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TMI Blog2009 (7) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of big volume of imported goods being sold in domestic market, person in-charge of the importing company; cannot claim that he was not aware of it – he himself had admitted in his statement and had paid duty; further, immediately after clearance, the goods have been sold which shows that they had no intention of fulfilling the obligation at the time of importation. Under these circumstances, it is quite clear that Section 111(o) is attracted and consequent penalty is imposable - C/822-823 and 990/2005 - A/1327-1331/2009-WZB/AHD - Dated:- 2-7-2009 - S/Shri B.S.V. Murthy, Member (T) and Ashok Jindal, Member (J) Cross Objection Nos. C/CO/407 and 410/2005 S/Shri Manoj Sanklecha and S.R. Dixit, Advocates, for the Appellant. Shri R.S. Srova, JDR, for the Respondent. [Order per: B.S.V. Murthy, Member (T)]. - M/s. V.K. Industries Ltd. (VKIL for short) imported 58984 MTs of imported Chinese steam coal. They filed two Bills of Entry claiming the benefit of Notification No. 31/97-Cus., dated 1-4-97. The Bills of Entry were filed on 2-2-99 and 8-2-99. Notification No. 31/97 provides exemption for material imported against advance licences issued after 1-4-97 and req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of finalization of assessment. (vi) No penalty is imposable without reasons setting out the manner in which the Appellant has contributed to evasion of duty. 3. In his argument on behalf of SCL, the learned counsel also submitted that it is settled law that for imposition of penalty under Rule 26 and Rule 209A under Central Excise Rules, 2002 and Central Excise Rules, 1944 respectively, mens rea is absolutely necessary and it has been held that penalty cannot be imposed on a company under the above rules at all since it cannot be said that unlike a person, the company had knowledge. Section 112 is similar to the provisions in Central Excise law and therefore no penalty could be imposed on the company SCL. Learned advocate also cited several decisions in support of his submission that there cannot be any penalty when the assessment is not finalized and the goods have not been confiscated. 4. On the other hand, learned JDR submits that as rightly pointed out by the Commissioner in his adjudication order, the goods have been rendered liable to confiscation because of misdeclaration under Section 111(o) of the Customs Act, 1962; the misdeclaration was made in the Bill of Entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment is finalized no action can be taken was vehemently argued. We find considerable force in the stand taken by the Commissioner in the impugned order that in this case, the conditions of Notification No. 31/97 under which exemption was claimed by VKIL, could not have been fulfilled at all by the importer in view of the fact that the goods were disposed of immediately to various parties without disclosing to them that the goods were imported under Notification No. 31/97 and were required to be utilised as per the conditions only. The fact that even SCL who had high sea sale agreement, had also paid the duty amount in addition to the cost of the coal, goes to show that none of the buyers was really aware of the fact that coal was imported and cleared, claiming benefit of Notification No. 31/97. We are not concerned with the liability to duty herein since the importer who is liable to duty has not filed appeal. The duty demand has been confirmed in the impugned order against VKIL only. Therefore, the only question is liability to penalty. 5.2 The first argument put forth was that no penalty is imposable in view of the fact that the goods are not at all liable to confiscat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty element of about Rs. 1 crore was paid separately, shows that SCL was not a party to the violation of conditions of Notification No. 31/97-Cus. and thereby rendering the goods liable to confiscation. As submitted by the learned advocate, Section 112(b) requires knowledge of the person that the goods are liable to confiscation. The very fact that the SCL paid the duty amount also separately while requiring VKIL to file Bill of Entry shows that they were not aware of the availment of Notification No. 31/97 by VKIL. It is also to be noted that SCL got only an invoice and there is no evidence to show, nor it was brought to our notice by either of the sides that SCL had got a copy of Bill of Entry filed by VKIL claiming the benefit of Notification No. 31/97. Since the knowledge of the liability of the goods to confiscation is essential for imposition of penalty, the cases against SCL as well as Shri V.R. Mohnot fails. 5.4 As regards Shri V.K. Agarwal, it is quite clear that as chairman of the company, he was the person concerned with importation of the goods and their disposal without fulfilling export obligation as envisaged under Notification No. 31/97-Cus., dated 1-4-97. He ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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