2005 (5) TMI 196 - AT - Customs

Duty liability - Importer - duty free licences - Penalty - misdeclaration of the goods - proper opportunity to defend not provided - Violation of Natural justice - Whether the Commissioner was right in holding that the duty not levied on the imported goods extending the benefit of notification 204/92 is demandable from the original licence holder even when he was not the importer - HELD THAT - The facts in the present case being pari materia with the case in Jupiter Exports 2001 (11) TMI 153 - CEGAT, MUMBAI . The decision in that case is applicable to the facts of this case. We therefore hold that duty cannot be demanded from the present appellant M/s. Dharam Exports on the goods imported by some other importers. We, however, hold that duty demanded on the goods imported by M/s. Dharam Exports as indicated in the annexure D to the show cause notice is sustainable and in any case the appellants have not even contested it. In regard to quantification of duty we hold that the Commissioner quantified the duty liability correctly. The appellants have not brought out any valid argument, insofar as the imports made by Dharam Exports, as to how the duty was wrongly calculated. The Commissioner in para 30 of his order dealt with this issue and gave his findings. The appellants before us have not come out with any fresh pleas to rebut these findings. Hence we reject the plea that duty liability of M/s. Dharam Exports who utilised the advance licences to import duty free goods is correctly arrived at. Penalty imposed on the karta of M/s. Dharam Exports, Shri Suresh Jumani u/s 114(i) of the Customs Act. We are in full agreement with the submissions made by the learned DR. The extent of fraud committed at the time of export of goods under DEEC is gigantic. The full benefit of advance licences obtained by fraud and misdeclaration is reaped by Suresh Jumani. The goods in this case where the content of PFY contained in the export goods is misdeclared amounts to misdeclaration of the goods in the context of the DEEC scheme under which the goods were sought to be exported. The goods became prohibited goods on account of misdeclaration. Suresh Jumani was well aware of the fact, being the exporter, that his goods did not contain the PFY content as declared. He was also aware of the fact that the certificates purported to have been given by SASMIRA are forged and bogus. In fact he entered into a conspiracy with M/s. Amol Shipping Agency to defraud the Revenue. The Commissioner has clearly brought out the role played by Suresh Jumani while imposing penalty on him. We do not see any infirmity in the order of the Commissioner. The penalty imposed on him is upheld. We now come to the appeal of Shri Ashok Pokharkar. Firstly, his statements which are inculpatory are against him. Secondly, his employees, one a forger and the other a manipulator, clearly implicate him in the whole episode. For monetary gain, he indulged in nefarious activities such as having export documents forged, manipulated, altered and tampered under his instructions. He is clearly a person concerned with the exports which resulted not only in huge loss to the exchequer but also rendered the export goods liable to confiscation. The Commissioner has rightly imposed a penalty u/s 114(i) of the Customs Act. The leniency shown by the Commissioner does not call for any further reduction in the penalty. The appeals are thus disposed off in the above terms.

Issues Involved:
1. Demand of duty from the original licence holder (deemed importer)
2. Quantification of duty liability
3. Imposition of penalty under Section 114(i) of the Customs Act
4. Alleged violation of principles of natural justice

Issue-wise Detailed Analysis:

1. Demand of Duty from the Original Licence Holder (Deemed Importer):
The primary issue examined was whether the Commissioner was right in demanding duty from the original licence holder, even when he was not the importer. The Commissioner considered M/s. Dharam Exports as the deemed importers and demanded duty from them. The Tribunal referenced an identical case, Jupiter Exports v. CC (Genl.), Mumbai, where it was held that an importer is one who holds himself to be the importer, and rejected the concept of a deemed importer. The Tribunal concluded that duty cannot be demanded from M/s. Dharam Exports for goods imported by other importers. However, duty demanded on goods imported by M/s. Dharam Exports themselves, as indicated in the annexure D to the show cause notice, was upheld since it was not contested by the appellants.

2. Quantification of Duty Liability:
The Tribunal held that the Commissioner correctly quantified the duty liability. The appellants failed to provide any valid argument against the duty calculation for the imports made by Dharam Exports. The Commissioner's findings in para 30 of his order were not rebutted with any fresh pleas. Hence, the duty liability of M/s. Dharam Exports, who utilized the advance licences to import duty-free goods, was correctly arrived at and upheld.

3. Imposition of Penalty under Section 114(i) of the Customs Act:
The Tribunal upheld the penalty imposed on Suresh Jumani, the director of M/s. Dharam Exports, under Section 114(i) of the Customs Act. The extent of the fraud committed was significant, involving misdeclaration of the content of PFY in export goods. The goods became prohibited due to misdeclaration, and Suresh Jumani was aware of the forged certificates. The penalty of Rs. 1 crore was deemed appropriate given the magnitude of the offence. Similarly, the penalty on Ashok Pokharkar, proprietor of M/s. Amol Shipping Agency, was upheld. His involvement in the forgery and manipulation of export documents was clearly established, justifying the penalty imposed.

4. Alleged Violation of Principles of Natural Justice:
The appellants contended that the principles of natural justice were violated as the case was decided ex parte without proper opportunity to defend. The Tribunal reviewed the Commissioner's order and found that sufficient opportunities were given to the appellants to present their defense. The non-cooperative behavior of the consultant was noted, and the claim of denial of natural justice was rejected. The Commissioner's efforts to ensure a fair process were acknowledged, and no violation of natural justice principles was found.

Conclusion:
The Tribunal allowed the appeal of M/s. Dharam Exports in part by setting aside the demand for duty on goods imported by transferees but confirmed the duty on imports made by M/s. Dharam Exports. The penalties imposed on Suresh Jumani and Ashok Pokharkar under Section 114(i) of the Customs Act were sustained. The appeals were disposed of in these terms.

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