TMI Blog2009 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... SAYAT, J. 1. Challenge in these appeals is to the judgment of Customs, Excise and Service Tax Appellate Tribunal, South Zone, Bangalore (in short the 'CESTAT'). The orders in original passed by the Commissioner of Customs, Bangalore and Commissioner of Customs, Chennai were affirmed subject to certain modifications. 2. Seven appeals were filed against the Order-in-Original No.27/2004 dated 27.7.2004 by Commissioner of Customs, Bangalore and Order-in- Original No.2724/2004 dated 30.9.2004 passed by the Commissioner of Customs, Chennai. The details of the orders challenged before the CESTAT and the quantum involved are as follows: Appeal No. Appellant Differential Duty Redemption Fine Penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant company, her statement was also recorded. The investigations conducted revealed that Shri R. Karumbaiah, his wife, Shri Thomas Mathew and his wife as Directors started M/s. Carpenter Classics Exim Pvt. Limited (in short 'CCEPL') as a private limited company in the year 1995. The company decided to import their requirements of kitchens from Veneta Cucine of Italy who are reputed manufacturers. Shri Karumbaiah and Thomas Mathew hatched a conspiracy to undervalue their imports for increasing their profits in the local market. For this purpose, they had prepared the invoices of the foreign supplier and sent them to Italy. Thomas Mathew floated a front company in the name of Proma SRL, the manipulated invoices were raised in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain customers in cash. The cash so collected was handed over by Shri R. Karumbaiah to Mr. Thomas Mathew for settling the account of Veneta Cucine. The portion containing the prices in the confirmation order has been cut out in almost all such documents ostensibly to hide the actual price from the customers. Thus, CCEPL substantially under-valued their import consignments in order to evade payment of customs duty. Similar modus operandi was adopted to import goods through Chennai Port also. On the basis of investigation, show cause notices were issued to the noticees. After observing the principles of natural justice, the adjudicating authorities at Bangalore and Chennai passed orders which were assailed before CESTAT. Various stands wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ravi Karumbaiah was the Managing Director and the Chief Promoter of the company. Shri Sanjeev Kabhur was ex- marketing manager of the company and Shri Thomas Mathew was the Director of the appellant-company and also a Director of Proma SRL who issued the invoices relating to the imports. Allegation was that with the help of Thomas Mathew invoices were issued by Proma SRL using it as a front. The actual suppliers of the imported equipment were M/s Veneta Cucine and other foreign companies. Investigations established that value of the imported goods as per Veneta Cucine was different from those in the invoices of Proma SRL. The difference between the two values was settled by Thomas Mathew who collected differential sale amount during his vis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty however was deleted so far as Shri Sanjeev Kabbur is concerned. 4. The primary stand is that even before the show cause notice was issued, to prove its bona fide, a sum of Rs.25 lakhs was paid. Reference is made by learned counsel for the appellant to the proviso to Section 114A of the Act. It is submitted that since reduction in the quantum is permissible, discretion is given in the matter of imposition of penalty. 5. Learned counsel for the respondents on the other hand supported the judgment. 6. Section 112(a) and Section 114A read as follows: "112(a) Penalty for improper importation of goods, etc. - Any person, - (a) who, in relation to any goods, does or omits to do any act which act or o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty or interest as reduced or increased, as the case may be, shall be taken into account : Provided also that in case where the duty or interest determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available if the amount of the duty or the interest so increased, along with the interest payable thereon under section 28AB, and twenty-five per cent of the consequential increase in penalty have also been paid within thirty days of the communication of the order by which such increase in the duty o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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