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TMI Blog2014 (6) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... ment under Section 111 and hence irrespective of the applicability of Clause (l) and (m) of Section 111, the goods would be liable for confiscation under Section 111 (d). In this case while the Commissioner has imposed redemption fine of ₹ 12,00,000/- and the same has been upheld by Hon’ble Member (Technical), Hon’ble Member (Judicial) has reduced the fine to ₹ 6,00,000/-. No calculation of the margin of profit has been given by the Department and this is the ground on which the redemption fine has been reduced. Since, the redemption fine in lieu of confiscation is dependent upon the profit margin in respect of which there is no evidence, on the question of redemption fine, I agree with the decision of Hon’ble Member (Judicial). Penalty of partner of the firm - Held that:- since penalty has been imposed on partnership firm under Section 112 (a), separate penalty on its partner, Shri Aditya Batra would not be justified under Section 112 (a). Penalty under Section 112 (b) is attracted when in respect of any illicitly imported goods liable for confiscation under Section 111, any person acquires their possession or deals with them in the manner mentioned Clause (b) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s declaration, having tracking number EA108-652-615-HK and accompanying the parcel is to be treated as entry for the purpose of the Customs Act. The description and value of the parcel was mis-declared and accordingly the parcel was seized on 09.02.2012. 3. During the course of investigations Shri Aditya Batra initially submitted a photocopy of invoice dated 10.12.2011 while recording his statement on 07.02.2012. Later on, he submitted original copy said to be of the invoice vide letter dated 15.03.20212. In this invoice value of 40,000 memory cards has been shown as HKD-48000. In Indian rupees this works out to Rs. 3,26,400/- taking exchange rate at Rs.6.80 under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The value of the seized goods has been taken on the basis of identical goods i.e. STRONTIUM brand micro SD memory cards of 2GB capacity being imported during contemporary period. Value of the seized goods has been re-assessed to be Rs.56,36,400/- under Rule 4 of the Customs Valuatio9n (Determination of Value of Imported Goods) Rules, 2007. 4. Shri Aditya Batra on 07.02.2012 further stated that he was partner of M/s Siddhanth En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d total value as HKD 48,000. This invoice did not bear any serial number and the Supplier s name and address was mentioned as HAINAN PENG HUA NATIONAL INDUSTRIES CO., Unit 704, Tai Yau Building, Portland Street, Mongkok, Kin . However, the original invoice submitted subsequently by Shri Aditya Batra thought his letter dated 15.03.2012 reflect the invoice number as PO 09/40/11 dated 10.12.2011 and name of the of the supplier as PRIDE OASIS HK LTD., HAINAN PANG HUA NATIONAL INDUSTRIES CO., Unit 704, Tai Tak Building Kin Hong Kong . However we find that the name of the sender mentioned in the speed Post customs declaration is Imelda, C/Block C6, 4/F, Nathan Road, Tsimshtsui, Kowloon, Hong Kong . we also find that though the memory cards were found to be of STROTIUM brand made in Taiwan, the same have been mis-declared as slow Micro Processor B grade (Unbranded Made in China) , in the copies of the invoices submitted by Shri Aditya Batra subsequently. Therefore even the second invoice (claimed to be original invoice) is not relevant to the impugned goods as it does not contain the true description of the goods and therefore the value mentioned therein cannot be taken as true and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Park, 1st Floor, Lajpat Nagar, New Delhi through his letter dated 16.12.2011 submitted that the parcel contained personnel effects, which were shipped by their shipper. The recovery of the memory cards is contrary to the declaration filed by Shri Aditya Batra, Noticee No. 2. It is noted that the memory cards were STRONTIUM brand of 2 GB capacity, whereas the same were declared as Slow Micro processor B grade (unbranded made in China) in the copy of the invoice submitted by Mr. Batra with his letter dated 16.12.2011 as well as during his statement tendered on 07.02.2012. I also find that the photocopies of the invoice submitted by Mr. Batra on both the occasions show the same of foreign supplier of these memory cards as Hainan Peing Hua National Industries Co.-Unit 704, Tai Yau Building, Portland street, Mongkok, Kin , whereas the original copy of the invoice submitted by Mr. Batra through his letter dated 15.02.2012 shows the supplier s name as Pride Oasis HK Ltd., Hainan Peng Hua National Industries Co., Unit 704, Tai Tak Building, Kin Hong Knog . This variation of the invoices has not been explained by the notices even in their reply to the show cause notice or at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcel was declared as PERSONAL EFFECTS/CLOTHS/SEE INLAY having value of HKD 720. However, no personal effect/cloths were found in the parcel but the same was found to contain 40,000 pieces of STRONTIUM brand Micro SD memory cards (Made in Taiwan), each of 2 GB capacity. I also note that no documents pertaining to these memory cards were found in the parcel. Further a photocopy of the invoice, which was submitted by Shri Aditya Batra on 07.02.2012, reflected the description of goods as 40,000 pieces of Slow Micro Processor B grade (Unbranded Made in China) and total value as HKD 48,000. This invoice did not bear any serial number and the Supplier s name and address was mentioned as HAINAN PENG HUA NATIONAL INDUSTRIES CO., Unit 704, Tai Yau Building, Portland Street, Mongkok, Kin . However, the original invoice submitted subsequently by Shri Aditya Batra thought his letter dated 15.03.2012 reflect the invoice number as PO 09/40/11 dated 10.12.2011 and name of the of the supplier as PRIDE OASIS HK LTD., HAINAN PANG HUA NATIONAL INDUSTRIES CO., Unit 704, Tai Tak Building Kin Hong Kong . However, I find that the name of the sender mentioned in the speed Post customs declaration is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a in his statement dated 06.3.2012 tendered under Section 108 of the Customs Act 1962, had admitted that as per the invoice of the similar goods shown to him, the value per piece was Rs.140.91 and that total value of the seized goods was Rs.56,36,400/- (Rupees fifty six lakh thirty six thousand four hundred only). 13. From the above stated investigations and facts on record, it clearly cames out that findings of the Commissioner of Customs are very elaborate and upto point clearly bringing out the truth. It is established that goods were illegally imported and liable for confiscation and imposition of penalty. Keeping in view overall factual matrix and results of investigations and clear admittance of the importer, Redemption fine of Rs.12,00,000/- (Rupees twelve lakh only) is adequate. A penalty of Rs.3,00,000/- (Rupees tree lakh only) on M/s Siddhant Enterprises is also justified due to involvement in illegal import and gross under valuation. A personal penalty of Rs.1,00,000/- (Rupees One lakh only) on Shri Aditya Bata is also justified. 14. In view of above, we endorse the findings arrived at by the Commissioner of Customs in his Order-in-Original No. VII(HQ)10/ACE/Adj./4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty is required to be set aside on the said appellant Shri Aditya Batra, on the ground that partnership firm already stand penalized as held by Member (Judicial) ? Date of hearing/decision : 03/01/14 Difference of Opinion Per. Rakesh Kumar :- 19. The appellant firm M/s Siddhant Enterprises is a partnership firm and Shri Aditya Batra is one of the partners. Shri Aditya Batra imported a post parcel declared to be containing personal effects/clothes with declared value of 720 Hong Kong dollars. The declaration accompanying on the parcel also mentioned the words - See Inlay in it . On examination, the contents of the parcel, the same were found to be 40,000 pieces of Strontium brand micro SD memory cards of 2GB capacity each made in Taiwan . Invoice accompanying the goods issued by M/s Hainan Peing Hua National Industries Co., Hong Kong to Shri Batra, mentioned the goods as Slow micro processors memory cards, B Grade (unbranded), made in China . The quantity of the goods was mentioned as 40,000 and the total value was mentioned as 48000 Hong Kong dollars. The value of the goods - 40,000 pieces of memory card of 2GB each of Strontium brand, made in Taiwan was as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of difference. 21. Shri V.S. Negi, the learned Counsel for the appellant, pleaded that there is no justification for confiscation of the goods under Section 111 (l) and 111 (m) of Customs Act, 1962, as Clause (l) and (m) of Section 111 of Customs Act, 1962 are not attracted in case of import through post parcel, that in this regard he relies upon the judgments of the Tribunal in the cases of CC, Mumbai vs. M. Vasi reported in 2003 (151) E.L.T. 312 (Tri. - Mumbai), Kuresh Laila vs. CC, Chennai reported in 2005 (189) E.L.T. 45 (Tri. - Chennai) and Sandhya Jewellers vs. CC, Ahmedabad reported in 2013 (293) E.L.T. 412 (Tri. - Ahmd.), wherein it had been held that the phrase entry made in this Act used under Section 111 (l) and 111 (m) only refers to entry made under Section 46 and the declaration made under Section 77 in respect of baggage and under Section 82 in respect of import through post parcel are not covered by the phrase entry made under this Act , which is applicable only to the bills of entry filed under Section 46 and, therefore, the provisions of Section 111 (l) and 111 (m) would not be applicable, that when confiscation of the goods has been ordered under Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sender stating the nature, weight and value of the contents and the Commissioner of Customs is satisfied that the nature, weight and value of the contents of the letter, packet or post parcel has been correctly stated in the declaration, while in this case there is gross mis-declaration with regard to nature and value of the contents and, hence, in any case, the goods having been imported in contravention of the prohibition imposed under Section 11 would be liable for confiscation under Section 111(d), that in any case both the Members have upheld the confiscation of goods and imposition of penalty under Section 112 (a) on the importer firm and the point of difference is only on the quantum of redemption fine and imposition of penalty under Section 112 (b) on Shri Aditya Batra, that as regards quantum of redemption fine, he supports the order of Hon ble Member (Technical) as looking to gravity of the offence and value of the goods, redemption fine of Rs. 12,00,000/- is not excessive, that as regards penalty on Shri Aditya Batra, Tribunal in the case of CCE, Daman vs. Mohd. Amin A.S. Lakha reported in 2012 (275) E.L.T. 465 (Tri. - Ahmd.), has held that penalty can be imposed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor penalty on the appellant firm or its partner would be attracted under Section 112 is without any merit. 25. Coming to the points of difference, the first point of difference is with regard to quantum of redemption fine. Quantum of redemption fine should be sufficiently high to neutralise to the entire margin of profit, as the basic principal is that no importer should be able to make profit by illicit imports. In this case while the Commissioner has imposed redemption fine of Rs. 12,00,000/- and the same has been upheld by Hon ble Member (Technical), Hon ble Member (Judicial) has reduced the fine to Rs. 6,00,000/-. No calculation of the margin of profit has been given by the Department and this is the ground on which the redemption fine has been reduced. Since, the redemption fine in lieu of confiscation is dependent upon the profit margin in respect of which there is no evidence, on the question of redemption fine, I agree with the decision of Hon ble Member (Judicial). 26. The second point of difference is with regard to penalty on Shri Aditya Batra under Section 112 (b), while Commissioner has imposed the penalty of Rs. 1,00,000/- on Shri Aditya Batra, partner of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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