1994 (6) TMI 55 - AT - Customs

Summary

Issues Involved:
1. Validity of import license and liability of goods to confiscation.
2. Quantum of redemption fine.
3. Juristic personality of M/s P.K. Himatsingka & Co.
4. Penalty on Smt. Kusum Himatsingka.

Detailed Analysis:

I. Validity of Import License and Liability of Goods to Confiscation:
The case facts reveal that on 24-1-1986, an import license was issued to M/s. Projects and Equipments Corporation of India Ltd. (PEC) for spare parts for Romanian road rollers. M/s. P.K. Himatsingka & Co. entered into an agreement with PEC to import these spare parts. Investigations revealed that the appellants had removed the original list annexed to the import license and attached a forged list, presenting it for clearance. The goods were imported under forged documents, rendering them liable to confiscation. The adjudicating authority confirmed the confiscation of goods for unauthorized importation without a valid license, contravening Section 3 of the Imports and Exports (Control) Act, 1947, read with Section 11 of the Customs Act, 1962.

II. Quantum of Redemption Fine:
The appellants challenged the quantum of the redemption fine, arguing it exceeded the market value of the confiscated goods. The adjudicating authority had added a 300% margin of profit to the CIF value of the goods. The Tribunal found that the confiscated bearings, not being included in the list annexed to the license, were intended for sale in the open market, commanding a high profit margin. The appellants failed to provide evidence to support their claim of a lower profit margin. Thus, the Tribunal upheld the redemption fine, finding it within the parameters of Section 125(1) proviso of the Customs Act, 1962.

III. Juristic Personality of M/s P.K. Himatsingka & Co.:
The Tribunal noted that M/s. P.K. Himatsingka & Co. was a sole proprietary concern of Smt. Kusum Himatsingka, not a legal entity on which a penalty could be imposed. The Tribunal set aside the penalty imposed on M/s. P.K. Himatsingka & Co., distinguishing it from the case of India Sea Foods, where the importer was a partnership firm.

IV. Penalty on Smt. Kusum Himatsingka:
The Tribunal found that Smt. Kusum Himatsingka had a role in the fraud, as she signed the forged list of spare parts. However, considering that her husband, Shri P.K. Himatsingka, was the prime mover in the scheme, the Tribunal reduced the penalties imposed on her. The penalties were reduced as follows:
- Appeal No. 1605/89: Reduced to Rs. 30,000/-
- Appeal No. 1604/89: Reduced to Rs. 30,000/-
- Appeal No. 1283/89: Reduced to Rs. 10,000/-
- Appeal No. 1602/89: Reduced to Rs. 30,000/-

Summary of Tribunal's Decision:
1. The liability of the goods to confiscation is upheld.
2. The redemption fine is not in excess of the market value of the goods and is commensurate therewith.
3. The penalty imposed on M/s. P.K. Himatsingka is set aside.
4. Penalties on Shri P.K. Himatsingka are confirmed.
5. The penalties imposed upon Smt. Kusum Himatsingka are reduced as specified.

The appeals are disposed of in these terms.