2024 (4) TMI 380 - AT - Customs

Recovery of differential duty u/s 28(1) of CA for the imports made in all the Bills of Entry along with interest and penalties on Umesh Kumar and Rajat Arora - Goods in excess of the declaration in the Bill of Entry - goods not declared at all in the Bill of Entry - rejection of declared assessable value - main contention of Umesh Kumar is that he had only lent his IEC to Rajat Arora and was in no way concerned with the imports at all and therefore, the impugned order needs to be set aside. Penalty on Umesh Kumar - HELD THAT - There are no evidence to support the submission of Umesh Kumar that he is telling the truth and nobody else is telling the truth from the Oath Commissioner who certified his affidavit, the lawyers who filed the Writ Petition in the High Court on behalf of his firm and made submissions before the High Court, the CHA who filed the Bills of Entry and the bank which opened an account in the name of his firm and remitted large sums abroad on account of his firm. No evidence has been put forth to support such wild claims by Umesh Kumar. These arguments which form the grounds of Customs Appeal no. 51578 of 2018 filed by Umesh Kumar cannot be sustained and accordingly, the appeal deserves to be dismissed. Penalty on Rajat Arora - Appeal was dismissed for non-prosecution - HELD THAT - This appeal which was initially dismissed for non-prosecution was restored on an application by the appellant. Thereafter, it was listed on 36 occasions over a period of five years and five months. While some adjournments were on account of other exigencies, the main reason for the adjournments were the requests of the appellant either in writing or in person or through proxy counsel. On 24 August 2023, on the request of the counsel, the matter was adjourned to 12 October 2023 as a last opportunity. Even on this 36th listing of the appeal, none appeared for the appellant. Needless to say that 36 adjournments is more than a reasonable opportunity of being heard given to the appellant. It is found from the records, when the goods were examined by the Customs and discrepancies were found, they were seized under a panchnama under section 110 in the presence of Deepak, G card holder of CHA M/s. Venstar Shipping Services and two independent witnesses. Quite logically, summons were issued to the proprietor of M/s. Aromatech and to the CHA for appearance on 29.9.2014 - the submission in this appeal that Rajat Arora has nothing to do with the import of goods or sales by M/s. Aromatech and that he was merely a freight forwarder holds no water. Having obtained an authorization from the proprietor of M/s. Aromatech and having appeared on his behalf in view of the summons issued to M/s. Aromatech, Rajat Arora cannot now turn around and say that he had nothing to with Aromatech. It is not the officers, but it is Rajat Arora who introduced himself into this case. Otherwise, a pure freight forwarder would have neither anything to do with the goods which are imported nor anything to do with the Customs clearance (which is the responsibility of the CHA). The conclusion in impugned OIO is that M/s. Aromatech had mis-declared the imported goods which were liable to confiscation under section 111(m) and (o) of the Act. Consequently, penalty was imposed on Rajat Arora under section 112(a) - Rajat Arora introduced himself as the sales incharge of M/s. Aromatech in his statement made representing Umesh Kumar, proprietor of M/s. Aromatech with an authorization from him. He provided to the department such details of the business as the IEC, VAT registration with different states and the bank account details of M/s. Aromatech which are most unlikely to be available with anyone not intricately connected with the business of the importer. Therefore, there are no reason whatsoever to interfere with the penalty. Appeal dismissed.

Summary

Issues Involved:
1. Misdeclaration of goods and non-compliance with customs regulations.
2. Availment of customs exemption without fulfilling conditions.
3. Imposition of penalties on Umesh Kumar and Rajat Arora.

Summary:

Issue 1: Misdeclaration of Goods and Non-Compliance with Customs Regulations

On 18.9.2014, a Bill of Entry No. 6807339 was filed with M/s. Aromatech as the importer. On examination, the goods were found to be in excess of the declaration in the Bill of Entry and there were also goods which were not declared at all in the Bill of Entry. Certain essential details such as the details of the importer, the exporter and the maximum retail price [MRP] were also missing on the cartons.

The goods were seized u/s 110 of the Customs Act, 1962 and the matter was investigated. Summons were issued to Umesh Kumar, proprietor of M/s. Aromatech, and in response, Rajat Arora appeared with an authorization from Umesh Kumar and introduced himself as the sales in charge of M/s Aromatech. He gave a statement admitting that the imported goods were in excess of the quantity declared and the Retail Sale Price as required was not affixed on them. He agreed to pay the Customs duty.

Issue 2: Availment of Customs Exemption Without Fulfilling Conditions

Further investigation also showed that 15 Bills of Entry had been filed prior to this Bill of Entry by M/s. Aromatech and in all these cases, the appellant had availed the benefit of Customs exemption notification no. 12/2012 dated 17.3.2012 without following the conditions of the notification. The importer declared the State as UP and provided its VAT registration number. However, from the VAT returns filed with the UP Government authorities, it was evident that the importer had not paid any VAT at all. Thus, the importer had evaded paying SAD declaring that the goods will be sold in UP but did not pay VAT in UP.

Issue 3: Imposition of Penalties on Umesh Kumar and Rajat Arora

By the order-in-original dated 25.2.2016 [OIO], the Commissioner confirmed the proposals in the SCN. This order was assailed by M/s Aromatech before this Tribunal in Customs Appeal no. 51647 of 2016. By Final Order dated 9.5.2017, this tribunal remanded the matter to the original authority. Following the directions of this Tribunal, the Commissioner passed Order in Original (denovo) dated 4.1.2018 [De novo OIO] which is now assailed in this Customs Appeal No. 51578 of 2018.

The OIO dated 25.2.2016 was also assailed by Rajat Arora in Customs Appeal no. 51595 of 2016, but his appeal was dismissed for non-prosecution by Final Order dated 25.1.2017. Thereafter, on an application from Rajat Arora, the appeal was restored on 24.4.2018.

Findings and Decision:

Umesh Kumar's appeal was dismissed as the Tribunal found no evidence to support his claims that he was not involved in the imports and that Rajat Arora was the actual importer. The Tribunal noted inconsistencies in Umesh Kumar's arguments and his involvement in the Writ Petition filed for provisional release of seized goods.

Rajat Arora's appeal was also dismissed. The Tribunal found that Rajat Arora had introduced himself as the sales incharge of M/s. Aromatech and was intricately involved in the business. The penalty u/s 112(a) of the Customs Act, 1962 was upheld as the Tribunal found no reason to interfere with the penalty imposed on Rajat Arora.

Both appeals were rejected, and the impugned orders dated 24.2.2016 and 4.1.2018 were upheld.

[Order pronounced on 08.04.2024]