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Hasmukh Ganatra, Nilesh Bansal, Ram Nivas Agarwal And Sunil Agarwal Versus Commissioners of Central Excise, Customs and Service Tax-Surat-I

2016 (3) TMI 557 - CESTAT AHMEDABAD

Validity of show cause notice - Issued by DGCEI officers of Mumbai - Held that: it is seen from the Bills of Entry for warehousing that the goods were imported at Mumbai Port and it was transhipped to the said unit at Surat, which is a customs station. Therefore as the goods were imported at Mumbai port, the DGCEI officers of Mumbai has jurisdiction to issue show cause notice.

Imposition of penalty - Under Section 112, and/or 114A of the Customs Act, 1962 - Conspiracy to defraud by in .....

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CIAL) AND MR. P.M. SALEEM, MEMBER (TECHNICAL) For the Petitioner : Shri G B Yadav, Advocate And Shri P Patankar, Advocate For the Respondent : Shri J Nair, Authorised Representative ORDER PER : MR.P.K. DAS, These appeals are arising out of a common order and therefore, all are taken up for disposal. 2. The relevant facts of the case in brief, are that one M/s Raj International claimed to be 100% EOU imported Ball Bearings and Polyester Fabrics. The Officers of Directorate General of Central Exci .....

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port purpose and diverted in the domestic market by M/s Raj International and to impose penalty on them amongst others including appellant herein. The Adjudicating Authority confirmed the demand of customs duty amounting to ₹ 30,31,697/- on three lacs pieces of Ball Bearing and ₹ 16,02,244/- another consignment of 27,989 mtrs of Polyester Fabrics alongwith interest and imposed penalty of equal amount of duty on M/s Raj Internationals. It has also imposed penalty on the appellants her .....

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behalf of Shri Nilesh Bansal. The Ld. Authorised Representative on behalf of the Revenue submits that no appeal was filed by M/s Raj Internationals. As the matter is old one of 2008, we proceed to decide the appeals of the appellants. 4. The Ld. Advocate on behalf of the appellants raised a preliminary issue in so far as the import was taken place at Sachin, Surat, and the show cause notice issued by the Addl. Director General, DGCEI, Zonal unit, Mumbai, is beyond the territorial of jurisdiction .....

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)ELT.149 (Tri Chennai) 5. On the other hand the Ld. Authorised Representative on behalf of the Revenue submits in the preliminary issue that the goods were imported at Mumbai port, which were transhipped to Surat, warehouse of the said unit. Thus, the contention of the Ld Counsel cannot be sustained. He further submits that the DGCEI officers were appointed as Customs Officers by Notification No. 27/2009-CUS (NT) dtd 17.3.2009. He also referred to Section 28 of the Customs Act 1962, invoked for .....

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ds on high-seas sales basis from M/s Sai Impex. It is revealed from the Bills of entry for warehousing as placed by the Ld Counsel on behalf of the appellants that the port of import was Mumbai JNPT. It is seen from the Adjudication order that Shri PT Hudda, proprietor of M/s ACA (Customs House Agent) in his statement dtd 4.12.2002 stated that he had undertaken the import clearance on behalf of M/s Raj Internationals, SEZ, Sachin Surat, since August 2002; that so far as he has handled only two i .....

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that the second imported consignment was cleared from the Nhava Sheva port consisting of 159 packages of polyester fabrics having a net weight of 10,143.30 kgs under a customs TP No 122 dtd 3.9.2002 and their job No.196/2002-2003; that upon the material reaching at Surat SEZ unit of M/s Raj Internationals, the Landing Certificate (LC) was obtained by the said importer which was handed over to him by Shri Rajendra Thakkar, the proprietor of M/s Raj Internationals; that they have in turn, submitt .....

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uty on goods transited under Section 53 or transshipped under Section 54 of the Act. For the purpose of the appreciation of the case, Section 53, 54 and 55 are reproduced below: 53. Transit of certain goods without payment of duty.- (1) Subject to the provisions of section 11, any goods imported in a conveyance and mentioned in the import manifest or the import report, as the case may be, as for transit in the same conveyance to any place outside India or any customs station may be allowed to be .....

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ll of transhipment shall be presented to the proper officer in the prescribed form.] (2) Subject to the provisions of section 11, where any goods imported into a customs station are mentioned in the import manifest or the import report, as the case may be, as for transshipment to any place outside India, such goods may be allowed to be so transshipped without payment of duty. (3) Where any goods imported into a customs station are mentioned in the import manifest or the import report, as the cas .....

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shipped, without payment of duty, subject to such conditions as may be prescribed for the due arrival of such goods at the customs station to which transhipment is allowed. 55. Liability of duty on goods transited under section 53 or transhipped under section 54.Where any goods are allowed to be transited under section 53 or transhipped under sub-section (3) of section 54 to any customs station, they shall, on their arrival at such station, be liable to duty and shall be entered in like manner a .....

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per officer for transhipment. The duty liability would arise after arrival of the goods at such customs station. Section 55 of the Act 1962 provides that the goods are liable to duty on their arrival at such station (customs station). On reading of the above provisions, it is clear that after importation of the goods into a customs port, it could be allowed to tranship to the customs station without payment of duty. In the present case, it is seen from the Bills of Entry for warehousing, the goo .....

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imposition of penalties. The main noticee M/s Raj Internationals had not filed any appeal. The Adjudicating Authority had given findings, while imposing penalty on the appellants, are as under: i) Penalty on Shri Hasmukh Ganatra of M/s. SFPL, The SCN brings out in detail, the key role played by Shri Hasmukh Ganatra in procurement, sale, and arrangement of fake export documents to cover up diversion of duty free goods. Further, the very fact that he stood as Surety for an amount of ₹ 1.5 cr .....

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Act 1962 can be imposed on him. Accordingly a penalty shall be imposed on him under Section 112 of the Customs Act 1962. ii) Penalty on Shree Sunil Agarwal of M/s. GB and Shree Ramnivas Agarwal of M/s. BD. As mentioned at appropriate place herein, no reply has been filed by these persons and their counsels had informed that they would be filing reply, but no reply has been filed by them. The department has discharged the initial onus by raising the allegations that they had dealt with the goods .....

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enalty on Shri Hemant Trivedi of M/s. SI As mentioned at appropriate place herein, no reply has been filed by him. Nor did he avail himself of the opportunities of being heard in person. The department has discharged the initial onus by raising the allegations that they had dealt with the goods, Ball Bearings involved in the instant case. Therefore I have to hold that the allegations stand proved and therefore a penalty under Section 112 of the Customs Act 1962 has to be imposed on him However, .....

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k in conviction. His statement regarding sale of part shipment to M/s. PI, who exported the same through M/s. Kamla Exports had been found to be bogus as no such firm was found existing Then, regarding theft of some goods, the fact remains that it is not a natural cause. Therefore all liabilities including penalty shall accure in such eventualities. The contention regarding the sub-standard nature of fabric was also found to be self contradictory. Regarding the pseudo nature of transactions carr .....

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to be imposed on him. However, since Shree Nilesh is not the registered person against whom duty can be confirmed under Section 28(b) ibid. I hold that no penalty under Section 114A of the Customs Act 1962 can be imposed on them. 10. Shri G B Yadav, Ld. Advocate appearing on behalf of Shi Hasmukh Ganatra submits that he had given surety in respect of the bond executed by M/s Raj International. He had no knowledge of the alleged irregularities committed by M/s Raj Internationals. He further submi .....

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bearings. He has assisted Shri Raju Mohtta for selling of the imported bearings. It is further submitted that the appellants had no knowledge from where the goods were procured by the said unit and sold in the open market illicitly. It is further submitted that the penalty was imposed on mere presumption and assumption. It is stated that even both the appellants are brothers but they have separate business identity. No statements of Shri Ram Nivas Agarwal was recorded. The penalty imposed on Sh .....

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he findings of the Adjudicating authority. He particularly drew the attention of the Bench the relevant portion of the statements of the various persons involved in this case. It is submitted that M/s Raj International had not filed appeal and therefore, M/s Raj International had accepted findings of the Adjudicating authority. He further submits that show cause notice proposed penalties under Section 112, and/or 114A of the Act. It is seen from the Adjudication order that Shri Rajendra Thakkar, .....

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t with the sole malafide intention of selling illegally in the local market. M/s Raj International had not filed appeal and therefore, the allegation against the import M/s Raj International has been established. 12. We find that the entire deal was financed by Shri Hasmukh Ganatra. He became surety for ₹ 1.45 crores towards B17 bond executed by the importer. It is revealed from the statement of the various persons that the business activity of M/s Raj Internationals was carried out and ma .....

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. 13. The penalty imposed on the other appellants ie., Shri Sunil Agarwal and Shri Ram Nivas Agarwal who were engaged in trading activity. We find that Shri Hasmukh Ganatra in his statement categorically stated that the purchase of imported goods were arranged by Shri Raju Mahotta of Kolkatta. The goods were delivered to Shri Sunil Agarwal and Shri Ram Nivas Agarwal who had arranged the finance and documents for the Bills of Entry in respect of high-seas sale agreements. All the documents were h .....

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