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TMI Blog2005 (6) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... he production had ceased at Halol plant. Stainless Steel Hot Rolled coils imported by USL and lying in the Customs Bonded Warehouse at CWC, Vashi were seized. 2.The statement of Shri A.S. Bhattar, Managing Director of USL was recorded. In his statement, he stated inter alia that electricity connection to Halol plant of USL was disconnected by the Gujarat State Electricity Board in September/October 1993 for non-payment of bills, that USL had account with Gulalwadi Branch of Bank of Baroda, which account was opened by him, that during the period August 1992 to December 1994, approximately Rs. 13.50 crores has been deposited in Gulalwadi Branch of Bank of Baroda and approximately Rs. 13.47 crores has been withdrawn from the account, that the money had been deposited into the account by Shri Jawahar P. Kanungo of M/s. Manek Metal Corporation, that he used to hand over blank cheques signed by him to Shri Jawahar P. Kanungo for withdrawal of amount from USL bank account, that DEEC licence dated 19-3-93 was issued in the name of USL, that the licence was utilised for import of raw materials such as Ferro Chrome, Ferro Silicon and Calcium Silicide etc., that he could not remember whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ferro Chrome, Ferro Silicide and Calcium Silicon (b) confiscation of above goods (c) confiscation of seized Hot Rolled Stainless Steel Coils (d) levy of interest at the rate of 24% on customs duty calculated from the date of clearance of goods and (e) penalties on USL, Shri A.S. Bhattar, Shri Jawahar Kanungo and its employees, Transporters and other Director of USL and Customs House Agent. 8.The Commissioner of Customs adjudicated the notice dropping the proceedings on the grounds that show cause notice issued by the Additional Director General, DRI, Mumbai was without jurisdiction and also that the notice was pre-mature for the reason that the first consignment was cleared by USL on 8-7-93 and the twelve months period for fulfilment of export obligation available under Licensing policy would come to an end on 8-7-94 and USL had applied for extension of period for fulfilment of export obligation to the DGFT hence these appeals by the Revenue. 9.We have heard both sides. 10.The Commissioner in his findings in Order-in-Original has held that : (1) The material imported by USL was cleared for Home Consumption but no evidence has been produced by USL as to how the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods for export produced by the importers. 12.In the light of the above findings of the Commissioner, we agree with the Revenue that the Commissioner ought to have concluded that imported goods have been used for the purposes other than the fulfilment of export obligations. His findings that the show cause notice is premature for the reason that the application has been made by USL to DGFT for extension of period for fulfilment of export obligation is also dearly erroneous, since USL have net contested the evidence brought on record by the Department of the fact that USL had ceased the production in their factory during the relevant period and since USL did not produce any evidence that they have utilised the imported duty free goods in the manufacture of final product for export. The goods are admittedly not available for production of export goods or traceable by the Investigating Officers and USL has not disclosed their location and therefore, the question of USL utilising imported materials and fulfilment of its export obligation, if the period therefor is extended, does not arise. 13.We also hold that non-availability of the goods for confiscation is not sufficient to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of debts and short-term loans, this has not been disclosed to BIFR and this amount has also not been reflected in the Balance Sheet. He also failed to give particulars of so called debtors of USL. He also admitted that the details of raw material imported under DEEC have not been shown in the raw material stock account maintained at Halol factory as on 31-3-93, 31-3-94 and 31-3-95. He has also admitted that he had not informed the bank about the duty free imports of raw material made by his company which were covered by LUT. We, therefore, impose a penalty of Rs. 25,00,000/- upon him. 16.Shri Jawahar Kanungo is also liable to penalty, as his involvement in the offence is clearly established. He has admitted that as a Proprietor of M/s. Manek Metal Corporation and Director in M/s. Kanungo Trading Metals Pvt. Ltd. and Manek Metal Trading Pvt. Ltd., he handled imports of USL, maintained liaison with M/s. H.G. Mehta Company and M/s. Jabee Co. for clearance of raw material imported duty free by USL and that he had directed M/s. Ashok Goods Transport to transport the raw material imported duty free by USL. He has also admitted that he had paid the Customs Duty and CHA charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We, therefore, impose a penalty of Rs. 25,00,000/- upon Shri Kanungo. 17.Regarding other Respondents, material on record is not sufficient to bring out their involvement in the offence committed by USL so as to hold them liable to penal action under Section 112 of the Customs Act. It has not been satisfactorily established that they dealt with the goods in any manner that rendered them liable to confiscation. We, therefore, hold that they are not liable to penalty and accordingly uphold the Commissioner's order dropping penalty proceedings against them. In the result, we hold as under : - (a) The Duty demand of Rs. 4,04,40,590/- is confirmed. (b) The goods in respect of which the above demand is confirmed are liable to confiscation. (c) Penalty of Rs. 50,00,000/- is imposed on USL. (d) Penalty of Rs. 25,00,000/- is imposed on Shri A.S. Bhattar. (e) Penalty of Rs. 25,00,000/- is imposed on Shri Jawahar Kanungo. (f) No penalties are imposed on the remaining respondents. 18.In the light of the above, the Appeal Nos. C/484/98 (USL), C/475/98 (Shri A.S. Bhattar) and C/483/98 (Shri Jawahar P. Kanungo) are allowed and other appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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