Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (12) TMI 1149 - DELHI HIGH COURT

2015 (12) TMI 1149 - DELHI HIGH COURT - 2016 (332) E.L.T. 278 (Del.) - Levy of penalty on CHA / agent, broker - Import of high end luxury cars from various foreign suppliers by mis-declaring as new - Undervaluation of goods - Imposition of penalty under sections 112(a) and 114AA of Customs Act, 1962 - Demand of differential duty - Held that:- Court noted that the CCIG proceeded to adjudicate the SCN in question, as far as Respondent No. 1 is concerned, without recording the statement of anyone o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

port was with the knowledge of Respondent No. 1, no penalty can be imposed on Respondent No.1. - There was no finding, based on the evidence on record, that Respondent No. 1 was aware of the illegal import in which the G-card holder was involved. Considering that it was a question of penalty, there ought to have been some tangible material to show that Respondent No. 1 was aware of the acts of its employee/agent, Mr. Prince. As rightly pointed out, if Respondent No. 1 was found to have acted in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

before the Appellant. The car was imported into India through M/s. A.K. International and cleared through customs on 4th April 2008 on payment of duty on the basis that it was a new car. It was ultimately sold to Respondent No. 2 on 21st April 2008. The CCIG sought to place the onus on Respondent No. 2 to show how the prior registration in UK, though stated for the purpose of onward sale to India, “has helped the transport authorities of UK for allowing the export of the impugned car.” There wa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

5 - S. Muralidhar And Vibhu Bakhru, JJ. For the Appellant : Mr. Rahul Kaushik, Senior Standing Counsel For the Respondents : Mr. Sanjay Kantawala, Advocate for R-1. Mr. Chidananda Urs B.G. Advocate for R-2. ORDER 1. This is an appeal by the Commissioner of Customs (Import), under Section 130 of the Customs Act, 1962 ( Act ), against the impugned order dated 17th December 2014 passed by the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) in Appeal Nos. C/58871 & 60232/2013-CU .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ort. Since second hand cars attracted higher customs duty than new cars, there was an obvious loss of revenue as a result of such import. Moreover, according to the Appellant, it was revealed that that Mr. Walia was also involved in under-invoicing the value of these vehicles at the time of import thereby evading the differential customs duty. A search was conducted in the premises of Mr. Walia and various documents were found. From the documents it appears that among several cars, one was Merce .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

According to the Appellant, the investigations revealed that the aforementioned vehicle after import had been sold to Respondent No. 2 who was a resident of Bangalore, Karnataka . Initially, a show-cause notice ( SCN ) was issued on 24th April 2012 to several persons including Mr. Walia and Respondent No. 1 herein. As far as Respondent No. 1 was concerned, it was asked to show cause through its G-card holder, Mr. G.S. Prince, why the penalty under Sections 112 and 117 of the Act should not be im .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ouse, New Delhi as to why penalty under Section 112 (a), Section 114AA and Section 117 of the Customs Act, 1962 should not be imposed on him. 6. On 3rd April 2013, summons was issued for recording of the statement of Mr. Vishwas Uday Singh Laad, Respondent No.2 herein, who was the ultimate purchaser of the car in question. A SCN was issued on 5th April 2013 to Mr. Sumit Walia, Mr. Tarun Kumar and Respondent No. 1 (on jointly and several basis) requiring them to explain why the valuation of the c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in fact already registered/sold prior to its importation into India. They were also asked to show cause why the car in question should not confiscated under Section 111 (m) and Section 111 (d) of the Act and why the differential duty of ₹ 68,59,92, along with interest on the delayed payment should not be demanded and recovered. 7. On the basis of the above SCN, an enquiry was held and an Order-In-Original passed by the Commissioner of Customs (Import and General) ['CCIG'] on 18th J .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(a) and 114AA of the Act and as far as Respondent No. 1 was concerned, a penalty of ₹ 10 lakhs was imposed under Section 112 (b) of the Act. 9. Both Respondent Nos. 1 and 2 herein filed separate appeals before the CESTAT. In the impugned common order dated 17th December 2014 in both appeals, the CESTAT held as under: (i) The car in question was initially imported for sale to M/s. Oswal in Ludhiana and later on purchased by Respondent No. 2 on 21st April 2008. Initially it had been imported .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mption fine was reduced to ₹ 5 lakhs. Upon payment of the reduced redemption fine, the car would be released to Respondent No. 2. Since the statement of Respondent No. 2 was not recorded and since no role of Respondent No. 2 was discussed, the penalties imposed on him under Sections 112 (a) and 114AA of the Act were not justified. (iv) As far as Respondent No. 1, the CHA, was concerned, it was not aware of the import of the car in question by its agent, Mr. G.S. Prince, the G-Card holder. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he Customs House Agents Licensing Regulations 2004 ( CHALR 2004 ) for which proceedings can be initiated against them under the said Rules. Thus, while the penalty was imposed on Mr. Prince, the penalty against Respondent No. 1 was dropped. Consequently, even in the present proceedings Respondent No. 1 could not be penalized since it had no knowledge of the illegal import. 10. In the present appeal the following two questions have been urged by the Appellant for consideration by the Court: (i) W .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ms duty payable. The second objection concerns the monetary limit for filing of appeals by the Department in this Court in terms of the Instruction F. No. 390/Misc./163/2010-JC dated 17th August 2011 issued by the Central Board of Excise & Customs, New Delhi ( CBEC ). The minimum monetary limit below which an appeal shall not be filed by the Department in this Court was fixed at ₹ 10 lakhs. It has been clarified in the aforementioned instruction that for ascertaining whether a matter w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ated 18th July 2013 passed by the CCIG as well as the impugned order dated 17th December 2014 passed by the CESTAT dealt with only the question of penalty. Therefore, as far as Respondents 1 and 2 are concerned, the present appeal does not involve any question of valuation or the corresponding customs duty. The first preliminary objection is accordingly rejected. 13. As regards the second preliminary objection, the Appellant is in appeal against the deletion by the CESTAT of the penalties of  .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

case, it is first submitted by Mr. Kaushik, learned counsel for the Appellant, that the CESTAT has, in the impugned order, proceeded entirely on the basis that in the order-in-original passed by the CCIG in certain subsequent SCNs had exonerated Respondent No. 1. It was not noticed that against those orders, appeals had indeed been filed by the Department before the CESTAT and the said appeals were pending. He accordingly, submitted that the impugned order should be set aside and the matter rema .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oncerned, it cannot escape liability since under Regulation No. 19 (8) of the CHALR 2004 it was required to exercise such supervision as may be necessary to ensure the proper conduct of any such employees in the transaction of business as agents . According to him, the CHA would be held responsible for all acts or omissions of his employees in regard to their employment. 17. In the present case, the Court noted that the CCIG proceeded to adjudicate the SCN in question, as far as Respondent No. 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ence of some tangible material to show that the illegal import was with the knowledge of Respondent No. 1, no penalty can be imposed on Respondent No.1. 18. Mr. Kantawala then referred to the findings recorded in the order-in-original dated 18th July 2013. The Court finds that in the said order as far as Respondent No.1 is concerned, one reason for justifying the penalty is that Respondent No.1 had failed to verify the antecedents of the importer diligently so as to inform the Department in case .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d out, if Respondent No. 1 was found to have acted in breach of Regulation 19 (8) of CHALR 2004, that might call for a separate action to be initiated under those regulations. However, that by itself will not justify the imposition of penalty under Sections 112 and 114AA of the Act unless knowledge of the illegal acts of the agent/employee is able to be attributed to his employer/principal, i.e. Respondent No.1. 19. In the circumstances, the Court finds that the view taken by the CESTAT in the c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to evade summons or that any coercive action was required to procure his presence. This, therefore, did not warrant any adverse inference being drawn against Respondent No.2 as was done by the CCIG in the order-in-original dated 18th July 2013. Respondent No. 2 appeared before the officers of the Department, gave a statement and produced the documents in his possession. 21. From the facts placed on record by Respondent No.2 it appears that the car in question was manufactured in United States o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version