2006 (2) TMI 405 - AT - Customs

Summary

Issues:
1. Imposition of penalty on appellants for importing restricted items without a license.
2. Confiscation of the consignment of refrigerant gas cylinders.
3. Legal position on imposing penalties on sole proprietors and firms.

Analysis:
1. The appeals were against an Order-in-Original imposing a penalty of Rs. 1 lakh each on the appellants for importing 234 cylinders of refrigerant gas without the required import license. The consignment was detected concealed in a container addressed to the appellant company. The adjudicating authority confiscated the consignment and imposed penalties. Despite notices, none appeared for the appellants, and only written submissions were filed. The Tribunal considered the submissions and upheld the confiscation of the consignment due to the absence of the necessary import license.

2. The Tribunal noted that penalties imposed on both the appellant company and its proprietor, Shri Jeewan Singh, cannot be simultaneously upheld. It was established that a penalty cannot be imposed on both a sole proprietor and the firm simultaneously. As the proprietorship firm has no independent legal existence from the proprietor, the penalty of Rs. 1 lakh imposed on the appellant company was set aside based on settled legal principles.

3. However, the Tribunal found that Shri Jeewan Singh, the proprietor of the appellant company, was the mastermind behind the import of the restricted items. He approached a cargo company for clearance, and his involvement in the illegal import was established through unretracted statements. Considering his pivotal role in the illegal import, the Tribunal dismissed the appeal filed by Shri Jeewan Singh and upheld the penalty imposed on him. The Tribunal concluded that there was no merit in Shri Jeewan Singh's appeal and ordered accordingly.

This judgment highlights the consequences of importing restricted items without the necessary licenses, the distinction in penalties between sole proprietors and firms, and the individual liability of key persons involved in illegal activities.