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TMI Blog2023 (7) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... concealing, selling or purchase of or dealing in any other manner with goods for which knowledge about their liability to confiscation exists with the person concerned with regard to any of the aforesaid activities. For levy of penalty under Section 112 of Customs Act ibid, the imputations of conduct as brought out in the show cause notice and as analysed in the Order-in-Original and the Order-in-Appeal have to be gone into to ascertain the correctness or otherwise of the imposition of such penalty. Thus, it is an undisputed fact that the impugned five containers found to contain prohibited goods, concealed amids cartons of A4 paper reams, were initially booked in the name of Ashtvinayak International, however later changed to M/s Global World Traders - it is wrong to infer, contrary to what has been done by authorities below that the said change in consignee name, meant to deceive the authorities is clearly a case of connivance. In fact, as it comes out from the testimonies of the various persons including Sarvesh Sharma, Anil Batra others, this change is clearly on account of misrepresentation by Anil Batra and there is not a fig leaf of evidence led in the show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngredient to invoke the same. This pre supposition is non-existing in the present matter as show cause notice leads no evidence to indicate a guilty mind on part of the appellant - In the case of MOHAMMED ILIYAS VERSUS COMMISSIONER [ 2018 (8) TMI 2119 - SC ORDER] the honourable Apex Court had held the penalty under Section 114AA, as not leviable (among other reasons) for no discussion being made as to the type of false /incorrect material. Similar is however the position in the present case. Thus, no penalty under Section 112 and Section 114AA is leviable - the impugned order in as much as it concerns the imposition of the penalty on the two appellants can therefore not be sustained and is therefore set aside - appeal allowed. - Customs Appeal No. 52111 of 2022 (SB) , Customs Appeal No. 52112 of 2022 (SB) - - - Dated:- 13-7-2023 - HON BLE MR. RAJEEV TANDON, MEMBER (TECHNICAL) Mr. D.K. Nayyar, Advocate for the Appellant Mr. Viswa Jeet Saharan, Authorised Representative for the Respondent ORDER RAJEEV TANDON : The present appeals have been filed by the appellants herein namely Sarvesh Sharma Sales Executive Codognotto Logistics India Pvt Ltd and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational to M/s Global World Traders. It is also pointed out in the show cause notice based on the statement of Shri Rajeev Ranjan Singh, Field Executive of Codognotto Logistics India Pvt Ltd that Anil Batra had earlier imported in the name of M/s Yashika International, bearing the same address as Ashtvinayak International (Shri Praveen Batra being the proprietor of Yashika International). 4. Shri Sarvesh Sharma in his voluntary statement recorded by the authorities under Section 108 of the Customs on 24.04.2017 admits that based on the E mail referred to supra, received from Shri Anil Batra, requesting to change the consignee name, he managed to get the consignee name changed at his company s end in China. He mentioned in his statement that Anil Batra had supplied to him the KYC document of Global World Traders on whatsapp, inter alia also mentioning that Vinod Kumar was his relative. The investigation also points out that Vinod Kumar proprietor of Global World Traders however disowned having knowledge of the subject import as also of handing over of the KYC documents to Anil Batra or any of the representative of Codognotto Logistics India Pvt Ltd, adding that he never met Anil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch changes forwarded the same to the shipping line for carrying out such changes. So I find that there was intent, for such forgery, to conceal that the imports are made by M/s Ashtvinayak International to escape detection by the customs or DRI so that they can fraudulently clear the goods. I find that Shri Rajeev Ranjan Singh field executive of the freight forwarder in his statement dated 22.04.2017 disclosed that the containers were originally booked by Shri Anil Batra proprietor of M/s M/s Ashtvinayak International. So role of Shri Anil Batra in import of said 5 containers is well evident and it is also evident that he procured KYC of M/s Global World Traders fraudulently and by such fake documents he got the HBL issued in the name of M/s Global World Traders. This is admitted by Shri Anil Batra in his confessional statement dated 01.06.2017 as mentioned in para 11.2 of the notice. So I find that Shri Anil Batra has not only imported prohibited and other goods liable for confiscation but at the same time used and caused to be made HBL which were falsely carrying on them wrong information in act dealing with Customs. For such act I find that Shri Anil Batra is liable for penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this proves that the terms freight prepaid on the HBL are wrong and manipulated and it shall be freight collect rather than freight prepaid. This also proves that the said HBL are manipulated and forged document and the same is prepared by the freight forwarder in which Shri Sarvesh Sharma played important role that too in connivance of Shri Anil Batra. So the submission made by him that he was not aware of the contents of the container is apparently mis-statement when it is clearly evident that they are involved in forgery of HBLs. It is Shri Sarvesh Sharma who asked the freight forwarder wheeltopn to change the HBL and that too only consignee name. These episodes show that they were aware of all the misdeeds of Shri Anil Batra and they knowingly done all these above act. So due to above reasons I find that the freight forwarder is equally responsible for not only mentioning of A4 paper reams in the IGM but which lead to confiscation of goods under various section but also involved in forgery in bill of lading in submission to the Customs. Accordingly, I hold that the freight forwarder M/s and Shri Sarvesh Shrama in his personal capacity are liable for penalty under section 112 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the subject goods were liable to confiscation. Also it is their case that there is nothing to show in the show cause notice that forgery had been undertaken so as to attract penalty under Section 114AA. Learned Advocate therefore submits that no penalty was imposable on either the company M/s Codognotto Logistics India Pvt Ltd or Sarvesh Sharma, Sales Executive of the company. Pointing out to the charge as made out in the show cause notice that M/s Codognotto Logistics India Pvt Ltd had deliberately connived with Anil Batra and Praveen Kumar Batra in changing the name of consignee without due diligence and verification from M/s Global World Traders and Vinod Kumar proprietor thereof, the learned advocate referring to the finding in the Order-in-Original states that, it is their case, that the finding of the adjudicating authority is beyond the scope of the show cause notice. He submits that as Sarvesh Sharma had obtained the KYC documents of Global World Traders there was no further requirement to verify the antecedents, therefore the impugned finding needs to be quashed. Further, the finding relating to the conclusion of House bill of lading HBL as manipulated and a forged d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in respect of which any prohibition is in force under this Act or any other law for whichever is the greater; the time being in force, to a penalty Substituted (w.e.f. 11-5-2001) for the words note exceeding five times the value of the goods or one thousand rupees by s. 107 of the Finance Act, 2001 (14 of 2001) [not exceeding the value of the goods or five thousand rupees], Substituted (w.e.f. 14-5-2015) by s. 83 of the Finance Act, 2015 (20 of 2015) [(ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent of the duty sought to be evaded or five thousand rupees, whichever is higher: Provided that where such duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent of the penalty so determined;] Inserted by s. 3 of the Customs, gold (Control) and Central Excises and Salt (Amendment) Act, 1973 (36 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of or dealing in any other manner with goods for which knowledge about their liability to confiscation exists with the person concerned with regard to any of the aforesaid activities. 12.1. In the aforesaid backdrop, for levy of penalty under Section 112 of Customs Act ibid, the imputations of conduct as brought out in the show cause notice and as analysed in the Order-in-Original and the Order-in-Appeal have to be gone into to ascertain the correctness or otherwise of the imposition of such penalty. Thus, it is an undisputed fact that the impugned five containers found to contain prohibited goods, concealed amids cartons of A4 paper reams, were initially booked in the name of Ashtvinayak International, however later changed to M/s Global World Traders. This change has been undisputedly brought out in the investigations that it was so done at the behest of Shri Anil Batra who had also tendered to the representives of M/s Codognotto Logistics India Pvt Ltd, Sarvesh Sharma, the requisite KYC documents, the house bill of lading of the same number, indicating no date of issue, but stating laden on board the vessel on 30.12.2016 mentions the original consignee name i.e. Asht ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is on record that Sharvesh Sharma had not taken the same for Ashtvinayak Interanationl, having already worked with Anil Batra in the past and for the stated reason that within a very short span, the consignees name was got amended and therefore, the need to do so did not exist anymore. Thus, for imposition of penalty on the two appellants, it is imperative to establish knowledge about the liability of the goods dealt with, to confiscation under Section 111 of the Customs Act, or the undertaking/not undertaking of an act on their part that would render such goods liable to confiscation under Section 111 ibid. It is observed that the show cause notice as also the impugned orders in the matter fails to impute and address comprehensively the acquisition/ existence of such knowledge of goods of prohibited nature being imported and therefore, subject the two appellants to penal consequences under Section 112. No penalty is imposable based on mere presumption of knowledge. There is nothing at all in the show cause notice that could clearly demonstrate existence of either prior knowledge or mens rea on the part of Sarvesh Sharma and through him the freight forwarding firm Codognotto Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impute knowledge about the usage of false or incorrect material in the transactions undertaken as regards the present two appellants. The learned Adjudicating Authority has tried to sustain this charge and imposed penalty under Section 114AA by pointing out the difference in the two bills of lading no. WHT1612256A WHT1612256B both undated but indicating laden on board the vessel dated 30.12.2016 freight to collect and WHT1612256A WHT1612256B both as dated 05.01.2017 as freight prepaid , and issued after amendment with the change in the consignee name and address. This, according to the department, therefore is enough to substantiate the penalty on the appellants. As per the fact on records, in the intervening time, the requisite payments were made to their principle overseas, that accounts for the change in status from freight collect to prepaid and this fact cannot be given a go by. The said difference pointed out by the learned Adjudicating Authority cannot be therefore held sufficient enough to uphold the charge of forgery and use of fact forged/fictitious documents. In fact, the show cause notice does not remotely alleges and castigates the two appellants herein fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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