2014 (6) TMI 510 - AT - Customs

Waiver of pre-deposit - Fraud - Mis declaration of goods - Attempt of clandestine removal of goods - Held that - Prima facie, record reveals that import of 5010 number of bottles of whisky in 501 cartons covered by B/E 795029 dated 26.05.2009 valued at Rs. 1,00,87,566/- (as against declared value of Rs. 83,94,779/-) were concealed under 847 cartons of Carbonated/Aerated water, Beverages and Ketchup etc. Valued at Rs. 5,51,518/- came in container No. DCCU 6984503. Such fact remained undisputed when physical verification of the container was made by Customs which resulted in above inventory as per Panchnama. Above bill of Entry was filed by M/s Swaraj International, Karol Bagh owned and run by one Harsh Anil Vasant. This was confirmed by the appellant Mool Chand Sharma Director of CHA M/s R.U. Import & Export Pvt. Ltd. The CHA was attempting to clear above consignment. In his statements recorded under section 108 of Customs Act, 1962 on 02.06.2009and 03.06.2009 Shri Mool Chand Sharma brought out his role affirming that Harsh Anil Vasant was also owner of both Swaraj International and M/s Mohit International. Statement of Mool Chand Sharma director of M/s Import Export Pvt. Ltd. prima facie, brought out his close connection with Harsh Anil Vasant designing the above modus operandi to defraud Revenue. Para 49.1 of adjudication order brought out how he extended his assistance to Harsh Anil Vasant for clearance of mis-declared goods filing a wrong bill of entry on 26.05.2009 deliberately and twice in past. Mool Chand Sharma laid hands on the stamp of Commissioner of Customs, ICD, TKD adopting unscrupulous means to make use thereof and forge document to make an attempt for clearance of the offending goods. His conduct dragged him to arrest along with Harsh Anil Vasant. Deliberate mis-declaration surfaced in respect of all the 3 B/Es and Shri Mool Chand Sharma failed to defend before learned Adjudicating Authority. Fraud is an act of deliberate deception of securing something by taking unfair advantage of another. It is a deception in order to gain by another s loss. It is a cheating intending to get an advantage as has been held in the case of S.P. Chengalvaraya Naidu V. Jagannath 1993 (10) TMI 315 - SUPREME COURT . In Ashok Leyland Ltd. V. State of Tamil Nadu 2004 (1) TMI 365 - SUPREME COURT OF INDIA it has also been held that fraud is proved when it is shown that a false representation has been made knowingly. Therefore there is no scope to grant total waiver of pre-deposit to the appellants for hearing their appeals. - stay granted partly.

Summary

Issues Involved:
1. Penalties imposed on individuals and companies for alleged mis-declaration of imported goods.
2. Allegations of involvement in a smuggling racket.
3. Validity of penalties and requirement for pre-deposit before hearing appeals.
4. Role of various parties in the alleged fraud and their connection to the imported consignments.
5. Involvement of Customs House Agent (CHA) and transporter in the alleged mis-declaration.

Issue-wise Detailed Analysis:

1. Penalties Imposed on Individuals and Companies:
The judgment addresses penalties imposed on Shri Mool Chand Sharma in different capacities: as a Director of M/s R.U. Imports & Exports Pvt. Ltd. and as a proprietor of M/s M.V. Logistics. Penalties of Rs. 30 lakhs and Rs. 50 lakhs were imposed respectively. Additionally, M/s R.U. Imports & Exports Pvt. Ltd. faced a penalty of Rs. 50 lakhs for mis-declaration of imported goods, and M/s M.V. Logistics faced a penalty of Rs. 40 lakhs for alleged involvement in the transportation of mis-declared consignments.

2. Allegations of Involvement in a Smuggling Racket:
The judgment details the allegations against the appellants, including the mis-declaration of goods imported under various bills of entry. Specifically, it was alleged that 501 cartons containing whisky were declared as carbonated/aerated water, beverages, ketchup, etc., and that past consignments also involved similar mis-declarations. The investigation revealed that the imported goods were concealed and that the appellants were involved in a scheme to evade customs duty.

3. Validity of Penalties and Requirement for Pre-deposit:
The Tribunal considered the arguments made by the appellants, who contended that the penalties were unwarranted and that they were not involved in any mis-declaration. The appellants argued that the goods were cleared after due inspection by Customs and that there was no evidence of their involvement in any fraudulent activities. However, the Tribunal found prima facie evidence of deliberate mis-declaration and involvement in the smuggling racket. Consequently, the Tribunal directed the appellants to make pre-deposits before hearing their appeals, with specific amounts detailed for each appellant.

4. Role of Various Parties in the Alleged Fraud:
The judgment outlines the roles of different individuals and entities in the alleged fraud. Shri Mool Chand Sharma, as the director of the CHA company and proprietor of the transporter, was found to have a close connection with the importer, Harsh Anil Vasant. The investigation revealed that they conspired to mis-declare the goods and evade customs duty. Statements from various individuals, including truck drivers and other associates, corroborated the involvement of the appellants in the smuggling racket.

5. Involvement of Customs House Agent (CHA) and Transporter:
The CHA company, M/s R.U. Imports & Exports Pvt. Ltd., and the transporter, M/s M.V. Logistics, were found to be actively involved in the mis-declaration of goods. The Tribunal noted that the CHA license of M/s R.U. Imports & Exports Pvt. Ltd. was suspended but later restored, and that the transporter played a role in moving the mis-declared goods. The evidence suggested that both entities were integral to the scheme to defraud the Revenue.

Conclusion:
The Tribunal concluded that there was sufficient prima facie evidence to support the allegations of mis-declaration and involvement in a smuggling racket. The appellants were directed to make specific pre-deposits before their appeals could be heard, and the stay applications were disposed of accordingly. The judgment underscores the seriousness of the allegations and the need for compliance with customs regulations to prevent revenue loss.