TMI Blog2014 (2) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... naging Director, Mr. G.P. Poddar and the Executive Director Mr. A.K. MIttal can be said to be excessive. If at all, the penalty imposed upon them was on the lower side. Therefore, there is no scope for reducing the penalty. - Decided against the appellant. - CRL.A. 352 of 2010, CRL.A. 353 of 2010, CRL.A. 354 of 2010 - - - Dated:- 17-2-2014 - V. K. Jain,JJ. For the Appellant : Mr. Subhash Bansal, Adv. For the Respondent : Mr. Vivek Sibal Mr. Jitender Ratta, Advs. JUDGEMENT V. K. Jain, J. A memorandum dated 22.3.2002, was issued by the Special Director, Enforcement Directorate, to the reskpondents, Rajasthan Petro Synthetics Ltd. (hereinafter referred to as the Company ), Mr. G.P. Poddar, Managing Director of the Company, Mr. A.K. Mittal, Executive Director of the Company and Mr. B.B. Verma, Manager of the Company, alleging therein that during 1985-1988 they had imported pigment preparations and not PP Dyed Chips which was the import item declared by the Company and the price for the said import were negotiated by Mr. G.P. Poddar and Mr. A.K. Mittal. Reference in this regard was made to the statement made by Mr. B.B. Verma on several dates under Section 40 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .P. Dyed Chips. 5. The Special Director of Enforcement also noted that the Customs Authorities had found that the consignment contained pigment preparations instead of P.P. Dyed Chips as declared by the importer and that the cost of P.P. Dyed Chips was less than that of the pigment preparation. He also noted that the order passed by the Customs Authorities was confirmed by CEGAT and the Special Leave Petition against this order was dismissed by the Hon ble Supreme Court vide its order dated 31.10.2001. 6. The order passed by the Special Director of Enforcement was challenged before the Appellate Tribunal for Foreign Exchange (hereinafter referred to as the Tribunal ). Initially the appeal was heard by a Bench consisting of the Chairperson Shri O.P. Nahar and Member Kumari Vijayalakshmi. Shri O.P. Nahar vide his order dated 11.7.2007 quashed the order passed by the Special Directorate of Enforcement whereas Kumari Vijayalakshmi upheld the said order. As a result the matter was referred to another Member Shri R.N. Poddar, for his decision on the following points of disagreement between Shri O.P. Nahar and Kumari Vijayalakshmi: i. Whether the appellants did not use the foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brings no such goods or does not send or bring goods of a value representing the foreign exchange acquired, within a reasonable time, or sends or brings any goods of a kind, quality or quantity different from that specified by him at the time of acquisition of the foreign exchange, such person shall, unless the contrary is proved, be presumed not to have been able to use the foreign exchange for the purpose for which he acquired it or, as the case may be, to have used the foreign exchange so acquired otherwise than for the purposes for which it was acquired. 8. It is an admitted case that the respondent-Company had acquired foreign exchange for importing P.P. Dyed Chips. This was expressly admitted by Mr. B.B. Verma in his statement recorded under Section 40 of the Act. Mr. G.P. Poddar also admitted this fact, in his statement. The order dated 8.6.2009, passed by Mr. R.N. Poddar, inter alia, reads as under: 2. The admitted facts without any controversy are that appellant company imported 39 consignments of goods in the years 1985-88 from Italy and France after obtaining few remittances of foreign exchange equivalent to Rs.87,58,617/- of pigment preparation which otherwise wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different from the goods for which foreign exchange was acquired or the imported goods were of a different kind from what was declared at the time of acquisition of foreign exchange. It was also pointed out that even the declaration submitted by the respondents at the time of acquiring foreign exchange was not placed on record. 12. There can be no quarrel with the legal proposition that it is for the Enforcement Directorate, to gather evidence which would show that the foreign exchange was used for a purpose other than for which it was acquired and/or that the goods actually imported were of a kind different from that was specified at the time of acquisition. But, in the present case, such material is available on record in the form of the statement made by Mr. B.B. Verma who clearly admitted that the goods declared by them at the time of import were PP Dyed Chips, whereas the goods actually imported by them were pigment preparation. In Naresh J. Sukhawani Vs. Union of India 1996 SCC (Crl.) 76, the Additional Collector of Customs imposed the penalty of Rs.1.00 lakh upon the appellant relying upon the statement made under Section 108 of the Customs Act by his accomplice Mr. Subh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding polypropylene chips. The Collector of Customs also had noted that as per the manufacturers literatures the pigment preparations are to be used to impart colour and is mixed with normal propylene in certain ratios before the polypropylene yarn is drawn. Even Mr. G.P. Poddar stated that PP Dyed Chips are virgin PP Polymers (major component) and pigments (minor component). When the polypropylene chips are treated with dyes they become Dyed PP Chips. A perusal of the order passed by the Collector of Customs on 24.1.1991 which was later upheld by CEGAT as well as by the Hon ble Supreme Court would show that the price of PP Dyed Chips is about three times the normal price of polypropylene and it varies according to the colour. In other words, the price is dependent on the colourant rather than the base material, i.e., polypropylene chips. Therefore, it would be difficult to dispute that pigment preparations are a product altogether different from PP Dyed Chips. Pigment preparations, it appears to me are the colouring substance whereas PP Dyed Chips are polypropylene chips which have been subjected to dyeing using a colouring substance for the purpose. Had PP Dyed Chips and pigmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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