1989 (11) TMI 182 - AT - Customs

Summary

Issues Involved:
1. Legality of imposing two separate penalties on ICIM.
2. Validity of imports and valuation of goods.
3. Personal penalties on individual appellants.

Detailed Analysis:

1. Legality of Imposing Two Separate Penalties on ICIM:
The primary issue raised by the appellants was the imposition of two separate penalties on ICIM by the Special Adjudicator. The appellants argued that the adjudicating authority had held the goods to have been imported in contravention of prohibition on such imports, thus the penalty on them can only be under Section 112(i) which relates to prohibited goods. The contention was that the separate penalty for evasion of duty is not sustainable under Section 112(ii) as it is not applicable in their case. The Tribunal found merit in this argument, noting that once goods are held to be imported in contravention of ITC regulations, the penalty should be imposed under Clause (i) of Section 112, which specifically prescribes penalty for prohibited goods. Consequently, the separate penalty imposed on ICIM for evasion of duty was set aside.

2. Validity of Imports and Valuation of Goods:
The department alleged that ICIM, under the guise of importing used machines for rebuilding and manufacturing, brought in various machines, particularly tabulators, which were undervalued. It was also alleged that spares not belonging to these machines were imported, and some goods were not declared at all. The department's case was supported by evidence in the form of correspondence, invoices, and Bills of Entry. The appellants contended that the imports were valid and the values were settled bona fide without any suppression. However, since the preliminary issue regarding the imposition of separate penalties was accepted, the appellants did not press the rest of their appeal on merits due to the long lapse of time and changes in the firm.

3. Personal Penalties on Individual Appellants:
- Mr. Gonsalves: The learned counsel informed that Mr. Gonsalves is deceased. Since the penalty under Section 112(a) is a levy in rem, the Tribunal agreed that with his death, the penalty would abate.
- Mr. Mookherjee: The Tribunal observed that Mr. Mookherjee, being an employee in the managerial cadre, could not plead total ignorance of the decisions relating to the imports. However, considering the long lapse of time, the penalty on him was reduced to Rs. 10,000.
- Mr. Richford: For similar reasons as Mr. Mookherjee, the penalty on Mr. Richford was reduced to Rs. 5,000.

The appeals were disposed of in these terms, with the Tribunal setting aside the separate penalty on ICIM for evasion of duty and reducing the penalties on Mr. Mookherjee and Mr. Richford.