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TMI Blog2005 (4) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... exports of such a magnitude and diversion of imported goods into domestic market and over valuation of the export goods are the acts of commission which have to be taken by the senior functionaries of the Company. No reasonable/prudent man can say that such an act of commission will be done by a lower functionary without the direction of Chairman/Managing Director. Once the Adjudicating Authority has discussed the liability to penalty in the impugned orders, the penalties are imposable on Chairman and Managing Director even if there is no separate mention of them in Order-in-Original. We, therefore, hold that penalties are imposable on Shri O.P. Agarwal and Shri B.K. Karnawat. The other two appellants Shri Dinesh Thakur and Shri B.L. Dhaluka are General Manager. As per the statement dated 31-5-1996, Shri Dinesh Thakur looks after the imports of the Company from Calcutta and exports production/processing are being looked after by Shri B.L. Dhaluka. He has further deposed that Shri B.L. Dhaluka mainly gives instructions regarding supply of the raw material (plastics) to processors and Dinesh Thakur gives instructions for supply of raw material. Being employees of the Company, they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and for export of plastic household articles; that though the import of plastic granules was effected by them without payment of duty of Rs. 20,37,08,675/- no export was made by them; that the imported raw material was diverted to domestic market. The Commissioner under Order-in-Original No. 5/2001 dated 16-1-2001 has - (a) Confiscated goods imported valued at Rs. 19,96,03,677/- and as the goods were not available for confiscation imposed a penalty of Rs. 10 crores on Ganapti Combines Ltd. (b) Confirmed Customs duty Rs. 20,37,08,675/- against the company and imposed a penalty of equivalent amount on them. (c) Also imposed penalties under Section 112 of the Customs Act as under :- (i) O.P. Agarwal Rs. 5 crores (ii) B.K. Karnawat Rs. 2 crores (iii) Dinesh Thakur Rs. 50 lakhs (iv) B.L. Dhaluka Rs. 50 Lakhs [Appeal Nos. 460-463/2001-A] 2.3 M/s. Ganpati Exports Ltd. was issued a quantity based advance licence for the import of polypropylene granules against an export obligation of 3691 Mts. of PP woven sacks. They, however, imported plastic raw materials PP granules of tape grade (i.e. other than the grade permitted under the licence). The Commissioner, under Order-in-Original No. 4/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1 crores (iii) Dinesh Thakur Rs. 50 lakhs (iv) B.L. Dhaluka Rs. 50 Lakhs [Appeal Nos. C/456-459/2001-A] 2.6 M/s. Ganpati Commerce Ltd. filled 11 shipping bills for export of plastic woven sacks for export to Russia towards fulfilment of their export obligation under DEEC Scheme. The exports were required to be made to General Currency Area and not Russia. The value of sacks had been declared to be Rs. 30 per sack which had been over-invoiced by almost 5 times. The Commissioner, under Order-in-Original No. 8/2001, dated 17-1-2001 has - (a) confiscated PP/HDPE sacks worth Rs. 13.30 crores with an option to redeem the same on payment of fine of Rs. 2 crores; (b) Restricted the value of the goods to Rs. 6 per sack, (c) Imposed penalties under Section 14 of the Customs Act as under (i) O.P. Agarwal Rs. 2 crores (ii) B.K. Karnawat Rs. 50 lakhs (iii) Dinesh Thakur Rs. 10 lakhs (iv) B.L. Dhaluka Rs. 10 Lakhs [Appeal Nos. C/397- 400/2001-A] 3. Shri C. Harishankar, learned Advocate, submitted that the impugned orders have been passed in violation of the principles of natural justice inasmuch as the copies of relied upon documents have not been supplied to the Appellants which incapacitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial relating to role played by him in committing the offence is brought on record. The learned Advocate mentioned that in the other impugned orders, the finding of the Commissioner, regarding the roles played by the Appellants, is stated in the same words, reproduced below : I also observe that each of the noticees tried to wash their hands off the whole transaction on flimsy grounds and unreliable submission. It is strange that the whole episode of misrepresentations, misdeclarations and deliberate violations of Customs Act, provisions of the EXIM Policy and notification conditions was managed without the knowledge of the senior officers of the company who were policy makers and decision makers of the company. I also intend to disagree with the submission of the Chairman and MD of the company that sitting in Delhi or Calcutta they do not have any control over the operation of the company at Calcutta, Mumbai or Kandla. It is a fact that in their statements the whole plan for evasion of Customs duty becomes crystal clear. 4.2 The learned Advocate contended that these findings are entirely vague findings as the roles of the individual Appellants, on whom personal penalties have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plate mere vicarious liability; that these section apply only where the person concerned has done, or has omitted to do, any act in relation to goods which has rendered the goods liable for confiscation; that these two sections cannot be applied to person merely because they are in-charge of the company, or even in-charge of the imports or exports effected thereby; that being penal provisions, Sections 112 and Section 114 are to be construed strictly that several statements were recorded in the present matters but none of them identify any of the appellants with having any specific act or omission with respect to imports/exports in question; that accordingly, penalties can not be sustained; that insofar as B.L. Dhaluka is concerned, there is no incriminating statement to be found anywhere; that Dinesh Thakur has been stated as being in-charge of imports and exports with no further elaboration; that B.K. Karnawat had retracted his statement dated 4-11-1996 on 5-11-1996 by writing a letter to DGRI. He relied upon the decision in Jasmine Bhogilal Shah v. CC, New Delhi - 2000 (121) E.L.T. 478 (T) wherein the Tribunal has held that penalty under Section 112(a) of the Customs Act is attr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. We have considered the submissions of both the sides. The learned Senior Departmental Representative has clearly shown that the copies of the relied upon documents were supplied to the Appellants by referring to the acknowledgements given by them while receiving the copies of the show cause notice and by bringing on records the letters addressed by the Counsel and Marketing Executive. We also do not find any force in the submissions of the learned Advocate that impugned orders had been passed without hearing them. The Adjudicating Authority has sent the intimation about fixing the date for personal hearing which had been received back with the endorsement of postal authorities left . The Appellants have not rebutted these findings by bringing any material or record such as any enquiry with the Postal Department or protest lodged by them with the said Department about making the endorsement left on the letters sent by the Department. There is no basis in the contention that the address might have been wrongly written or there might be some other infirmity in the despatch. We, therefore, hold that the impugned orders have not been passed in contravention of the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orts Ltd., that the export work was done as per direction of Calcutta office where all the Appellants are based. The Chairman and Managing Director of a Company deal with the policy matters and these imports and exports of such a magnitude and diversion of imported goods into domestic market and over valuation of the export goods are the acts of commission which have to be taken by the senior functionaries of the Company. No reasonable/prudent man can say that such an act of commission will be done by a lower functionary without the direction of Chairman/Managing Director. Once the Adjudicating Authority has discussed the liability to penalty in the impugned orders, the penalties are imposable on Chairman and Managing Director even if there is no separate mention of them in Order-in-Original Nos. 3/2001, 7/2001 and 8/2001. We, therefore, hold that penalties are imposable on Shri O.P. Agarwal and Shri B.K. Karnawat. The decision in the case of Steelco Gujarat Ltd. v. CCE - 2000 (121) E.L.T. 747, relied upon by the learned Advocate in support of contention that penalty can not be imposed in general terms, is not applicable to the facts of the present matter. In the said matter the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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