RAVISH KAMATH Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) In these appeals C.S.T.A. Nos. 3 and 2/2008 is filed by Mr. Ravish Kamath, Chief Executive Officer of M/s. Big Bags India Pvt. Ltd. and C.S.T.A No. 31/2007 is filed by Mr. Suresh Kumar Ramsisaria, Director of M/s. Chakrapani Vyapar Pvt. Ltd., possessor of raw materials supplied by the exempted Appellant-Company questioning the common order passed by the Customs Tax Appellate Tribunal' (hereinafter in short called as Tribunal') in so far as levy of penalty for violation of certain terms and conditions of 100% Exemption to the above company vide Notification No. 52/03-CG dt. 31-3-2003 issued under the Customs Act of 1962 (hereinafter in short Act). In so far as other two appellants are concerned, they have challenged the penalty imposed upon them u/sec. 110(o) of the Act for non-complying with the terms and conditions of Notification granting exemption in favour of the applicant in the first appeal referred toand further direction issued by the Assessing Officer u/sec. 112(b) of the Act for confiscating of the goods framing certain substantial questions of law which are subsequently re-framed by the learned counsel for the appellants by filing a memo dt. 2-3-2008, in so far as appeal No. 2/2008 is concerned and in so far as appeal Nos. 3/2008 and 31/2007 are concerned the learned counsel for the appellants contended that the penalty imposed upon them u/sec. 112(b) of the Act, particularly in appeal No. 3/2008 for non-compliance with the terms and conditions of Exemption Notification granted in favour of the appellant-Company, who is an exporter with regard to importing of goods with exemption of payment of customs duty to facilitate it to use such Imported goods as raw materials for manufacture of the goods and export 100% of the same. The duty exempted imported goods were sold on payment to the appellant in C.S.T.A. No. 31/2007 and therefore imposed penalty upon them under Section 112(b) of the Act for non-compliance with the terms and conditions of the exemption granted in favour of the co-appellant in Appeal No. 2/2008 and imposed penalty under Section 111(o) upon the said appellant-Company urging various grounds and prayed to set aside the impugned orders by answering the substantial questions framed in the Appeals.

(2.) The undisputed facts of the case are referred to by the Customs Appellate Tribunal in the impugned judgment that the levy of penalty on the appellants is after following the procedure contemplated under the provisions of the Customs Act read with Rules and after giving opportunity to the appellants to file their statement of objections and participate in the proceedings. The Assessing Officer has passed an order by recording a finding holding that transporting 100% duty free imported goods in favour of the appellant-Company in the first appeal to use the same as input goods for manufacture of 100% export goods with certain terms and conditions, the same is violated by it. The Adjudicating Authority while demanding the customs duty has invoked condition No. 3(d)(I)(ii) of the Notification No. 52/2003-Cus., dated 31-3-2003 as amended read with Section 72(d) of the Customs Act, 1962 and also condition No. 4(a)(ii) the Notification No. 22/2003-Central Excise dated 31-3-2003 as amended. After satisfying the material evidence on record by the Assessing Officer has held, that the goods obtained duty free by the appellant-company have been diverted to M/s. Chakrapani Vyapar Pvt. Ltd. which is in violation of the exemption notification granted in favour of the appellant-company in Appeal No. 2/2008. The appellant in C.S.T.A. No. 31/2007 is the Director of the transferee company on whom the penalty under Section 112(b) of the Act is levied. Assailing the correctness of the said findings they filed appeal straightaway to the Tribunal to CESTAT, urging various grounds, contending that the findings and reasons recorded by the Assessing Officer with regard to violation of terms and conditions of the Notification dated 31-3-2003 with regard to 100% exemption of raw materials in favour of the Company in Appeal No. 2/ 2008, which company has re-supplied the goods from whom he has borrowed is the defence put forward by it, which is not accepted by the Assessing Officer and Appellate Authority. The plea of the Company is that it has borrowed the raw materials from appellant in C.S.T.A. No. 31/2007 for the purpose of manufacture of 100% export goods to meet out its commitment in the agreement for supply of goods. No doubt, the said company has not obtained permission from the competent authority. It has conceded that there may be contravention in this regard to that extent the penalty levied against the Company is justified and not levying the customs duty under provisions of Section 28 of the Act, further levying excise duty also upon the appellant- company in the first appeal for contravention of the terms and conditions of exemption order granted in its favour in respect of raw material obtained by it at the time of importing the goods in favour of the Company to facilitate it to manufacture the goods by using 100% duty free imported goods to export the same to foreign countries and earn foreign exchange.

(3.) Learned counsel for the appellant Shri K.S. Ravishankar, submits that both customs, excise duty and penalty levied upon the company and its Chief Executive Officer is erroneous in law. This aspect of the matter is not considered by the Appellate Tribunal while considering the case put forth before it by the company. Therefore, the learned counsel requests this Court to answer the re-framed substantial questions of law in favour of the assessee and requests this Court to allow the above appeals filed both by the company and its C.E.O. by setting aside the impugned common order passed by the Tribunal.