9911796707
TMI Blog2011 (4) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... anding Customs duty of Rs.58,38,234/- from M/s Nandlal Shivaldas (Prop: Shri Nandlal Kishandas Khemani) in respect of 288 MTs of High Density Polyethylene (HDPE) by invoking the extended period of limitation under Section 28 of the Customs Act, 1962, holding the said goods liable to confiscation under Section 111(d) and (o) of the Act, imposing a penalty equal to duty on Shri Nandlal Kishandas Khemani under Section 114A of the Act and imposing penalties on three others, including a penalty of Rs.5 lakhs imposed on Shri Naresh A Shah, under Section 112 of the Act. A total amount of Rs.8 lakhs deposited by Shri Nandlal Kishandas Khemani and two others was appropriated towards the above demand of duty. 2. The Commissioner s order was passed in adjudication of a show-cause notice which was issued on 31.3.1998 under Sections 28 and 124 of the Customs Act, for - (a) demanding duty on the aforesaid quantity of HDPE imported duty-free under two Advance Licences (No. 313812 dated 11.5.93 and No. 313813 of even date) and Notification No. 203/92-Cus dated 19.5.1992; (b) holding the said goods liable to confiscation and imposing penalties on Shri Nandlal Kishandas Khemani (Propriet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any manner except in the discharge of export obligation under the Advance Licence. As per the second condition, where the benefit of Notification is sought by a person other than the licensee, such person should establish that the licence was made transferable by the Licensing Authority. The show-cause notice alleged that neither of the conditions had been complied with inasmuch as the imported goods had been diverted in the local market after clearance and the Advance Licences did not bear endorsement of transferability by the Licensing Authority. The show-cause notice also held the goods liable for confiscation under Section 111(o) and (d) of the Customs Act and also held the noticees liable for penalty under Section 112(a) and (b) of the Act. A penalty was also proposed under Section 114A of the Act. These proposals were contested by the parties. The impugned order was passed in adjudication of this dispute. 3. Heard both sides. Learned Counsel for Shri Nandlal Kishandas Khemani (Proprietor of M/s Nandlal Shivaldas) has reiterated the grounds of Appeal No. C/311/03. It is submitted that, even according to the show-cause notice, the goods were actually imported and cleared b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by pointing out that in the present case, the case of the Revenue is that Shri Naresh A Shah assisted Shri Nandlal Kishandas Khemani for getting finances and depositing the amounts in the account of M/s Nandlal Shivaldas in Dena Bank for payment to the foreign supplier. The Counsel refers to the statement dated 25.7.1996 of Shri Nandlal Kishandas Khemani, wherein Shri Khemani had stated that he had opened an account with Dena Bank through Shri Mahesh Ganatra and that Shri Ganatra used to deposit amounts in this account. The learned Counsel means to say that the finding recorded against Shri Naresh A Shah in the impugned order is contrary to the oral evidence of Shri Nandlal Kishandas Khemani. The licence broker was exonerated from penal liability under Section 112 of the Act. Considering this aspect, Counsel pleads, the penalty on Shri Naresh A Shah should be vacated or reduced. 5. Learned SDR, at the outset, points out that the appeal filed by Shri Naresh A Shah against an earlier order of the Tribunal (2005 (179) ELT 316) was dismissed by the Hon'ble High Court of Bombay vide Naresh A Shah Vs. Commissioner of Customs 2008 (223) ELT 137 (Bom). Therefore, according to him, Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cences, which were traded by Shri Naresh A Shah, is over Rs.58 lakhs, but the penalty imposed on him by the Commissioner is only Rs.5 lakhs. According to the learned SDR, the quantum of penalty does not call for reduction. 6. We have given careful consideration to the submissions. It is not in dispute that 288 MTs of HDPE were imported and cleared duty-free under two Advance Licences which stood in the name of M/s Nandlal Shivaldas (proprietor: Shri Nandlal Kishandas Khemani). It is, again, not in dispute that the licensee did not discharge export obligation and consequently the licences did not bear the DGFT s endorsement of transferability. Shri Nandlal Kishandas Khemani was very much aware to this non-transferability of the licences. He was also aware of the fact that he alone could make duty-free import under the licences in the DEEC scheme. Nevertheless, he transferred both the licences to Shri Mahesh Ganatra for a consideration of Rs.25 lakhs as alleged in the show-cause notice. Shri Mahesh Ganatra, in turn, sold the licences to Shri Naresh A Shah for a consideration of Rs.31 lakhs as alleged in the show-cause notice. Shri Naresh A Shah, in turn, sold the licences to Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the market. Still, they indulged in these activities rendering the goods liable to confiscation under Section 111 of the Customs Act, 1962. Therefore, it is held that each of them is liable to a penalty under Section 112(a) (b) and/or 114A of the Customs Act, 1962. These findings of the learned Commissioner were recorded against all the noticees including Shri Nandlal Kishandas Khemani. These findings were enough to support the penalty on Shri Nandlal Kishandas Khemani under Section 112 of the Act. Nevertheless, the learned Commissioner imposed penalty on him under Section 114A of the Act. This error of law can be rectified at our end in the appeal filed by Shri Nandlal Kishandas Khemani. We, therefore, hold that Shri Nandlal Kishandas Khemani is liable to be penalized under Section 112 of the Customs Act on the basis of the findings recorded against him in para 19 of the impugned order. We note that Section 112(a) of the Act does not require physical handling of the goods by a person for a penalty on him. It is enough if it is found that a person, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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