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TMI Blog2024 (2) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... f the rules ibid. 2. I hold that the goods with re-determined value of Rs. 5,93,25,481/- are liable for confiscation under Section 111 (1) & (m) and 119 of the Customs Act, 1962 but refrain from imposing redemption fine as the said goods have been pilfered and are not available for confiscation. 3. Against the total duty of Rs. 1,71,16,587/-, I appropriate Rs. 2,82,534/- already deposited by M/s Nomita International and demand the differential duty amounting to Rs. 1,68,34,053/- from M/s Container Corporation of India Ltd. under Section 45 of the Customs Act, 1962. 4. I impose a penalty of Rs. 1,00,000/- (Rupees one lakh only) on M/s CONCOR under Section 117 of Customs Act, 1962. 5. I impose a penalty of Rs. 1,00,00,000/- (Rupees one crore) under Section 112(a)(v) of the Customs Act, 1962 and of Rs. 50,00,000/- (Rupees fifty lakh only) under Section 114AA of the Act ibid on M/s Nomita International (Prop. Sh. Lalit Kumar). 6. I impose a penalty of Rs. 2,00,00,000/- (Rupees two crore) under Section 112(a)(v) of the Customs Act, 1962 and of Rs. 50,00,000/- (Rupees fifty lakh only) under Section 114 AA of the Act ibid on Sh. Atal Bhushan Bhatt. 7. I impose a penalty of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beads (with holes) 70181020 3,971 2 Glass beads (with two holes) and Glass seed beads (with holes) 70181020 936 3 Glass Chatons (undeclared ) 70181090 19,104 TOTAL 24,011 7. Since samples could not be drawn, the container was resealed with Customs Seal Nos. 227352 and 227353 and it was re-opened the next day on 21.11.2014 in the presence of Shri Rajesh Jha and Shri Akhilesh Kumar. Samples were drawn from for further investigation under Panchanama dated 21.11.2014. However, as gate pass to take out the samples from the investigation area could not be obtained after completing of proceedings, the drawn samples were put inside the container and it was sealed with Customs Seal Nos. 227376 and 227377. The container was reopened on next date on 22.11.2014 in the presence of panchas and in the presence of Shri Rajesh Jha and Shri AKhilesh Kumar by Panchnama dated 22.11.2014 and samples were taken out from the container and it was sealed with Customs Seal Nos. 227393 and 227394. The container was lying in the ICD Tughlakabad and by Seizure Memo dated 23.02.2015, the goods were seized under section 110 as they were found to be liable to confiscation under section 111. Voluntary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de in respect of the impugned Bill of Entry, as well as violation of CBLR Rules by himself/ by his CHA firm/ by Marketing Manger of his CHA firm. (I) The seized goods lying in Container No. OOLU1372503 which were required to be kept in safe custody by CONCOR were stolen for which an FIR was also lodged with Delhi Police and thus CONCOR also failed to discharge it's duties and obligations." 8. Accordingly, a show cause notice dated 18.11.2014 was issued which culminated in the issue of the impugned order. 9. CONCOR in its reply dated 26.10.2016 submitted as follows: (a) That container was shipped from China to India and had moved under transhipment bond of the shipping line to ICD Tughlakabad by train and it was shifted to import warehouse on 19.11.2014. The seal was intact and it was cut on 20.11.2014 in the presence of representative of Customs, CONCOR, CISF and Shipper/CHA; (b) By a letter dated 24.02.2015 customs reported that the container was seized and sealed by Customs Seal No. 227393 and 227394 by Seizure Memo dated 23.02.2015 and it had requested to keep the goods under safe custody; (c) A letter dated 24.02.2015 was written after gap of 94 days after the exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the goods were seized by the customs. It became aware of the seizure only when it received a letter from the Customs on 24.02.2015 when it found the customs seal was missing and replaced by a red colour private seal with no number. He further asserted that penalty under section 117 was wrongly imposed on CONCOR. 11. Learned authorized representative appearing for the department placed on record a letter dated 24.02.2015 sent by the Superintendent SIIB to the General Manager of CONCOR intimating that the goods contained in the aforesaid container were seized under section 110 by seizure memo dated 23.02.2015 and sealed with customs seal Nos. 227393 and 227394 and requesting the CONCOR to keep the goods under safe custody until further orders from the customs. In response, CONCOR sent a letter dated 28.02.2015 intimating that the container was found without customs seals and with only a red colour private seal without any seal number. 12. Learned authorized representative appearing for the department submitted that the goods had not left the customs area within which the custodian of the goods was CONCOR. 13. It is not disputed that the goods were handed over in the container b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CONCOR intimating about the seizure, and asking it to keep the goods in safe custody. At no point of time had the goods left the custody of CONCOR. Therefore, the responsibility for safe custody of the goods lies with CONCOR. 17. Therefore, CONCOR was liable to pay the duty under section 45 for the goods lost. Since part of duty was already paid, the demand was made confirmed only to the extent of duty not paid or short paid. He also asserts that the penalty under section 117 was correctly imposed on CONCOR. 18. We have considered the submissions with respect to this appeal on both sides. 19. The undisputed facts of the case are that the container was handed over by the shipping line to ICD TKD and the seal was intact at that time. The goods which are imported and are in the customs area shall remain in the custody of the custodian approved by the Commissioner of Customs until they are cleared for home consumption or for warehousing or transhipment. It is the responsibility of the custodian to keep a record of such goods and send a copy thereof to the proper officer and not permit such goods to be removed from the customs area or otherwise dealt with except under and in accorda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2). In short, the liability to pay duty travels along with the imported goods. 23. The question which arises is if the goods get lost while they are in the custody of the custodian before they are cleared for home consumption, who is liable to pay duty? As per section 45 (3) the custodian is liable to pay duty if any good are pilfered after unloading thereof in the customs area while in the custody of the custodian. 24. Section 45 reads as follows: " (1) Save as otherwise provided in any law for the time being in force, all imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the 1[Principal Commissioner of Customs or Commissioner of Customs] until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII. (2) The person having custody of any imported goods in a customs area, whether under the provisions of sub-section (1) or under any law for the time being in force,-- (a) shall keep a record of such goods and send a copy thereof to the proper officer; (b) shall not permit such goods to be removed from the customs area or otherwise dealt with, except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a penalty not exceeding one lakh rupees." 27. Clearly, there is violation of section 45 by the CONCOR inasmuch as it had not taken proper care of the goods in its custody and as a result they were pilfered. The value of the goods which were pilfered is Rs. 5,93,25,481/-. Considering this amount, we find that penalty of Rs. 1 Lakh imposed on CONCOR under section 117 is fair and reasonable and calls for no interference. Customs Appeal No. 51911 of 2018 filed by Shri Bhalinder Singh 28. Shri Bhalinder Singh is assailing penalty of Rs. 20 lakhs under section 112(a) and Rs. 10 lakhs under section 114 AA imposed upon him. 29. Learned counsel for the appellant made the following submissions; (a) B S Mann, the Proprietary firm, is licensed as a Customs Broker. Shri B S Mann duly obtained all the KYC documents and verified the credentials of the importer and its address before the filing Bill of Entry which is the subject matter of this appeal. Shri B S Mann had pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions; (a) During the relevant period Shri Atal Bhushan Bhatt, was the Marketing Manager of Shri B S Mann, CHA, whose statement were recorded on 20.11.2014 under section 108. This statement has not been retracted by Shri Bhatt till date. He confirmed in his statement and that the sample of glass beads was shown to him and that he was aware of the undeclared item i.e., glass chatons and that he was a "G" card holder of Shri B S Mann. Shri B S Mann, the "F" card holder, made his statement on 21.11.2014 in which he confirmed the sample of imported goods were shown before the import and that these samples were handed over to Shri Bhatt which are glass chatons. (b) During the relevant period Shri Lalit Kumar the proprietor of the importer was in Jail in connection with an attempt to murder charge on 15.11.2014 even before the Bill of Entry was filed on 18.11.2014. (c) Shri Bhatt was the employee of Shri B S Mann, and, therefore, during the relevant period Shri B S Mann is liable for any action or inaction by Shri Bhatt in his capacity as the representative of Shri B S Mann. (d) On request of Shri B S Mann, Shri Atal Bhushan Bhatt was cross-examined before the Commissioner on 04.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being imported and had filed Bills of Entry with the wrong description. 33. Therefore, the goods were correctly held to be liable for confiscation under section 111 (l)and (n) of the Customs Act. However, before the goods could be confiscated they were pilfered after their seizure while in the custody of the CONCOR. The Commissioner had, therefore, not imposed any redemption fine. Penalty under section 112 (a) can be imposed on any person who, in relation to a goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act. In this case, the glass chatons were imported and having seen the samples even after the import Shri B S Mann and through his employees filed a Bill of Entry for glass beads. In fact, 90% of the goods were glass chatons. We, therefore, find that Shri B S Mann was correctly held liable to penalty under section 112(a). 34. Penalty under section 114AA can be imposed if any person knowingly or intentionally makes, signs or uses or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material fact in the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2016 and had appeared for personal hearing on 24.01.2016 through his advocate Shri Vipin Yadav. The defense of Shri Rohit Sharma as follows: i. That he had no knowledge of the goods in question imported under the Bill of Entry but he was induced/coerced by Shri Atal Bhushan Bhatt to say before the Superintendent that he was working with M/s Nomita International as its manager. That he had neither any role in the import nor any knowledge of the goods which were imported and that he had subsequently severed all connections with Shri Bhatt. ii. He was the employee of Shri Bhatt and was working for him since November, 2014 and was looking after the transportation of goods. Shri Bhatt was in the business of transportation and logistics and was also working for Customs Broker Shri B S Mann as his employee. iii. His responsibility was confined to arrange transportation on daily basis containers to transport imported goods to godowns for which purpose he would keep a personal diary regarding movements of all vehicles. He worked for Shri Bhatt since November, 2014. On 20.11.2019 he went to the office of Shri Bhatt to report about his work when Shri Bhatt informed him about M/s Nomita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Customs Act before the Superintendent that he was the Manager of M/s Nomita International and that he had obtained the documents related to the import from owner of M/s Nomita International and handed them to Shri Bhatt for further processing and filing the Bill of Entry, and that he aware of the undeclared chatons which were seized by the customs authorities. This statement was made on 21.11.2014 and has not been retracted. All the material facts which were indicated in the statement such as the address of M/s Nomita International and the nature of its business matched with the facts available on record. We, therefore, find no reason to believe that the statement was made incorrectly or and under pressure or coercion. We also find that there was no retraction of the statement since November, 2014 until the issue of the show cause notice more than a year later. Any person who makes a statement under threat or coercion retracts it once the threat or coercion is removed. In this case, the appellant claims that he had left the service of Shri Bhatt in November, 2014 itself. That being the case, there was no scope for Shri Bhatt to exert any pressure on the appellant after tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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