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TMI Blog2023 (7) TMI 1174X X X X Extracts X X X X X X X X Extracts X X X X ..... the majority order - The third member held that Since, none of the acts referred to in Section 112(b) of Customs Act, 1962 are proved against the appellant, imposition of penalty under Section 112(b) also cannot sustain. From the above decision it can be seen that the present appellant involved in the above case was similarly placed broker for advance licence and by the majority decision, the penalties were set aside - since same facts and issue were involved, following the aforesaid decision in the present case also the penalties are not sustainable. Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant was not aware of misuse of the licences by M/s. Kay Bee Tex Spin Ltd. for showing fictitious export and therefore appellant cannot be held to be aiding and abetting the said 100% EOU as held by learned Member (Judicial) or it has to be held that Shri T.S. Makkar was aware that no goods would be cleared but only paper transactions will be made and therefore he could be said to be aiding and abetting duty evasion as held by Member (Technical)? (iv) Whether in the facts and circumstances of the case, it can be said that Shri T.S. Makkar did not deal with the goods and therefore is not liable to penalty in view of the decision of the Tribunal-LB in the case of M/s. Steel Tubes of India Ltd. as held by learned Member (Judicial) or it has to be held that he is liable to penalty having dealt with the goods as held by Member (Technical)? 27. I have carefully gone through the orders passed by the Hon'ble Brother Members, the points of difference, oral and written submissions of both the sides, and the entire voluminous records before me. This matter has arisen before me as third Member consequent upon differences of opinion between the learned Member (Judicial) and the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant that he was aware of the fact of said licences being forged. The Revenue has heavily relied on the findings recorded by the learned Member (Technical). However, it is seen that procurement of licences from Shri R.K. Gupta has not been disputed anywhere. It is also not disputed that other persons namely Shri K.D. Sharma and Shri Nitin Rastogi also used to buy licences from Shri R.K. Gupta. Filing of anticipatory bail by Shri R.K. Gupta is also not in dispute. The Member (Judicial) has also recorded in her findings in para 14 that Shri Manoj Goyal in his statement dated 28-12-2001 admitted having purchased the licences at a premium of 33-34%, however the same was being paid by 100% EOU to Shri R.C. Jain. No evidence suggests that the present appellant sold the licences directly to 100% EOU on such premium. In absence of any cogent evidence, although circumstances may raise grave suspicion, I am unable to hold that the appellant was aware that the licences were fake, forged or fictitious. 2nd point : Whether it can be held that all the evidences relating to Shri R.K. Gupta have not been further investigated by DRI as held by learned Member (Judicial) or whether it has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00% EOU, (iv) Shri Jai Singh Chahar, authorized signatory of the said 100% EOU. 33. However, none of these oral statements implicated the appellant by any direct or indirect reference to the appellant's role in either misuse of the licenses or fictitious export/sales of yarn. These statements point accusing finger towards M/s. Amar Brothers and Shri Puneet Rungta for fictitious sale/dispatch of goods, and towards Shri R.C. Jain and Shri Puneet Rungta regarding procurement of licence/ARO. There is no evidence whatsoever to establish that the appellant was known to M/s. Kay Bee Tex Spin Ltd., so as to even remotely infer any aiding and abetting with the said 100% EOU on such basis. 34. In this light, it appears that solely on the basis of the appellant's oral statement, it cannot be established that he was aware that no goods would be cleared but only paper transactions will be made. Moreover, when it is established that the appellant was not even known to the concerned directors/persons of the said 100% EOU, the question of aiding and abetting them would not arise. 4th point : Whether in the facts and circumstances of the case, it can be said that Shri T.S. Makkar did not de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volving denial of refund of tax realised by the State from the petitioner therein. The Hon'ble Supreme Court was pleased to direct refund with interest by adopting purposive construction rather than strict construction. The issue in hand however is of imposition of penalty, and hence I am of the view that strict construction would have to be given to penal provisions, unlike any beneficial provision. 37. In the instant case neither the appellant has dealt with or transacted for the goods in any manner, nor has it been established that he was aware about forged/fake nature of the licences. Therefore in such peculiar facts of the case none of the judgments cited by the Revenue and relied by the learned Member (Technical) would have any application. 38. In Sachidananda Banerjee, A.C.C., Calcutta v. Sitaram Agarwala reported in 1999 (110) E.L.T. 292 (S.C.) the Hon'ble Supreme Court was concerned with third persons who had nothing to do with the actual import but might have come in possession of smuggled goods, knowingly, after they had been smuggled. While confining to the facts of the said case it was held that respondent Sitaram was concerned in dealing with the goods, as he with ..... 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