2013 (10) TMI 503 - AT - Customs

Imposition of penalty - Import of Base Oil in the guise of Rubber Processing Oil - Held that - prima facie conclusion is that the department has made out a case in their favour and not the importer. At this stage, learned counsel submits that they have bills to show that the major portion of the imported goods as RPO. However, in the absence of any proper explanation with regard to note book / private records seized and with regard to the huge amounts transferred through non-banking channels and through other persons to Shri Mohammed Sameer s Dubai Account and investigation details and records found and the test report of M/s Shriram Institute of Industrial Research stating that the imported goods was not RPO, we find that no documents have been submitted by the appellants to support their claim - appellant is required to be put to terms. - stay granted partly.

Summary

Issues involved:
Customs duty evasion through import of Base Oil as Rubber Processing Oil, discrepancy in declarations, retracted statements, analysis of imported goods, evidence from recovered documents, payments made through non-banking channels, discrepancy in trading records, lack of supporting documents for imported goods, pre-deposit requirement for differential duty and penalties.

Analysis:

1. The case involved an investigation into the importation of Base Oil under the guise of Rubber Processing Oil by M/s K.K. Impex, leading to the confirmation of a differential Customs duty of Rs. 2,10,65,504/- along with penalties imposed on the firm and the Power of Attorney holder. The appellant's advocate argued that the case lacked evidence against the appellants, citing retracted statements and contradictory test reports regarding the nature of the imported goods.

2. The Revenue's representative contended that documents recovered from the importer's premises revealed discrepancies in declarations, quantity, and value of goods, supported by hand-written registers and computer data. Statements from individuals receiving money, along with email correspondences indicating changes in Invoices and Bills of Entry, were presented as evidence of wrongdoing.

3. The Commissioner's findings were challenged by the appellant's advocate, who failed to explain the non-banking channel payments and discrepancies in trading records. The advocate's defense centered on the trading activity of goods purchased in India, but lacked documentary evidence to support the claim that the imported goods conformed to the required standards.

4. The Tribunal acknowledged the lack of substantial evidence from the appellants to refute the department's case, leading to a prima facie conclusion in favor of the department. Despite the appellant's claim of bills showing the imported goods as RPO, the absence of proper explanations for seized records, non-banking channel transactions, and test reports indicating non-conformity with RPO standards weakened their position.

5. Consequently, the Tribunal directed M/s K.K. Impex to pre-deposit Rs. 50,00,000/- towards differential duty and the Power of Attorney holder to pre-deposit Rs. 5,00,000/- as penalty within six weeks. The appellants were required to report compliance by a specified date, with a waiver of pre-deposit for the balance dues and a stay against recovery during the appeal's pendency.