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TMI Blog2017 (3) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... J Shah, appellant of Tax Appeal No. 817 of 2016 is concerned, it is required to be noted that he has been imposed penalty of ₹ 10 lacs. Both the Adjudicating Authority as well as the learned Tribunal have held Shri Jayesh Shah as master mind/kingpin with respect to the impugned illegal import and the said Shri Jayesh Shah has been imposed penalty of ₹ 5 lacs only. In the facts and circumstances of the case, Shri Bipin J Shah also could have been imposed penalty of ₹ 5 lacs at par with Shri Jayesh Sharad Shah. Decided partly in favor of appellant. - Tax Appeal No. 239 of 2016, Tax Appeal No. 817 of 2016 - - - Dated:- 28-12-2016 - M. R. Shah And B. N. Karia, JJ. Mr Paresh V Sheth, Advocate for the Appellant Mr Sudhir M Mehta, Advocate for the Opponent JUDGMENT ( Per : Honourable Mr. Justice M. R. Shah ) As both these Appeals arise out of impugned common judgment and order passed by the learned Customs, Excise Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad [hereinafter referred to as, the Tribunal ] passed in Order No. A/11809- 11812/2015 dated 3rd December 2015, both these Tax Appeals are decided by this common judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the goods were being arranged either by Shri Bipin J Shah or Shri Jayesh Shah through one Shri Raja [Shri Rajendra Lodaya]; that Shri Jayesh Shah also used to come down to Mundra to facilitate the clearance work; that he met Shri Jayesh Shah through Shri Raja. In his further statement dated 26th July 2007, Shri Nilesh Nanda inter alia stated that his company used to get customs duty deposited through M/s. Anchor Logistics CHA; that sometimes Shri Jayesh S Shah used to hand them demand drafts for payment of customs duty and on other occasions, they used to themselves make the demand drafts; that they used to receive payments from Shri Bipin Shah and Shri Jayesh S Shah for the same. 2.4 That, on 13th July 2007, the statement Shri Chirag P Patel, Partner of M/s. Arya Transport was also recorded under Section 108 of the Customs Act, 1962. That, statement of one Mohammad Pappu, driver of M/s. Arya Transport was also recorded under Section 108 of the Act on 13th July 2007. That, the statement of one Shri Rajendra Jawerchand Lodaya [Raja] was also recorded under Section 108 of the Customs Act on 14th July 2007. Likewise, statements of other related persons were also recorded unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Customs Act, 1962, he inter alia has stated that he is the proprietor of M/s. DMP Enterprise; that the whole idea of import of Baby Diapers was that of Shri Jayesh S Shah; that Shri Jayesh Shah was doing the business of import of Perfumes, Shampoos, Soap and Talcum Power, etc., and that the said Jayesh Shah had asked him to start the business of import of baby diapers and that only his name was used for this purpose and rest of the things, such as all the arrangements viz., starting from contacting the overseas suppliers, financial arrangements, clearance from customs, payment of customs duty, payment of CHA charges, payment of transportation charges, transportation of the cleared goods to Mumbai and their subsequent sale was being looked after by Shri Jayesh S Shah. On the basis of material recovered during the course of investigation, the Adjudicating Authority issued the show cause notice under Sections 28 124 of the Customs Act, 1962 upon M/s. DMP Enterprise, Gandhidham [Kutch]; M/s. B.S Trading Company LLC, Dubai-UAE; Shri Bipin J Shah, Gandhidham and Shri Jayesh S Shah, Mumbai. That, M/s. DMP Enterprise, Gandhidham-Kutch was called upon to show cause as to why : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal has dismissed the said Appeals, confirming the order passed in OIO by the Adjudicating Authority. 6. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 3rd December 2015 passed by the learned Tribunal, Shri Bipin J Shah, sole proprietor of M/s. DMP Enterprise, Gandhidham has preferred Tax Appeal No. 817 of 2016 and Shri Jayesh S Shah has preferred Tax Appeal No. 239 of 2016. 7. Shri Jayesh S Shah, in his Tax Appeal No. 239 of 2016, has proposed the following questions of law : [A] Whether the Hon. CESTAT is correct in confirming the order of adjudicating authority and consequently confirming penalty imposed under the provisions of Section 112 (a) of the Customs Act, 1962 ? [B] Whether the Hon. CESTAT is correct in not giving any specific findings on the ground raise in appeal memo as well as during the course of personal hearing ? [C] Whether the Hon. CESTAT is correct in confirming the penalty though the Department has not pointed out any act or omission on the part of the applicant which has rendered the goods liable for confiscation ? [D] Whether the Hon. CESTAT is correct in confirming penalty under the provisions of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p to Shri Bipin J Shah, who is his relative [brother-inlaw], there is no other evidence to connect the said Shri Jayesh Shah with respect to the import of the goods/consignment in question. 9.2 It is submitted by Shri Sheth, learned advocate appearing on behalf of the appellant-Jayesh Shah that as such on importation of material, the proprietor of M/s. DMP Enterprise, Gandhidham had filed all the relevant documents; including the Bill of Entry and it was M/s. DMP Enterprises which imported the material and even subsequently approached the authority for re-export of the consignment. It is submitted that the aforesaid fact proves beyond doubt that the ownership of the material was of that M/s. DMP Enterprise only, and in fact in law, they alone can be said to be the importers. It is submitted that Shri Jayesh Shah is neither an importer nor submitted any documents of import, etc. Both the authorities below have materially erred in imposing penalty upon appellant- Jayesh Shah under Section 112 (a) of the Customs Act, 1962. It is submitted that therefore, the said Jayesh Shah cannot be said to be an importer in terms of provisions of Section 112 (a) of the Customs Act, and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 11. Both these appeals are opposed by Shri Sudhir Mehta, learned advocate appearing on behalf of the Revenue. It is submitted that there are concurrent finding of fact recorded by both the authorities below with respect to the role of Shri Jayesh Shah. It is submitted that as such Shri Jayesh Shah is found to be the kingpin and the master mind of the entire import. It is submitted that therefore, considering Section 112 (a) of the Customs Act, 1962, even if the said Shri Jayesh Shah might not have submitted the Bill of Entry, considering the provisions of Section 112 of the Act, penalty is imposable under Section 112 (a) of the Act. It is submitted that no error is committed by both the authorities below in imposing penalty upon the said Shri Jayesh Shah under Section 112 (a) of the Customs Act. In support of his above submissions, Shri Sudhir Mehta, learned advocate appearing on behalf of the Revenue has relied upon decision of Punjab Haryana in case of Sushil Sharma v. CESTAT, 2016 (334) ELT 19 (P H); two decisions of the Madras High Court in case of Commissioner of Custom [Exports], Chennai v. Royal Impex, 2015 (325) ELT 740 [Madras] as well as in case of Ram Gopal Kudal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterprise : [i] Ashish Enterprise 2005 (179) ELT 545 (T) [ii] Anil Jatia 2004 (162) ELT 702 [T] [iii] Durga Trading Co 2003 (162) ELT 245 (T) [iv] Royal Springs 2002 (146) ELT 571 (T) [v] Harish Mehra 2002 (147) ELT 1213 (T) [vi] Sarala Enterprise 2001 (128) ELT 113 (T) 9.2 As regards role played by Shri Jayesh S Shah, it is observed from his statement(s) dated 22.8.2007 and 23.8.2007 recorded under section 108 of Customs Act, 1962 that he has admitted the fact of having transferred a total of ₹ 16,80,000/- from his A/c. No. 623791518339 with ICICI Bank, Mulund, Mumbai to M/s. Aditya Logistics, Smt. Nutan B Shah and Shri Rajesh Lodaya. Shri Jayesh S Shah has sought to explain this transfer of money by terming as financial assistance to Shri Bipin Shah, Proprietor of M/s. DMP Enterprise (who happens to be his brother-in-law). However, if this were to be so, there is no explanation about transfer of this money to the account(s) of M/s Aditya Logistics [who was engaged by M/s. DMP Enterprise for clearance of goods] and Shri Rajendra Lodaya [who was engaged in transportation of goods imported by M/s. DMP Enterprise from the port of impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned. These goods, as noted in panchnama dated 11.,7.2007, were packed in boxes and were stacked in the contained in such a manner that boxes containing only baby diapers were placed in front while the other goods about which no mention was made in the bill of entry were placed behind them. It is also a matter of record that the importer filed bill of entry on 12.6.2007 by declaring the description of goods as baby diapers and even before the container was opened and goods were taken up for examination on 11.7.2007, the importer made payment of differential duty on 21.6.2007 and admitted the offence in his voluntary statement dated 5.7.2007. On the other hand, on 13.7.2007, the said foreign supplier made a vague and unsubstantiated requested for re-export citing mistake of his employees and by stating that goods were actually meant for Africa [without furnishing any details about such commitment.] This sequence, by itself is sufficient to give rise to an inference that the foreign supplier was also a party to the attempt being made by the importer to pass off branded diapers and cosmetic and toiletry items under the guise of unbranded diapers. For this reason, it will have to be hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e; as suggested. 15. Now so far as appeal preferred by Shri Bipin J Shah, appellant of Tax Appeal No. 817 of 2016 is concerned, it is required to be noted that he has been imposed penalty of ₹ 10 lacs. Both the Adjudicating Authority as well as the learned Tribunal have held Shri Jayesh Shah as master mind/kingpin with respect to the impugned illegal import and the said Shri Jayesh Shah has been imposed penalty of ₹ 5 lacs only. In the facts and circumstances of the case, we are of the opinion that Shri Bipin J Shah also could have been imposed penalty of ₹ 5 lacs at par with Shri Jayesh Sharad Shah. Therefore, the impugned order passed by the Adjudicating Authority and confirmed by the learned Tribunal imposing penalty of ₹ 10 lacs is required to be modified to the aforestated extent. Penalty imposed upon Shri Bipin J Shah is hereby reduced to ₹ 5 lacs. 15.1 It is reported that Shri Bipin J Shah has already deposited a sum of ₹ 5 lacs with the Department, pursuant to the order passed by this Court and the same may be treated as deposit of penalty imposed upon him under Section 112 (a) of the Customs Act, 1962. Therefore, to the aforestated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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