- CIF. Total value of the two types of goods came to be Rs. 71,48,975/- as against a declared value of Rs. 38,500/- and re-assessed value of Rs. 70,000/-. Scrutiny of the BDF showed that the goods contained in the said 21 crates were not de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at after de-stuffing the said goods from the container, the same were divided into two lots and were kept apart from each other to show as if the two lots belonged to different importers. The goods as declared in the BDF were shown to the Customs authorities whereas the goods not declared were not shown to the Customs authorities to evade examination. In the present matter also the wooden crates in case of both the BDFs were not examined. Sh. Salman admitted that out of the said 256 packages in the consignment covered by BDF No. 1032 dated 18-11-2009, 14 packages were other than Potlas. Out of the said 14 packages, two (02) packages contained old and used cupboard and table and the same were lying in the godown of a transporter at Mazgoan. The other two (02) packages were sent to Gujarat as per the addresses mentioned on the packages along with Potlas. Balance ten (10) packages/wooden crates were delivered at the given addresses and the same were received by the consignees in perfect condition. He submitted that he did not have the idea as to what goods were contained in the said ten (10) wooden crates. 2.7 In respect of the goods covered by the BDF No. 1048 dated 23-11- 2009 i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled, i.e., Sh. Riyaz Ahmed Niyaz Ahmed in respect of BDF No. 1032, dated 18-11-2009 and Sh. Shahul Hameed Shabu in respect of BDF No. 1048, dated 23-11-2009 disowned the said goods and admitted that they lent their passports to the said Sh. Salman for monetary considerations. 2.11 In his statements, the first applicant submitted that he hired services of the second applicant for doing interiors for his house in Delhi. For the purpose of selection of items of interior decoration, he took the second applicant with him to UK on his own expenses. The first applicant further submitted that they made purchases worth GBP 1,91,475 in UK. Before his return to India, the first applicant entrusted shipment of the said goods to India to one Sh. Bhupendra Madlani of M/s. Maina Freight Forwards in UK and agreed to pay GBP 30,000 for the same. After these arrangements, the first applicant returned to India whereas the partners of the second applicant stayed back. In their statements, the partners of the second applicant submitted that they made some purchases for themselves which included a General s Bust (made of bronze) with pedestal, a pair of table lamps, two brass tables and some glasswar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 129 108 21 20 claimed by Sh. Sharuk Passi 01 claimed by Sh., Sandeep Khosla/Abu Jani TOTAL : 385 350 35 (02 unclai-med) 33 claimed packages 3.1 Thus, to summarize the modus operandi of the case, the facts briefly are that the first applicant along with the second applicant went to UK for purchase of items of interior decoration for decoration of the first applicant s house in Delhi. The first applicant bought goods worth GBP 1,91,475 whereas the second applicant bought goods worth GBP 31,950. For shipment of the said goods to India they contacted Sh. Bhupendra Madlani of M/s. Maina Freight Forwarders in UK who agreed to ship the said goods to the applicant s door-steps charging GBP 30,000 for the same inclusive of Customs duty and other handling charges. 3.2 Instead of shipping the said goods in the names of the said applicants, the said goods were shipped in the names of unrelated persons namely S/Sh. Riyaz Ahmed Niyaz Ahmed and Shahul Hameed Shabu by mis-using their passports details. Sh. Bhupendra Madlani of M/s. Maina Freight Forwarders of UK in connivance with Sh. Khan Abdul Aziz @ Salman attempted to smug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat under Section 127B(1) of the Act no application could be made unless a Bill of Entry has been filed by the applicants. Further, in the present matters only a Baggage Declaration Form was filed, which is not covered by the definition of Bill of Entry under Section 2(4) of the Act. The Revenue has further contended that it has challenged the decisions of the Hon ble Bombay High Court in the matters of Manish Kalvadia [2008 (228) E.L.T. 342 (Bom.)] and M/s. Hoganas India Ltd. under Special Leave Petition in the Hon ble Supreme Court. 4.1 Hearing in the matter was held on 31-3-2011. The applicants were represented by Sh. Sujay N. Kantawala, Advocate assisted by his Legal Assistant Sh. Mahadeo Londhe. Revenue was represented by S/Sh. D.M. Advani and S.H. Hatangadi, both S.I.O.s, and Sh. G. Shiva Shanker, I.O. from DRI, Mumbai Zonal Unit, Mumbai. 4.2 At the outset, the ld. Advocate submitted that the facts of both the cases were identical and a common Show Cause Notice dated 9-11-2010 was issued to the applicants. Both the applicants were together while buying the said goods in U.K. for the common purpose of interior decoration of the house of the first applicant. Re-iterating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by praying for full immunity to both the applicants from fine and penalty. He also prayed for grant of immunity to both the applicants from prosecution. 4.4 The ld. Representative of the Revenue submitted that the application was not admissible because it did not satisfy conditions stipulated under Section 127B(1) of the Act since no Bill of Entry was filed. Also the BDF did not fall under the definition of a Bill of Entry as specified in Section 2(4) of the Act, which meant a Bill of Entry as referred to in Section 46 of the Act. Moreover, the goods imported by the applicant never came to be declared even in the BDF. The ld. Representative pointed out that the passengers under whose names the said goods were booked were not the real owners but were mere carriers who lent their Passport details for monetary considerations. He submitted that the said passengers did not even know the contents of the packages. The ld. Representative further stated that the goods were purchased from U.K. but had not come from UK. He submitted that the goods were first sent to Dubai from where the same exported to India in the names of unrelated persons. 4.5 Contesting the reliance of the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re were no documents to prove their claim. However, the ld. Representative conceded that in the facts and circumstances of the case, the duty could be demanded only from the applicants since they made themselves out to be the owners of the said goods. On another query from the Bench, as to what difference it made if the goods were not shipped by the applicants in their own names, the ld. Representative replied that in order to claim to be importer of the said goods, the Bill of Lading covering the said goods must be in the names of the applicants. Upon such action, the IGM would have included the details of the applicants such as their names, passport numbers, number of packages, description of the goods etc. The applicants not having taken due care to do so, the said goods arrived in the names of unrelated persons through Dubai. The Bench, however, observed that the said technicalities could not hinder settlement of the cases since not only the Revenue had identified the applicants as the owners of the said goods, even the Customs duty was demanded and recovered from them. Provisional release of the said goods was also made to the very same applicants. The Bench further observed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of declaration through Bill of Entry and, therefore, non-filing of Bill of Entry cannot be construed as non-fulfillment of condition for filing settlement applications. This issue is already settled in a number of orders passed by the Commission and even the Hon ble High Courts had accepted this position. To elucidate, a pertinent reference may be made to the order passed by the Principal Bench of the Settlement Commission in the case of Ashok Kumar Jain reported in 2009 (247) E.L.T. 893 (Sett Comm.). The aforesaid order draws support from the decision of the Hon ble Madras High Court in the case of V.C. Mohan v. Commissioner of Customs (Air), Chennai-I reported in 2008 (222) E.L.T. 344 (Mad.) and of the Hon ble Bombay High Court in the case of Commissioner of Customs, Mumbai v. Manish Kalvadia reported in 2008 (228) E.L.T. 342 (Bom). The ld. Advocate for the applicant has also additionally placed reliance upon order of the Hon ble Bombay High Court in the case of Union of India v. Hoganas India Ltd. [2006 (199) E.L.T. 8] and of the Apex Court [(sic) Settlement Commission] in the case of A. Mahesh Raj reported in 2001 (131) E.L.T. 707 (Sett. Comm.) wherein it has been held that non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited the same, the prayer made by them for granting full immunity from fine, penalty etc. lacks justifiable basis. The applicants cannot be said to have acted in a bona fide manner when they visited abroad and purchased goods worth over Rupees two Crores with intent to import the same for their personal use, yet they did not import the goods as their own personal Baggage but entrusted the responsibility to a Freight Forwarder who transshipped the goods from another port in the name of persons clearly unrelated to the two applicants. The covert methods used for transshipping the goods clearly expose the collusion of the applicants in giving effect to their mala fide intent to evade duty. It is evident from the facts and circumstances of the case that the two applicants made an attempt to evade Customs duty by so organizing the imports as to avert direct responsibility for defrauding the Revenue. The Bench therefore holds that in view of gross misdeclaration of the contents and the value of goods in BDFs, the imported goods have been rendered liable for confiscation and the two applicants have also rendered themselves liable to penalty for their act of omission and commission co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant Sh. Sharuk Passi from penalty in excess of Rs. 5,00,000/- (Rupees Five Lakhs Only). The second applicant M/s. Abu Jani Sandeep Khosla are granted immunity from penalty in excess of Rs. 1,00,000/- (Rupees One Lakh Only). The amounts of fine and penalty ordered as above shall be adjusted from the amounts already deposited by both the applicants. The amounts remaining in excess after appropriation and adjustment towards duty, fine and penalty ordered as above shall be refunded to the respective applicants. Prosecution : The Bench grants immunity to the both applicants and the co-applicant from prosecution under the Customs Act, 1962 insofar as the present case is concerned. 7. The above immunities are granted under sub-section (1) of Section 127H of the Act. Attention of the applicant is also invited to the provisions of sub-section (2) and (3) of Section 127H ibid. 8. This order of settlement shall be void in terms of sub-section (8) of Section 127C of the Act, if the Settlement Commission subsequently finds that it has been obtained by fraud or misrepresentation of facts. 9. This order of settlement is limited to the applicants herein. The Revenue is at liberty to t ..... 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