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TMI Blog2002 (5) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of duty under Duty Exemption Entitlement Certificate (DEEC) Scheme and later on goods were to be sold in the open market instead of being utilised in the manufacture of export goods. During the course of investigation, statements of several persons were recorded, including that of Shri Nitin R. Parekh, partner in M/s. Parekh Sons, CHA, who stated inter alia that one Shri Manoj Shah had given him the job of clearance of cyanuric chloride imported by M/s. Vishal International, that he used to deliver the same to Manoj Shah who used to store the goods in the warehouse of M/s. Parekh Corporation, of Shri Manoj Shah who stated that he is a trader in chemical and during the course of business he came into contact with Shri Ashok Dewan who o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opened a bank account in the name of M/s. Vishal International. He denied that he had imported any cyanuric chloride or taken any advance licence under the DEEC scheme, although signatures appearing in the B/E and other documents were admitted to be his signature. He further stated that he had received commission of Rs. 10,000/- for the above. 2. Investigations into the bank accounts of M/s. Vishal International revealed that M/s. Vishal International had received huge amount from M/s. Reliable Traders and M/s. Seema Enterprises. Statement of one Shri Deshmukh, Manager of M/s. Parekh Corporation was also recorded in which he deposed that 4 consignments of cyanuric chloride had come to his warehouse out of which he had stored 165 drums in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noj C. Shah, Shri Vinay Agarwal, M/s. Parekh Sons, M/s. Parekh Corporation and Shri B.N. Kode, the proprietor of M/s. Reliable Traders and proposing confiscation of the consignment seized on 8-2-93. The notice was adjudicated by the Commissioner of Customs, Mumbai who confirmed the duty demand and ordered absolute confiscation of the seized goods and also imposed penalties on all the co-noticees. He imposed penalty of Rs. 25 lakhs each on Shri Vinay Agarwal and M/s. Parekh Sons, penalty of Rs. 5 lakhs on M/s. Parekh Corporation and penalty of Rs. 2 lakhs on Shri B.N. Kode. Hence these appeals. 4. We have carefully considered the submissions made on both sides. We find that the Commissioner has reached the conclusion that M/s. Vishal I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Customs duty rendering the goods liable to confiscation, processing, carrying, removing, depositing, harbouring, keeping, selling, purchasing and dealing with the goods which they knew or had reason to believe were liable to confiscation under Section 111 of the Customs Act, 1962. This demonstrates that it is sub-clause (b) of Section 112 which is used against the appellants as ingredients of Section 112(b) have been reproduced in the notice relating to penal action against the appellants. Therefore, what is to be determined is, whether the appellants had knowledge or reasonable belief that the goods in question were liable to confiscation. What is significant to note is that the goods are permitted to be imported under OGL and they a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sec. 112(b). In these circumstances, we hold that penal action against him is not sustainable and hence set aside the penalty imposed upon him. 5. As far as Parekh Sons is concerned, there is nothing in the statement of Shri Nilin Parekh or in the statement of other persons that they had knowledge that the goods imported under DEEC scheme in the name of M/s. Vishal International were not meant for export production but were to be sold in the open market or that M/s. Vishal International was a non existing firm. In fact, both Vinay Agarwal and Nitin Parekh have stated that they were introduced to one Shri Devendra Kumar Sharma, proprietor of M/s. Vishal International and there is no material to prove that either Vinay Agarwal or Nitin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalised for the reason that he had opened an account in the name of M/s. Reliable Traders at the insistence of Vinay Agarwal who promised to him 1% commission on the transaction done in the account of M/s. Reliable Traders and after opening the bank account he signed blank cheques which he had handed over to Vinay Agarwal. What is used against him is that he was told by Vinay Agarwal that if the Customs authorities enquire anything about the account of M/s. Reliable Traders, Kode should not name him (Vinay Agarwal) but should use the name of one Ashok Dewan. This material is not sufficient for holding that Shri Kode was a party to the role played by Shri Manoj Shah and hence we set aside the penalty imposed upon him. 8. In the result, pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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