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TMI Blog2002 (11) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... powders like HDPE, LDPE, PVC, etc., from M/s. M.K. Industries, M/s. Anant B. Timbadia Company, M/s. Par Petro Chem Ltd., Petro Impex. (I) Private Limited and M/s. Bishwanath Industries Limited; and subsequently cleared them free of customs duty against advance licences under DEEC Scheme. The advance licences were granted under actual user condition. Subsequent investigations by DRI revealed that M/s. Kunal Overseas Limited had unauthorisedly sold the goods cleared free of duty in the local market in contravention of the actual user condition under the licence. The case was investigated by the DRI from which it transpired that : (a) M/s. Kunal Overseas Ltd. had obtained 11 advance licences from Jt. DGFT, Mumbai by showing M/s. Plast Containers, Palghar as their supporting manufacturer. The advance licences contained a condition that the resultant export products will be manufactured out of the imported duty free raw material, at the supporting manufacturer s unit. (b) M/s. Kunal Overseas Ltd., imported a total quantity of 6634.592 MTS of various plastic raw materials valued at Rs. 14,11,64,759/- which was cleared under benefit of Customs Notification No. 30/97, da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued proposing confiscation of goods cleared under the 11 advance licences obtained by M/s. Kunal Overseas Limited in terms of Sections 111(d) and (o) of the Customs Act, 1962, proposing recovery of duty of Rs. 9,74,52,797/- jointly and severally from: Name Duty Amount (Rs.) 1. M/s. Kunal Overseas Limited and M/s. Anant B. Timbadia Co. 32,18,178.00 2. M/s. Kunal Overseas Limited and M.K. Industries Ltd. 58,21,651.00 3. M/s. Kunal Overseas Ltd., M/s. Bishwanath Industries Ltd., M/s. Par Petro Chem Ltd. and M/s. Petro Impex (I) Pvt. Ltd. 8,61,69,815.00 4. M/s. Kunal Overseas Ltd. 22,42,458.00 Total 9,74,52,797.00 in terms of the proviso to Section 28 of the Customs Act, proposing adjustment of an amount of Rs. 3,57,25,000/- already deposited voluntarily against the duty payable and proposing levy of interest. The notice also proposed penal action against M/s. Kunal Overseas Limited, under Section 112(a) and (b) or 114A of the Customs Act, 1962 against M/s. Kunal Overseas Limited and other noticees for acts of omission and commission rendering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences and Notification 30/97-Cus., dated 1-4-1997 as amended, rendering the imported goods liable to confiscation, has been prima facie levelled only against M/s. Kunal Overseas Limited, who are also alleged to have wilfully suppressed the fact of diversion of duty free imported goods into the local market, attracting the proviso to Section 28 of the Customs Act, 1962. The prima facie charge against the respondents is that they aided and abetted Shri Paresh Parekh of Kunal Overseas Limited in the evasion of customs duty as they used the forged supporting manufacturer's documents for effecting duty free clearance of the goods, selling the same in the domestic market and also monetarily benefiting in such sale; thus, rendering them liable to penalty under Section 112 of the Customs Act. We also note that the payment of Rs. 2,00,30,000/- by Dimple Overseas Limited under cover of letter dated 29-1-1999 has been accepted by the Commissioner as bargain deposit for seeking his release from jail. According to the Commissioner Shri V.K. Gandhi was first arrested on 18-1-1999, his residence was sought to be searched on 22-1-1999, search at his office and residence took place on 25-1-1999, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verseas Limited/V.K. Gandhi and accordingly we dismiss the application C/Stay-2398/2002. 10. As regards the remaining two applications, the respondents in C/Stay-2450/2002-Mum. is M/s. Anant B. Timbadia Company and Shri Anant B. Timbadia is the respondent in C/Stay-2451/2002-Mum. On queries from the Bench Shri Shetty confirms that M/s. Anant B. Timbadia Company is a proprietary concern represented by its proprietor Shri Anant B. Timbadia. Learned Counsel for the Revenue does not controvert this. The material on record shows that Anant B. Timbadia is the proprietor of M/s. Anant B. Timbadia Company. This being so, only one appeal is required, as in the eye of law, the proprietor and the proprietary concern are one and the same. Hence we dismiss the application No. C/Stay-2450/2002-Mum and appeal No. C/817/2002-Mum. filed by the Revenue against M/s. Anant B. Timbadia Company as not maintainable. 11. As regards Shri Anant B. Timbadia, although he paid Rs. 20 lakhs towards duty liability in this case, we find that the show cause notice prima facie treats only M/s. Kunal Overseas Limited as the person liable to pay duty for violation of Notification 30/97, benefit of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Dabur India Ltd. v. State of Uttar Pradesh [1990 (49) E.L.T. 3 (S.C.)] he directed refund of the money deposited by V.K. Gandhi. He found that the charges against that the V.K. Gandhi had not been proved and refrained from imposing penalty upon him. In the appeal by Revenue challenge has been made of the logic leading to the non-imposition of penalty on Gandhi and the directions of refund of the amount is claimed to be improper on the ground that the procedure under Section 27 of the Customs Act, 1962 was not followed. 15. In the stay application the prayer is made only for stay of the observations for refund of the amount deposited by M/s. Dimple Overseas/V.K. Gandhi. 16. Show cause notice dt. 27-7-99 from which the proceedings commenced, invoke the provisions of Section 28 of the Act, in the title itself. However in paragraph 11(b) the name of Gandhi is not shown as the person from whom the duty short-levied was demanded under Section 28 of the Act. 17. Therefore the show cause notice itself did not fix any legal liability to pay duty on Shri V.K. Gandhi. 18. Seciton 28 of the Act requires a notice to be served on the person chargeable with the duty . 19. Who is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bills of entry and to permit them to clear the goods on payment of duty. The High Court held as follows : In my considered view, as rightly contended by the learned Senior Standing Counsel for the Central Government, the words, namely, 'at any time between their importation and the time when they are cleared for home consumption' occurring in Section 2(26) are important. It has already been noted that the goods had arrived on 27-9-1986 on which date the importation had become complete having crossed the customs barrier. At that relevant time it was only M/s. Continental Silk House which was the importer and for that alone the goods were intended. As a matter of fact, the bills of entry had been filed by M/s. Jeena Co. They still stand. Those bills have not been cancelled; nor the imported goods were abandoned. In law, therefore, no other person can claim to be the importer of the goods except the person shown in the Manifest originally as seen from the above Tabular Statement against Line Nos. 150, 151 and 152. After the completion of importation on 27-9-1986, there cannot be another importer for the very same goods. 23. This judgment was followed by the Tribunal in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orters by filing the B/E along with requisite declaration for clearance against their pass book. Their backing out is only on account of the detection of the illegal design for selling the imported duty free materials. Though, M/s. Vikram Overseas disclaimed the goods in their early letters, in their letter dated 4-4-1991 waiving show cause notice, they sought for release of the goods to them on payment of duty and penalty. This indicates that they continued to have an idea of clearing the goods at the time of adjudication by paying duty and penalty. But they have not perused their claim for redemption of the goods on payment of duty and fine before us. In such circumstances, we are to consider only the claim of Shri Biren Shah for treating him to be the importer. We cannot persuade ourselves to accept him either as a person, who held out as an importer by getting the documents in his name at the time of arrival of the goods. M/s. Vikram Overseas only have filed the B/E and held themselves out to be the importer. If they disclaimed the goods, the Department cannot substitute another person as importer, in the context of the provisions of Sec. 48 of the Customs Act, whereunder if t ..... 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