2013 (8) TMI 570 - AT - Customs

Abetting diversion of Goods - Assesses were engaged in abetting diversion of Muriate of Potash which were imported at concessional rate of duty for use as fertilizer or in the manufacture of composite fertilizer the allegations against assessee prima facie, seems to be incorrect as they had produced records of proper accounting of imported fertilizers and sale thereof to the persons who were authorized to deal in such kind of goods. Penalty u/s 112(b) and 114(i) - Waiver of pre deposit stay application -- none of the assessees had imported the goods The assessees were charged for export of fertilizers in the guise of Industrial Salt Held that - The penalties imposed u/s 112(b) by any stretch of imagination cannot be fastened on all the assesses - assessee had made out a prima facie case for waiver of pre-deposit of the amounts involved waiver of pre deposit allowed decided in favour of assessee.

Summary

Issues:
Penalties imposed under Sections 112(b) and 114(i) of the Customs Act, 1962 on various appellants for abetting diversion of imported Muriate of Potash (MOP) for unauthorized use.

Analysis:

Penalties under Section 112(b) and 114(i):
The adjudicating authority imposed penalties on the appellants for their involvement in the diversion of MOP. The appellants raised various defenses, such as being exporters, dealers, distributors, transporters, or employees, claiming lack of awareness regarding the diversion. Notably, M/s Indian Potash Ltd. demonstrated proper accounting of imported fertilizers, leading to a prima facie case for waiver of pre-deposit. Consequently, their application for waiver was allowed, and recovery stayed pending appeal disposal.

Specific Appellants' Defenses:
- M/s Poshak Fertilizers, akin to a previously granted waiver case, was granted unconditional waiver due to proper clearances to registered sub-dealers.
- Transporters Shri Sanjay G. Virda and Shri Hamir S. Humbal had no penalties imposed but faced vehicle confiscation. Their stay petitions were dismissed as not maintainable.
- Appellants not directly involved in importation were absolved from penalties under Section 112(b) as they were charged for exporting MOP as Industrial Salt. Waiver and stay of recovery were granted for these penalties.
- M/s Dadi Impex Pvt. Ltd. and Shri Anand Prakesh Chaudhary offered a fair pre-deposit, leading to waiver and stay of recovery for the remaining penalties under Section 114(i).
- Other appellants were directed to pre-deposit specific amounts based on their involvement in the MOP export scheme. Compliance reporting was set for a future date, and waiver was granted subject to such compliance.

This judgment carefully considered each appellant's role in the MOP diversion scheme, granting waivers based on individual circumstances and compliance with pre-deposit conditions. The decision ensured a fair assessment of penalties under the Customs Act, 1962, balancing legal obligations with the appellants' claims of lack of awareness or limited involvement in the unauthorized activities.