9911796707
TMI Blog1992 (5) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... OKO HAMA, Japan, and it was transported to ICD, New Delhi, by Rail from Bombay under tranship permit dated 2-9-1985 and no Bill of Entry was filed by the party till 15-4-1986. On 15-4-1986, as a result of the search of the premises of M/s. Stitch Craft, New Delhi, 13 cardboard boxes containing 10 bundles each of zips in running length (200 Mts. each) collectively valued at Rs. 1,30,000/- (market value) were recovered. Same were seized, as no document showing lawful import, purchase, etc. were found in the premises or produced by M/s. Stitch Craft. After investigation, Show Cause Notice was issued to the present appellants to Show Cause as to why 1,51,000 pieces of zippers contained in the said container No, SCPU-235985(6) be not confiscated, as the same were imported without any import licence/CCP and further that they have been under-invoiced to the tune of Rs. 72,266/- and also to show cause as to why 26,000 mts. of zip fasteners in Coil seized from the premises of M/s. Stitch Craft be not confiscated for contravening the provisions of ITC and Chapter IV-A of the Customs Act. They were also asked to show cause as to why the penal action under Section 112 of the Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l penalty, he submitted that, no case of penalty was made out and alternatively, in the absence of any penalty on the proprietor of the firm, no penalty can be imposed on the Authorised Signatory, that is to say, Shri Anoop Sarin. In reply, Shri B.S. Ganu, learned SDR, supported the impugned Order. 5. We have considered the submissions. From the statement of Shri Anoop Sarin, recorded on 15-4-1986 and 16-4-1986, it is clear that the shipment under reference was negotiated and finalised with M/s. Takisee Co., Ltd. Tokyo, Japan, when Shri Anoop Sarin his brother Shri Sandeep Sarin and Shri Anil Sarin, went to Japan in May, 1985 and they did not have any licence to cover the subject import. This statement is corroborated by Shri Sandeep Sarin in his statement recorded on 16-4-1986. From the impugned Order we also find that on enquiries with the shipping agent, it was revealed that the appellants had paid Rs. 16,347.41 to them (shipping agent) in their Bombay Office towards Sea Freight and Rs. 5,900/- towards inland haulage from Bombay to ICD, New Delhi, and received delivery Order No. 157, dated 14-10-1985 from the shipping agent. It is an admitted fact that the appellants filed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the learned counsel for the appellants that the discount @ 33 % should have been given in terms of Order No. 836/87-A, dated 5-10-1987 is not well founded. From a perusal of the said Order, it is clear that in that case the value of the subject goods was declared by the importer as Rs. 1,28,033/- whereas the authorities concerned assessed it at Rs. 3,34,735/- and issued the Show Cause Notice which was ultimately confirmed by the Adjudicating Authority. On appeal, this Tribunal neither accepted the value declared by the importer nor the value which the Adjudicating Authority confirmed and the price in respect of Sugah Traders less 331/3% was considered to be a fair basis for fixing the value of the goods imported in that case. This is not the situation here. Hence we reject the said contention of the learned counsel as regards valuation, 7. The other contention of the appellants, that since no penalty was imposed upon the proprietor of M/s. Sarin Sons, the penalty imposed on its Authorised Signatory appears to have force in the facts and circumstances of the case. In the impugned Order, the Addl. Collector has observed as follows - As regards the penal liability of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were not in possession of any import licence even when they filed the bill of entry which was several months after the goods had arrived. In fact, their claim before the adjudicating authority was that they had not received any intimation that the goods had been shipped to them. 13. Since I agree with Learned Member (Judicial) so far as the order of confiscation of the goods is concerned, it would not ordinarily be necessary for me to record a separate Order. But while dealing with the argument that it was not necessary for the appellants to be in possession of a licence on the date of shipment, I would only like to say that under Clause 3(1) of the Imports (Control) Order 17/55, dated 7th Dec., 1955, no goods can be imported in India except under, and in accordance with a licence or a Customs Clearance permit. The argument taken before us by Shri Julka during the hearing was that since they wanted to produce a Replenishment Licence during the proceedings before the Additional Collector, they should have been allowed to do so. It is for examining this argument that a look at the wordings of the relevant clauses is necessary and they are reporduced below :- 3. Restriction on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is it necessary that the goods should be imported under, and in accordance with a licence, they can be shipped only after the date of issue of the licence, they should conform to the description given in the licence and the importer has also to produce the licence before the customs authorities at the time of clearance of the goods. A provision for clearance of the goods by submitting a bond or guarantee has also been made in clause 3-A in cases where the importer is unable to produce the licence at the time of arrival of the goods. Clause (5) of the I.T.C. Order prescribes that the licensing authority may issue the licence subject to one or more of the conditions stated therein. Among those mentioned are the one relating to the manner of disposal of the goods, the price at which they may be sold or distributed, and certain other conditions prescribed in Schedule V to the I.T.C. Order. Sub-clause (3) of Clause 5, which is relevant for examining Shri Julka s argument about transferability of licences is as under :- 5(3). It shall be deemed to be a condition of every such licence that :- (i) no person shall transfer and no person shall acquire by transfer any licence issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrival of the goods for securing their clearance. The contention of Shri Julka that the Additional Collector should have allowed them to submit REP licences which they purchased after the arrival of the goods is not warranted by law and has rightly been rejected. 18. As regards Shri Anoop Sarin on whom a penalty of Rs. 50,000/- has been imposed, the following extracts from the Show Cause Notice bring out his role :- 6. In his statement dated 15-4-1986 recorded under Section 108 of the Customs Act, 1962, Shri Anil Kumar Sarin, partner of M/s. Stitch Craft stated, inter alia, that since 1982-83, he and his younger brother Shri Anoop Sarin are the two partners of M/s. Stitch Craft; that one container No. 235985(6) was imported by them which was lying at ICD, New Delhi; that the documents pertaining to this container are on D.P. basis and the documents should be with the Bank of India, Connaught Circus, New Delhi; that these Zip fasteners were supplied by M/s. Taksei Co. Ltd., Japan; that they have not received any reminder for clearance of this container lying at ICD, New Delhi from the shipping agents. Shri Anil Sarin also stated that the import matters of their concern is looke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey have imported only two consignments of Zip fasteners; that one was cleared from C.W.C., Gurgaon Road during 1985 for which a penalty of Rs. 2 lakhs was imposed which have already been deposited by them; that the second consignment of zip fasteners has been imported from Japan and is lying at ICD, New Delhi in container No. SCPU-235985(6) which arrived in Oct., 1985; that this consignment has not been cleared so far; that they have not received any intimation from any bank about the receipt of documents in any bank in India; that this consignment was imported on D.P. basis and no L.C. was opened; that they have not received any reminder from the supplier of these goods from Tokyo; that when he, his brother Anup Sarin were in Japan during the month of May, 1985, negotiation for booking of this consignment was done by them with M/s. Taksei Co. Ltd., Japan; that this order was placed for an amount of Rs. 3 lakhs approx.; that M/s. Taksei Co. are known to his brother Mr. Anup Sarin because he had been exporting garments to their associates in Japan; that his brother Mr. Anup Sarin is authorised signatory declared by him to deal in all the matters pertaining to M/s. Sarin Sons a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er two brothers that it was Anup Sarin who was looking after the (a) import matters of Stitch Craft (b) all matters pertaining to M/s. Sarin Sons of which he was also the authorised signatory. 20. It also appears from paragraph 28 of the impugned Order that the goods were examined, in the presence of the noticee Shri Anoop Sarin . In paragraph 31 of the Order, there are references to the statements of Anup Sarin which stand corroborated by the statements of his other brothers. In the face of all this evidence and the important role which he played which doing the entire work of Sarin Sons it cannot be contended that Shri Anup Sarin had not done anything to warrant imposition of penalty on him under Section 112 merely because he acted as authorised signatory or that failure to impose penalty on the sole proprietor would, in any manner, reduce the liability of Shri Anup Sarin to penalty. It is important to remember that Section 112 talks of any person being liable to penalty for improper importation of goods etc. Thus, it is clear that the scope of Section 112 is very comprehensive. The role of Shri Anup Sarin has been brought out from the Show Cause Notice and has been highli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under Section 111, becomes liable to penalty. In the light of the discussions in this Order, it is clear that Shri Anoop Sarin was not only the authorised signatory of the firm but was doing the entire work of the firm and was fully aware of what all was going on in connection with the import of these goods. In the light of the above, I am of the considered view that the imposition of penalty on Shri Anup Sarin was fully justified and, considering the facts of the case, do not think that the penalty of Rs. 50,000/- was excessive. In this view of the matter, I would propose an order dismissing both the appeals on all counts. Sd/- (N.K. Bajpai) Dated 22-1-1992 Member (Technical) 23. In view of a difference of opinion having arisen between the Members, the matter is referred to the President under Section 129C(5) of the Customs Act, 1962 on the following point: Whether, in the facts and circumstances stated in the Order of Member (Judicial), the appeal of Shri Anoop Sarin is to be allowed or, for reasons stated in the Order of Member (Technical), it is to be rejected. Sd/- Sd/- N.K. Bajpai G.P. Agarwal Member (T) Member (J) 24. [Order per: S.V. Maruthi, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., Tokyo, Japan". Similarly, Shri Sandeep Sarin in his statement stated that when he, his brother Anup Sarin were in Japan during the month of May, 1985, negotiation for booking of this consignment was done by them with M/s. Taksei Co. Ltd. Japan; that this order was placed for an amount of Rs. 3 lakhs approx.; that M/s. Taksei Co. are known to his brother Mr. Anup Sarin because he had been exporting garments to their associates in Japan. From the above it follows that 3 brothers were in Japan and negotiated the deal. Therefore, the 3 brothers were aware of the transaction and they were posted with the nature of transaction. It is true that Shri Anoop Sarin is an authorised signatory of M/s. Sarin sons and he had been pursuing the matter after deal was finalised. The fact that he pursued the matter later on does not, in any way mitigate the liability of the other two brothers in the negotiation of the deal. Shri Sandeep Sarin further states that they do not have any REP licence to clear these zip fasteners from I.C.D., New Delhi but they will procure the same from local market in a few days for getting the shipment cleared; that he could not say from which broker they will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h case. In the present case, the Collector having found all the 3 brothers equally responsible for the commission and omission has not imposed any penalty on two brothers while imposing penalty on the third member. Though not imposing the penalty on the other two brothers is not a mitigating circumstance, there is no justification for imposing the penalty on Shri Anoop Sarin having not imposed the penalty on Shri Anil Sarin and Shri Sandeep Sarin. I, therefore, agree with Shri G.P. Agarwal, Member (Judicial) that the appeal of Shri Anoop Sarin should be allowed and the penalty should be set aside. Sd/. (S.V. Maruthi) Dated: 19-5-1992 Member (Judicial) FINAL ORDER 29. In view of the opinion of the majority on the question of imposition of penalty on Shri Anoop Sarin, his appeal is allowed and the order imposing penalty on him is set aside. 30. Both the Members having agreed on the appeal of M/s. Sarin sons, the order of confiscation and penalty are upheld and their appeal dismissed. Sd/- Sd/- (G.P. Agarwal) (N.K. Bajpai) Dated : 26-5-1992 Judicial Member Technical Member - - TaxTMI - TMITax - Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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