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TMI Blog2014 (6) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... ate charge-sheet by the Department for which the law can take its course. Accordingly, it is held that no penalty is imposable upon Shri Mukhalesh Jain and the appeal filed by him is required to be allowed.e - Decided in favour of assessees. - Appeal No.C/200,222/2012-SM - Order No. A/11041-11042/2014 - Dated:- 30-5-2014 - MR. H.K. THAKUR, J. For the Appellant : Shri H.D. Dave, Shri D.K. Trivedi - Advocates For the Respondent: Shri Jitendra Nair, Superintendent (AR) JUDGEMENT Per: H.K. Thakur; 1. Appeal No.C/222/2012 has been filed by the appellant Shri Khem Singh Lalas with respect to a penalty of Rs.1 lakh imposed upon him under Section 114 (i) of Customs Act, 1962 by CC Kandla under OIO No.KDL/COMMR/02/2012-13, dt.22.05.2012. Appeal No.C/200/2012 has been filed by Shri Mukhalesh Jain with respect to a penalty of Rs.5 lakhs imposed upon him under Section 114(i) of Customs Act, 1962 of the above order passed by adjudicating authority. 2. The brief facts of the case are that the DRI Chennai intercepted two containers bearing No.TGHU 8926084 and TRLU 6669027 from a vessel on sail from Mundra Port to Malaysia. These two containers were brought to Chenn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which reads as under:- 3.6 Examination and sealing of export consignments under Central Excise seal On being deputed by the Range Officer visit the specified premises for examination and sealing of export consignments and prepare examination report as per relevant departmental instructions. Duly completed examination report must accompany the export goods as per instructions/ circulars on the subject. To depute the Sector Officer or himself carry out the process of examination and sealing as per relevant departmental instructions. To ensure that in the case of free shipping bills, the assessee has to mandatorily opt for self sealing of export consignment in view of Boards circular No.860/18/ 2007-CX, dt.22.11.07. 3.1 It was his case that as per this circular, duty of the Superintendent regarding examination and physical stuffing of consignments, is to depute officer or himself to carry out the process of examination. He argued that for stuffing and sealing of the present containers Shri Mukhalesh Jain Inspector was deputed and there are no signatures on the invoice indicating that this appellant was present during the stuffing, examination and sealing. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble with the DRI. Even in the case of impugned bottle seals and the containers, no examination report from any authorized laboratory is available with the DRI. (iii) He had sought information under RTI from various Customs and Central Excise Commissionerate whether the department Bottle Seal is made by Government undertaking unit or private party. The Customs House, Kandla in its reply has informed that the Bottle Seals are purchased from supplier who quotes the lowest rates, irrespective of the fact whether it is government undertaking or private party and no supervision of Government office exists there. Therefore, it was very much possible that the same number and color bottle seal could be replicated/made and their misuse cannot be ruled out. (iv) In a particular case, a container No.TTNU 2516442 was stuffed with Roofing tiles under the supervision of Shri Rajkumar, Preventive Officer at CWC-CFS, Gandhidham on 11.07.2006 and after stuffing Shri Rajkumar, Preventive Officer put the remarks on the shipping bill that the container No.TTNU 251644 stuffed under Customs supervision and sealed with department bottle seal No.EXP 681367. After stuffing, the said container was tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lous elements indulge in cutting the seal, de-stuffing the container and stuffing with red sander logs and re-sealing back with duplicate seals of Customs and shipping line. The containers are then exported out of India. (viii) In another case, pursuant to intelligence received by the DRI that under the declared export cargo namely Raw Gypsum in shipping bill, red sanders were being attempted to be smuggled out of India, container No.CRXU-1606480 was de-stuffed in the presence of Panchas and other officers. On de-stuffing the goods declared as Raw Gypsum packed in plastic bags of 50 Kgs each, red sander logs found concealed at the bottom of the container beneath these bags. During the investigation, the premises of godown of M/s Mahalaxmi Warehouse and Allied Industries, Gandhidham were searched in the presence of police and independent Panchas. 151 plastic bags filled with dull white colored powder were found lying there which were detained by the officers of DRI. Further, the officers found 30 one time used bottle seals, electric machine for embossing numbers on bottle seals, dies of various numbers and alphabets, various tools, nut-bolts etc. As per DRI, it prima facie appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Proprietor of M/s Oswal Handicrafts, Jodhpur, and the driver were recorded. 4.2 Ld.Advocate also relied upon the observations of the adjudicating authority in Para 25 of the OIO dt.22.05.2012 that Shri Mukhalesh Jain was not a part of the conspiracy or abetment which could be established only on the basis of the concrete evidences. It was emphasized by the Advocate of the appellant that statements of the other offenders like Deepak Jain, Proprietor of M/s Oswal Handicrafts and the transporter were not recorded which could throw light whether the red sander logs were stuffed before sealing done by Shri Mukhalesh Jain or same was substituted after the clearance from the factory. 4.3 Ld.Advocate also relied upon the following case laws and argued that in the absence of any extraneous consideration for lack of knowledge of the appellant regarding Red Sander Logs stuffed in the container; no penalty under Section 114 of the Customs Act, 1962 is attracted:- i) A.P. Sales Vs CC Hyderabad 2006 (198) ELT 309 (Tri-Bang) ii) CC New Delhi Vs Hargovind Export 2003 (158) ELT 496 (Tri-Del) iii) CC Bangalore Vs M. Naushad 2007 (210) ELT 464 (Tri-Bang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring of the one time seals do raise a suspicion that red sander logs were stuffed from the very first go and there was no furniture stuffed in these two containers. At the same time, it cannot be ignored that appellant Shri Mukhlesh Jain has brought on record certain facts reproduced in Para 16 of OIO dt.22.05.2012. As per Para 16 (iii), it is observed that one time bottle seal are purchased by the Revenue from the Government Undertakings or private parties based on the lowest rates quoted for supply of one time bottle seals and there is no supervision by Government agency over the manufacturing of such bottle seals. Further, from Para 16 (iv) (v) of the submissions made by the appellant before adjudicating authority, as reproduced in Para 4 above, it is evident that instances exist where goods were substituted after sealing by the concerned officer either without tampering with the seal or by using duplicate one time seals by embossing the desired number. It is also observed from Para 16 (vii) of the order dt.22.05.2012 that a senior officer of DRI has written to Additional Chief Secretary of Govt. of Rajasthan that the smugglers in India place order for export of various goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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