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TMI Blog2011 (5) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... i Gaurang H. Bhatt, for the Respondent. JUDGMENT All these appeals under Section 130 of the Customs Act, 1962 (the Act) arise out of common order dated 2-6-2005 passed by the Customs, Excise Service Tax Appellate Tribunal, Mumbai in Appeal Nos. C/386, 387, 388, 385 and 384 of 2002-Mum, and the facts and contentions are also common, hence, the same were taken up for hearing together and are disposed of by this common judgment. 2. While admitting the appeal, this Court had vide order dated 11-7-2006, formulated following substantial question of law : Whether the order of the Appellate Tribunal does not suffer from perversity in the matter of reduction of penalty as regards the appellants? 3. The facts of the case are that the appellants in Tax Appeals No. 345 of 2006, 346 of 2006 and 347 of 2006 are engaged in the business of manufacturing of textile articles, whereas the appellants in Tax Appeals No. 348 of 2006 and 349 of 2006 were persons interested in the conduct and business affairs of the appellants in Tax Appeals No. 345 of 2006, 346 of 2006 and 347 of 2006. 4. That one M/s. Baroda Synthetics Ltd., holder of DEEC license, purchased Polyester Filament Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owards duty liability on the goods cleared without payment of duty. He admitted that the goods cleared in the name of M/s. BSL did not reach his factory, nor did he pay for the goods sold on high sea sale basis. 6. Pursuant to investigation carried out by the Director of Revenue Intelligence, a show cause notice came to be issued to various parties, including the appellants herein, which culminated into an order dated 16-1-2002 passed by the Commissioner of Customs (Adjudication), whereby he directed confiscation of PFY valued at ₹ 2,05,42,925/- involving customs duty of ₹ 2,63,86,825/- under Section 111(o) and 111(m) of the Customs Act, 1962 (the Act) and also confirmed duty of ₹ 2,63,86,825/- under Section 28 of the Act, and held that M/s. Baroda Synthetics Ltd. should pay this duty as the Bills of Entry were filed for them and they were the importers under the Customs Act, along with interest thereon, and imposed penalty of an equal amount. The penalties under Section 112 of the Customs Act also came to be imposed on various parties as under : (a) M/s. Anita Synthetics Pvt. Ltd. ₹ 10,00,000 (Rupe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajubhai Goyal ₹ 5,00,000 (Rupees five lakhs only) (u) Shri Prakash Rawal ₹ 5,00,000 (Rupees five lakhs only) (v) Shri Gajanan Agrawal ₹ 5,00,000 (Rupees five lakhs only) (w) Shri Girdhari Lal ₹ 2,00,000 (Rupees two lakhs only) (x) Shri Naresh Lala ₹ 2,00,000 (Rupees two lakhs only) (y) Shri Suresh Balu Agre ₹ 2,00,000 (Rupees two lakhs only) (z) Shri Narendra Ajwani ₹ 2,00,000 (Rupees two lakhs only) 7. Penalties of ₹ 8 lakhs each came to be imposed upon the appellants in Tax Appeals No. 345 of 2006, 346 of 2006 and 347 of 2006 and penalty of ₹ 5 lakhs each came to be imposed on the appellants in Tax Appeals No. 348 of 2006 and 349 of 2006. 8. Being aggrieved, the appellants preferred appeals before the Tribunal. The Tribunal vide the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, it is apparent that penalty of ₹ 20 lakhs was imposed on the Director of M/s. Baroda Synthetics Ltd. who had perpetrated the entire fraud and fraud was also proved on the record of this case, whereas penalty of ₹ 5 lakhs was imposed on the Director of the recipient without considering the magnitude of the case against these persons, the value of the goods and amount involved as regards these persons and such other relevant factors. It was submitted that the action of the Commissioner clearly indicated ad hocism while imposing penalties. It was submitted that penalties of ₹ 8 lakhs on the firms/companies and also of ₹ 5 lakhs each on Shri Rajubhai Goyal and Shri Prakash Raval were clearly excessive and disproportionate when compared to the penalties imposed on the Directors of M/s. Baroda Synthetics Ltd. It was submitted that penalty cannot be imposed only because it is lawful to do so but while imposing penalty, involvement of the person has to be clearly brought out and the amount of penalty should also be proportionate to involvement of the said person. It was urged that the action of imposing penalties on the appellants without considering these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the case of the Department, to that extent. It was submitted that as there is no ground or reason given by the Appellate Tribunal for reducing penalties of the appellants from ₹ 8 lakhs to ₹ 2 lakhs, the order of the Appellate Tribunal is also in violation of the principles of natural justice. 12. Inviting attention to the provisions of Section 112 of the Customs Act, 1962, the learned advocate submitted that while issuing show cause notice proposing to impose penalty under Section 112 of the Act, it is required to be indicated as to whether the action is sought to be taken against a person under clause (a) or clause (b) of Section 112 of the Act. It was submitted that in the present case, the show cause notice did not state the exact default. According to the learned advocate no specific role has been attributed to the appellants, nor is any specific involvement indicated and that the reduction in penalty is on an ad hoc basis. It was submitted that the impugned order of the Tribunal suffers from a perverse approach inasmuch as the relevant facts for levy of penalty have not been considered. It was urged that the Tribunal having not assigned reasons for the propor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e advance licence issued in the name of BSL and after clearance, the goods were transported to Surat as per instructions of Shri Rajubhai Goyal through Riya Roadlines and challans were made in the name of BSL A/c Goyal Impex, Fibre and goods were received by a man of Goyal Group. That in the statement of Naresh Goyal of M/s. Riya Roadlines and M/s. Cargo Carriers, it is stated that they had picked the imported PFY as per the instructions of M/s. Rajubhai Goyal of M/s. Goyal Impex and as per his instructions, goods were transported to his factory and total eleven trucks were delivered to the factory of M/s. Goyal Impex and the name and address of the consignee was shown as M/s. BSL A/c Goyal Impex. That the goods were delivered at the factory of M/s. Goyal Impex, but the receipts were given in the name of B.N. Textiles. Mr. Naresh Goyal vide his letter dated 2-5-2000 had stated that goods transported by them belonged to Shri Rajubhai Goyal. The adjudicating authority has further recorded that Shri Suresh Balu Agrey, who was running a firm in the name of Shri Ganesh Shipping Services, had stated that Mr. Satyanarayan Agarwal of M/s. Surat Induction, Shri Manish of Krystal Polyfab, Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the view that the same calls for reduction of penalty. 19. On behalf of the appellants, great emphasis has been laid on the observations made by the Tribunal in paragraph 19 of the impugned order wherein, the Tribunal has recorded that the lorry receipts also show that the receipt of goods was acknowledged by Anita Synthetics Pvt. Ltd., Ramesh Kumar Ltd., Annapurna Textiles etc. It was submitted that in the entire order of the Tribunal, there is no reference to any involvement of the appellants. The aforesaid contention of the appellants requires to be stated to be rejected inasmuch as, merely because there is no specific reference to the name of the appellants in paragraph 19 of the impugned order, it does not mean that the Tribunal has not found any involvement of the appellants in respect of the offence in question. The Tribunal has referred to Anita Synthetics Pvt. Ltd., Ramesh Kumar Ltd., Annapurna Textiles etc. Thus, it is apparent that instead of referring to all the appellants before it, inasmuch as there were about 21 appellants before the Tribunal, the Tribunal has referred to the names of only some of the parties. However, a perusal of the order of the adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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