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TMI Blog2014 (10) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to as "Balaji"). Sometime in October 2004, Balaji placed an order for supply of Heavy Melting Scrap (HMS) from M/s. Sun Metal Casting LLC, UAE. Pursuant to the said order, 183.650 MTs of HMS was supplied on 25-10-2004, enclosed with an invoice dated 25-11-2004. The said consignment was accompanied by a no-war material certificate issued by M/s. Sun Metal Casting LLC, UAE and a pre-shipment Inspection Certificate dated 2-11-2004 issued by Moody International, Iran certifying that the said consignment was free from arms, ammunition, mines, shells, cartridges, radio-active contamination or any other explosive materials. 2.2 The said consignment was sold by Balaji to M/s. S.G Steels Pvt. Ltd., Uttaranchal (herein after referred to as "SGS") on high seas. The Bill of entry for clearance of the HMS consignment was filed on 20-12-2004 and after the Customs authorities had examined the consignment, some used and rusted empty cartridges/shells were found in some of the containers. The entire goods/consignment was confiscated by the Commissioner of Customs, Inland Container Depot, Tughlakabad, New Delhi and a penalty was imposed on SGS. 2.3 Thereafter, separate show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' under Foreign Trade (Regulation) Rules, 1993 - the petitioner submitted that the importer, in the present case, was M/s. S.G. Steels Pvt. Ltd. 5. The petitioner also submitted that there was no evidence that the petitioner had any knowledge regarding the presence of empty, used and rusted shells in the consignment and hence there was no deliberate disobedience of statutory provisions. Thus, it was submitted that the imposition of penalty was illegal and violative of principles of natural justice. 6. The petitioner also relied upon judgment in Tarak Nath Gayen and Others v. Customs, Excise and Gold (Control) Appellate Tribunal and Others - 1987 (31) E.L.T. 631 (Cal.) as well as in Hindustan Steel Ltd. v. State of Orissa - 1978 (2) E.L.T. (J159) (S.C). 7. It was submitted by the respondents that after the receipt of report from the JDG, ECA (HQ), show cause notices were issued for imposition of penalty on Balaji and SGS for violation of Sections 8(b), 9(4) and 11(2) of the Foreign Trade (Development & Regulation) Act, 1992 for the same cause of action. And, subsequently, fiscal penalty of Rs. 2,50,000/- was imposed on the Balaji after considering the submissions m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try; (D) by a service supplier of India, through presence of Indian natural persons in the territory of any other country : Provided that "import" and "export" in relation to the goods, services and technology regarding Special Economic Zone or between two Special Economic Zones shall be governed in accordance with the provisions contained in the Special Economic Zones Act, 2005 (28 of 2005)" 11. The term 'importer' is defined under Rule 2(c) of the Foreign Trade (Regulation) Rules, 1993 which reads as under :- "(c) "importer" or "exporter" means a person who imports or exports goods and holds a valid Importer-exporter Code Number granted under Section 7." 12. By the impugned order dated 7-9-2006, a penalty of Rs. 2,50,000/- was imposed on Balaji on the basis that it had imported the offending goods. This is apparent from the contents of the said order, the relevant extracts of which are quoted below :- "7. Thus M/s. Balaji Impex, D-108/4, Saket, Meerut-250004 the high Sea Seller (the noticee firm) has mis-declared the description of the goods in the import documents for HMS but have imported objectionable items of war m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is liable to be rejected. This allegation (of abetting) does not find mention in any of the impugned orders. The impugned order dated 7-9-2006 specifically alleges that Balaji had "misdeclared the description of goods in the import documents for HMS but have imported objectionable items of war materials and sold to the final importer in a clandestine manner with an intention to smuggle the same into India". Undisputedly, this allegation cannot be sustained. In the first instance, Balaji had not imported any objectionable items into India. Further, the intention to smuggle the said items cannot be ascribed to Balaji as Balaji was not the beneficiary of the import of the goods in question in India. 16. Even, if one assumes that Balaji was charged with abetting import of goods in contravention with the FTDR Act, it is obvious that Balaji alone could not be penalized for the same. It is implicit in an allegation of abetting an offence that another person is guilty of that offence which is alleged to have been abetted. In this case, SGS would have been the offender as well as a beneficiary of the import of goods into India. However, SGS had succeeded in its appeal and the pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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