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2020 (10) TMI 288 - AT - CustomsMisdeclaration of export goods - mis- declaration of attempt to export 22 carat gold jewellery - Outright Scheme for manufacture of Gold Jewellery with an obligation to export the same with certain quantity of gold within stipulated period of ninety days with required value addition - allegation is that in order to show that the export of gold in the form of Gold Jewellery was in compliance with the said scheme, the appellant SGPL mis-declared the actual quantity of gold containing in the said jewellery - Confiscation - Redemption Fine - penalty. HELD THAT - From the statement of Roshan Vernekar and that of the other persons recorded in the impugned Order, one thing is very clear that the export quantity of gold declared in the Shipping Bill is incorrect and the same was detected by the Customs authority on a thorough re-examination of the declared gold jewellery meant for export. It is not disputed by SGPL at any stage of the proceeding that the content of the gold in the jewellery meant for export was found to be 3540 gms. instead of the declared quantity of 13,633.730 gms - Ld. Commissioner was justified in directing confiscation of the goods and imposition penalty on SGPL under the respective provisions of the Customs Act, 1962. However, the quantum of fine directed and penalty imposed appears to be on higher side in the circumstances of the case and the evidence brought on record. Hence, to meet the ends of justice the redemption fine is reduced to 20.00 lakhs and penalty to ₹ 5.00 lakhs on SGPL. While imposing penalty on Shri Roshan Vernkear, learned Commissioner analyzing the evidences observed that Shri Roshan Vernekar did not take any steps to examine the content of the gold in the gold studded jewellery before export and declaration made on behalf of the appellant company M/s SGPL. The learned Commissioner also did not accept the submission of Shri Roshan Vernekar that the making of jewellery was entrusted to one Shri Hitesh Desai, who met him only once and also without visiting the premises of Bengali Babu, who carried out the making of jewellery for export, and the said gold jewellery was accepted as genuine and declaration with Customs for export was filed accordingly. Thus, he found him guilty and imposed penalty both under section 114(iii) 114AA of Customs Act, 1962. There are no justification to interfere with the said finding of the Ld. Commissioner which points out to omission of necessary steps required to be taken by Shri Roshan Vernekar in the verification of the jewellery and preparation of export documents on behalf of SGPL. Also, it cannot be ignored that as a remedial action, necessary criminal case was initiated against the karigar - the penalty imposed on him seems to be disproportionate and consequently deserves to be reduced. Consequently, penalty on Shri Roshan Vernkear under Section 114AA is reduced to ₹ 2.00 lakhs and penalty under Sec. 114(iii) is set aside as imposition of penalty under Sec. 114AA would meet the ends of justice. In imposing penalty on Directors Mrs. Deepa Vernekar and Mrs. Shilpa Vernekar, the learned Commissioner observed that even though they have not signed any export documents, they are liable for penalty for the mis-declaration and misdeeds of Shri Roshan Vernekar. I do not find merit in the observation of the learned Commissioner imposing penalty on Directors Mrs. Deepa Vernekar and Mrs. Shilpa Vernekar, as neither of them was examined nor in any of the statements of other witnesses, anyone implicated them stating that they had knowledge about handing over the gold to Hitesh Desai for making the jewellery and/or they had the knowledge of the content of the gold in the jewellery declared for export was less than the declared quantity in the export documents. Therefore, imposition of penalty on them cannot be sustained. Penalty on CHA - HELD THAT - There are force in the contention of the CHA inasmuch as the Department could not produce any cogent evidence to establish the fact that either Shri Vinay Shah or CHA was aware of the fact that the gold jewellery meant for export did not contain the quantity of gold as declared along with other imitation stone, assuming for a while that Shri Vinay Shah was the employee of the CHA. He has prepared the document as declared to him on behalf of the exporter - the imposition of penalty on Shri Vinay Shah and the CHA cannot be sustained. Application allowed in part.
Issues Involved:
1. Confiscation of goods under Section 113(h) and 113(i) of the Customs Act, 1962. 2. Imposition of penalty under Sections 114(iii), 114AA, and 117 of the Customs Act, 1962 on SGPL and other appellants for mis-declaration of gold content in exported jewellery. Issue-wise Detailed Analysis: 1. Confiscation of Goods: The appellant, SGPL, filed a shipping bill for the export of 15290.330 gms of 22 Carat Studded Gold Jewellery, declaring a gold content of 13633.730 gms. Upon re-examination, the actual gold content was found to be only 3540 gms. The discrepancy led to the issuance of a show-cause notice proposing the confiscation of the goods under Section 113(h) and 113(i) of the Customs Act, 1962. The adjudicating authority confiscated the gold jewellery, allowing redemption on payment of a fine of ?35 lakhs and imposed a penalty of ?10 lakhs on SGPL under Section 114(iii) of the Customs Act, 1962. The Tribunal upheld the confiscation but reduced the redemption fine to ?20 lakhs and the penalty to ?5 lakhs on SGPL. 2. Imposition of Penalty: - SGPL and Shri Roshan Vernekar: The Tribunal found that the mis-declaration of gold content was established. However, it noted that the penalty imposed was disproportionate. The penalty on SGPL was reduced to ?5 lakhs. For Shri Roshan Vernekar, the Tribunal acknowledged his omission in verifying the gold content but recognized his subsequent action of filing a criminal case against the karigar. The penalty under Section 114AA was reduced to ?2 lakhs, and the penalty under Section 114(iii) was set aside. - Ms. Deepa Vernekar and Ms. Shilpa Vernekar: The Tribunal found no evidence implicating these directors in the mis-declaration. They were not involved in the day-to-day business or in signing any export documents. Consequently, the penalties imposed on them were set aside. - M/s Protocol Logistics Pvt. Ltd. and Shri Vinay Shah: The Tribunal found no cogent evidence that the CHA or Shri Vinay Shah was aware of the mis-declaration of gold content. The CHA had signed the documents as disclosed to them, and Shri Vinay Shah was not proven to be their employee. Therefore, the penalties imposed on them were set aside. Conclusion: The Tribunal modified the impugned order, allowing the appeals of Ms. Deepa Vernekar, Ms. Shilpa Vernekar, M/s Protocol Logistics Pvt. Ltd., and Shri Vinay Shah, and partly allowing the appeals of SGPL and Shri Roshan Vernekar by reducing the fine and penalties.
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