2003 (10) TMI 458 - AT - Customs

Summary

Issues Involved:
1. Validity of notices invoking the extended period of limitation under Section 28 of the Customs Act.
2. Imposition of penalties on A.R. Gupta, Pravin Gupta, and Bipin Gupta.
3. Involvement and penalty on Vinod Jatia.
4. Penalty on J.K. Yagnik.
5. Penalty on H.P. Daga & Co.

Detailed Analysis:

1. Validity of Notices Invoking the Extended Period of Limitation under Section 28 of the Customs Act:
The appellants contended that the notices demanding duty were invalid as they invoked the extended period of limitation under Section 28 of the Customs Act but were not signed by the Commissioner. The Tribunal found that the notices did not cite Section 28 but demanded duty based on non-compliance with Notification 186/88, which required the goods to be used in the manufacture of export goods. Thus, the preliminary contention regarding the validity of the notices was rejected.

2. Imposition of Penalties on A.R. Gupta, Pravin Gupta, and Bipin Gupta:
The Tribunal examined the involvement of the Gupta family in the import and sale of goods. The Commissioner's orders cited statements from Arun Natwarlal Patel and others, indicating that the Guptas orchestrated the import process, obtained advance licenses, and sold the goods in the market. The statements of the Guptas themselves admitted their role in facilitating the imports and handling the documentation. The Tribunal found substantial evidence implicating the Guptas and rejected their contention that they were merely facilitators. Consequently, the Tribunal upheld the penalties imposed on them.

3. Involvement and Penalty on Vinod Jatia:
Vinod Jatia's counsel argued that there was no evidence against him except the statements of the Gupta family, who claimed he was the financer and the real importer. The Commissioner had exonerated Jatia in three out of four orders, finding no direct evidence of his involvement. The Tribunal noted that the statements of the Guptas, who did not admit their own involvement, were insufficient to impose a penalty on Jatia without corroborative evidence. The Tribunal found no material evidence against Jatia and concluded that the Commissioner's imposition of a penalty on him was based on speculation. Therefore, the penalty on Vinod Jatia was set aside.

4. Penalty on J.K. Yagnik:
J.K. Yagnik contended that he was a victim of the Guptas' conspiracy and had signed documents innocently for a small amount. Considering his limited gain, age, health, and financial hardship, the Tribunal found that a penalty of Rs. 1 lakh was appropriate, reducing the original penalty imposed by the Commissioner.

5. Penalty on H.P. Daga & Co.:
H.P. Daga & Co. argued that the Commissioner's order was influenced by allegations made by the Guptas' counsel and that they were not given a fair hearing. The Tribunal found that the appellant did not receive proper notice and hearing, and the Commissioner's decision was swayed by unsubstantiated allegations. Therefore, the Tribunal allowed the appeal and remanded the case for a fresh adjudication, ensuring a fair opportunity for the appellant to present their case.

Conclusion:
- Appeals by A.R. Gupta, Pravin Gupta, and Bipin Gupta were dismissed, upholding the penalties.
- Appeal by Vinod Jatia was allowed, setting aside the penalty.
- Appeal by J.K. Yagnik was partially allowed, reducing the penalty to Rs. 1 lakh.
- Appeal by H.P. Daga & Co. was allowed by way of remand for a fresh adjudication.