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2020 (2) TMI 233 - AT - CustomsFraudulent removal of imported goods without payment of proper customs duties - contravention of the provisions of Section 12 of Customs Act, 1962, read with Notification no. 34/97 dated 07.04.1997 - Wilful presentation of wrong documents - Confiscation - penalties - HELD THAT - The Show Cause Notice dated 13.03.2009 demanded only part of duty that has been debited by the respondents, from the DEPB License in respect of the Ex-Bond Bill of Entry. The demand made in the Show Cause Notice dated 11.03.2010 was in respect of the entire amount of duty that was to be paid in respect of the said ex-bond Bill of Entries. Commissioner has by removing the Ex Bond Bill of Entries covered by the Show Cause Notice dated 13.03.2009 from the demand made in the Show Cause Notice dated 11.03.2010, has without considering the demand made in respect of said Ex Bond Bill of Entries by the second show cause notice limited the demand to the amount shown to be paid by utilizing the DEPB License. Since Commissioner has instead of reducing the overlapping demand made by the two show cause notice, removed the entire demand made against those ex-bond Bill of Entries by Show Cause Notice dated 11.03.2010, which were covered by earlier Notice dated 13.03.2009 we are not in position to uphold the impugned order in this respect. In our view Commissioner should have recorded finding in respect of each Bill of Entry covered by Show Cause Notice dated 11.03.2010 and then confirmed our dropped the demand made. If there was any overlapping demand in the two show cause notices, then the demands should have been adjusted to the extent of overlap. Thus the matter needs to be remanded back to the adjudicating authority to re-determine the issues in respect of the Bill of Entries covered by 2nd Show Cause Notice, which have been removed by him for the reason of their being covered by 1st Show Cause Notice. Imposition of penalties u/s 112(a) of CA - HELD THAT - From the findings recorded by the Commissioner, it is evident that he has imposed the penalty on Appellant, CHA, for his failure to discharge the obligations cast on him in terms of Regulation 13 of Custom House Licensing Regulation 2004 and also certain activities of one of his employee namely Shri Rajesh Bhanushali - However, Hon ble Delhi High Court has in case of COMMISSIONER OF CUSTOMS VERSUS SHIVA KHURANA 2019 (1) TMI 838 - DELHI HIGH COURT has held there is nothing in the Regulations nor in the Customs Act which can cast such a higher responsibility as are sought to be urged by the Revenue. In the absence of any indication that the CHA concerned was complicit in the facts of a particular case, it cannot ordinarily be held liable - penalty cannot be upheld and is set aside. Appeal allowed by way of remand.
Issues Involved:
1. Quantification of demand in relation to the two Show Cause Notices (SCNs). 2. Penalties imposed on various parties under Section 112(a) and Section 114A of the Customs Act, 1962. 3. Role and liability of the Custom House Agent (CHA) and its employee. Detailed Analysis: 1. Quantification of Demand: The appeals were filed against the Order in Original No Belapur/02-03/Taloja/R-V/SLM/Commr/2012-13/Bel/937 dated 11.06.2012. The Commissioner adjudicated two SCNs: a. SCN dated 13.03.2009: - Allegations included fraudulent removal of imported goods using DEPB Licenses with negligible credit balance and presenting wrong documents. - The goods valued at ?125.72 Lakh were liable to confiscation under Section 111(o) and 111(d) of the Customs Act, 1962. - Customs duty of ?51,13,537 was confirmed under Section 28(1) of the Customs Act, 1962. - Penalties and interest were imposed under Sections 114A, 112, and 28AB of the Customs Act, 1962. b. SCN dated 11.03.2010: - Allegations included clearance of goods without TRA/RA, using expired licenses, and depositing customs duty in unauthorized banks. - Goods valued at ?7,31,15,745 were liable to confiscation under Section 111(d) of the Customs Act, 1962. - Customs duty of ?9,32,28,417 was demanded under Section 28(1) of the Customs Act, 1962. - Penalties and interest were imposed under Sections 114A, 112, and 28AB of the Customs Act, 1962. The Commissioner confirmed the duty demand of ?51,13,537 for the first SCN and ?8,28,60,998 for the second SCN after removing overlapping demands. However, the Tribunal found that the Commissioner should have recorded findings for each Bill of Entry covered by the second SCN and adjusted overlapping demands. The matter was remanded back to the adjudicating authority for re-determination. 2. Penalties Imposed: Penalties were imposed on various parties under Sections 112(a) and 114A of the Customs Act, 1962. The penalties included: - ?1,00,00,000 on M/s. Akshay Exports under Section 114A. - ?10,00,000 on Shri Sanjay Sharma, authorized signatory of M/s. Akshay Exports, under Section 112(a). - ?10,00,000 on M/s. P. Cawasji & Co. (CHA of M/s. Akshay Exports) under Section 112(a). - ?25,00,000 on Shri Rajesh Bhanushali, employee of M/s. P. Cawasji & Co., under Section 112(a). 3. Role and Liability of the Custom House Agent (CHA) and Its Employee: The CHA, M/s. P. Cawasji & Co., and its employee, Shri Rajesh Bhanushali, were penalized for failing to discharge their obligations under Regulation 13 of the Custom House Agent Licensing Regulation 2004 (CHALR 04). The Commissioner found that the CHA did not ensure the authenticity of the importer and the licenses used, leading to fraudulent clearances. The Tribunal, however, referred to the Delhi High Court's decision in Shiva Khurana [2019 (367) ELT 550 (Del)], which stated that a CHA's duty is to verify the Importer Exporter Code (IEC) and not to investigate the veracity of the documents. The Tribunal found that the penalty imposed on the CHA was not justified and set it aside. Conclusion: - The appeals filed by the revenue were allowed, and the matter was remanded back to the adjudicating authority for re-determination of the duty demand under the SCN dated 11.03.2010. - The appeal filed by M/s. P. Cawasji & Co. was allowed, and the penalty imposed on the CHA was set aside.
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