2004 (12) TMI 280 - AT - Customs

Issues Involved:

1. Confiscation of seized goods under Sections 111(d) & 111(o) of the Customs Act, 1962.
2. Recovery of differential duty from the real importer.
3. Penalty on M/s. Cashmir Enterprise under Section 112(a)(ii) of the Customs Act, 1962.
4. Penalty on Vijay N. Desai under Section 112(a)(ii) of the Customs Act, 1962.
5. Penalty on Shri Mukesh Shah and M/s. Shah & Mehta under Section 112(a) of the Customs Act, 1962.
6. Exoneration of Suresh K. Shah, Partner of M/s. Shah & Mehta.
7. Penalty on the proprietor of M/s. Vijay Bazar & Co. under Section 112(a)(ii) of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Confiscation of Seized Goods:
The Commissioner concluded that out of 17 MT of PVA BP 20 imported, 5 MT, as available and seized, should be confiscated under Sections 111(d) and 111(o) of the Customs Act, 1962, and offered a redemption fine of 3 lakhs.

2. Recovery of Differential Duty:
The Commissioner ordered the recovery of differential duty on the quantity of 17 MT from the real importer, without naming the real importer.

3. Penalty on M/s. Cashmir Enterprise:
A penalty of Rs. 8,50,000/- was imposed on M/s. Cashmir Enterprise under Section 112(a)(ii) of the Customs Act, 1962 for lending their name to enable the clearance of goods under Notification No. 345/86-Cus.

4. Penalty on Vijay N. Desai:
A penalty of Rs. 20 lakhs under Section 112(a)(ii) was imposed on Vijay N. Desai, identified as the mastermind behind the conspiracy for illegal import, illegal claims, and illegal sale of the goods, thereby defrauding the Government revenue.

5. Penalty on Shri Mukesh Shah and M/s. Shah & Mehta:
- For M/s. Shah & Mehta:
The Commissioner found that the partnership firm of Licensed Customs House Clearing Agents (CHA) was liable for penalties due to the acts of their partner, Shri Mukesh Shah. However, the Tribunal found that the partnership firm could not be held liable for the acts of individual partners beyond the partnership business. Since one partner was exonerated and the other partner's role was not clearly established, the penalty on the partnership firm was not upheld.

- For Shri Mukesh Shah:
The Commissioner found that Mukesh Shah aided and abetted the illegal clearance and sale of the goods, rendering them liable for confiscation. The Tribunal, however, found that the evidence did not conclusively prove that Mukesh Shah's actions led to the diversion or misuse of the goods. The penalty on Mukesh Shah was therefore set aside.

6. Exoneration of Suresh K. Shah:
The Commissioner found no evidence to justify the imposition of a penalty on Suresh K. Shah, Partner of M/s. Shah & Mehta, and he was exonerated.

7. Penalty on the Proprietor of M/s. Vijay Bazar & Co.:
A penalty of Rs. 5 lakhs was imposed on the proprietor of M/s. Vijay Bazar & Co., a Chartered Agents firm, under Section 112(a)(ii) of the Customs Act, 1962.

Conclusion:
The Tribunal allowed the appeals of Shri Mukesh Shah and M/s. Shah & Mehta, setting aside the penalties imposed on them. The findings indicated that the evidence did not conclusively establish their liability for the alleged offenses under the Customs Act, 1962.

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