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TMI Blog2025 (1) TMI 1461X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A and 114AA of the Customs Act. Such a finding has been recorded by the Commissioner on the basis of conjectures and surmises. There is nothing on record to indicate that the appellant and Raj Kumar Pal had colluded. The fact that the appellant had paid the correct amount of duty to Raj Kumar Pal through banking channels does not support the finding recorded by the Commissioner. Raj Kumar Pal clearly stated in his statement before the customs authorities that he had received the correct amount from the appellant but for his own gains he paid a reduced amount. The appellant has deposited the differential amount of duty with interest. Section 114A of the Customs Act provides that where the duty has been short paid for reason of collusion or any willful statement or suppression of facts, the person who is liable to pay duty shall be liable to pay the penalty equal to the duty - In the absence of any collusion or any willful mis-statement or suppression of facts by the appellant, penalty under section 114A could not have been imposed upon the appellant. Penalty under section 114AA of the Customs Act is imposed if a person knowingly makes, signs or uses or causes to be made, signed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to pay all charges, including customs duty, to Raj Kumar Pal by banking channels; (ii) Raj Kumar Pal arranged the delivery of goods and provided copies of the customs assessed Bills of Entry and the bank attested challans reflecting payment of customs duty; (iii) During a search at the office of the appellant on 04.11.2015 by SIIB, the appellant provided the Bills of Entry and TR6 challans given to the appellant by Raj Kumar Pal; (iv) Statement of Sushant Gupta, Director of the appellant company was also recorded. He stated that M/s Complete Forwarders Pvt. Ltd. and M/s Complete Logistics undertook all clearance related work till April 2014, after which payment was made directly to Customs through online facility; (v) Raj Kumar Pal explained that the modus operandi followed by him was to create forged documents and these documents were provided to the appellant. The duty of customs was paid on import invoices fabricated by him to reflect a lower value. He also admitted that this fraud was committed by him, for his own benefit; and (vi) On being informed that Raj Kumar Pal had not deposited the customs duty, the appellant made a voluntary deposit of an amount of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raj Kumar Pal owner of M/s Complete forwarders Pvt. Ltd and M/s Complete Logistics was handling their entire work of Custom clearance of M/s Spectro Analytical Lab Ltd up to September 2013 and of M/s Spectro Lab Equipment Pvt Ltd up to April 2014. Enquiries conducted in respect of M/s Complete forwarders Pvt Ltd and M/s Complete Logistics revealed that the firms were not found existing on the given address. Shri Raj Kumar Pal was not found at given address, but surprisingly he appeared before Custom officers when contacted on mobile no 9811684222 provided by Shri Sushant Gupta in November 2015. Before this date, as per the SCN, Shri Raj Kumar Pal had already defrauded M/s Spectro Lab Equipment Pvt. Ltd for an amount of Rs 1,19,54,241/-, The appearance of Shri Raj Kumar Pal before the Customs officers after he had defrauded M/s Spectro Lab Equipment Pvt Ltd for, an amount of Rs 1,19,54,241/-, in response to a phone call is surprising. More surprising is the fact that both the applicants did not lodge an F.I.R, but filed only a complaint with the Police as late as on 11.02.16, i.e, four months after they had come to know of the fraud by Shri Raj Kumar Pal. As per the report of the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by us through cheque" Accordingly, the co-applicant was asked to submit his Bank statement. The same was not submitted and the Advocate of the co-applicant during the hearing held on 29.3.17 stated that he has not been able to procure the bank statement though Shri Raj Kumar Pal visited the bank a number of times and their bank has not provided the statement to him saying that the account has been closed in the year 2014. It was also Informed by Shri Arora, Advocate that he does not know the Bank Account number of Shri Raj Kumar Pal. ***** 37. This leads us to conclude that M/s Spectro Lab Equipment Pvt Ltd deliberately and in a very systematic and planned manner arranged to submit doctored and forged documents to evade Custom duties. The role of the co-applicant Shri Raj Kumar Pal as it emerges from the foregoing is that of a dummy erected to take the blame in a situation like the present one when the modus operandi of evasion of duty by Applicants' is detected and act as a buffer. In this view of the things, Shri Raj Kumar Pal does not appear to have actually masterminded the evasion of Custom duty. 38. From the above it is clear that, the applicants though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case. I find that the importer have admitted and discharge their duty liability. They vide their reply dated 16.04.2018 also claimed to have paid some amount towards their interest liability. The details of amount claim to have paid by the importer is refurnished below:- S.No. Challan No. & date Amount (in Rs.) Remarks 1. 731897 dated 06.11.2015 50,00,000/- Deposited during investigation (as mentioned in the SCN) 2. 737709 dated 01.01.2016 25,00,000/- Deposited during investigation (as mentioned in the SCN) 3. 739866 dated 16.02.2016 44,54,241/- Deposited after issuance of SCN 4. 742147 dated 04.04.2016 43,20,421/- Deposited after issuance of SCN (interest portion) I find that even in para 15 of their reply dated 16.04.2018, Noticee No. 1 has very clearly admitted that they are not disputing the duty and interest in the instant case Thus, I find that the noticees has admitted their duty liability. 5.4.1 In view of the above, I find that the issue of duty liability is resolved and the noticees admitted the fact and discharged the same. Now, the issue arises is the penalty imposed in the SCN to the importer firm and noitcee no. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Settlement Commission for settlement the case and requested for grant immunity from prosecution and penalties proposed in the SCN. From examination of the documents, Bank statement and material facts submitted by the noticees during investigation and in the Settlement Commission I find that: (a) Noticee No. 1 handed over all the documents for clearance from Customs to Shri Raj Kumar Pal, who has admitted that he used to change the value of the goods in the invoice and hand over the altered invoices to CHAs who would file Bills of entry for lower value based on doctored invoices. (b) as per the enquires made by the officers of the SIIB, both the firm of Shri Raj Kumar Pal i.e. M/s Complete Logistics and M/s Complete forwarders Pvt Ltd were not found existing on the given address. Shri, Raj Kumar Pal was also not found at given address, but surprisingly he appeared before Customs Officer when after being contacted on mobile number provided by Shri Sushant Gupta in November 2015. The appearance of Shri Raj Kumar Pal before the Customs officers after he had substantially defrauded M/s Spectro Lab Equipment Pvt Ltd in response to a phone call is surprising. More surprising is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial facts/evidences available and facts submitted before the Settlement Commission and discussed above, I find that that M/s Spectro Lab Equipment Pvt Ltd deliberately and in a very systematic and planned manner arranged to submit doctored and forged documents to evade Custom duties. The role of the co- applicant Shri Raj Kumar Pal as it emerges from the foregoing is that of a dummy planted to take the blame in a situation like the present one when the modus operandi of evasion of duty by Applicants' is detected and act as a buffer. In this view of the things, Shri Raj Kumar Pal does not appear to have actually masterminded the evasion of Custom duty but he has abated and committed the forgery on the sole directions of the noticee No. 01. ***** 5.7 In view of the above, I hold that the differential duty amounting to Rs. 1,19,54,241/- in SCN has rightly been demanded under Section 28(4) along with interest under Section 28AA of the Customs Act, 1962. 1962. ***** 5.8 I further find that Penalties have been proposed on the notice under Section 114A and Section 114AA of the Custom Act, 1962." (emphasis supplied) 8. The order passed by the Commissioner to the exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g any unlawful acts. These were done by him, on his own account. The appellant cannot be penalized for the unauthorized acts of an agent; (ix) No enquiries have been made, by the Department as to how Raj Kumar Pal obtained the original stamp of the Superintendent of Customs and the bank officials. Raj Kumar is a regular offender and has been penalized in several other cases and the appellant is a victim of his illegal acts; (x) The appellant had filed a police complaint. Despite several visits to the police station, the police failed to take any action against Raj Kumar Pal. There was nothing further, appellant could have done, beyond reporting the offence to the police. It was for the police to undertake the necessary investigations. In fact, the police report clearly states that the matter is still under investigation; (xi) The appellant had made the necessary deposits towards duty, interest, and penalty. As the deposits are adequate discharge of the liability, the appellant had requested that the proceedings be concluded in terms of section 28(5) of the Customs Act; and (xii) The amount deposited by the appellant is required to be appropriated towards the confirmed duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opies of Bills of Entry in his office reflecting the actual value of each import consignment and used to generate the print out reflecting the actual particulars of import consignment ..... he admitted that what he charged from the client was this higher element of customs duty and not the actual element of customs duty paid to customs; on being pointed out that his act tantamounted to fraud on Government exchequer as the actual Customs duty was charged by him from the client but the lesser customs duty was paid, he stated that as admitted earlier, he required money to establish himself in the business and to bear the expenses of running a business establishment and hence he committed this mistake;" 13. It is also not in dispute that the appellant has deposited the entire duty amount with interest, as is clear from the following chart: FY Duty paid by Raj Kumar (A) Payment made by Spectro to Raj Kumar (B) Excess payment made to Raj Kumar by Spectro (B-C) Amount payable as per Customs (D) Differential duty (D-A) 2011-12 4,91,449 54,50,000 49,58,551 42,99,150 38,07,701 2012-13 4,78,892 53,79,984 49,01,092 54,71,020 49,92,128 2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertake other business work. We had engaged Sh. Raj. Kumar Pal owner of M/s Complete forwarders arid M/s Complete Logistic, 847/1, Ground Floor, Mata Chowk, Main Vasant Kunj Road Mahipalpur, New Delhi for customs clearing-work. For Customs clearances, we used to handover original invoice and other documents to Sh. Raj Kumar Pal who filed Bill of Entry in Customs, Paid Customs duty and other charges and then raised bill on us which was paid mostly through cheque. On 04.11.2015 Customs officers from, SIIB Air Cargo Complex, (Import) Commissionerate, New. Customs House, New Delhi visited our premises and conducted search proceedings against both the firms and resumned records as per detail given in Ann-"A" to the Panchnama prepared in respect of each firm (Copy enclosed). Statement of Sh. Sushant Gupta, Director in both companies Viz M/s Spectro Lab Equipments Ltd., and M/s Spectro Analytical Labs Ltd., was recorded under section 108 of the Customs Act, 1962 on 04.11.2015 for which he was summoned to the office of Superintendent SIIB, AIR Cargo Complex Import, New Custom House, New Delhi. Another statement Dt:-23.12.2015 was also recorded. The applicant stated that al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and forged documents to evade payment of customs duties and Raj Kumar Pal was a dummy planted by the appellant. It is for this reason that the Commissioner imposed penalties upon the appellant under sections 114A and 114AA of the Customs Act. 18. Such a finding has been recorded by the Commissioner on the basis of conjectures and surmises. There is nothing on record to indicate that the appellant and Raj Kumar Pal had colluded. The fact that the appellant had paid the correct amount of duty to Raj Kumar Pal through banking channels does not support the finding recorded by the Commissioner. Raj Kumar Pal clearly stated in his statement before the customs authorities that he had received the correct amount from the appellant but for his own gains he paid a reduced amount. The appellant has deposited the differential amount of duty with interest. 19. Section 114A of the Customs Act provides that where the duty has been short paid for reason of collusion or any willful statement or suppression of facts, the person who is liable to pay duty shall be liable to pay the penalty equal to the duty. 20. In the absence of any collusion or any willful mis-statement or suppression of facts by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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