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TMI Blog2006 (11) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner. 4. Appeal No. C-429/06 alongwith Stay Petition has been filed by Shri Jayesh Gala against the imposition of penalty of Rs. 10 lacs under Section 114 of the Customs Act, 1962. 5. Appeal No. 430/06 alongwith Stay Petition has been filed by Shri Govind Sharma against the imposition of penalty of Rs. 10 lacs under Section 114 of the Customs Act, 1962. 6. As regards the appeal of Shri Bhagwan Sippy, it is seen from the finding portion of the Commissioner s Order that he has denied in his written submission dated 31-10-05 the allegation made against him in the Show Cause Notice. The contention is that it is incorrectly mentioned in the Show Cause Notice that he was the partner of M/s. Bharat Overseas Communicators, instead he was only an employee of the said CHA Firm, that statement of Shri A.M. Pakhre Suptd. of Customs was recorded by DRI on 31-5-2005 under Section 108 and he stated that Yes, sample of electrodes was shown to me by Mr. Yogesh Kumar, as it being engineering product, I presumed the declared value to be correct and I relied upon the report given by Mr. Yogesh Kumar. This is conclusive proof that no facts were hidden, concealed of suppressed in any manner b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y brand names, the qualities and sizes found did not tally etc. 8. Shri Mukesh Bhanushali : The ld. Counsel for this appellant submitted that Shri Mukesh Bhanushali, is assistant of Shri Jayesh Gala. Ld. Counsel further submits that the Commissioner has passed ex parte order against the appellant, despite the request for adjournment made by him. Therefore, the proceedings against Shri Mukesh Bhanushali are in clear violation of principles of natural justice and are liable to be set aside. He has also submitted that the goods are neither prohibited nor dutiable. 9. The Commissioner in his findings against Shri Mukesh Bhanushali recorded that he has failed to submit his written reply. He has also not appeared for personal hearing except that Commissioner has recorded that Shri Mukesh Bhanushali failed to rebut the allegations made against him in the show cause notice. No other findings has been recorded against him. 10. Shri Jayesh Gala : So far as Shri Jayesh Gala is concerned, ld. Counsel for the appellant inter alia submitted that there is no corroborative evidence against the appellant. No material on record to show that the appellant was involved in aiding and abetting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. Commissioner has passed ex parte order against the appellant though a request for adjournment was made. Therefore, the impugned order has been passed in gross violation of the principles of natural justice and as such impugned order is liable to set aside on this ground alone, that ld. Commissioner should have appreciated that the seized goods are neither prohibited nor dutiable, that this appellant was working with the CHA and has not rendered any goods liable for confiscation, that the statement was obtained by coercive measures, the statement was retracted on 23-4-2004 before the Hon ble Chief Metropolitan Magistrate; Ld. Commissioner has grossly erred in relying upon the statement of this appellant that over valuation per se can t result in the availment of DEPB as export value has to be realized first for the incentive to be available; in the present case the investigation has disclosed no under hand dealing or any under transaction and no investigation in fact has been carried out with the foreign buyer, the allegations against the appellant were misconceived and unwarranted and the order imposing the penalty is not sustainable and this has to be set aside inter ali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hom a penalty of Rs. 3 lacs was imposed by the Commissioner has been allowed and the penalty set aside as per order No. A-408-409-WZB/06/CSTB dated 3-4-06 [2006 (201) E.L.T. 66 (Tribunal)] along with other appeals in paras 7 8 Tribunal has recorded as under :- I/We find that the entire case rests upon the retracted statement of Shri Jayesh Gala, who has claimed to be the agent of the exporters and his statement has not stood the test of cross examination as the Commissioner has rejected the appellants request to cross examine him. We further note that the inspection report of the appellant, on the shipping bill has been countersigned by the Superintendent of Customs Shri Pakhare, that the order to verify the fair declared value of electrodes was earned out by verification with the local purchase invoice of electrodes, that samples of electrodes were shown to the Superintendent who presumed that the declared value was correct and also relied upon the report of the appellant. It is also an admitted position that it is not a job of the examiner to arrive at the correct valuation of the goods and therefore even though he had been directed to verify the declared fair value of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received for passing orders on stay application only, no final orders can be passed without putting revenue to notice who did not get the full opportunity of presenting its case on merits and matter was argued briefly for forming a prima facie view in the matter. In view of this I refrain from passing a final order and instead proposing an order under Section 129E regarding pre-deposit of penalty. 16. For better appreciation it would be necessary to briefly narrate the facts of the case. The present matter is regarding overvaluation of export when on a specific intelligence received by DRI the containers which were examined by the customs for exports were intercepted and re-examination was carried out. On re-examination it was found that the goods did not correspond to those mentioned in the export invoices either in quantity or quality or value. The examination report at page 3 and 4 of the order-in-original brings out glaring inconsistencies in as much as against 60000 pieces declared, pieces found were 132480, against 102240, 106920 and 81000 pieces no quantity whatsoever was found. Similarly for another category against 291600 pieces only 54270 were found which clearly establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Angadia was found to be fake. Shri Jayesh Gala undertook the clearance of the goods though he was not a CHA nor its employee but was working in the name of M/s Bharat Overseas Communicators and Shri Bhagwan Sippy, Chief Executive of Bharat Overseas CHA No. 11/658 allowed his licence to be used by Shri Jayesh Gala on payment of certain amount in respect of the shipping bills handled by Shri Jayesh Gala. Shri Mukesh Bhanushali was the other associate of Shri Jayesh Gala who was accompanying Shri Jayesh Gala during the custom clearance work and was in the knowledge of the fraudulent export undertaken through Shri Jayesh Gala. In view of all these facts, show cause notice was issued to M/s. Payal Exim, Shri Govind Sharma, Shri Jayesh Gala, Shri Bhagwan Sippy, Shri Bhanushali and Shri Yogesh Kumar (Preventive Officer) proposing reduction of FOB value from Rs. 12,68,47,247/- to Rs. 30,83,736/- denying DEPB benefits and proposing confiscation of goods and imposition of penalties. The charge against Shri Yogesh Kumar (Preventive Officer) was that he colluded Shri Jayesh Gala in overvaluing the goods by not properly examining the goods. The show cause notice was confirmed by the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re hidden and therefore no penalty can be imposed. 20. As regards Shri Mukesh Bhanushali, it was submitted that ex parte order has been passed against him and the Commissioner has simply confirmed the allegation in the show cause notice without giving any finding. 21. The learned D.R. on the other hand submits that all the notices except Shri Yogesh Kumar and at a later stage Shri Bhagwan Sippy has been avoiding a series of summons issued to them and were absconding. The statements were initially retracted but retraction was later on rebutted and they have affirmed the facts in their subsequent statements. Shri Jayesh Gala, Shri Govind Sharma and Shri Mukesh Bhanushali have not responded to the show cause notice at all nor attended the personal hearing on the ground that they have applied for compounding of offence to the Chief Commissioner. It was submitted that compounding is only in respect of prosecution and not for imposition of fine and penalty and the fact that they have approached for compounding establish that they confessed the offence committed by them. 22. I find that there is enough evidence with the revenue to show that Shri Jayesh Gala and Shri Govind Sharma ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Shri Bhagwan Sippy it appears that by allowing Shri Jayesh Gala to work on his licence without knowing the exporter himself, he has abetted in the fraudulent export and so is the case with Shri Mukesh Bhanushali who associated in clearance business of Shri Jayesh Gala. The merits of this evidence can be examined at the time of final hearing but no prima facie case has been made out for complete waiver. I therefore order Shri Jayesh Gala and Shri Govind Sharma to deposit a sum of Rs. 4 Lakhs each towards penalty and Shri Bhagwan Sippy and Shri Mukesh Bhanushali Rs. 50,000/- each within 8 weeks from the date of the receipt of the order and on such compliance there shall be waiver from pre-deposit of the balance amount of penalties. Sd/- (K.K. Agarwal) Member (Technical) DIFFERENCE OF OPINION Since there is a difference of opinion between Member (Technical) and the learned Member (Judicial), the following points of difference of opinion may be put up to the Hon ble President for referring the matter to the 3rd Member for resolving the issue. (1) Whether in the facts of the case where the matter has been heard only for stay a final order can be passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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