MODESTO CORPN. Vs. CC

JUDGEMENT

(1.) Pursuant to information that Shri Ishwar Panjabi, owner of M/s. Modesto Corporation , Delhi was fraudulently importing and selling various goods in the guise of diplomatic cargo, the Customs Officers intercepted one Maruti Van No. DID -7306 in Sanik Farm, New Delhi of the morning of 8.11.88. Shri G.D. Mehta was driving the said van and he was the sole occupant. The van contained five cardboard cartons. Upon opening the said cartons, they were found to contain 4600 rolls of Konica DX Colour film of Japanese origin valued at about Rs. 3.0 lakhs in the Indian market and Rs. 92,000 GIF. Since Shri Mehta failed to show any document evidencing lawful import or possession of the films they were seized under Section 110 of the Customs Act, 1962. So was the Maruti Van No. DID -7306. Upon enquiry, Shri Mehta disclosed that these goods were obtained from Shri Ishwar Panjabi and were collected from 201 Sanik Farm, New Delhi. Thereupon, Customs Officers searched those premises. The search resulted in the recovery of 676 pieces of video cassette recorders, 357 pieces of video cassette players, 59500 colour film rolls of foreign origin collectively having market value of over Rs 1.5 crores and a CIF value of about Rs. 55 lakhs. These goods were ascertained to be part of a consignment imported through Calcutta Port in the name of Liberian Embassy and that the remaining goods were lying in the godown of M/s Amritsar Bombay Carriers (M/s ABC). That godown was searched on 20.11.98. This search led to recovery of VCRs/VCPs and photographic colour films of foreign origin having market value of Rs. 2.3 crores and a CIF price of about Rs. 80 lakhs. Further enquiry also showed that these goods were imported at Calcutta Port in the guise of construction materials and that they had been cleared without payment of any customs duty under a certificate issued by Ministry of External Affairs for duty free clearance of construction materials. As a part of investigations, the Customs Officers also searched the office and residential premises of Shri Ishwar Panjabi, which led to seizure of Indian currency of less than Rs. 3.0 lakh etc. The Officers also recovered a diary and some business papers from Shri Ishwar Panjabi. Shri Ishwar Panjabi explained the entries in the diary and papers as relating to the transactions with various parties in Bombay etc. who had purchased from him air -conditioners, photocopiers etc. which has been obtained as imports by various Embassies. At the end of investigations Show -cause notice C.No. VIII(SB) 10/230/88/3804 dated 12.5.1989 was issued by the Additional Collector of Customs proposing to confiscate the goods under seizure and to impose penalties on 32 persons. This Show -cause notice was partly adjudicated vide Order -in -Original No. 326/91 dated 23.12.91 passed by Additional Collector of Customs and goods under seizure were by the Collector of Customs. This adjudication order stated that the issue relating to penalty on the 32 noticees will be decided separately. This order became final with the disposal of appeal filed against it by this Tribunal. The issue of penalty was adjudicated subsequently vide Order -in -Original No. 98/A&R/V.S/97 dated 31.10.97 by Commissioner of Customs, Delhi imposing penalties on many parties. All the present appeals are directed against penalties imposed under that order. Since all the appeals are directed against the same order of adjudication and issue are interconnected, these appeals were heard together and are being disposed by this common order.

(2.) We have perused the records and considered the submissions made by both sides.

(3.) As already noted the penalties are in connection with the role of present appellants in the import, transport, purchases, possession, distribution etc. of the goods under seizure as well as the goods mentioned in the transactions recorded in the diary and other papers kept by Shri Ishwar Panjabi. The appellants fall into two main groups (1) persons connected with the confiscated goods (i.e. goods imported in the name of the Liberian Embassy) and (2) persons who are mentioned in the diary of Shri Ishwar Panjabi. We proceed to take up the appeals under these two headings.