M/S.Metacon Industries vs Commissioner Of Customs(Prev.), ...

Appeal No. CU/199/06

(Arising out of the order in Appeal No. 02/Cus/Com(P)/WB/2006 dated 24.02.2006 passed by the Commissioner of Customs (Prev.), Kolkata)

FOR APPROVAL AND SIGNATURES OF

SHRI H.K.THAKUR, HONBLE TECHNICAL MEMBER

1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not ?

3. Whether Their Lordships wish to see the fair copy : of the Order? 4. Whether Order is to be circulated to the Departmental : Authorities?

M/s.Metacon Industries APPLICANT(S) VERSUS Commissioner of Customs(Prev.), Kolkata ...RESPONDENT (S)

APPEARANCE:

SHRI N.K.CHOWDHURY, ADVOCATE FOR THE APPELLANT SHRI A.KUMAR, AC(AR) for the Respondent

CORAM:

SHRI H.K.THAKUR, HONBLE TECHNICAL MEMBER

Date of Hearing: 09.10.2015 Date of Decision: 09.10.2015

ORDER NO. FO/A/75601/15

Per Shri H.K.Thakur

This appeal has been filed by the appellant against a penalty of Rs 20 lakh imposed upon the appellant by Commissioner of Customs (Prev.) Kolkata, west Bengal under OIO No. 02/CUS/Com(P)/WB/2006 dt 24/02/2006.

2 Sh. N.K. Chowdhary (Advocate) appearing on behalf of the appellant argued that no provision of the Customs Act 1962 has been quoted in the order portion of OIO dt 24/02/2006 as to under which Section penalty of Rs. 20 lakh has been imposed upon his clients. Learned Advocate argued appellant had not imported the present consignment of Zinc Flux Skimmings from Bangladesh for which bills of entry were been filed at Malidapur land Customs Station. That appellant has not authorized any CHA to file any bills of entry on his behalf and had no knowledge as to who has used their name while filing bills of entry. That appellant could not import any Zinc Flux Skimmings when their authorization issued by Ministry of Environment & Forest has expired that even the CHA who filed the bills of entry has not implicated the appellant and that CHA has confirmed to the effect that he has not received any authorization from the appellant. That adjudicating authority in his findings has only discussed circumstances on the basis of presumption & surmises that appellant is the importer of the contraband consignments.

2 Learned Advocate relied upon the following case laws in support of his argument:-

(i) Pradeep Arora Vs Commissioner of Customs, Chennai [2002(150) ELT 1301(Tri.-Del.)]

(ii) Narendra B. Jain Vs Commissioner of Customs (Adj.), Mumbai [2014(304) ELT 563 (Tri.-Mumbai)]

(iii) AIA Engineering Ltd. Vs Commissioner of Customs, Ahmadabad [2011(274) ELT 470 (Tri.-Ahmd.)]

(iv) R.K. Patel & Co. Vs Commissioner of Cus. & C. Ex., Nasik [2008(227) ELT 558 (Tri.-Mumbai)]

(V) Sunderlal Vs Commissioner of Customs (Prev.), Patna [2004(165) ELT 250 (Tri.-Kolkata)]

(Vi) J.S. Oberoi Vs Commissioner of Customs, Chandigarh-I [2014(308) ELT 526 (Tri.-D

(Vii) Chemworld Inc. Vs Commissioner of Cus. (Import), Nhava sheva [2014(305) ELT 153 (Tri.-Mumbai)]

(Viii) B. Lakshmichand Vs Government of India [1983(12) ELT 322 (Mad.)]

(ix) Delco Precitone Jewelers (P) Ltd. Commissioner of Cus. New Delhi [2000 (124) ELT 1105 (Tribunal)

3. Sh. A. Kumar AC (AR) appearing on behalf of the Revenue made the bench go through the findings of the OIO passed by the Adjudicating authority. It was his case that documents enclosed with the bills of entry were such which could have been made available only with the consent & knowledge of the appellant. Learned AR thus strongly defended the order passed by the Adjudicating authority.

4. Heard both sides & perused the case records. The issue involved in the present appeal is whether appellant is liable to penalty and whether he should be held to be the importer of consignments of zinc Flux Skimmings for which two bills of entry were filed by CHA M/s. R.N. Lal & Bros. It is observed from the case records that appellant has denied to have imported the consignments for which bills of entry were filed by the CHA. The signatures on the bills of entry have been found to be not made by the appellant. Even the CHA who filed bills of entry has not implicated the appellant to have authorized him for filing the impugned bills of entry There are few statements of Sh. Nanda Ganguly , Sh. Uttam Swarckar, a Sircar holder of CHA , Sh. Sunil Agarwal, a metal Trdev and Md. Fazlul Hoque to the effect that appellant was making certain enquires regarding transportation & importation of zinc Flux skimmings. Penalty under Sec  112 of the Customs Act 1962 can be imposed only upon on importer or any person who claims himself to be an importer. Appellant has neither filed any bill of entry nor is he claiming the ownership of the imported goods. Circumstantial evidences discussed by the adjudicating authority only raise a suspicion about the appellant but it is a settled position of law now that suspicion howsoever grave can not take the place of an evidence. There is no evidence on record that appellant has signed the bills of entry and has given all the documents personally to the Customs House agent or any other person. Penalty can not be imposed upon the appellant on the basis of suspicion created by presumption & surmises by holding him to be the importer.

4.1 Appellant has relied upon, interalia, on the case laws of Narendra B. Jain Vs CC(Adj) Mumbai (Supra) and Chemworld Inc Vs CC (Import), Nhava sheva to argue that no penalty is imposable upon him as appellant is not the importer. Para- 2,6.1 & 6.2 of the relied upon case law Chemworld Inc Vs CC (import) Nhava sheva (Supra) are relevant & are reproduced below:-

 2. The appellants, M/s. Chemworld Inc., Ahmadabad, were issued with a show cause notice dated 22/4/2009 for fraudulent import of sodium sul-phate. However, neither the appellant nor anyone filed any bill of entry or claimed to be the importer of the goods. Nevertheless, since the documents received showed the appellant as the consignee, action was initiated. The investigating agency, DRI recorded a statement of the appellant wherein the appellant confirmed that they had not imported the said consignment and had also written a letter to the foreign supplier to that effect. Nevertheless, a show cause notice was issued to the appellant proposing to impose penalties for lending their the IEC code to somebody else. 6.1 We find that the issue involved in the present case is very strange one. Any charge of violating the provisions of Customs Act would arise only when somebody files a bill of entry for import of the goods and claims himself to be the importer. In the present case as is evidenced from the records no bill of entry has been filed and therefore, violating the provisions of Section 111 (M) of Customs Act would not arise at all. Secondly, the appellant did not have any IEC code at the time of importation: therefore, lending of IEC code to anyone else also would not arise. Consequently there cannot be any violation of Rules 7 & 11 of the Foreign Trade (Regulations Rules attracting the provisions of Section 111 (D) of the Customs Act. 6.2 We do not understand how in such a scenario can the Customs authorities proceed against the appellant and impose penalty when no cause of action has arisen. The said action is clearly unsustainable in law. Accordingly, we set aside the impugned order imposing penalty on the appellant.

The ratio above laid down by CESTAT Mumbai also fortifies the views of the bench expressed in Para- 4 above.

5. In view of the above observations & settled proposition of law penalty imposed upon the appellant is set aside & appeal of the appellant is allowed.

(Operative part of the order was pronounced in the open court.)

(H.K. THAKUR) TECHNICAL MEMBER

Tushar kumar