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TMI Blog2015 (12) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... no finding, based on the evidence on record, that Respondent No. 1 was aware of the illegal import in which the G-card holder was involved. Considering that it was a question of penalty, there ought to have been some tangible material to show that Respondent No. 1 was aware of the acts of its employee/agent, Mr. Prince. As rightly pointed out, if Respondent No. 1 was found to have acted in breach of Regulation 19 (8) of CHALR 2004, that might call for a separate action to be initiated under those regulations. However, that by itself will not justify the imposition of penalty under Sections 112 and 114AA of the Act unless knowledge of the illegal acts of the agent/employee is able to be attributed to his employer/principal, i.e. Respondent No.1. Registration certificate of the car obtained by the First Secretary (Trade), High Commission of India, London (UK) was produced before the Appellant. The car was imported into India through M/s. A.K. International and cleared through customs on 4th April 2008 on payment of duty on the basis that it was a new car. It was ultimately sold to Respondent No. 2 on 21st April 2008. The CCIG sought to place the onus on Respondent No. 2 to show h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he price disclosed in the invoice was US$47,700. A concessional customs duty was paid by declaring it to be a new car. 4. The statements of Mr. Sumit Walia, Mr. Tarun Kumar and Mr. G.S. Prince, the G-card holder of the Customs House Agent ( CHA ), M/s. Buhariwal Logistics (Respondent No. 1 herein) were recorded. According to the Appellant, the investigations revealed that the aforementioned vehicle after import had been sold to Respondent No. 2 who was a resident of Bangalore, Karnataka . Initially, a show-cause notice ( SCN ) was issued on 24th April 2012 to several persons including Mr. Walia and Respondent No. 1 herein. As far as Respondent No. 1 was concerned, it was asked to show cause through its G-card holder, Mr. G.S. Prince, why the penalty under Sections 112 and 117 of the Act should not be imposed on them. 5. Subsequently, a corrigendum was issued to the above SCN on 8th October 2013 wherein after para 20.2, the following sub-para had been inserted: 20.3. Now, therefore, Shri G.S. Prince, s/o Late S. Inderjeet Singh, resident of A-8, Brother Hood Apartment, Vikas Puri, New Delhi 110 018 (G. Card Holder of M/s. Buhariwal Logistics, 1310, Pragati Towers, Rajen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th December 2014 in both appeals, the CESTAT held as under: (i) The car in question was initially imported for sale to M/s. Oswal in Ludhiana and later on purchased by Respondent No. 2 on 21st April 2008. Initially it had been imported by Mr. Walia in the name of Mr. Tarun Kumar on 4th April 2008. Respondent No. 2 had purchased the car after clearance from the customs. He was a bona fide purchaser of the car. He took a loan of ₹ 60 lakhs for purchase of the car. (ii) The contention of Respondent No. 2 that car was in fact not an old car and that there was no misdeclaration at the time of import was rejected. (iii) The car in question was liable to be confiscated but the redemption fine was excessive. Therefore, the redemption fine was reduced to ₹ 5 lakhs. Upon payment of the reduced redemption fine, the car would be released to Respondent No. 2. Since the statement of Respondent No. 2 was not recorded and since no role of Respondent No. 2 was discussed, the penalties imposed on him under Sections 112 (a) and 114AA of the Act were not justified. (iv) As far as Respondent No. 1, the CHA, was concerned, it was not aware of the import of the car in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en rightly pointed out by Mr. Rahul Kaushik, learned Senior standing counsel for the Appellant, that as far as the Respondents herein are concerned, both the order-in-original dated 18th July 2013 passed by the CCIG as well as the impugned order dated 17th December 2014 passed by the CESTAT dealt with only the question of penalty. Therefore, as far as Respondents 1 and 2 are concerned, the present appeal does not involve any question of valuation or the corresponding customs duty. The first preliminary objection is accordingly rejected. 13. As regards the second preliminary objection, the Appellant is in appeal against the deletion by the CESTAT of the penalties of ₹ 20 lakhs levied on Respondent No. 2 and ₹ 10 lakhs on Respondent No.1. Therefore, notwithstanding the fact that the CESTAT may have, by the impugned order, set aside the penalties, as far as the Department is concerned, the amount involved for the purpose of determining the monetary limit would be the penalties as determined by the order-in-original. Since the penalty amounts are ₹ 10 lakhs and more, the second preliminary objection is rejected. 14. Turning to the merits of the case, it is first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled to verify the antecedents of the importer diligently so as to inform the Department in case of any adverse observation. The other reason is that it had failed to supervise its employees so as to thwart the illegal import of the impugned car. There was no finding, based on the evidence on record, that Respondent No. 1 was aware of the illegal import in which the G-card holder was involved. Considering that it was a question of penalty, there ought to have been some tangible material to show that Respondent No. 1 was aware of the acts of its employee/agent, Mr. Prince. As rightly pointed out, if Respondent No. 1 was found to have acted in breach of Regulation 19 (8) of CHALR 2004, that might call for a separate action to be initiated under those regulations. However, that by itself will not justify the imposition of penalty under Sections 112 and 114AA of the Act unless knowledge of the illegal acts of the agent/employee is able to be attributed to his employer/principal, i.e. Respondent No.1. 19. In the circumstances, the Court finds that the view taken by the CESTAT in the case of Respondent No.1 does not suffer from any illegality. 20. Turning to the case against Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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