TMI Blog2005 (4) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... f 12 AWBs and the related Bills of Entry. He imposed a penalty of Rs. 7 lakhs on M/s. MNS Exports, Bangalore under Section 112 of the Customs Act, 1962. He ordered cancellation of EOU Licence bearing No. 55/96 granted to M/s. MNS Exports in terms of Section 58(3) of the Customs Act, 1962. He imposed a penalty of Rs. 1,00,000/- on Shri Narayana Bhatt, Managing Director of M/s. MNS Exports under Section 112 of the Customs Act. He imposed a penalty of Rs. 10,00,000/- on Shri H. Bhaskar, Inspector of Customs, under Section 112(b)(ii) of the Customs Act, 1962. He imposed a penalty of Rs. 50,000/- on Smt. Shilla Shree, w/o of Shri H. Bhaskar under Section 112 of the Customs Act, 1962. He imposed a penalty of Rs. 5,00,000/- on Shri Vikram Jain of M/s. Texworth International, Bangalore under Section 112(b)(ii) of the Customs Act, 1962. He imposed a penalty of Rs. 5,00,000/- each on Shri Ravi Prakash, Shri B. Prasad and Shri Srinivasa Rao employees of M/s. MNS Exports Pvt. Ltd. under Section 112(b)(ii) of the Customs Act, 1962. The appeal of Shri H. Bhaskar appears to have been dismissed on account of non-compliance of Stay Order. In this order, we are disposing of the appeals of all the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be to file the required documents with the ACC, Bangalore, for clearance of the consignments in the name of M/s. MNS Exports, but actually meant for Shri Vikram Jain. Shri Bhaskar would get certain consideration at the rate of Rs. 11/- per metre. The three employees of M/s. MNS Exports would also in turn receive certain consideration from Shri H. Bhaskar. The company at Singapore also would receive some commission. As per the records, all these activities had been carried out without the knowledge of M/s. MNS Exports. When M/s. MNS Exports learnt the nefarious activities of their employees, they took immediate action to dismiss them from service. In all, 12 consignments of imports have been cleared from ACC, Bangalore in the name of M/s. MNS Exports. The goods were described as lining material. The statements reveal that actually the goods would be silk fabrics. The same imported goods along with some additional goods were exported by Shri Vikram Jain. This is in a nutshell what has happened. 6.Revenue proceeded against the appellants by issue of Show Cause Notice. After adjudication, the Commissioner has issued the impugned order. 7.Now let us take up the appeal of each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the adjoining premises, we are satisfied that there is no mala fide. There was no intention on the part of Shri Narayana Bhatt or M/s. MNS Exports to divert the goods to local market. Due to severe thunderstorm, the goods were removed to the adjoining premises to prevent damages. Hence, there is absolutely no justification in levying penalties on M/s. MNS Exports and also Shri Narayana Bhatt. Inasmuch as the goods were used with the permission of the Commissioner in the manufacture of goods, which were later exported, the demand of duty is not sustainable. 10.As regards the demand of duty of Rs. 34,54,338/- from M/s. MNS Exports, the learned Advocate adduced the following arguments : (i) Section 2(26) of the Customs Act defines 'Importer' as a person including any owner or any person holding himself out to be the importer. In the present case, the learned Commissioner himself has come to the conclusion in the impugned order that Shri Vikram Jain was the owner of the goods since the goods, which were imported in the name of M/s. MNS Exports were the same goods which were re-exported back to the same Singapore supplier. M/s. MNS Exports, at no time, were the owner of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatements of the 3 errant employees and also the immediate action taken by the appellants to terminate their services go to establish that the acts of the 3 employees were without the knowledge and consent of the principal viz. M/s. MNS. Hence, no liability could be fastened on the MNS for the wrongful acts committed by the employees at their own risk and responsibility for their pecuniary gain. Strangely, the Commissioner, in the impugned order, has omitted the reference to "unless the contrary is proved" while dealing with Section 147(2) and deemed knowledge and consent of the owner/importer. (x) The learned Advocate cited the following case-laws to hold that the principal is not liable for the action of the Agent outside the authority given to him. (1) Plastchem Industries v. CC, Nhava Sheva - 2000 (120) E.L.T. 775 (T) "The importer is the person, who has caused the import to be made". (2) CCE, Mumbai v. JAC Enterprises - 2001 (129) E.L.T. 179 (Tri.-Bom.) "When employees of CHA have to carry on job on their own without the consent or knowledge of the employer, those acts are not in the course of their employment." (3) K. Krish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees caused the imports during the course of their employment. Therefore, the learned SDR urged that the Commissioner was right in demanding duty from M/s. MNS Exports. 12.After going through the records of the case, we are neither convinced by the learned SDR's arguments nor the reasoning adopted by the learned Adjudicating Authority in demanding duty on the imported consignments from M/s. MNS Exports. The learned Adjudicating Authority himself has given a clear finding that the goods were imported for Shri Vikram Jain by the 3 employees of M/s. MNS for certain monetary consideration. After clearance from the Air Cargo Complex, the goods were not sent to the factory of M/s. MNS Exports. The goods were delivered to Shri Bhaskar who, in turn delivered the goods to Shri Vikram Jain. Moreover, no liability can be fastened on M/s. MNS Exports, as the employees acted beyond the authorisation given to them. They mis-used their position to import goods free of duty for Vikram Jain. It is very clear that the learned Adjudicating Authority has failed to interpret Section 147(2) of the Customs Act properly. As pointed out by the learned Advocate, he has omitted to interpret the words "unles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence that Mrs. Shilla Shree gave a cheque of Rs. 15,000/- to Shri Ravi Prakash. All these indicate that the employees were not that innocent as they plead now. Moreover, they have not retracted from their statements. Therefore, the imposition of penalties on them is justified. We are not inclined to show any lenient treatment to the 3 appellants. The Adjudicating Officer's order imposing penalties is justified. Under these circumstances, the three appeals filed by S/Shri Ravi Prakash, B. Prasad and Srinivasa Rao are dismissed. Appeal of Smt. Shilla Shree 17.Shri Kesava lyengar, the learned Advocate appeared for Smt. Shilla Shree w/o Shri H. Bhaskar. The learned Advocate urged that Smt. Shilla Shree was not at all concerned with the import of the consignments in question. She was owning a car. The Adjudicating Authority has penalised her on the ground that her car was used for clearing the imported goods and also she paid Rs. 15,000/- by way of Cheque to Shri Ravi Prakash, being the commission payable by Shri H. Bhaskar for clearance and delivery of the impugned goods from Air Cargo Complex, Bangalore. The Adjudicating Authority has, in para 19 of his order, has stated the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were meant only for Shri Vikram Jain. Shri Bhaskar had clearly stated that the consignments were meant only for Shri Vikram Jain. Shri Vikram Jain also had identified the consignments referred in the 12 Airway Bills as the same, which were exported by him to the Singapore party. The statements of both Shri Vikram Jain and Shri H. Bhaskar give a wealth of information, which could not have been the imagination of the investigating officers. There is also evidence that Shri H. Bhaskar was receiving huge amounts as consideration for the help he rendered to Shri Jain. There is evidence that the 3 employees of M/s. MNS Exports received monetary consideration from Shri Bhaskar. The Adjudicating Authority has considered the totality of the circumstances and came to the conclusion that Shri Jain is liable for penalty under Section 112. The fact that the goods had been delivered to Shri Bhaskar is corroborated by the statement of the transporter Shri Govindaraj. Under these circumstances, we have no reason to set aside the findings of the Adjudicating Authority. Moreover, the penalty imposed is not very harsh considering the gravity of the offence. Hence, the appeal is rejected. (Pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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