2005 (5) TMI 225 - AT - Customs

Summary

Issues Involved:
1. Illegal import and concealment of metals by M/s. Suren International Limited.
2. Claims of ownership and legality of goods by M/s. Gaurav Exim Pvt. Ltd.
3. Imposition of penalties on various individuals and entities involved.

Detailed Analysis:

1. Illegal Import and Concealment of Metals by M/s. Suren International Limited:

The case pertains to the illegal import of tin, nickel, and zinc by M/s. Suren International Limited by concealing these metals in consignments declared as aluminium scrap. The company also imported excess quantities of aluminium scrap and copper scrap instead of aluminium scrap. Investigations revealed that large quantities of prime quality tin (40 MTs) and nickel (42 MTs) ingots were found concealed in containers declared to contain aluminium scrap. Additionally, undeclared large excess quantities of copper and aluminium scrap were discovered. The customs authorities conducted search operations at various locations, including the residence and godown of M/s. Suren International Limited, resulting in the seizure of significant quantities of metals. The investigation concluded that the imports were controlled by Shri Harish Kumar and his wife Mrs. Renu Mahant, with other officers performing routine functions. The Commissioner confiscated goods worth over Rs. 9 crores imported by M/s. Suren International Limited and goods worth about Rs. 5.5 crores seized from two trucks and a godown.

2. Claims of Ownership and Legality of Goods by M/s. Gaurav Exim Pvt. Ltd.:

M/s. Gaurav Exim Pvt. Ltd. claimed ownership of the goods seized from the two trucks and the Ganga Nursery godown, asserting that they had purchased them from two Delhi parties. However, no such claim was made at the time of seizure, and the truck drivers, transport operators, or godown keepers did not support this claim. The investigation found that M/s. Gaurav Exim Pvt. Ltd. belonged to the same family as M/s. Suren International Limited, and the entire claim of purchase was false. The purported selling firms were defunct, and their sales tax registration had been surrendered or revoked years before the alleged sales. The purported suppliers from Bombay only provided invoices without supplying goods, and banking records showed that payments were withdrawn as cash and returned through hawala. The Commissioner concluded that the seized goods were illegally imported and belonged to the businesses controlled by Shri Harish Kumar.

3. Imposition of Penalties on Various Individuals and Entities Involved:

Penalties were imposed on various individuals and entities under Section 112 of the Customs Act, 1962. The highest penalty of Rs. 25 lakhs was imposed on Shri Harish Kumar, who disowned any involvement in the business activities of M/s. Suren International Limited. However, the evidence, including handwritten notes and business records, indicated that he was actively running the business. The penalty imposed on Mrs. Renu Mahant, a director of M/s. Suren International Limited, was Rs. 50,000/-. The penalties imposed on other individuals were justified based on their involvement in the illegal imports. However, the penalties imposed on Dr. Hans Nagar and Shri Hemant Khera were not warranted. Dr. Nagar's association was limited to the concealment of business files at his farm house, and he insisted that the records be removed. Shri Hemant Khera was an employee of M/s. Suren International Limited and was not in command of the situation.

Conclusion:

The appeals of Dr. Hans Nagar and Shri Hemant Khera were allowed, and the penalties imposed on them were set aside. The appeals filed by other individuals and entities were rejected, and the confiscation of goods and imposition of penalties were upheld. The judgment highlights the deliberate concealment and smuggling of goods by M/s. Suren International Limited and the involvement of various individuals in the illegal activities.