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TMI Blog1989 (11) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... ICIM were licensed to produce certain types of data processing equipment for Indian market and surrounding countries. The production included manufacture, assembly, re-building and factoring. ICIM get the components, spares, used machines and other raw material only from ICL which is the parent firm in U.K. The goods seized as a result of the search at Poona factory comprised of control panels, transformers, core store machines and tabulators as listed in the related Panchnama. The documents seized consisted mostly of files and registers with correspondence amongst different units of ICL group in India and with the Government of India, Commerce Ministry as also with the Customs House. As a result of investigation, 32 Show Cause Notices were issued jointly and severally to ICL (India) to ICIM and to its employees S/Shri Mookherjee, Richford and Gonsalves in regard to action to be taken under Section 111 and Section 112 of Customs Act, 1962. Twenty Show Cause Notices out of the above were issued to ICIM and the other appellants herein. The charges of contravention of the Customs Act, namely, 111(d), 111(1) and 111(m) alleged in the Show Cause Notices relate to certain series of impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - each. The import licences granted initially were for the spares for the aforesaid machines and for tabulators hulks at their book value. However, what ICIM imported after the 1st year of the phased manufacturing programme was 900 series tabulators which had high book values and lot of life in it. These machines were imported by under-invoicing them at a ridiculously low value and to suit the percentage fixed by the Government so as to get future licences. The Department s stand is that under-valuation, mis-declaration and non-declaration was also for bringing in as many of the data processing equipment and as much spares as possible within the licences given for the manufacturing unit of ICL group. In some cases it was alleged that such ready to use machines and parts thereof which would not have been allowed by the Government if asked for importation by the Trading Unit of this group, namely, ICL (India), were brought in by ICIM. Such mis-declaration and under-valuation resulted in heavy loss of duty to the Government apart from contravening the restrictions imposed under ITC. According to the department s estimate in the Show Cause Notice, the total loss of duty involved in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of duty. The learned counsel contended that two penalties under Section 112(a) for the above reasons were unlawful because the adjudicating authority had held the goods to have been imported in contravention of prohibition on such imports, and, as such, the penalty on them can only be under Section 112(i) which relates to prohibited goods, whereas the adjudicating authority had also imposed penalty for evasion of duty. This penalty is bad in law because penalty for evasion of duty on dutiable goods other than prohibited goods is separately covered by Section 112, Clause (ii) which is not applicable in their case as this department had held the import as that of prohibited goods. Therefore, it was argued that the separate penalty for evasion of duty is not sustainable and should be set aside. The learned counsel further submitted that if the appellants submissions on this preliminary point were accepted, they were not inclined to press the rest of their appeal, for the reason that the matter was very old, and the offence alleged in the order under appeal relates to imports of 1963 to 1968 where Show Cause Notices were issued during 1969 and 1970 and the adjudication order was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red at a very low value. They had also imported spares not belonging to these machines and the learned SDR pointed out that some of the goods were not declared at all. The other appellants had also deliberately acted in effecting such unauthorised imports and the learned SDR urged that the quantum of personal penalty on them is commensurate with their respective roles in the offence. 4. The submissions made have been carefully considered. The learned counsel for the appellants had raised a preliminary legal issue in this case in respect of appellant ICIM which he submitted may be decided in the first instance because if the appellant s case were to be accepted on this issue, they will not be pressing the rest of appeal on merits due mainly to the long lapse of time and due to the various changes which had taken place in the appellant s firm itself during the period. The argument put-forth is that the adjudicating authority had erred in law in imposing two separate personal penalties on this appellant under Section 112 of Customs Act, 1962 because having held the import to be in contravention of prohibition on such import under Import Trade Control Regulations, the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the declared value and the value thereof or one thousand rupees, whichever is the highest. It is clear that for purposes of imposition of penalty, the ceilings are prescribed in Clauses (i) to (v) of the Section. Goods in respect of which any prohibition is in force under the Customs Act, 1962 or under any other law is categorised separately under Clause (i), and penalty for dutiable goods other than prohibited goods is distinctly covered by Clause (ii). On a perusal of the Show Cause Notices issued to the appellants in this background, we find that the allegation is that the goods have been imported in contravention of prohibition under Section 3 of Imports and Exports (Control) Act, 1947 attracting the prohibition under Section 11 of Customs Act, 1962 on the ground that the impugned goods had been imported without a valid import licence or had been imported without any licence at all. While mentioning the consequential liability to confiscation under Section 111 of the Customs Act, the Show Cause Notices has also mentioned that the goods are prohibited and dutiable. The Show Cause Notices then invoke Section 112, Clause (i) for the purpose of personal penalty. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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