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TMI Blog2014 (5) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 32/2005 dated 8.04.2005. As the applicant has failed to make out a case for 100% waiver of the penalty, the Tribunal has directed the applicant to make a pre-deposit of 20% of the penalty confirmed against him within a period of eight weeks. After passing the stay order, the applicant moved a miscellaneous application for modification of the stay order dated 14.03.2013. In the modification application the applicant submits that while passing the stay order dated 14.03.2013, the Tribunal has observed that the applicant is an importer and imported the goods under Target Plus Scheme which were diverted into open market, this fact is not correct. The applicant also submitted that in fact the applicant is not an importer in the case but he is only a commission agent, therefore, the stay order has been passed without appreciating the true facts. 4. After considering the submissions made by the learned Counsel appearing for the applicant, we recalled the stay order dated 14.03.2013 and the same is directed to be listed for hearing along with the stay applications of co-noticees in the same matter. 5. Today, when the mater came up for hearing, the learned Counsel for the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8.1 Further, in the light of the observations made by various Hon'ble High Courts and the Apex Court in the following cases:- (a) Mercedes Benz India Pvt. Ltd. vs. Union of India - 2010 (252) ELT 168 (Bom) - the Hon'ble High Court has observed as under:- "17. We are not happy to observe but constrained to say that one must remember that pursuit of the law, however glamorous it is, has its own limitation on the Bench. In a multi-judge court, the Judges are bound by precedents and procedure. They could use their discretion only when there is no declared principle to be found, no rule and no authority. The judicial decorum and legal propriety demand that where a learned single Judge or a Division Bench does not agree with the decision of a Bench of co-ordinate jurisdiction, the matter should be referred to a larger Bench. It is a subversion of judicial process not to follow this procedure. In our system of judicial review which is a part of our Constitutional scheme, we hold it to be the duty of the judges of the courts and members of the tribunals to make the law more predictable. The question of law directly arising in the case should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inate Bench of the Tribunal has overruled, in effect, an earlier judgment of another Coordinate Bench of the same Tribunal. This is opposed to all principles of judicial discipline. If at all, the subsequent Bench of the Tribunal was of the opinion that the earlier view taken by the Coordinate Bench of the same Tribunal was incorrect, it ought to have referred the matter to a larger Bench so that the difference of opinion between the two Coordinate Benches on the same point could have been avoided. It is not as if the latter Bench was unaware of the judgment of the earlier Bench but knowingly it proceeded to disagree with the said judgment against all known rules of precedents. Precedents which enunciate rules of law form the foundation of administration of justice under our system. This is a fundamental principle which every presiding officer of a judicial forum ought to know, for consistency in interpretation of law alone can lead to public confidence in our judicial system. This Court has laid down time and again that precedent law must be followed by all concerned; deviation from the same should be only on a procedure known to law. A subordinate court is bound by the enunciatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the hallmarks of the judicial discipline, particularly in passing interlocutory orders." 9. The applicant has made out a case of 100% waiver of pre-deposit. Therefore, we waive the requirement of pre-deposit of the penalty imposed on the applicant and recovery thereof is stayed during the pendency of the appeal. 10. Registry is directed to tag this appeal along with Appeal No. C/1290 to 1292/12. The stay application is disposed of in the above terms. (Pronounced in open Court on 20.11.13) Per: P.K. Jain, Member (Technical) I have gone through the order recorded by my learned brother Member (Judicial) which was received by me on 12.11.2013. I am unable to agree with the order as well as the reasoning. In this case, it is necessary to briefly state the facts. 2. The applicant has come in appeal against the imposition of penalty of Rs. 75,00,000/- imposed under Section 112(b) (i) of the Customs Act, 1962, and also filed an application for stay. 3. M/s. Ankh, New Delhi is an exporter house and was having Duty Free Credit Entitlement (DFCE in short) license and therefore were entitled to import certain goods without payment of Customs duty vide Notification NO. 32/2005-Cus d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough he himself approached Shri Paramdeep Singh Kohli of M/s. Ankh, Delhi and this fact has been admitted by him. 3.2 The other main contention of the applicant in the appeal is that the goods made from the imported material will be grey fabric which are exempt from payment of Central Excise duty under Notification 30/2004-CE dated 09.07.2004. Therefore, diversion of the goods does not create any liability or double benefits of duty to the importer. There are other few contentions which are not being mentioned here as these have absolutely no strength. 3.3 In the impugned order the duty liability of Rs. 1,79,90,857/- has been fixed on M/s Ankh besides imposing a penalty of Rs. 2 crores. In addition to M/s Ankh, 16 other persons have been imposed penalty under Section 112(b) (i) of the Customs Act. The penalties varies from Rs. 5,00,000/- to Rs. 75,00,000/-. The penalty of Rs. 75,00,000/- have been imposed on the present applicant. 4. The only ground on which waiver of penalty is proposed by my learned brother is that the penalties on the importer M.s Ankh Textile Pvt. ltd. And on M/s Ansh Textile Ltd. And Shri Inderjit B Sawhney have been waived of by the Tribunal vide order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In case, the Appellate Tribunal is of the opinion that the deposit of the penalty levied would cause undue hardship to such person, the Appellate Tribunal can dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the interests of revenue. Hon'ble Supreme Court in the case of Benara Valves ltd. vs. CCE reported in 2006 (204) ELT 513 (S.C), while analyzing Section 35F of the Central Excise Act, 1944 (which is exactly similar) has stated as under:- "11. Two significant expressions used in the provisions are "undue hardship to such person" and "safeguard the interests of revenue". Therefore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interest of Revenue have to be kept in view. 12. As noted above there are two important expressions in Section 35(F). One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fresh show-cause notice was issued for further period on the same issue. The matter came up before the Tribunal and the Tribunal again allowed the appeal of the assessee which was taken to the Hon'ble Supreme Court by the Revenue and the appeal was dismissed on the grounds of delay. Thereafter, another show-cause notice was issued to the assessee for the intervening period which was upheld by the original authority as well as by the first appellate authority and the assessee came in appeal before this Tribunal. The Tribunal did not follow the earlier two final orders and rejected the appeal filed by the petitioner. Against the said rejection, the assessee filed a Writ Petition in the Hon'ble Bombay High Court and in that context the observation, as reproduced by may learned brother in para 8.1(a) above was made by the Hon'ble High Court of Bombay. 4.6 The second case relied on by my learned brother is relating to M/s Gammon India Ltd. vs. Commissioner of Customs Mumbai in Civil Appeal NO. 5166 of 2003. I have gone through the said judgement. In the said case the issue involved was whether M/s Gammon India ltd. are eligible for the benefit of Notification No. 17/2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced in sub-para (c) of para 8.1 above. 4.8 In addition to these three judgements which are relied on by my learned brother as quoted above, the learned Advocate for the applicant has also quoted two judgements namely (1) the judgement of Hon'ble High Court of Madhya Pradesh at Indore Sayaji Hotels Ltd. vs. Union of India reported in 2011 (268) ELT 315 a and (2) Warda coal Transport Pvt. Ltd. vs. Union of India- 2009 (13) STR 490 (Bom,). 4.9 I have gone through these two judgements. In the case of Sayaji Hotels Ltd. (supra) the assesee was registered for mandap keeper service and was paying service tax and the issue was relating to whether the cost of foods and beverages during the mandap keeper service would be includable in the assessable value. The assessee was issued periodical show-cause notice in respect of two demands confirmed by the Revenue. The Tribunal granted stay order while in respect of the third demand on the same issue the Tribunal asked for a deposit of duty and it is in this context the Hon'ble High Court took a view that the Tribunal has committed gross illegality in not maintaining uniformity and consistency in exercise of its judicial discretion. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been correctly imposed under Section 112(b)_(i). The said provision reads as under:- "Section 112. (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111,shall be liable, - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty 4 [not exceeding the value of the goods or five thousand rupees] 4 , whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penaltynot exceeding the duty sought to be evaded on such goods or five thousand rupees, whichever is the greater; 6.1 It may be mentioned that mens rea is required for imposition of penalty under Section 112(b) of the said Act. Prima facie the investigation has revealed the same. In my view, the cases relating to penalties have to be examined with reference to the facts of each case. Cases of penalties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember:- Whether in the facts and circumstances of the case and case laws relied by Member (Judicial), the requirement of pre-deposit of penalty be waived in the case of applicant Shri Rajesh Atmanand Agarwal as held by Member (Judicial). Or The applicant be asked to deposit Rs. 15,00,000/- (Rupees fifteen lakhs only) as a condition to hear the appeal. ORDER -M/520/14/CSTB/C-I Order by Third Member on Difference of Opinion Date of Hearing : 24.01.2014 Per: P.R. Chandrasekharan, Member (Technical) 7. A difference of Opinion is placed before me for consideration reads as follows: "Whether in the facts and circumstances of the case and case laws relied by Member (Judicial), the requirement of pre-deposit of penalty be waived in the case of applicant Shri Rajesh Atmanand Agarwal as held by Member (Judicial). Or The applicant be asked to deposit Rs. 15,00,000/- (rupees fifteen lakhs only) as a condition to hear the appeal." 8. A case of import of Polyester Spun Yarn (PSY) by availing customs duty exemption under Duty Free Credit Entitlement (DFCE) scheme by M/s Ankh, New Delhi was investigated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the main appellant and two of the co-appellants pre-deposit have been waived, in the case of the present appellant also the same treatment should be accorded. He relies on the decision in the case of Maninder Singh Vs. Commissioner of Customs, Cochin - 2009 (247) ELT 534 (Tri-Bang) and Champaklal P Desai Vs. Commissioner of Customs, Kandla - 2009 (246) ELT 563 (Tri-Ahmd) in support of the contentions. He also relies on the decision of the Hon'ble Apex Court in the case of Vishnu Traders Vs. State of Haryana & Others and the decision of the Hon'ble High Court of Bombay in the case of Wardha Coal Transport Pvt. Ltd. - 2009 (13) STR 490 (Bom)., wherein the Hon'ble Courts have observed that there should be consistency of approach and uniformity in the exercise of judicial discretion respecting similar causes. Therefore, appeal of the present appellant also should be heard without insisting on any pre-deposit. 9.1 He further points out that the total commission, the appellant could have earned, is only 5% of the duty saved, which would work out to about Rs. 9 lakhs and, therefore, pre-deposit of Rs. 15 lakhs is harsh. Accordingly, it is prayed that the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ratio which flows from the said order. 11.2 In the present case, it is an admitted position that the appellant knowing fully well facilitated the diversion of the goods imported under Target Plus Scheme in complete disregard of the provisions of law, for which he received a consideration. Thus, the appellant appears to have actively aided and abetted evasion of customs duty and, therefore, penalty was imposable on the appellant under the provisions of Section 112(b) of the Customs Act, 1962. If penalty is imposable, there is no reason why at the interim stage, the applicant should not be put to terms. A pre-deposit of Rs. 15 lakhs against the confirmed penalty of Rs. 75 lakhs works out to only 20% of the penalty imposed and cannot be said to be harsh or excessive. Even in the earlier order of the Tribunal, the appellant has paid a sum of Rs. 68 lakhs against the confirmation of duty demand of Rs. 1.79 crore, which approximately works out to 40% of the demand confirmed. Therefore, in the present case, a pre-deposit of Rs. 15 lakhs ordered by the Member (Technical) cannot be faulted. Accordingly, I concur with the view expressed by the learned Member (Technical). 12. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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