Shri Harishankar vs C.C. Lucknow

[Arising out of Order-in-Appeal No. 65/Cus/Alld/2011 dated 30.09.2011 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Allahabad].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

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?

Shri Harishankar .Appellants

Vs.

C.C. Lucknow .Respondent

Appearance:

Ms. Rinki Arora, Advocate for the Appellants

Shri. V.P. Batra, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 28.01.2015

FINAL ORDER NO. 50288/2015-CU(SM)

Per Ashok Jindal:

The appellant is in appeal against the impugned order confirming the penalty of Rs.50,000/- under Section 11(2) of the Customs Act 1962.

2. The facts of the case are that silk yarn of Chinese origin was recovered from the residential premises of the appellant during the course of the investigation. The appellant disclosed that this yarn belong to Shri Deepak Mishra and Shri Narayan Mundra. Subsequently the appellant rejected the statement initially given and claim to be the owner of the said goods. But again changed their statement and said that they made the statement claiming ownership of the goods under pressure from Shri Deepak Mishra and Shri Narayan Mundra and submits that appellant has nothing to do with the goods. As the appellant did not made proper statement and keep changing their statements, therefore the penalty of Rs.50,000/- was imposed on the appellant by the lower authorities on the premise that the appellant has aided and abetted for activity of smuggling of goods. Aggrieved from the said order appellant is before me.

3. The Ld. Counsel for the appellant submits that silk yarn of Chinese origin is not notified goods under section 123 of the Customs Act, 1962. Therefore, to allege that goods are of smuggling in nature, the onus lies on the revenue. As revenue has failed to discharge their onus therefore goods cannot be held are of smuggling in nature. In these circumstances, penalty is not imposable.

4. On the other hand Ld. AR submits that in the case of Satyanarayana Silk Koti Vs. C.C. Bangalore-2011 (264) E.L.T. 56 (Kar.) which has been affirmed by the Honble Apex court. The Honble High Court held that although the goods are not notified goods under section 123 of the Customs Act but the assessee has failed to prove that licit source of acquisition of the goods.

5. Therefore goods are liable for confiscation and consequently redemption fine and penalty is imposable.

6. Heard the parties. Considered the submissions.

7. In this case also the appellant has failed to give the source of licit acquisition of the goods and only stated that these goods belong to Shri Deepak Mishra and Narayan Mundra. In these circumstances, relying on the decision of Satyanarayana Silk Koti (Supra) I hold that penalty on the appellant is imposable. Further, I find that in this case goods have been absolutely confiscated.

8. Therefore I hold that penalty of Rs.50,000/- imposed on the appellant is highly excessive. Therefore I reduce the penalty to Rs.25,000/-. With these terms appeal is disposed off.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

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C/634/2011-CU(SM)