TMI Blog2006 (8) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... equivalent amount under Section 114A of the Act was determined on them. (b) The appellant in Appeal No. CDM 14/05 is Mr. Sunil Kishorepuria, Chief Executive of CCCPL, on whom a penalty of Rs. 20,00,000/- has been imposed under Section 112(a) and (b) of the Act. (c) The appellant in Appeal No. CDM 186/05 is Mr. Rajesh Adani, Managing Director of Adani Exports Ltd. (hereinafter referred to as AEL for short) on whom penalty of Rs. 25,00,000/- under Section 112(a) and (b) of the Act. (d) The Appellant in Appeal No. CDM 167/05 is Mr. Vivek Nagpal, Chairman Cum Managing Director of M/s. Padmini Polymers Ltd. (hereinafter referee to as PPL for short), on whom penalty of Rs. 15,00,000/- has been imposed under Section 112(a) and (b) of the Act. (e) The Appellant in Appeal No. CDM 188/05 is M/s. Brisk Plastics and Chemical Pvt. Ltd. (hereinafter referred to as BPCL for short), who have challenged the confiscation of the goods, on whom a redemption fine of Rs. 50,00,000/- and a penalty of Rs.10 Lacs have been imposed. (f) The Appellant in Appeal No. CDM 187/05 is Mr. Virendra Sutaria, Director, BPCL on whom a separate penalty of Rs. 10,00,000/- has been impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rowed money from his company - PPL, which he used to purchase the said goods as he believed there was good demand and profit by selling the said goods in the local market. Further inquiry also revealed that AEL had made payment aggregating to Rs. 64 Crores to PPL. These investigations resulted in show cause notice 25-1-2001, wherein it was alleged that : (i) the goods are not Computer Software and hence not eligible for exemption under the said notification referred to above; (ii) the value declared was inflated and the correct value was as per the export declaration filed by M/s. Gulf Software, which is Rs.1.8 Crores (approx.) against the declared value of Rs. 24.89 Crores (approx.) (iii) the goods were liable for confiscation for mis-declaration of description and value (iv) all the parties referred to above had acted in a manner which have rendered the goods liable for confiscation and hence each of them liable for penalty under Section 112(a) and (b) of the Act. (d) The Commissioner has passed the Order demanding duty imposing penalties and confiscating the goods with an option to redeem the same on payment of fine as stated above. 2.1Shri S. K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that in another similar case relating to import by M/s. Pioneer Business Enterprises at Bangalore from the same supplier, the Commissioner had after inquiry accepted the values and that order was accepted by the department against which no appeal was filed. He points out that the titles imported by Pioneer Business Enterprises are same/common as set out in the chart set out at page 178. He lastly submitted that there was no contrary evidence to rebut the expert opinion of the Electronics and Computer Software Export Promotion Council vide letter dated 19-6-1998 to the effect that the value of USD 15 was fair. 2.3 Apart from merits, Shri Bagaria also submitted that there is no justification for invoking the extended period of limitation in terms of proviso to Section 28(1) of the Act, since the goods were released after inquiry and 100% examination. 2.4 Shri V.S. Nankani, Ld. Advocate appearing on behalf of Rajesh Adani, while adopting the submissions of Shri Bagaria, further submitted there is no case of penalty on Rajesh Adani. He stated that AEL had opened the letter of credit in accordance with law as it was permitted to do so, in its capacity as Star Export Status ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only after inquiries were started through the Indian Consulate. He submits that since the value was misdeclared, the Commissioner has rightly invoked the extended period of limitation and the imposition of fine and penalties were justified. 3.1We have considered the facts and submissions made by both sides, we find that:- (a) On the issue of eligibility to notification exemption, the case is squarely covered by the decision of the Apex Court in Pentamedia Graphics Ltd. (Supra). The relevant para 12 is reproduced herein. "12. Submission of the learned counsel appearing for the Revenue that the 'Capture Animation Files' are not software since another software is required to load the same is without any substance. It is evident from the book of Computers and Microprocessors by A.C. Downton, that a loader programme is required to load software on the disk of the computer. This concept is called as boot strapping. In other words, if software is required to load a programme on the computer then the programme which has to be loaded on the computer continued to be software. Simple because the 'Motion Capture Animation Files' requires another software known as 'soft image' to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said notification No. 11/97-Cus. (c) On the issue of valuation, the export declaration initially filed and the revised export declaration may give rise to a suspicion. However, we have to appreciate and take into account the totality of the facts and other circumstantial evidence, since it is settled law is that suspicion cannot take the place of evidence. The other circumstantial evidence in the form of contemporaneous imports of like/similar goods shows that the value declared is correct. Section 14 of the Act provides that the value shall be the price at which such or like goods are ordinarily sold or delivered at the time and place of importation. The contemporaneous imports relied upon by CCCPL is evidence which cannot be discarded, when in some cases, the supplier of imports at Mumbai, Bangalore and Goa is the same. The Commissioner of Customs, Bangalore, vide order No. 38/2001 /Commr. Adj. dated 31-12-2001 has accepted the value of similar goods from the same supplier after conducting full inquiry. The department has not challenged that order and has accepted the findings therein. We therefore find that even if the declared value is not acceptable as Transaction Val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dard. We do not find any material on record to support or arrive at such finding. In fact the consignment was examined twice, the second time being 100%. Nothing is shown from the examination reports that goods were sub-standard. The goods were released after enquiry and final assessment. The expert bodies have also not stated that goods were sub-standard. The adjudicating authority's findings on conjectures have to be discarded. Inferences drawn must be supported by evidence or material and not just personal views or opinion of the adjudicator. (g) Having held on merits that the goods are entitled to exemption and the value declared is correct, it may not be necessary to deal with issue of limitation, but since both sides made submissions thereon, we also record our findings thereon. From the record, it appears the goods were initially examined on 11-6-98, the Department caused inquiry to be made during the course of which statement of the concerned persons were recorded, opinion of two government agencies, who confirmed the correctness of the value as well as description. Thereafter, the same were released. The importer disclosed all facts and documents. Nothing incriminati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edly on the facts of the case, Vivek Nagpal has entered into the picture only at the time of purchase of goods by BPCL of the goods that is after Customs clearance. There is nothing on record to show the loan advanced by PPL is for the purchase of imported CD ROMs from CCCPL. There is no allegation against PPL. The act of extending loan by Vivek Nagpal through PPL could not have has not rendered the goods liable for confiscation. Hence the penalty imposed on Vivek Nagpal is also set aside. (c) As regards appeal of BPCL and Mr. Virendra Sutaria, there is nothing on record to show that the goods purchased for home consumption were liable for confiscation. The Commissioner has drawn adverse inference based on inability to sell goods for long. That is penalty by loss of profit in itself. It is for lack of commercial wisdom. Positive evidence is required to draw nexus to arrive at penalty as alleged. The statements recorded under Section 108 relied upon in the notice do not support the theory of collusion or conspiracy amongst the parties. Rather we find them exculpatory and supporting the defence. Grounds for penalty 112 (a) or (b) have to be construed strictly. The findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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