2022 (3) TMI 1004 - AT - Customs

Levy of penalty u/s 112 (a) and (q) of the Customs Act, 1962 - allegation is also that documents pertaining to its firm have illegally been used in the impugned import - evidence on record proving involvement in the alleged illegal import or not - HELD THAT - It is an admitted fact that the import export code (IEC) was applied for by M/s. Pico Trading Co. in December, 2010 with the help of Shri Deepak Rishi. All relevant documents were provided by Shri Sanjay Arora the proprietor of M/s. Pico Trading Co. to said Shri Deepak. Admittedly, the said IEC Code was received in the month of January, 2011. The consignment in question entered into Indian Territory in the month of October, 2011 - No explanation is produced by Sanjay Arora about several calls being made between him and Mr. Deepak in the month of October, 2011 that too for the durations as long as of 599 seconds. The only evidence relied upon is the FIR lodged by Shri Sanjay Arora but the said FIR is after the import and after Shri Sanjay Arora had joined the investigation. The possibility of said FIR as an after-thought to manipulate defence cannot be ruled out. Further, no outcome of the investigation in the said FIR have been brought on record, though original adjudicating authority has held Shri Sanjay Arora to be the victim of identity theft whereby his identity has been used to cause the fraudulent imports. But his association with Shri Deepak Rishi is very much established on record. From the testimony of all the noticees herein the transaction which appears in corroboration is that Shri Deepak Rishi was the mastermind for the impugned imports and every other noticee has acted at his instance - Sanjay Arora has not been the victim of identity theft. He rather allowed his papers to be used by Shri Deepak Rishi. Hence, he cannot walk out of being called as abater/ conspirator. Penalty upon him under section 112 of Customs Act, 1962 has therefore rightly been imposed - We are in agreement with the original adjudicating authority that after imposition of penalty on proprietor the simultaneous penalty on his firm for the same offence has been correctly dropped. The order under challenge to that extent stands upheld. The modus operandi for operating such imports has also been disclosed by said Deepak Rishi in his statement as was recorded on 30.11.2011. He has specifically named Nawal Kishore Singh to rather be the mastermind of the impugned import and that Mr. Nawal Kishore Singh had clear knowledge about the consignment to contain branded luxury items instead of unbranded glassware. Shri Nawal Kishore Singh has not brought anything on record to falsify said testimony. His association with Deepak Rishi rather stands corroborated from the testimony of Bhupinder Singh even the call records of Shri Deepak Rishi proved association of Nawal Kishore Singh with Deepak Rishi - even Sanjay Arora is not the victim of identity theft. He sent his documents for the impugned imports and was constantly in touch with Shri Deepak Rishi during the period of import. Hence the findings against the second appellant, namely, Shri Nawal Kishore Singh are also hereby upheld. As a result of entire above discussion, we hereby uphold the order under challenge except for the separate penalty on M/s. Pico Trading Co. Consequent thereto, both the appeals stand dismissed. Appeal disposed off.

Summary

Issues Involved:
1. Misdeclaration and undervaluation of imported goods.
2. Involvement of various individuals in the fraudulent import.
3. Imposition of penalties under Section 112 (a) & 114A of the Customs Act, 1962.

Detailed Analysis:

Misdeclaration and Undervaluation of Imported Goods:
The consignment declared as unbranded glassware was found to contain branded glassware, liquor, cigarettes, and other miscellaneous goods upon examination. The total value of the seized goods was ?3,24,93,450/-. The misdeclaration was intended to evade customs duty.

Involvement of Various Individuals:
The Department's investigation identified several individuals involved in the fraudulent import, including the proprietor of M/s. Pico Trading Co., Shri Sanjay Arora, and Shri Deepak Kumar Rishi, among others. The investigation revealed that Shri Sanjay Arora had applied for an IEC Code with the help of Shri Deepak Kumar Rishi, who allegedly misused the documents provided by Shri Arora to import misdeclared goods.

Role of Shri Sanjay Arora:
The Show Cause Notice (SCN) and subsequent investigation highlighted that Shri Sanjay Arora was in regular communication with Shri Deepak Rishi during the relevant period. The call records indicated multiple calls between them around the time of the import. Despite Shri Arora's claim of being a victim of identity theft, the Tribunal found sufficient evidence of his association with Shri Deepak Rishi and concluded that Shri Arora allowed his documents to be used for the fraudulent imports.

Role of Shri Nawal Kishore Singh:
Shri Nawal Kishore Singh, an employee of Shri Bhupinder Singh, was implicated through call records and statements. The investigation revealed that Shri Singh was involved in facilitating the fraudulent import by providing necessary documents and coordinating with Shri Deepak Rishi. The Tribunal upheld the findings against Shri Singh, citing sufficient evidence of his active participation in the conspiracy.

Imposition of Penalties:
The Original Adjudicating Authority imposed penalties under Section 112 (a) & 114A of the Customs Act, 1962, on the involved parties. Shri Sanjay Arora was penalized ?10,00,000/- under Section 112 (a) and (q). The Tribunal upheld the imposition of penalties, rejecting the defense of identity theft and acknowledging the active involvement of Shri Arora and Shri Singh in the fraudulent import.

Conclusion:
The Tribunal upheld the order of the Original Adjudicating Authority, confirming the penalties imposed on Shri Sanjay Arora and Shri Nawal Kishore Singh. The appeals were dismissed, and the findings of the involvement of the appellants in the fraudulent import were affirmed. The Tribunal refrained from making any findings concerning CONCOR, as a separate appeal was pending.