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TMI Blog2011 (5) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... e articles, whereas the appellants in Tax Appeals No. 348 of 2006 and 349 of 2006 were persons interested in the conduct and business affairs of the appellants in Tax Appeals No. 345 of 2006, 346 of 2006 and 347 of 2006. 4. That one M/s. Baroda Synthetics Ltd., holder of DEEC license, purchased Polyester Filament Yarn (PFY) from various importers on high sea sale basis. The consignments were cleared by M/s. S.K. Punjabi, CHA, whereas M/s. Shree Roadlines, Mumbai, M/s. Riya Roadlines, M/s. Cargo Carriers, M/s. Shree Somnath Carriers and M/s. Sainath Roadways transported the imported goods after clearance. In the usual course, the imported goods should have been delivered at the premises of M/s. Baroda Synthetics Ltd. (BSL), however, the imported goods were delivered at the premises of (1) M/s. Surat Induction Ltd., Surat, (2) M/s. Krystal Polyester Ltd., Bhiwandi, (3) M/s. Goyal Group of Companies, Surat and (4) M/s. Kansal Group of Companies, Surat. The appellants in Tax Appeal Nos. 345 of 2006, 346 of 2006 and 347 of 2006 are companies belonging to M/s. Goyal Group of Companies. Out of the aforesaid four companies, M/s. Surat Induction Ltd. and M/s. Krystal Polyester Ltd. ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act, along with interest thereon, and imposed penalty of an equal amount. The penalties under Section 112 of the Customs Act also came to be imposed on various parties as under : "(a) M/s. Anita Synthetics Pvt. Ltd. Rs. 10,00,000 (Rupees Ten lakhs only) (b) M/s. Annapurna Textiles Rs. 5,00,000 (Rupees five lakhs only) (c) M/s. Pondiya Poly Pvt. Ltd. Rs. 5,00,000 (Rupees five lakhs only) (d) M/s. Kejriwal Silk Mills Rs. 5,00,000 (Rupees five lakhs only) (e) M/s. Krystal Polyfab Ltd. Rs. 10,00,000 (Rupees Ten lakhs only) (f) M/s. Surat Induction Pvt. Ltd. Rs. 10,00,000 (Rupees Ten lakhs only) (g) M/s. Goyal Texturisers Rs. 8,00,000 (Rupees eight lakhs only) (h) M/s. Goyal Impex Rs. 8,00,000 (Rupees eight lakhs only) (i) M/s. Goyal Fibres Rs. 8,00,000 (Rupees eight lakhs only) (j) M/s. Kusum Synthetics P. Ltd. Rs. 5,00,000 (Rupees five lakhs only) (k) M/s. Kejriwal Silk Mills P. Ltd. Rs. 5,00,000 (Rupees five lakhs only) (l) M/s. S.K. Punjabi Rs. 5,00,000 (Rupees five lakhs only) (m) Shri Ganesh Shipping Services Rs. 5,00,000 (Rupees five lakhs only) (n) Shri M.V. Rajaguru Rs. 20,00,000 (Rupees twenty lakhs only) (o) S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal has maintained the penalties against them. 10. Mr. Paresh Dave, learned advocate appearing for the appellants in each of the appeals submitted that from the facts of the case, it is apparent that penalty of Rs. 20 lakhs was imposed on the Director of M/s. Baroda Synthetics Ltd. who had perpetrated the entire fraud and fraud was also proved on the record of this case, whereas penalty of Rs. 5 lakhs was imposed on the Director of the recipient without considering the magnitude of the case against these persons, the value of the goods and amount involved as regards these persons and such other relevant factors. It was submitted that the action of the Commissioner clearly indicated ad hocism while imposing penalties. It was submitted that penalties of Rs. 8 lakhs on the firms/companies and also of Rs. 5 lakhs each on Shri Rajubhai Goyal and Shri Prakash Raval were clearly excessive and disproportionate when compared to the penalties imposed on the Directors of M/s. Baroda Synthetics Ltd. It was submitted that penalty cannot be imposed only because it is lawful to do so but while imposing penalty, involvement of the person has to be clearly brought out and the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the fraud and not reducing the penalties in case of the appellants, who were only the buyers of a small quantity of the goods even as per the case of the Department, to that extent. It was submitted that as there is no ground or reason given by the Appellate Tribunal for reducing penalties of the appellants from Rs. 8 lakhs to Rs. 2 lakhs, the order of the Appellate Tribunal is also in violation of the principles of natural justice. 12. Inviting attention to the provisions of Section 112 of the Customs Act, 1962, the learned advocate submitted that while issuing show cause notice proposing to impose penalty under Section 112 of the Act, it is required to be indicated as to whether the action is sought to be taken against a person under clause (a) or clause (b) of Section 112 of the Act. It was submitted that in the present case, the show cause notice did not state the exact default. According to the learned advocate no specific role has been attributed to the appellants, nor is any specific involvement indicated and that the reduction in penalty is on an ad hoc basis. It was submitted that the impugned order of the Tribunal suffers from a perverse approach inasmuch as the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Shri Sureshbhai, Shri Prakash Rawal of Goyal Group of Companies had approached them to get the clearance of imported POY/PFY against the advance licence issued in the name of BSL and after clearance, the goods were transported to Surat as per instructions of Shri Rajubhai Goyal through Riya Roadlines and challans were made in the name of BSL A/c Goyal Impex, Fibre and goods were received by a man of Goyal Group. That in the statement of Naresh Goyal of M/s. Riya Roadlines and M/s. Cargo Carriers, it is stated that they had picked the imported PFY as per the instructions of M/s. Rajubhai Goyal of M/s. Goyal Impex and as per his instructions, goods were transported to his factory and total eleven trucks were delivered to the factory of M/s. Goyal Impex and the name and address of the consignee was shown as M/s. BSL A/c Goyal Impex. That the goods were delivered at the factory of M/s. Goyal Impex, but the receipts were given in the name of B.N. Textiles. Mr. Naresh Goyal vide his letter dated 2-5-2000 had stated that goods transported by them belonged to Shri Rajubhai Goyal. The adjudicating authority has further recorded that Shri Suresh Balu Agrey, who was running a firm in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V. Rajyaguru, Ex-Director of M/s. BSL is concerned, found that he was not shown to be a direct beneficiary of the fraud and therefore, the Tribunal was of the view that the same calls for reduction of penalty. 19. On behalf of the appellants, great emphasis has been laid on the observations made by the Tribunal in paragraph 19 of the impugned order wherein, the Tribunal has recorded that the lorry receipts also show that the receipt of goods was acknowledged by Anita Synthetics Pvt. Ltd., Ramesh Kumar Ltd., Annapurna Textiles etc. It was submitted that in the entire order of the Tribunal, there is no reference to any involvement of the appellants. The aforesaid contention of the appellants requires to be stated to be rejected inasmuch as, merely because there is no specific reference to the name of the appellants in paragraph 19 of the impugned order, it does not mean that the Tribunal has not found any involvement of the appellants in respect of the offence in question. The Tribunal has referred to Anita Synthetics Pvt. Ltd., Ramesh Kumar Ltd., Annapurna Textiles etc. Thus, it is apparent that instead of referring to all the appellants before it, inasmuch as there were abou ..... 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