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TMI Blog2017 (2) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... t be made against Appellant. To bring home the charges of mis-declaration it is required that such mis-declaration was done by the person for export of goods. We find that in export of goods, M/s Jabs International or Shri Bharat Shah had no role to play. The export of goods took place from the factory of M/s Aroma International under the supervision of the jurisdictional officers of said EOU and the appellants were at no stage involved in exports. The Appellant came into picture only at the time of discounting of bills and at that stage also no misdeclared documents were filed. In such case we are of the view that the allegation of mis-declaration of export goods against M/s Jabs International or Shri Bhaskar Shah are not sustainable. In view of our observations we thus hold that the redemption fine against the Appellant under section 125 of the Customs Act and penalties under Section 114 (i) and (ii) against M/s Jabs International and Shri Bhaskar Shah are not sustainable. Imposition of penalty u/s 112 (a) - Held that: - neither in the show cause notice or the impugned order the role of Appellants for diversion of imported goods is forthcoming. Since the Appellant has no ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of M/s Aroma International and in few cases the goods manufactured by them were exported through M/s Aroma International. M/s Jabs International and its director Shri Bhaskar Bhanuvadan Shah were also made co-noticee and it was proposed to confiscate the goods exported and to impose penalties upon them. The proposal against M/s Jabs International and its director Shri Bhaskar Shah were made on the ground that in respect of 15 export consignments for which the orders has been received by them and which were fulfilled by exports effected by M/s Aroma International, while the goods exported were Chilli powder, M/s Aroma International misdeclared the goods in the shipping bills as 'Spices Powder' . The adjudicating authority after following due process of law held that 51 export consignments were mis-declared by M/s Aroma International and thus are liable for confiscation under Section 113 (d) and 113 (i) of the Customs Act, 1962 readwith Section 11 (1) of Foreign Trade (Development and Regulation) Act, 1962 and Rule 11 14 of Foreign Trade (Regulation) Rules 1993. He held that as the goods are not available for confiscation a fine of ₹ 1,25,00,000/- is imposable on M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted to the bank for collection of export proceeds also described the goods as Chilli Powder . He submits that it is only M/s Aroma International who has misdeclared the goods in the Shipping Bill as Spice Powder . 3.1 He submits that Shri Piyush Meghani, Partner of M/s Aroma International who was earlier working with the Appellant as Trainee started his own independent business and thus approached the Appellant M/s Jabs International for getting the export documents discounted as M/s Aroma were facing financial crunch. The Appellants agreed for discounting the export bills at the rate of 2%. Accordingly, upon Aroma International endorsing the Bills of Lading and/ or Mate Receipt in the Appellant s favour, the Appellants thereafter approached the Bankers with the export documents which were sent through the Appellant's Bankers for collection with instructions to hand over the documents to the foreign buyers against payment. Pending such collection of payment from the foreign buyers, the Appellants paid 98% to Aroma International. The difference of 2% was earned by the Appellants as discounting commission. The Export goods at the time of export by M/s Aroma were examined a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned, the same is illegal as they were concerned with only 15 export consignments and in those 15 export consignments also they have not made any misdeclaration before customs and no document pertaining to them was filed. That no documents containing misdeclartion of goods was submitted by them or was there documents and hence it cannot be said that they have made any misdeclaration of goods. Therefore they cannot be burdened with fine in lieu of confiscation of export goods. 3.3 He submits that the Commissioner on Page 30 of the impugned Order proceeded on a mere conjecture and surmise by holding that there was some arrangement other than that of discounting of the export documents which was not so evident. There is absolutely no evidence to establish some arrangement other than that of discounting of the export documents. Neither is there any such evidence nor has the Commissioner spelt out what other arrangement was there and he has proceeded on a mere suspicion and conjecture. There is no illicit gain or benefit derived by the Appellants by undertaking the discounting of the Export documents. The discounting of the export documents for a commission of 2% is a perfectly legit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e discounted 66 consignments of M/s Aroma International. That Shri Piyush Meghani had earlier worked as trainee with M/s Jabs International. Two of the imported consignments of M/s Jabs were sold to M/s Aroma on High Seas sale basis and some of the export consignments were arranged from M/s Jabs. In some cases the amount was paid by M/s Jabs to M/s Aroma International after discounting of bills which shows their relationship and which shows involvement of M/s Jabs International in manipulation of documents. M/s Jabs International helped M/s Aroma in getting factory premises and also arranged local supplies in some cases. There was variation in actual price of goods and that discounted by them. Till year 2000, the office space was shared between Aroma and M/s Jabs. He submits that in his statement before the investigation authorities Shri Bhaskar Shah has confessed that the bills of exports containing wrong description were prepared under compulsion of EOU obligations and the said statement was not retracted. He further submits that description of goods in Bill of Lading were different than that exported. That Shri Bhaskar Shah has abetted in misdeclaration of export goods and thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chilli Powder only. They had not availed any export benefit. That there is no evidence of them being involved in export of goods by misdeclaring the same and the impugned order is illegal. 7. We have considered the submissions made by both the sides and perused the records. We find that the allegations of misdeclaration of export goods is mainly against M/s Aroma International and its partner who is not in appeal before us. In these appeals we are concerned only with fines and penalties imposed against M/s Jabs International, its director Shri Bhaskar Shah and M/s Gandhi Associates. 7.1 We find from the records that the adjudicating authority has mainly imposed fine and penalty against M/s Jabs International and Shri Bhaskar Shah on ground of misdeclaration of export goods and diversion of imported goods by M/s Aroma International. We find that M/s Aroma International had imported goods without payment of duty showing its purported use in manufacture of export goods. It was found during the investigation that the imported goods instead of such use were diverted into local market. Further it was found that in order to show the fulfillment of export obligation the goods were s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bills, bill of lading and all documents of those 15 export consignments submitted to the Bank are of Chilli Powder only. In such view of the fact we find that M/s Jabs International had on no occasion misdeclared the goods at the time of exports. 7.3 In case of allegation of valuation of goods as pointed out by the Ld. Advocate we find that the prices of goods stated by Shri Bhaskar Shah in his statement is matching with the prices in bills of exports discounted by the bank, hence in such case it cannot be shown that the excess prices were quoted by the Appellants. We find that Shri Piyush Meghani earlier being trainee at M/s Jabs International or M/s Jabs helping M/s Aroma International in getting factory space or sharing of office space cannot be construed as M/s Jabs Involvement in alleged misdeclaration unless and records or documents submitted at the time of exports shows their involvement. Further we find that there is no allegation or instance showing benefit accruing to M/s Jabs International or Shri Bhaskar Shah in alleged misdeclaration by M/s Aroma. It is more so as none of the export benefit has been accrued to M/s Jabs International. Further it is not forthcoming o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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