Cus - Appellants had approached Settlement Commission & admitted liability and also charges levelled in SCN - in view of admission before statutory authority, Penalties correctly imposed - appeal dismissed: CESTAT
By TIOL News Service
MUMBAI, SEPT 09, 2014: GOODS imported by M/s Sonu International were examined by the Customs authorities and it was found that the importer described the goods as unbranded whereas the goods were found to be of Philips brand. During investigation it was found that earlier four consignments of similar goods were imported by M/s. R.R. Exports. Statement of Shri Rajendra Doshi, proprietor of M/s. R.R. Exports, was recorded under Section 108 of the Customs Act, whereby he stated that the four consignments were imported by one Shri Shankarlal Sharma and Shri Manu Advani by using his firm's name and IEC code. The statements of Shri Shankarlal Sharma and Shri Manu Advani were recorded u/s 108 of the Customs Act whereby they admitted that the goods were imported under the name of M/s. R.R. Exports. However, the same were unbranded goods and appropriate duty has already been paid. Enquiries were made from M/s. National Shipping Agency, Custom House Agent of M/s. R.R. Exports. Shri Manish R. Sangani, partner of the CHA, in his statement admitted that the goods imported by M/s. R.R. Exports were dealt with by them and all the documents for clearance were received either from Shri Shankarlal Sharma or Shri Manu Advani. The draft in respect of the customs duty was also deposited by Shri Shankarlal Sharma. The CHA also admitted that the goods were branded goods whereas the same were declared by the importer as unbranded. On this evidence, show cause notice was issued demanding differential duty of Rs.15,94,827/- and for imposition of penalties.
The adjudicating authority confirmed the demand and imposed penalties.
Before the CESTAT, it is the contention of the appellant that the importer is M/s R.R. Exports and the appellant, Shri Shankarlal Sharma, only introduced Shri Umesh Advani to the proprietor of M/s. R.R. Exports. There is no evidence on record to show that the appellant Shri Shankarlal Sharma has previous knowledge regarding misdeclaration of goods imported in the name of M/s. R.R. Exports. The contention on behalf of the appellant, Shri Umesh Advani, is also that the unbranded goods were imported and there is no evidence on record to show that the goods in question were branded goods. The appellant produced copy of a communication received from the supplier to show that the goods were unbranded goods hence the penalties are not sustainable.
The Revenue representative while relying upon the findings of the adjudicating authority submitted that the appellants approached the Settlement Commission to settle the dispute and before the Commission they had admitted the full duty as demanded by the Revenue and also admitted that the appellants are the actual importer in respect of the goods which are imported in the name of M/s. R.R. Exports and they also accepted and admitted all allegations and charges contained in the show cause notice. It is further submitted that the Settlement Commission rejected the applications filed by the appellants on the ground that the bills of entry were filed in the name of M/s. R.R. Exports and who had not filed any application to settle the dispute. Inasmuch as in view of the admission made before the Settlement Commission, the appellants have no case, hence the impugned order is rightly passed submitted the AR.
The Bench observed -
"8. We find that on receipt of the show cause notice, both the appellants approached the Settlement Commission whereby the appellants admitted their liability on the ground that the appellants are the actual importers and also accepted and admitted the allegations and charges made in the show cause notice. In view of the admission made by both the appellants before a statutory authority i.e. the Settlement Commission regarding misdeclaration of the goods imported in the name of M/s. R.R. Exports, we find no merit in the contention of the appellants…."
The appeals were dismissed.
In passing: "If the contention on behalf of the Revenue that since applicant has admitted duty liability before Settlement Commission the duty had to be upheld straightaway, is accepted, in that case, there is no question of further adjudication by the CE Officer" - Gujarat High Court in Maruti Fabrics - 2014-TIOL-1090-HC-AHM-CX.
(See 2014-TIOL-1704-CESTAT-MUM)
