2006 (1) TMI 428 - AT - Customs

Duty demand - limitation - Confiscation of the imported goods and penalty - HELD THAT - The Commissioner has not rebutted the stand of the importers that Mahendra Shah is not their agent. In these circumstances there is no wilful misstatement or suppression of facts with an intention to evade payment of duty on the part of the importers so as to attract the proviso to Section 28(1) against them. We therefore agree with the importers that the demands are barred by limitation in the light of Tribunal s decision in the case of H. Kumar Gems 2001 (2) TMI 246 - CEGAT MUMBAI . Thus the demands are barred by limitation penalties imposed upon the importers are set aside. Penalties imposed on Shri Prakash Mohta Shri S.N. Baheti Shri Kamlesh Mehta and Shri Rasiklal Mehta are also set aside. The penalty imposed upon Shri Mahendra Shah under the provisions of Section 112(a) of the Customs Act is also set aside as even though he admittedly had knowledge that the SILs were forged/fake such knowledge is not sufficient to hold that there was any omission or commission on his part so as to render the imported silver/gold liable to confiscation u/s 111(d) and (o) of the Act. In the result we set aside the impugned order and allow the appeals.

Summary

Issues:
- Duty demand confirmation on imported gold and silver
- Denial of exemption benefit under Notification No. 117/94-Cus.
- Liability of goods to confiscation under Section 111(d) and (o) of the Customs Act, 1962
- Imposition of penalties on the importer and individuals
- Allegations of forged SILs and involvement of various parties
- Show cause notice for duty recovery, confiscation, and penalties
- Appeal based on limitation and lack of evidence
- Tribunal's decision on limitation and applicability of provisions
- Setting aside penalties and impugned order

Analysis:
The judgment involves appeals concerning duty demand confirmation on imported gold and silver, denial of exemption benefit, liability of goods to confiscation, and imposition of penalties. The Commissioner confirmed a duty demand of Rs. 6,69,40,149 on consignments imported by a company, alleging forged SILs purchased from brokers. The case revolved around the use of bogus SILs for import, with various individuals involved in the transaction chain. The Commissioner issued show cause notices for duty recovery, confiscation, and penalties, leading to the appeals.

The Tribunal focused on the point of limitation and lack of evidence regarding the importers' involvement in the alleged wrongdoing. It was noted that the demands were barred by limitation, citing precedent cases and statutory provisions in the Customs Act. The argument that forged licenses render the buyer's title void was dismissed, and the Tribunal found penalties inapplicable to the importers and individuals. The judgment highlighted the distinction between normal limitation periods and those under the proviso to Section 28(1) of the Customs Act.

Ultimately, the Tribunal set aside the impugned order, allowing the appeals and overturning the penalties imposed on the importers and individuals. The decision emphasized the lack of evidence linking the importers to the alleged misconduct, leading to the dismissal of penalties and duty demands based on limitation grounds.