9911796707
TMI Blog2024 (3) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... has been produced by the Department to remotely show that there was wilful involvement of the Appeallant in the issuance of COO certificates. The submission of the Appellant that the COO certificates have not been cancelled by the Zambian Authorities cannot be overlooked or brushed aside just because the department has formed a view that the same were not authentic. We have already observed that the said view is without any basis and unsupported by any evidence. Department has not made any effort to check the correctness of the COO certificates and if any attempt is made the documents proving the same have not been annexed to the SCN or placed on record. Furthermore, the Department choosing to not investigate the Iran entities viz., National Iranian Industries Co. and Coppernium International FZE goes on to show the incomplete nature of investigation. Therefore as held by us the authenticity of the documents cannot be doubted due to lack of evidence. Thus, penalty u/s 112(a) and 114AA of the Act cannot be imposed on both the Appellant and its directors and the same deserves to be set aside. Penalty On Appellant - In cases where there is absolutely no involvement of assessee and whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ani, the directors of the Company (referred to as the Director and/or Directors) against the same Order-in-Appeal dated 25.10.2023 imposing separate penalties on each of the directors under Sections 112(a) and 114(AA) of the Act. 1.1 The main issue in the present case relates to country of origin of goods. The case of the department is that the Appellant herein had mis-declared the country of origin (herein after referred to as COO) of goods as Zambia instead of Iran. It is relevant to note that the present proceedings have no duty implication as the Appellant admittedly never intended to avail any duty benefit basis the country of origin certificates (herein after referred to as COO certificates) and have paid duty at proper value determined on the basis of LME price prevalent on the date of assessment. 1.2 The brief facts of the case are that the Appellant during the Normal course of business had raised Purchase Order on NBJ International FZ-LLC, Dubai, UAE (herein after referred to as the supplier) for supply of Copper Cathode on CFR, Nhava Sheva. Accordingly, it was the duty of the supplier to supply the goods to the Buyer (Appellant) at the destination port viz., Nhava Sheva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.03.2022 and (d) Mr. Amol Pongde, authorised representative of M/s. Radiant Maritime India Pvt. Ltd, statement dated 19.04.2022. 1.8 Subsequently, goods were seized and a Provisional order was passed by the department which was challenged before this Tribunal. This Tribunal vide order dated 27.06.2022 permitted clearance of goods, on Appellant furnishing a bank guarantee of Rs. 1,00,00,000/-. 1.9 Pursuant to the aforesaid order, the Customs Department released the goods provisionally. Thereafter, a Show Cause Notice (referred to as SCN) dated 04.01.2023 was issued calling upon the Appellant and its directors to show cause as to why - a) 1497.83 MTs of Copper Cathode conforming to LME Grade A having assessable value Rs. 110,41,45,320 imported under Bills of Entry No. 7078318, 7078308, 7078197 and 7078275 all dated 14.01.2022 should not be confiscated under Section 111(d) and 111(m) of Customs Act, 1962; b) Penalty should not be imposed in terms of Section 112(a) of Customs Act, 1962; c) Penalty should not be imposed in terms of Section 114AA of Customs Act, 1962 1.10 The SCN was issued on the following allegations: (i) The Appellants have mis-declared country of orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -23-24 dated 25.10.2023 (referred to as the Impugned Order), the Commissioner (Appeals) rejected the contentions and submissions made by the Appellant as well the Directors and concurred with the findings of the Adjudicating Authority made in the Order-in-Original. 1.14 The present Appeals have been filed against the impugned order. 2. We have heard and considered the oral arguments made during the hearing and written submissions filed post hearing. During the hearing the Shri Jitendra Motwani, learned counsel for the Appellant has filed a synopsis of arguments challenging the impugned order. The Synopsis of arguments are reproduced below for sake of clarity: * The entire case of the Department which has been confirmed by the Commissioner (Appeals) is that the Appellant has mis-declared the COO of the imported goods as Zambia instead of Iran and registration obtained under NFMIMS basis the said document is incorrect and therefore, the goods are liable for confiscation. To confirm the allegation of goods being imported from Iran instead of Zambia, the Commissioner (Appeals) has erroneously held that the COO certificates furnished by the Appellants were fake/forged and the same w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative of M/s SGS India Pvt. Ltd., could not have commented on the manufacturer of goods, as the said company is solely dealing with inspection of goods and in any event he was not directly working for the inspecting agency viz., SGS Iran; * That the department has not even made an attempt to reach out to the Zambian Authority to check on the authenticity of COO certificates. The COO certificates being properly stamped and signed cannot be overlooked and or brushed aside by the customs department without any evidence of same being not authentic and unless the same is cancelled or the same is proclaimed as fake by the issuing authority; the department cannot go beyond the said COOs as held by Hon'ble Supreme Court in the case of Zuari Industries Vs Commissioner of Customs 2007 (210) E.L.T. 648 (S.C.); * The letter dated 26.05.2022 issued by the DRI to Commissioner of Customs, Nhava Sheva does not pertain to COO certificates pertaining to bills of entry assessed under impugned order. In any event while the said letter mentions about some overseas enquires with Zambia Revenue Authority, the same does not produce any communication issued by the Zambian Authority questioning the corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not even attempted to examine important factors like reaching out to Zambian Authorities and Parties from Iran; * There is no dispute that the Appellant has made payment to their foreign supplier in Dubai and not to any party in Iran. Furthermore, there was no contract between Appellant and any party in Iran including National Iranian Industries Co. or Coppernium International FZE. The Appellant had entered into a contract with the supplier NBJ International, Dubai and it is not even the case of the Department in SCN or in any of the orders passed by authorities below, that Appellant was dealing with either National Iranian Industries Co or Coppernium International FZE or was aware of their existence. Hence, the finding that the Appellants knowingly submitted forged COO certificates is without any basis and based on presumption and assumption. * It is submitted that none of the activities viz., switching of BL, inspection of goods was done at the behest or within the knowledge of the Appellant. The said activities form the basis of the proposed demand. The Appellant undisputedly had a contract with the foreign supplier in Dubai who had supplied the goods as per the PO. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificates which was issued and stamped by competent authority in Zambia, which notably, has not been cancelled till date. The NFMIMS registration is required to regulate the import of copper and it is not country specific. Hence, providing wrong COO certificates does not have any bearing on the said registration, especially when the competent authority i.e. DGFT had not cancelled the said registration till date. Further there is no prohibition for import of goods from Iran as has been accepted by the commissioner (Appeals) himself and as held by Bombay High court in Global Ace Shipping Lines Inc [Writ Petition (L) No. 5118 of 2020] * That the Appellant declared the country of origin based on documents supplied by the foreign supplier. It is settled law that charge of mis-declaration cannot be sustained against the importer when Bills of Entry were filed based on documents received from foreign suppliers. * No documentary proof whatsoever has been produced by the Department to establish that the Appellants had any prior knowledge that the COO certificates are purportedly not genuine. * That that the Appellant had paid duty as per full rate applicable and without availing any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Vishal Amlani; b) Satish Amlani; c) Mr. Dhiraj Kumar Jane d) Mr. Amol Pongde, letter issued by DRI dated 03.11.2022 and legible copy of SCN (marked as "Compilation Volume 2") was furnished. 3. Shir S S Vikal, the departmental authorised representative reiterated the findings of the impugned Order-in-Appeal. 4. The entire issue in this appeal relates to alleged mis-declaration of Country of Origin of copper cathodes imported by the Appellant. As recorded above there is no duty implication in the matter inasmuch as the Appellant has never intended to avail any duty benefit basis the COO certificates in dispute. The relevant para of the show cause is reproduced below for sake of clarity: "6.1 As per discussion made in the foregoing paras and documentary evidences on records, it is noticed that M/s. Amglo Resources Private Limited filed four Bill of Entry bearing No. 7078318, 7078308, 7078197 and 7078275 all dated 14.01.2022 under Section 46 of the Customs Act, 1962 for import of 1497.83 MTs of 'Copper Cathode Conforming to LME Grade 'A' having assessable value Rs. 110,41,45,320/- through ICD Tumb. The importer had declared Basic Customs Duty @ 5%, Social Welfare Cess @ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 06.04.2022 and the seizure memo dated 02.02.2022 is totally silent on the aspect of undervaluation. The seizure memo in fact gives the complete history of the matter but does not contain any allegation about the undervaluation of goods. Given the above it is submitted that the condition to furnish BG of 15% of value is extremely onerous, more so when the Appellant has shown his will to deposit entire amount of duty on value declared by it." 30 to 34 ……. 35. Apart from the same, the appellant herein has always been willing to pay the entire duty amount of around Rs. 25 crores at the time of clearance of the goods, which was not the case in Hazel Mercantile case (supra) as in the case of Hazel no duty was payable on export goods. Also, it is an undisputed fact that the department has alleged mis-declaration on the part of the appellant based on Country of Origin certificate which in normal cases is issued by the appropriate authority of the exporting country and the importer in India has no role in the issuance of the same. The investigation on this behalf is ongoing and yet to be concluded. 36 to 38 …….. 39. Further it is a settled law that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jawaharlal Nehru Port Trust. 4.5 Investigation led to the department summoning Mr. Jane, authorised representative of M/s. SGS Inspection & Survey and Inspection, India. His statement was recorded on 30.03.2022 during which he deposed that the seals that were cut from the containers were of SGS group of companies and the seal numbers were matching with the inspection certificate issued by SGS Iran. He further deposed that Bill of Lading No. ATSBNDTUM2112412 of Asian Tiger Shipping LLC was submitted wherein the consignor was mentioned as National Iranian Copper Industries Company and consignee was mentioned as M/s. Coppernium International FZE UAE and the inspection of the goods were carried out by SGS Iran on directions of M/s. Sanaye Va Maaden Mes Kerman Zamin at Bunder Abbas Port, Iran. Basis the same, the department in para 5.1 has alleged that the since the goods were inspected in Iran between 22.12.2021 to 27.12.2021 and further the fact that the Inspection Report dated 08.01.2022 records that "prior to loading, all cargo stock were covered by tarpaulin" clearly show that the goods originated from Iran instead of Zambia. On the basis of this deposition, it appears that the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse to office letter of Nhava Sheva Commissionerate dated 19.04.022 and the same reads as under: "2. In this regard overseas enquiries as sought were conducted and it is learnt from the Zambia Revenue Authorities that the Country of Origin Certificate bearing Ref. No. ZM/N/2741 is not authentic. 4.9 Basis the above evidence the Commissioner (Appeals) vide impugned order has confiscated the goods and imposed redemption fine on the Appellant. Penalties have been imposed on the Appellant and the two directors under both section 112(a) and 114(AA) of the Act. 4.10 It is the case of the Appellant that the evidence relied upon by the department does not remotely show that the goods had originated from Iran. Having submitted proper COO certificates stamped by Zambia Revenue Authorities, the same could not be declared as forged/fake on basis of presumptions and assumptions. No efforts were taken by the department to reach out to the Zambian authorities to check the authenticity of the COO certificates. Similarly, the letter issued by DRI to Nhava Sheva Commissionerate cannot further the case of the department as the letter does not disclose the nature of overseas enquires nor does it d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porter connived with the different entities abroad like the exporter, Shipping Line/Agent to create whole bunch of manipulated/forged documents including the country of origin certificate to show that the impugned goods originated from Zambia against the true country of origin i.e. Iran. 4.14 Whether there is any evidence to back and support the above allegations made in the show cause notice will have to be looked into by us. a) Supreme Court in the case of Gokuldas Exports (supra) has held that "A party which asserts a fact has to establish it. In this case it was the plaintiff who asserted that second revalidation was permissible. It was for the plaintiff to establish it." b) Similarly, Hon'ble Bombay High Court in the case of Phoenix Mills v/s Union of India 2004 (168) ELT 310 has held that : "16. Having considered the rival submissions at length, the controversy lies in a very narrow compass which can be adjudicated upon the text of the show cause notices itself. The show cause notice dated 2nd November, 1992 incorporated at Exh. 'E' issued by respondent No. 3 specifically, states, "for the purposes of printing of fabric the petitioners require "printing paste", and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of COO certificates being forged/fake and further Appellant and its directors having connived in the same is made by the department the burden to the prove the above is solely on them and cannot be shifted on the Appellant unless cogent evidence is produced in support of the said claim. It is the case of the department that the goods imported by the Appellant did not originate in Zambia as declared but were from Iran. The Appellant on the other hand had submitted COO certificates which are stamped by Zambia Revenue Authority, Tanzania Customs, Lusaka Customs Port, Customs Service Division and Tanzania Revenue Authority. Nothing stopped the department from reaching out to the issuing authority viz., Zambia revenue authority through official channel to check the veracity of the COO certificates and understand if the same were issued by them or not. No communication to this effect has been produced before us. It cannot be even conclusively said that an attempt was made in this regard. We are of the view that communication with the Zambian Authorities was the first logical step that the department ought to have taken if they intended to support the allegation that the COO certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut corroborative and supporting documents cannot be the basis to label a document issued by an independent foreign authority non authentic. Further we find merits in the arguments of the Appellant that the said communication in any event relates to COO No. ZM/N/2741 dated 03.11.2022 whereas the COO certificates involved in the present case were No.ZM/N/2742, No. ZM/N/2743, No. ZM/N/2744 and No. ZM/N/2745 all dated 8.11.2022. The reasoning adopted in the impugned order in Para 8.3 to the effect that since all 80 containers originated from the same source of country on a single Bill of lading which were subsequently split into 4 bills of lading would be enough to show that if one COO certificate is found fake the others would also be fake is totally incorrect. The reason provided by the Commissioner (Appeals) to reject the submissions of the Appellant is that the findings of the Adjudicating authority has not been rebutted by the Appellant. The said finding itself is faulty and contrary to the records of the case as the Appellant in grounds of Appeal had disputed the findings of the Adjudicating authority basis the said letter. Be that as it may, we are of the view that the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Zambian Authorities on the basis of which the DRI has purportedly learnt and formed an opinion the COO certificate mentioned in the letter was not authentic. For the aforesaid reasons we are of the view that the said letter cannot be the basis to hold that the COO certificates impugned in the present case were not authentic. 4.17 Coming back the allegations made in para 6.6.2 of the show cause notice, the department has alleged that the importer connived with the different entities abroad like the exporter, Shipping Line/Agent to create whole bunch of manipulated/forged documents including the country of origin certificate to show that the impugned goods originated from Zambia against the true country of origin i.e. Iran. Comparing the aforesaid allegation with the contents of the show cause notice, we are constrained to note that no investigation whatsoever has been carried out by the department against any of the parties mentioned above to remotely suggest what has been alleged by the department. Mr. Jane in his statement had deposed that the consignor in the first Bill of lading was National Iranian Copper Industries Co whereas the consignee was Coppernium International. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggest that the Appellant knew either "National Iranian Industries Co." or "Coppernium International FZE" "Asian Tiger Shipping LLC". From the show cause notice and the statements of witnesses, it is clear that the department has not even alleged that the Appellant knew about the said purported trade or was a party to it. No documentary evidence has been produced to suggest otherwise. In view of the aforesaid, we are of the view that the finding of the Commisisoner (Appeals) in relation to manipulation of bill of lading and or connivance of the Appellant for the same deserves to be set aside being unsupported by any evidence. 4.20 The Appellant in fact has been contending right from the adjudication stage that it had no contract with any Iranian company who got the goods inspected and the said parties were not known to them in any manner. The authorities below have completely overlooked this aspect. The department while making allegations as grave as one made in para 6.6.2 was expected to establish a clear link to allege connivance on the part of the Appellant. 4.21 Even otherwise the department has relied upon statements of following persons to hold that goods have originated fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same inspect in a country of their choice. This will be totally contrary to the provisions of FTAs and Rules of origin between India and various countries. The Inspection of goods, in our view is a contractual issue and the same can be done as per contractual arrangement between parties. In the present case the inspection was done with respect to the first leg of transaction between Iran and UAE, to which neither the supplier was a party nor the Appellant. Most importantly the inspection report that is purported to have been submitted by Mr. Jane during the recording of his statement has not been made a part of RUDs. We are unable to understand the reason for which the said document has not been placed on record, especially when the case of the department hinges on the same. The said error is not condonable as it is a settled law that department cannot go beyond the scope of SCN and documents relied upon therein. It is not forthcoming from the SCN or statement of Mr. Jane as to what was the basis to hold that M/s National Iranian Copper Industries Co. was manufacturer of the goods as we have no doubt in our minds that inspection of goods cannot be equated to manufacture of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letters of Coppernium International and NBJ International (the supplier in the present case) appear to have the same signature. Like the statement of Mr. Jane here also we note that the said letters seeking switching of BL filed by Coppernium International and NBJ International (the supplier in the present case) which purportedly have the same signatures are not a part of RUDs of SCN. Accordingly, there is no way for us to test if the statement of Mr. Pongde on signatures being same be taken as true. Further we agree with the submission of the Appellant that Mr. Pongde was not a forensic or handwriting expert, and the said letter was not sent for signature testing by the department. Accordingly, we hold that statement of Mr. Pongde does not in any manner further the case of the department that goods were of Iran Origin. 4.25 Having held that above we are constrained to note that the finding of the Commissioner (Appeals) that the Appellant has not challenged the statements of the above two person is erroneous. Apart from the fact that nothing incriminating qua the Appellant and its Directors has been stated in the statement, the Appellant have challenged the statements of the both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permissible in law. Case laws of this Tribunal which were otherwise binding on the department have not been considered. Accordingly, we hold that the findings of the Commissioner (Appeals) that the COO Certificates were bogus or fake and that the goods have originated from Iran and not Zambia, is incorrect and has been given by non-appreciation or mis interpretation of statements and /or document/submissions of the Appellant. 4.29 One of the arguments of the Appellant is that the entire basis on which the SCN has been issued viz: quality control stickers of December 2021 being incorrect and/or inconclusive to prove origination of goods has not been dealt with by the authorities below. It is the case of the Appellant that merely because the COO certificates were issued on 08.11.2021 and the packing sticker were of December 2021 cannot be the reason for department to allege that the Appellant had submitted fake/forged COO certificates by mentioning the COO as Zambia. It has been argued that the goods may have been shipped from Zambia to Iran and from there to Jabel Ali and then to India cannot be ruled out and the supplier of goods can as per his choice get the quality of goods che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the goods originated from Zambia is on the Appellant and they failed to discharge the said burden. The said Section is reproduced below for sake of clarity: SECTION 46. Entry of goods on importation. - [(4A) The importer who presents a bill of entry shall ensure the following, namely:-- (a) the accuracy and completeness of the information given therein; (b) the authenticity and validity of any document supporting it; and (c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or under any other law for the time being in force.] 4.31 We don't see how the above Section can be relied upon to shift the burden of proof on the Appellant assessee. The Appellant has submitted certain documents which bear appropriate stamps of the issuing authority. Admittedly the Appellant had no role in issuance of the documents. Since the department had disputed the authenticity of a document issued by a contracting state, the onus was on it to reach out to the Zambian authorities through official route provided under the FTA Regulations. Even otherwise the department could have pursued with the concerned/appropriate ministry to reach out to Zambian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he country of origin of goods was mis-declared and the same had originated in Iran instead of Zambia. The finding of the Commissioner (Appeals) on manipulation of import documents or connivance on the part of the Appellant, being unsubstantiated also is erroneous. On the contrary as held by us above, the department has failed to produce a single document or evidence to remotely support their case of mis-declaration of country of origin. As recorded by us above, the investigating authority instead of reaching out Zambian authorities and Iran entities have chosen to rely upon statements of witnesses who were not competent to depose on origin of goods. If that was not enough the department while issuing the show cause notice have not made documents submitted by the said witnesses a part of the show cause notice through RUDs. It is a settled law that documents not made part of relied upon documents cannot be relied upon. Given the above we have no hesitation in holding that the case of the department that goods have originated from Iran instead of Zambia must fail on all counts and we hold accordingly. 4.33 Having held the above, we will not deal with other alternative submissions mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Iran between 15th January 2020 and 18th January 2020, and cargo, covered by Import General Manifest No. 2244928/22.01.2020 of MT Chem Trader filed for discharge at Mumbai and purportedly taken on board at Jebel Ali on 16th January 2020 was, in fact, loaded during clandestine call at Bamder Imam Khomeini in Iran between 12th January 2020 and 14th January 2020. ………. 8. The first issue that comes up relates to the place of origin. There is no contention on the part of customs authorities that appellants had insisted upon sourcing from Iran or that they had any commercial engagements with suppliers in Iran that was sought to be obfuscated by a paper trail through Dubai/Sharjah. On the contrary, the entire proceedings have been carried through on the presumption that there is no engagement other than with the contracted suppliers. The sole evidence of goods not being of Taiwanese/Omani origin, as contained in the bills of lading, are the records of passage by MT Braveworth from Fujairah to Sohar en route to India having been interrupted by allegedly calling at Dayyer in Iran and of MT Chem Trader having called at Bander Imam Khamenei in Iran before arrival at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said statements do not prove anything against the Appellant. Further placing reliance on the inspection/quality check date to dispute the correctness of country of origin of goods and taking the place of inspection of goods as place of origination of goods itself is faulty as mere inspection of goods in Iran cannot establish that the goods have originated from Iran. We find force in argument of the Appellant that the possibility of goods having originated in Zambia and then being transhipped through Iran before reaching Dubai cannot be ruled out. The inspection of goods in Iran cannot establish that the goods originated from Iran in absence of any confirmation from the Iranian entities that the goods originated from Iran. Even the statements are not conclusive for reasons stated above. Hence, we are of the view that the decision in the case of Jupiter Dyechem (supra) will apply to the present case on all fours. 4.37 Similarly we note that CESTAT in the case of Agarwal Industrial Corporation Ltd. vs. Commr. of Cus. Mangalore reported in 2020 (373) ELT 280 (Tri-Bang) has decided a similar case in favour of the party. The demands in the said case were dropped with the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 112(a) and 114AA of the Act. The Appellants have argued that the documents filed by them were supplied by the supplier and they had no role in issuance of the COO certificates. It is further submitted that no benefit was ever availed on the basis of the said certificates and also no evidence has been placed on record to show their involvement in any manner. Accordingly, as a without prejudice argument the Appellant have prayed that redemption fine and penalty cannot be imposed. In any event the quantum of redemption fine and penalty has been challenged too. 4.40 The Commissioner (Appeals) in the present case has held the goods are liable for confiscation under section 111(d) and 111(m) of the Act. As per the Commissioner (Appeals) the act of Appellant obtaining 'compulsory registration' under Non-Ferrous Metal Import Monitoring System (NFMIMS) on the basis of false documents viz., COO certificates have rendered the goods liable for confiscation. Apart from the above the goods have been held liable to confiscation under Section 111(m) of the Act on the ground that the Appellant did not care to verify the genuineness of the COO certificates and chose to file statutory documents bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are required to be registered under NFMIMS. Since goods imported by the Appellant are falling under the said Notification, the Appellant has duly obtained registration as required. On perusing the said Notification of DGFT, we note that the same is product specific and not country specific inasmuch as registration is required to be obtained basis the product that is imported irrespective of country of origination or country of import. Accordingly, submission of the Appellant that even if it is assumed that the goods were imported by them from Iran, the same will not have any bearing on the registration obtained under NFMISM needs to be accepted. The said registration in any event has not been disturbed by the DGFT till date and the same supports the argument of the Appellant as being the issuing authority the decision on whether the registration was proper or not will lie with DGFT and not customs. In any event, even as per the department, the goods were required to be compulsorily registered under NFMIMS which has been done. The DGFT has not taken any action on alleged violation of any provision of FTD&R Act or the Rules made thereunder. Keeping in mind the above and since Countr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng beyond the show cause notice deserves to be quashed and set aside on this ground as well. Even otherwise the charge in show cause cannot sustain as the department has not been able to show any document or produce any evidence on the basis of which it can be held that the Appellant was aware about the COO certificates was fake or had deliberately used the same. 4.45 We are in agreement with the submission of the Appellant that declaration made by them while filing import documents was basis the documents submitted by the supplier. There is no evidence to the contrary. Infact the statements of witnesses relied upon in the SCN does not state anything against the Appellant or the directors. 4.46 The Appellant had purchased the goods from Dubai based supplier who has confirmed that the goods are of Zambian Origin and to this extent has provided stamped COO certificates to the Appellant. There was neither any contract with any party in Iran nor was any payment made to them. Undisputedly the Appellant had entered into a contract with Dubai based company and payments were also made to it through proper banking channels. On the other hand, the department has not produced any evidence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to any goods, does or omits to do any act which act, or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act. Similarly, penalty under Section 114AA of the Act is imposable on person who knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect. 4.49 We have noted above that the department has failed to discharge the burden cast upon it to conclusively prove that the goods had originated in Iran as against Zambia. Accordingly, the question of imposing any penalty be it under 112(a) of 114AA will not arise. Apart from the above, we have found that no evidence has been produced by the Department to remotely show that there was wilful involvement of the Appeallant in the issuance of COO certificates. The submission of the Appellant that the COO certificates have not been cancelled by the Zambian Authorities cannot be overlooked or brushed aside just because the department has formed a view that the same were not authentic. We have already observed that the said view is without any basis and unsupported by any e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty under section 112 (a) of the Act. Similarly in Commissioner v/s Trinetra Impex Pvt. Ltd. reported as 2020 (372) E.L.T. 332 (Del.), the Hon'ble Delhi High Court held that while mens rea for imposition of penalty under Section 112 (a) of the Act is not a condition precedent, however, said ingredient is necessary for imposition of penalty under the said section. 4.52 In Extrusions Vs. Collector of Customs reported as 1994 (70) ELT 52 the Hon'ble Kolkata High court has held as under: "30. In P. Ripakkumar and Company v. Union of India, reported in 1991 (54) E.L.T. 67, a Division Bench of the Bombay High Court set aside the confiscation on the finding that the importer had acted bonafide. It was held at page 71 of the report as follows :- "8. On the specific statement made by both the counsels, we propose to examine the question as to whether on the facts and circumstances of the case, the order of confiscation passed by the Customs authorities and the order of imposition of redemption fine in lieu thereof should be sustained. In these circumstances, Shri Mehta submitted that the action of the petitioners was bonafide and consequently the order of confiscation and redemption fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t instance. In our view, the principles laid down by the Supreme Court in Hindustan Steel Ltd. (Supra) have to be kept in mind and duly applied, mutatis mutandis, in cases of confiscation of goods and imposition of redemption fine as well. In the instant case, however, the Tribunal fell in error in holding that the question of intention is irrelevant in deciding upon the confiscation and quantum of redemption fine. The instant case is a fit one where confiscation should not have been made having regard to the bonafide conduct of the applicant." In view of the above settled position and considering our findings that no evidence has been produced by the department showing any role of Appellant and its directors in the alleged mis-declaration Penalties as confirmed by the impugned order are required to be set aside. 4.53 In relation to penalty imposed under Section 114AA, It is submitted that the key words in the aforesaid Section is 'knowingly' and 'intentionally' and therefore unless mens-rea is established beyond doubt Penalty under the said section cannot be imposed. 4.54 We have provided detailed findings in relation to failure on the part of the department to either prove tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
