2002 (3) TMI 194 - AT - Customs

Summary

Issues Involved:
1. Demand of duty on sodium lauryl sulphate imported by Choice Laboratories.
2. Demand of duty on clove bud oil imported by Ratilal Hemraj.
3. Confiscation of peppermint oil and imposition of fine on Choice Laboratories.
4. Imposition of penalties on Choice Laboratories, Fresh Laboratories, Ratilal Hemraj, and Yogesh Korani.

Issue-wise Detailed Analysis:

1. Demand of duty on sodium lauryl sulphate imported by Choice Laboratories:
The Collector of Customs demanded duty of Rs. 8.11 lakhs on 7.2 tons of sodium lauryl sulphate imported by Choice Laboratories, which was wrongly cleared without payment of duty under Notification 159/90. However, the appeal by Choice Laboratories was dismissed as withdrawn because the appellant produced a certificate showing full and final settlement of its dues under the Kar Vivad Samadhan Scheme, 1998.

2. Demand of duty on clove bud oil imported by Ratilal Hemraj:
The Collector found that Ratilal Hemraj imported 2.2 tons of clove bud oil valued at Rs. 7.27 lakhs and wrongly cleared it free of duty under Notification 159/90. The duty payable was Rs. 7.34 lakhs, which was adjusted against the cash deposit already made. Additionally, a fine of Rs. 1.00 lakh was ordered in lieu of confiscation under clause (o) of Section 111 of the Act. The Collector concluded that the goods were imported by Ratilal Hemraj, utilizing the licence of Choice Laboratories. Despite the claim that the goods were sold on a high sea basis to Choice Laboratories, the evidence indicated that Ratilal Hemraj was the real importer. The Collector's decision was based on statements and documentary evidence, including letters and admissions by the parties involved.

3. Confiscation of peppermint oil and imposition of fine on Choice Laboratories:
The Collector ordered the confiscation of 1998 kg of peppermint oil under clause (o) of Section 111 of the Act, giving Choice Laboratories the option to redeem the goods on payment of a fine of Rs. 2.00 lakhs. Additionally, an amount of Rs. 25.25 lakhs was to be recovered before the goods could be redeemed. This decision was based on the finding that the licence was sold, and the goods were imported and cleared without fulfilling the export obligations.

4. Imposition of penalties on Choice Laboratories, Fresh Laboratories, Ratilal Hemraj, and Yogesh Korani:
- Choice Laboratories: A penalty of Rs. 5.00 lakhs was imposed under Section 112 of the Act. However, the appeal was dismissed as withdrawn due to the settlement under the Kar Vivad Samadhan Scheme.
- Fresh Laboratories: A penalty of Rs. 1.00 lakh was imposed, but it was set aside on appeal as the Commissioner's order was contradictory, stating that Fresh Laboratories had not imported any goods nor utilized its import licence.
- Ratilal Hemraj: A penalty of Rs. 1.00 lakh was imposed due to the wrongful clearance of clove bud oil and the utilization of Choice Laboratories' licence.
- Yogesh Korani: A penalty of Rs. 15.00 lakhs was imposed. The Tribunal found that Yogesh Korani played a central role in the transactions, including the sale of the licence, importation of goods, and dealings with the Custom House. His active participation and knowledge of the illegality justified the penalty, and the benefit of the Kerala High Court's judgment in Tom. K. Thomas v. Union of India & Others was not applicable to him.

Conclusion:
The Tribunal upheld the Collector's findings and decisions on the demands of duty, confiscation, and penalties, except for the penalty on Fresh Laboratories, which was set aside. The appeals were disposed of accordingly.