Cus - Smuggling - Fact that appellant was only a low-paid employee does not in any manner absolve him of having contravened provisions of law which attracted penalty: HC
By TIOL News Service
NEW DELHI, DEC 24, 2018: ON suspicion of mis-declaration and smuggling of contraband, the Customs authorities detained four containers, for which Bills of Entry (BOE) were filed on behalf of M/s. Shivani Industries. It was found that the containers were stuffed with cigarettes, radial tubeless tyres and premium brand foreign liquor.
The BOEs were filed by a G-Card holder for M/s. Rama Kant Sahu and the documents were apparently handed over to him by Mr. Malkiat Singh, proprietor of the importer. The involvement of one Mr. Inderjit was also discerned. The goods were seized u/s 110 of the Customs Act, and notices were issued to the importer, its proprietor, Mr. Inderjit Singh and Mr. H.S. Chadha.
The investigations had inter alia led to the seizure of documents in the form of electronic/digital files found in the laptop of Mr. H.S. Chadha who used to deal with foreign tyre manufacturers. The other appellant - Mr. Inderjit Singh is alleged to have assisted Mr. Malkiat Singh in the said operations.
Based on the statements recorded and the investigations done, the adjudicating authority concluded that Mr. H.S. Chadha was the mastermind behind these operations.
In adjudication proceedings, demands in excess of Rs. 10 crores was confirmed against the noticee and personal penalties were also imposed.
The appeals by Mr. H.S. Chadha and Mr. Inderjit Singh were rejected by the CESTAT.
Therefore, they are before the High Court and argue that cross-examination of Mr. Malkiat Singh was not provided; that apart from the statements and so-called material seized from Mr. Chadha, no link could be established in any credible manner between him and the alleged smuggling of contraband; Mr. Inderjit Singh was a low-paid employee and he had no knowledge of the smuggling activities given that whatever he did was at the behest of Mr. H.S. Chadha, therefore, the imposition of penalty to the tune of Rs. 1 crore was disproportionate.
The High Court extracted paragraphs from the order-in-original concerning the above submissions made by the appellants and further observed that there was no infirmity with the order-in-original.
In as much as it is held that the order is not unreasonable because -
+ Revenue did not rely merely upon the statement of Mr. Malkiat Singh - who later claimed, was a mere lender and had no substantial means - but also upon other material, including crucial evidence seized from the premises of Mr. H.S. Chadha. This Court had the occasion to consider Mr. Chadha's appeal to the CESTAT which did not deny his foreknowledge of Mr. Malkiat Singh. In the appeal he merely stated that he acted as a consultant. If those facts are taken into account, the emails (especially the email dated 28.04.2014 between Sh. H .S. Chadha and Sh. Inderjt Singh regarding K-Fortune General Trade LLC) exchanged with the foreign suppliers, pose more questions. In these circumstances, the plaintiff's request for cross-examination and its rejection by the Revenue cannot be characterized as violation of principles of natural justice.
+ As far as the appeal of Mr. Inderjit Singh is concerned, the Court is of the opinion that his involvement in the whole operation was also with knowledge. The fact that he was an employee of Mr. H.S. Chadha, in the opinion of the Court, does not in any manner absolve him of having contravened provisions of law which attracted penalty. Given that Section 112 of the Act, prescribed an outer limit of penalty amount equivalent to duty (which in this case amounted to over Rs. 10 crores), the imposition of penalty at the rate of Rs. 1 crore cannot be considered disproportionate.
Concluding that no question of law arises, the appeals were dismissed.
(See 2018-TIOL-2673-HC-DEL-CUS)
