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TMI Blog2002 (9) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... leged that there was an admitted lapse and clear violation of the provisions of the DEEC Scheme and the licensing conditions governing duty free import of the raw silk yarn in question and customs duty on an import of 6116.530 Kgs of raw silk amounting to Rs. 13,59,472/- became liable to be paid and the same was paid up by various demand drafts as detailed in the notice. The proprietor also indicated in his statement that the Bank Guarantee executed by him may be enforced to the extent of Rs. 97,825/- and the balance would be paid by him. After completion of the enquiries, a show cause notice was issued inter alia to the present appellant requiring to show cause as to why - "Now THEREFORE Shri Praveen Kumar Dalmia and Shri Chaganmal Jain a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Praveen Kumar Dalmia, proprietor of M/s. Vinayaka Industries and Shri Chaganmal Jain, Proprietor of M/s. Kaveri Silk & Jute (P) Ltd., Bangalore." The Commissioner vide the impugned order came to a finding : "18. I have carefully gone through the records of the case. The allegation against the party is that they had imported mulberry raw silk under the two advance licences, namely 2040494, dated 29-3-95 and 2296196, dated 7-4-95, duty free. The duty involved in the said two consignments worked out to Rs. 13,59,472/-. However, the party did not make any export in respect of the said advance licence commitments and therefore, this case. 19. In reply to the show cause notice and at the time of personal hearing it was argued that the party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned, during the course of investigation Shri Chaganmal Jain had deposed that he knew Shri Praveen Kumar Dalmia and there was an agreement that mulberry raw silk will be imported by Shri Praveen Kumar Dalmia and sold to M/s. Kaveri Silks & Jute (P) Ltd. Shri Chaganmal Jain had also come forward to get over some financial problems to the tune of Rs. 12.25 lakhs. Thus, the nexus between both the persons are clearly identified and accepted. There has been a flow of funds in turn for imported consignments. Both the persons are in the same business. Thus, having regard to the facts and circumstances of the case, there is every reason to believe that M/s. Kaveri Silks & Jute (P) Ltd., had abetted in the act of importing mulberry raw silk and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty amount confirmed. The two bank guarantees, namely for Rs. 97,825/- and Rs. 14,328/- are allowed to be adjusted against the duty liability and interest thereon. I impose a penalty of Rs. 50,000/- (Rupees fifty thousand only) each on Shri Praveen Kumar Dalmia, proprietor of M/s. Vinayaka Industries and Shri Chaganmal Jain, Proprietor of M/s. Kaveri Silks & Jute (P) Ltd., under Section 112(a)(ii) of the Customs Act, 1962." 2. (a) When the matter was called Shri Lakshmi Narayan learned advocate fairly conceded that he is not pressing the appeal, as regards the liability to pay the duty, as determined. He is contesting the levy and recovery of interests thereon and the penalty imposed under Section 112 of the Customs Act. He submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Shri Chaganmal Jain stand proved..." will not to our mind cause the visit of penalty under Section 112(a)(ii), especially - (a) When no proposal for confiscation of any goods has been made in the show cause notice and or arrived at, as can be seen from the findings of the Commissioner extracted supra. Therefore, the penalty imposed is required to be set aside. (b) We have considered the plea as regards the liability for interest on the amount of duty of Rs. 13,59,472/- confirmed by this order. The liability of duty is not in dispute before us substantial portion thereof has been deposited before the show cause notice was issued. There is no doubt that the Import Policy Para 128 thereof prescribes as follows :- ".......To the Customs a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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