1992 (10) TMI 184 - AT - Customs

Issues Involved:

1. Evasion of Customs Duty
2. Admissibility and Credibility of Statements
3. Valuation of Imported Goods
4. Imposition of Penalties
5. Involvement and Liability of Clearing Agents

Detailed Analysis:

1. Evasion of Customs Duty:

The Directorate of Revenue Intelligence raided the premises of Panam Maintenance Office and Panam Cargo Office at Indira Gandhi International Airport, New Delhi, on 20-8-1987, and recovered incriminating documents. These included original shipping orders/invoices and fabricated invoices showing lesser value, along with other relevant documents such as Bills of Entry. Statements from key individuals admitted their knowledge and collusion in the wilful mis-statement, suppression of facts, undervaluation, and evasion of Customs duty from 1982 onwards. The total duty evaded by Panam Airways during this period was calculated to be Rs. 29,61,527/-. Panam Airways paid this amount on 9-9-1987 without prejudice to its rights.

2. Admissibility and Credibility of Statements:

The statements of Mr. Wiessmenn, Director (India) Panam Airways, and other involved parties were crucial. Mr. Wiessmenn admitted the evasion of duty and the practice of submitting fabricated invoices. His statements were corroborated by other evidence, including the documents seized and the statements of other individuals involved. The adjudicating authority found these statements credible and used them as a basis for the judgment.

3. Valuation of Imported Goods:

The appellants argued that the shipping orders were internal documents and the prices mentioned were notional amounts for budgetary purposes. They contended that the valuation should be determined under Section 14(b) of the Customs Act read with the Customs Valuation Rules, 1963, specifically Rule 8, providing for best judgment valuation. However, the adjudicating authority found that the prices mentioned in the shipping orders were accurate and upheld the order relating to the adjustment of duty.

4. Imposition of Penalties:

The adjudicating authority imposed penalties under Section 112(a)(iii) of the Customs Act, 1962, on various appellants. The penalties were initially set at high amounts but were later reduced by the appellate tribunal. The penalties were reduced as follows:
- Panam Airways: Reduced from Rs. 75 lakhs to Rs. 25 lakhs
- Mr. Wiessmenn: Reduced from Rs. 5.5 lakhs to Rs. 2 lakhs
- Mr. Ashok Kumar Sehgal: Reduced from Rs. 5 lakhs to Rs. 1.5 lakhs
- Airport Handling Services: Reduced from Rs. 7 lakhs to Rs. 3 lakhs
- Mr. Ranganathan: Reduced from Rs. 2 lakhs to Rs. 50,000
- Mr. Ramesh Chander: Reduced from Rs. 5,000 to Rs. 2,000

5. Involvement and Liability of Clearing Agents:

The involvement of M/s. Airport Handling Services and its employees was scrutinized. The statements and evidence indicated that they were complicit in the undervaluation of goods and evasion of duty. The adjudicating authority found that the clearing agents had knowledge of and participated in the fabrication of invoices. The penalties imposed on the clearing agents were also reduced by the appellate tribunal but were upheld in principle due to their involvement in the malpractice.

Conclusion:

The appellate tribunal upheld the impugned order with modifications, specifically reducing the penalties imposed on the appellants. The tribunal found sufficient evidence of duty evasion and involvement of the appellants in the malpractice. The judgment emphasized the credibility of the statements and the proper valuation of imported goods, leading to the imposition of penalties under the Customs Act, 1962. The appeals were rejected subject to the modifications in penalties.

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