2002 (9) TMI 714 - AT - Customs

Warehousing licence - Private Bonded Warehouse licence - Cancellation of - Penalty - Confiscation of conveyance

Summary

Issues:
1. Cancellation of private bonded warehouse license under Customs Act, 1962.
2. Duty demand confirmation and penalty imposition for contravention of Customs Act provisions.
3. Confiscation of goods and penalties on individuals involved in diversion of bonded stores.

Issue 1: Cancellation of private bonded warehouse license
The Commissioner of Customs, Kandla, canceled the private bonded warehouse license of M/s. Parson Brothers under Section 58(2)(b) of the Customs Act, 1962. The Commissioner confirmed duty demand of Rs. 2,01,712 on M/s. Parson Brothers for goods not supplied to a vessel as per a shipping bill. Investigations revealed a conspiracy to divert bonded cargo to the local market. The Tribunal found no violation by M/s. Parson Brothers and set aside the penalty and license cancellation as they did not contravene Customs Act provisions.

Issue 2: Duty demand confirmation and penalty imposition
The duty demand and penalties were imposed on M/s. Parson Brothers, Shri Rajendra Bansal, and Shri K. Chavda for contravention of Customs Act sections. The Tribunal found Shri Bansal aware of irregularities and involved in the diversion of goods. Despite Bansal's plea of ignorance, the Tribunal upheld penalties and confiscation of a vehicle used in the diversion. M/s. Parson Brothers' negligence in supervision and record-keeping was highlighted, leading to duty evasion. The Tribunal upheld the penalties imposed on Bansal and reduced the fine for the confiscated vehicle.

Issue 3: Confiscation of goods and penalties on individuals involved
Shri K. Chavda admitted involvement in diverting bonded stores to the local market and sought leniency in penalty imposition. The Tribunal upheld the penalty of Rs. 55,000 on Chavda, considering him the main conspirator. The appeals were disposed of accordingly, affirming penalties on Chavda and Bansal, and reducing the fine for the confiscated vehicle. The Tribunal emphasized the importance of proper supervision and compliance with Customs regulations for bonded warehouse operators to prevent duty evasion and diversion of goods.

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