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TMI Blog2024 (2) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... ord to show that the customs officers had taken the goods out of the customs area. There is also nothing on record to show that anybody else was permitted to and had taken the goods from customs area. With reference to a letter dated 24.02.2015 the custodian found on 28.2.2015 that the container seal was broken and there was a private seal in red colour without any seal number. On opening, they found the goods were lost. Clearly, there is no scope of any interpretation in this chain of events except that the goods were pilfered while they were in the custody of the custodian CONCOR. Therefore, we find that in terms of section 45 (3), the CONCOR had to pay customs duty. Since part of the duty was already paid by the importer only the differential duty was demanded from CONCOR in the impugned order. We, therefore, find infirmity in the impugned order in so far as the confirmation of demand of duty u/s 45 (iii) on CONCOR is concerned. Imposition of penalty u/s 117 - Clearly, there is violation of section 45 by the CONCOR inasmuch as it had not taken proper care of the goods in its custody and as a result they were pilfered. The value of the goods which were pilfered is Rs. 5,93,25,481 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e three appeals are dismissed and the impugned order is upheld. - MR. DILIP GUPTA, PRESIDENT AND MR. P. V. SUBBA RAO, MEMBER ( TECHNICAL ) Ms. Reena Rawat, Shri Ashutosh, Shri Usmaan Khan, Advocate for the appellant Shri Rakesh Kumar, Authorised Representative for the Department ORDER These three appeals have been filed to assail the Order-in-Original [impugned order] dated 30.03.2018 passed by the Commissioner of Customs (Import) ICD TKD whereby he decided the proposals made in the show cause notice dated 18.11.2015. The operative part of this order is as follows: ORDER 1. I reject the declared value of Rs. 19,20,433/-in r/o bill of entry no. 7418730 dt. 18.11.2014 under Rule-12 of the Customs Valuation (Determination of Value of Import Goods) Rules, 2007 and re-determine the same as Rs. 5,93,25,481/- under Rule-9 of the rules ibid. 2. I hold that the goods with re-determined value of Rs. 5,93,25,481/- are liable for confiscation under Section 111 (1) (m) and 119 of the Customs Act, 1962 but refrain from imposing redemption fine as the said goods have been pilfered and are not available for confiscation. 3. Against the total duty of Rs. 1,71,16,587/-, I appropriate Rs. 2,82,534/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Quantity declared Value declared Duty paid 1. Glass Beads with two holes KGS 14,652 18,32,057 2,69,532 2. Glass seeds beads with holes KGS 942 88,377 13,002 Total 15,594 19,20,434 2,82,534 6. The Bill of Entry was initially marked for 10% examination and since some boxes appeared to contain glass chatons, which were not declared in the Bill of Entry the case was handed over to a Special Intelligence and Investigation Branch [SIIB] who carried out 100% examination of the goods on 20.11.2014 in the presence of Shri Rajesh Jha G card holder and Shri Akhilesh Kumar, H card holder of the Customs Broker M/s B S Mann. On examination, the following goods were found: S. No. Description of goods CTH Quantity (in KGS) 1 Glass beads (with two holes) and Glass seed beads (with holes) 70181020 3,971 2 Glass beads (with two holes) and Glass seed beads (with holes) 70181020 936 3 Glass Chatons (undeclared ) 70181090 19,104 TOTAL 24,011 7. Since samples could not be drawn, the container was resealed with Customs Seal Nos. 227352 and 227353 and it was re-opened the next day on 21.11.2014 in the presence of Shri Rajesh Jha and Shri Akhilesh Kumar. Samples were drawn from for further investigation un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied to mislead the investigations by giving wrong statements inasmuch as earlier he had wrongly stated that in the case of Nomita International, money emanated from M/s Krishna Logistics account, but in all the imports of M/s Nomita International, the duty deposits were made in cash by him as received from Mr. Lalit Kumar (importer) and Rohit Kumar (Manger of the Importer). (j) Shri Rohit Sharma (Manager of M/s Nomita International) was aware of the mis- declaration in the import consignment as well as about the nature of sample; he was actually participating in getting his mis-declared goods cleared from Customs. (k) Shri B. S. Mann, CHA knew Sh. Lalit Kumar and M/s Nomita International and was aware of mis-declartion made in respect of the impugned Bill of Entry, as well as violation of CBLR Rules by himself/ by his CHA firm/ by Marketing Manger of his CHA firm. (I) The seized goods lying in Container No. OOLU1372503 which were required to be kept in safe custody by CONCOR were stolen for which an FIR was also lodged with Delhi Police and thus CONCOR also failed to discharge it's duties and obligations. 8. Accordingly, a show cause notice dated 18.11.2014 was issued which cul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntainer to the CISF for safe custody by which time the goods had gone. CONCOR is not liable to pay customs duty under section 45 (3) and is also not liable for any penalty under section 117; (h) There is a severe lapse on the part of the customs as proper investigation would reveal, therefore, the demand of duty and imposition of penalty on CONCOR cannot be sustained. (i) During the personal hearing held on 26.10.2016 Shri P L Kaul, Manager CONCOR along with Ms. Yuktri Anand, learned counsel for CONCOR appeared and reiterated the submissions. 10. Learned counsel for CONCOR asserted that the demand of duty on CONCOR was not sustainable for the reason that it was not part of Panchnama drawn under which the goods were seized by the customs. It became aware of the seizure only when it received a letter from the Customs on 24.02.2015 when it found the customs seal was missing and replaced by a red colour private seal with no number. He further asserted that penalty under section 117 was wrongly imposed on CONCOR. 11. Learned authorized representative appearing for the department placed on record a letter dated 24.02.2015 sent by the Superintendent SIIB to the General Manager of CONCOR i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stodian who will be required to keep them in safe custody until further orders. If the seized goods are confiscated, they become the property of the Central Government and will, accordingly, be disposed of. If they are released either unconditionally or on redemption fine, the custodian will have to hand over the goods to the importer. In this case the goods are lost while they were in the custody of the CONCOR. The fact that the seizure was done after three months after the examination makes no difference to the case because even if the goods were not seized, the custody will continue to be with the custodian CONCOR. After the goods were seized on 23.03.2015, a letter was immediately sent to CONCOR intimating about the seizure, and asking it to keep the goods in safe custody. At no point of time had the goods left the custody of CONCOR. Therefore, the responsibility for safe custody of the goods lies with CONCOR. 17. Therefore, CONCOR was liable to pay the duty under section 45 for the goods lost. Since part of duty was already paid, the demand was made confirmed only to the extent of duty not paid or short paid. He also asserts that the penalty under section 117 was correctly imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay duty as it is he who owns the goods. If the goods are confiscated, the title passes on to the Central Government and the duty is recoverable from the sale proceeds of the confiscated goods. If the goods are allowed to be redeemed after confiscation after paying the fine under section 125, the title of the confiscated goods goes back to the importer and, therefore, in terms of section 125 (2), the importer has to pay the duty in addition to the redemption fine. 22. The owner of any imported goods may, at any time, before their clearance for home consumption relinquish its title to the goods and thereupon he shall not be liable to pay the duty thereon as per section 23 (2). In short, the liability to pay duty travels along with the imported goods. 23. The question which arises is if the goods get lost while they are in the custody of the custodian before they are cleared for home consumption, who is liable to pay duty? As per section 45 (3) the custodian is liable to pay duty if any good are pilfered after unloading thereof in the customs area while in the custody of the custodian. 24. Section 45 reads as follows: (1) Save as otherwise provided in any law for the time being i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, we find that in terms of section 45 (3), the CONCOR had to pay customs duty. Since part of the duty was already paid by the importer only the differential duty was demanded from CONCOR in the impugned order. We, therefore, find infirmity in the impugned order in so far as the confirmation of demand of duty under section 45 (iii) on CONCOR is concerned. 26. As far as the imposition of penalty under section 117 is concerned, we find that this section is a residual provision for imposition of penalty and it reads as follows: 117. Penalties for contravention, etc., not expressly mentioned. Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a penalty not exceeding one lakh rupees. 27. Clearly, there is violation of section 45 by the CONCOR inasmuch as it had not taken proper care of the goods in its custody and as a result they were pilfered. The value of the goods which were pilfered is Rs. 5,93,25,481/-. Considering this amount, we find that penalty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge. (e) The appellant s only association with the impugned goods was to the extent of filing of a Bill of Entry on the basis of the documents produced by the importer and any mis-declaration in the documents rendering the goods to liable to confiscation should not render the appellant liable to penalty under section 112(a). (f) Penalty under section 114 AA also cannot be imposed upon the appellant because prior knowledge or intention is required to impose penalty under section 114 AA and Shri Mann had no such knowledge. 30. On behalf of the Department, learned authorized representative for the revenue made the following submissions; (a) During the relevant period Shri Atal Bhushan Bhatt, was the Marketing Manager of Shri B S Mann, CHA, whose statement were recorded on 20.11.2014 under section 108. This statement has not been retracted by Shri Bhatt till date. He confirmed in his statement and that the sample of glass beads was shown to him and that he was aware of the undeclared item i.e., glass chatons and that he was a G card holder of Shri B S Mann. Shri B S Mann, the F card holder, made his statement on 21.11.2014 in which he confirmed the sample of imported goods were sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave had no responsibility as to the actual contends of the goods. In this case, the importer is not in the business of importing the glass beads or glass chatons and was indeed a regular importer of radiators for tractors. This consignment was different and the importer had provided samples of the goods to be imported to Shri Bhatt who was the Manager of Shri B S Mann. In turn, Shri Bhatt had shown those samples to Shri Mann. In this factual matrix we find no reason to believe that Shri Mann had innocently filed the Bill of Entry with a wrong declaration. Both Shri Mann and his Manager were fully aware of actual goods being imported and had filed Bills of Entry with the wrong description. 33. Therefore, the goods were correctly held to be liable for confiscation under section 111 (l)and (n) of the Customs Act. However, before the goods could be confiscated they were pilfered after their seizure while in the custody of the CONCOR. The Commissioner had, therefore, not imposed any redemption fine. Penalty under section 112 (a) can be imposed on any person who, in relation to a goods, does or omits to do any act which act or omission would render such goods liable to confiscation under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... getting any salary from the proprietor Shri Lalit Kumar s but he was working for him on commission basis. Shri Lalit Kumar s residence was searched and nothing incriminating was found. From this statement and the statement of others and the investigation it is clear that Shri Rohit Sharma was aware of the mis-declaration of the import consignment and was also aware of the nature of the sample and further that he was actually participated in getting the mis-declared goods cleared from customs. 37. Accordingly, the SCN was issued to him also. In reply, Shri Rohit Sharma sent written replies on 23.03.2016 and 21.04.2016 and had appeared for personal hearing on 24.01.2016 through his advocate Shri Vipin Yadav. The defense of Shri Rohit Sharma as follows: i. That he had no knowledge of the goods in question imported under the Bill of Entry but he was induced/coerced by Shri Atal Bhushan Bhatt to say before the Superintendent that he was working with M/s Nomita International as its manager. That he had neither any role in the import nor any knowledge of the goods which were imported and that he had subsequently severed all connections with Shri Bhatt. ii. He was the employee of Shri Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Rohit Sharma neither signed nor filed any documents what so ever for clearance of the consignments and even implicated by his co-noticee Shri Bhatt. Therefore, the penalty imposed on Shri Rohit Sharma may be set aside and the appeal may be allowed. 39. Learned authorized representative appearing for the department supports the findings of the impugned order and asserts that it calls for no interference what so ever. 40. We have considered the submissions on both sides in this appeal and perused the records. 41. Admittedly, Shri Rohit Sharma made a categorical statement under section 108 of the Customs Act before the Superintendent that he was the Manager of M/s Nomita International and that he had obtained the documents related to the import from owner of M/s Nomita International and handed them to Shri Bhatt for further processing and filing the Bill of Entry, and that he aware of the undeclared chatons which were seized by the customs authorities. This statement was made on 21.11.2014 and has not been retracted. All the material facts which were indicated in the statement such as the address of M/s Nomita International and the nature of its business matched with the facts av ..... X X X X Extracts X X X X X X X X Extracts X X X X
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