2006 (3) TMI 544 - AT - Customs

Summary

Issues Involved:
1. Violation of Natural Justice
2. Liability for Customs Duty and Penalty
3. Ownership and Responsibility for Payment of Duty
4. Validity of Statements and Retraction
5. Adherence to Legal Procedures and Documentation

Detailed Analysis:

1. Violation of Natural Justice
The appellants argued that the principle of natural justice was violated as they were not provided with relevant documents despite multiple requests. They claimed this hampered their ability to respond to the show cause notice and participate in the hearing. However, it was found that the appellants had acknowledged receipt of the show cause notice and the relied-upon documents, as evidenced by an acknowledgment dated 8-9-2003. The Tribunal concluded that the appellants' claims were false and that they had unnecessarily delayed the adjudication proceedings. Thus, the principles of natural justice were not violated.

2. Liability for Customs Duty and Penalty
The Commissioner of Central Excise & Customs, Surat-I, demanded duty of Rs. 7,04,338/- on 17,171 yards of imported polyester fabrics from M/s. Harshvardhan Exports along with interest under Section 72 of the Customs Act. Additionally, penalties were imposed: Rs. 1 lakh on Shri Ramesh Chander Chunnilal Agarwal, Director of M/s. Harshvardhan Exports, and Rs. 5 lakhs on M/s. Harshvardhan Exports. The Tribunal upheld these penalties, noting that the goods were cleared without payment of customs duty and were falsely recorded as deemed exports.

3. Ownership and Responsibility for Payment of Duty
The appellants contended that the duty should be paid by the owner of the goods, Shri Kirti Kumar Ottamchand Doshi, from whose premises the goods were seized. However, the Tribunal found that M/s. Harshvardhan Exports had imported the goods and sold them without paying duty, manipulating their records to show deemed exports. Therefore, M/s. Harshvardhan Exports was held liable for the duty and penalties under Section 72 of the Customs Act.

4. Validity of Statements and Retraction
Shri Ramesh Chander Chunnilal Agarwal retracted his statement dated 20-3-2003, but the Tribunal noted that he had admitted the facts in a subsequent statement on 18-6-2003. The Tribunal found that the retraction was not credible and that the initial statement was voluntary and accurate. The Tribunal thus relied on these statements to confirm the liability of M/s. Harshvardhan Exports and Shri Ramesh Chander Chunnilal Agarwal.

5. Adherence to Legal Procedures and Documentation
The appellants claimed that they did not receive certain documents necessary to respond to the show cause notice. However, the Tribunal found that the appellants had acknowledged receipt of the relevant documents and had access to the necessary information. The Tribunal concluded that the appellants had failed to avail themselves of the opportunities to present their defense, and thus, the adjudication process was fair and in accordance with legal procedures.

Conclusion:
The appeals were rejected, and the Tribunal upheld the demand for customs duty and the imposition of penalties on M/s. Harshvardhan Exports and its Director, Shri Ramesh Chander Chunnilal Agarwal. The Tribunal found no merit in the appellants' claims regarding the violation of natural justice, ownership and responsibility for duty payment, and the validity of statements and retraction. The legal procedures and documentation were deemed to have been properly adhered to.