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TMI Blog2004 (12) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... real importer, without naming the real importer. (iii) Penalty of Rs. 8,50,000/- was imposed on M/s. Cashmir Enterprise, Shivpur, Shrinagar, Kashmir under Section 112(a)(ii) of the Customs Act, 1962 for lending their name to enable clearance of the goods under Notification No. 345/86-Cus. (iv) Penalty of Rs. 20 lakhs under Section 112(a)(ii) on Vijay N. Desai the brain behind the conspiracy for illegal import, illegal claims and illegal sale of the goods and for defrauding the Government revenue. (v) For acts of aiding and abetting cheating, defrauding the Government of revenue, penalty of Rs. 5 lakhs each was imposed on Shri Mukesh Shah, M/s. Shah Mehta the clearing Agents, under Section 112(a) of the Customs Act, 1962. (vi) Found no evidence to justify imposition of penalty on Suresh K. Shah, Partner of M/s. Shah Mehta the clearing agents. (vii) Penalties of Rs. 5 lakhs was imposed on proprietor of M/s. Vijay Bazar Co. a Chartered Agents firm under Section 112(a)(ii) of the Customs Act, 1962. Only Shri Mukesh K. Shah M/s. Shah Mehta are in appeal before us. Their appeals are being disposed off by this common order. 2. After h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir Enterprises. It was also clear to all concerned that only documents will be produced and in the of Cashmir Enterprises as actual users and the goods would be sold in Bombay as they have been imported for sale by Vijay N. Desai. In spite of this M/s. Shah Mehta through their partner Shri S.K. Mehta executed a bond and provided the CHA surety on the said bond to show that the imports have been made by M/s. Cashmir Enterprises for their bona fide use. They, therefore, succeeded in getting the goods cleared from Customs not only under OGL but under concessional rate of duty under Notification 345/86-Cus., dated 16-6-86. The plea of the learned Advocate that they got the goods cleared in the normal course of their business is not supported by evidence on record because work of clearance was attended to by them with the help of Mukesh Shah who was not authorised to get the goods cleared. They had also executed a bond and provided CHA surety for fraudulent import. The certificate of actual consumption of goods by M/s. Cashmir Enterprises which was recovered from their premises is also to be looked into in this background. The argument by the learned Advocate that the certificate was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the said documents were never presented to the Customs Authorities by the CHA i.e. after the goods are landed and up to the clearance from Customs or thereafter. The non questioning of the partners by the investigators i.e. DRI and the exoneration of Shri Suresh K. Shah, the Partner of CHA firm, by the adjudicator from the liability to a penalty under Section 112(a) or (b) of the Customs Act, 1962 itself would indicate that the penalty on the partnership firm of M/s. Shah Mehta, under Section 112(a), for abetting, cheating or defrauding cannot be upheld. (iii) For penalty on partnership firms as arrived at, would call for a culpable mental state and a Partnership firm, in the facts herein or in law cannot be held to be having the same. The individual personality of a partnership firm like that of a Company is not clearly recognized. Therefore, penalty under Section 112 of the Customs Act, 1962 only on the firm and partners being absolved cannot be upheld. (iv) Perusal of Section 140 of Customs Act, 1962 reveals that every person who was in charge of the firm at the relevant time and the firm would be liable to a penalty and penalty on the firm would be cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learance and its sale etc. from evidence on record it also appears that he had prior knowledge regarding the clearance of the consignment, its sale in the local market and the arrangement for producing fictitious and bogus documents to give the impression that the goods had been sent to Srinagar whereas the goods have been sold in the local market. The submission by the learned Advocate the Mukesh Shah had no knowledge that any illegal act had been committed in respect of the impugned goods and that the goods are to be sold in the market, and that lorry receipts are required to be produced only as fictitious evidence is contradicted by evidence on record. I find that Mukesh Shah in his statement dated 27-6-91 recorded under Section 10B of the Customs Act, '62 has stated that Vijay N. Desai had approached him in September, 1990 requesting to clear the consignment of 17 m tons of PVA under IGM 2060/126 under concessional rate of duty under Notification 345/86, dated 16-6-86. He inquired about the conditions of the notification and Vijay N. Desai informed him that he had already finalized the deal with an actual user in Kashmir for arranging clearance of the goods at concessional rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant in the circumstances of this case because Mukesh Shah was a co-conspirator with Vijay N. Desai and Nazir Shah for illegal import, illegal clearance and illegal sale of the goods in the market for profit. It is also on record that he received Rs. 70,000/- from Vijay N. Desai. This amount can be explained only as his part of the booty and cannot be explained what for an amount of Rs. 70,000/- was received by Mukesh Shah if he merely arranged for transportation of the goods from Bombay to Srinagar. 26. The learned Advocate had also argued that the lorry receipts were obtained by Mukesh Shah bona fide and in a legitimate way and the goods were actually loaded on to the lorries and there was no legality committed by Mukesh Shah in arranging for the lorries. It is stating only part of the truth. From the statement of Mukesh Shah it is abundantly clear that he had prior knowledge that the goods are not to be transported to Srinagar and that lorry receipts have to be procured only as an evidence that the goods have actually gone out of Bombay so that no investigations take place further. In this context again I refer to statement of Mukesh Shah wherein he stated "in the mean tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent dated 18-6-91 "I am surrendering a bunch of documents which is maintained in our office - now serial numbered from pages 1 to 13. I have signed the first page (No. 1) and the last Page (Page no. 13) in token of having submitted the same today. This party was introduced to me by one Mr. Vijay N. Desai of Inter Trade Electronics (P) Ltd. Mr. Nazir Shah has given me the import declaration, photocopy of SSI certificate along with certificate of Directorate of Industries, stating that goods be cleared under concessional rate of duty. After giving these documents Mr. Nazir Shah told me that I should clear the goods under concessional rate of duty as they are manufacturer of ferrites. On the basis of these documents I prepare the Bill of Entry and filed in the Custom House." Therefore, it is clear that Mukesh Shah took an active part in the clearance of the goods also and the submissions by the learned Advocate that he was not concerned with the clearance of the goods is not factually correct. I reiterate that the statement of Mukesh Shah has not been retracted at any time and it being the statement recorded under Section 108 is an admissible piece of evidence. There is independent co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who, 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," The goods are found to be liable to confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962. As regards liability under Sections 111(d) 111(o) on admitted role of Mukesh K. Shah, which as it appears from the notice issued. "10. In his statement recorded under Section 108 of the Customs Act, 1962 on 18-6-91 Shri Mukesh Kuverji Shah has stated that : (i) they had cleared one consignment of Poly Vinyl Alcohol BP-20 vide B/e No. 2090/126, dated 26-6-90 imported by M/s. Cashmir Enterprises, Shivpuri, Srinagar; (ii) this party was introduced to them by one Mr. Vijay Desai of M/s. Intertrade Electronics (P) Ltd., Champaklai Industrial Estate, Sion, Bombay sometime in September, 1990; (iii) the introduction had taken place in their office and along with Mr. Desai, one Mr. Nazeer Shah was with them; (iv) Mr. Desai told him that Mr. Nazeer Shah is a friend of him and wanted to clear the consignment of PVA which had already come per vessel S.S. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Vijay N. Desai told him that he had already finalized with some Actual user in Kashmir for arranging certificate for clearing at concessional rate of duty; (viii) Thereafter one day Shri Vijay N. Desai had forwarded through his employee Shri Harish Dharamshi duplicate set of invoice, B/L and certificate of origin and original copies of OGL declaration duly signed on behalf of so-called Actual users in the name and style of M/s. Cashmir Enterprises, Shivpora, Srinagar, J K. (ix) Shri Vijay N. Desai requested him to get the documents noted in the Customs Department and told him that certificate for concessional rate of duty under Notification No. 345/86 issued by Director of Industries Commerce, J K Government along with SSI certificate fulfilling the A.U. conditions will be given to him by one Shri Nazeer Shah; (x) Thereafter the SSI certificate no. SSI-K/3775 dated, 9-10-90 for concessional rate of duty and SSI certificate and one sealed cover addressed to AC, Customs, Bombay was given to them by one person introducing himself as Shri Nazeer Shah in October, 1990; (xi) Shri Nazir Shah also told him that these documents were for the concessional r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had charged 50% of the 2% of value + duty from Shri Vijay N. Desai in cash form for this he had paid Rs. 9,000/- in case to Shri Parmanand Sharma including the amount Rs. 2,000/- (i.e. Rs. 1,000/- for the two fake lorry receipts); (xix) Shri Vijay N. Desai paid him Rs. 70,000/- for everything he had done; (xx) In his statement on 10-6-91 he told lies as Shri Vijay N. Desai had requested him not to tell the truth to the DRI and that he would manage it through Mr. Nazir Shah; (xxi) Shri Nazir Shah also telephoned him requesting him not to tell the truth to the Deptt. 12. Shri Parmanand S. Sharma, Partner of M/s. Richa Roadlines has stated in his statement recorded under Section 108 of the Customs Act that; (i) One Mr. Nazir Shah contacted him over phone and informed him whether he could deliver goods (PVA) from Bombay to Srinagar; (ii) Mr. Nazir Shah suggested that he would send the goods by local transport to his office from where it could be loaded in a lorry and dispatched to Srinagar. (iii) Mr. Nazir Shah told him that the goods were imported goods and already cleared from the Docks; (iv) The same day Mr. Nazir Shah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods had gone beyond the BMC limit and for obtaining the said 'N' form Shri Mukesh Shah gave him seven thousand rupees; (vii) The lorry receipts are bogus and no goods had been transported to Srinagar; (viii) He had issued bogus lorry receipts on the instructions of Shri Mukesh Shah with the idea that he would be getting more work from M/s. Shah Mehta. 14. In his statement dated 28-6-91 Shri Vijay Natwarlal Desai has inter alia stated that : (i) He is having manufacturing unit in the name of M/s. Intertrade Electronics Pvt. Ltd. doing sliting activity of Magnetic tape; (ii) They were importing raw material (jumbo rolls) of Magnetic tape and the same were cleared by Mr. Mukesh Shah of M/s. Shah Mehta during the period 1984 to 87; (iii) He knew one Mr. Nazir Shah of J K Srinagar for the last 8/9 years through his brother Shri Prakash N. Desai; (iv) Shri Prakash Desai is a LIC agent and Shri Nazir Shah is also a LIC agent and Travel agent; (v) He had no other business connection other than the import of Poly Vinyl Alcohol (PVA) BP-20 imported from Taiwan in the name of M/s. Cashmir Enterprises, Shivpura, Srinagar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises is in existence, there is no manufacturing activity; (xix) Shri Nazir Shah had told him that he (Shri Shah) will somehow manage to get the consumption on certificate showing the consignment having been consumed in the unit at Srinagar; (xx) He had paid a total amount of Rs. 18,70,000/- for 17 MT of. PVA at the fate of Rs. 110/- per Kg in cash to Mr. Nazir Shah in different instalments; (xxi) There is no evidence for this payment in the room of documents; (xxii) The duplicate set of documents were given to Mr. Mukesh Shah by him (Mr. Desai) through his employee Shri Harish Dharmsy; (xxiii) The OGL declaration duly signed were given to him by Shri Nazir Shah. (xxiv) It is true that he had invested the amount and given Rs. 6 lakhs, equivalent to the cost of documents, for retirement and that the certificate for availing concessional rate of duty under Notification No. 345/86 and a copy of SSI Certificate were arranged by Shri Nazir Shah. (xxv) He had sold the material to various parties the names of which he had to check from his record; (xxvi) Out of the quantity of 17 MT (850 bags), a balance of 5 MT (250 bags) are still lying at Gal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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