J.K. SYNTHETICS LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THESE appeals raise a common question of law hence they are being disposed of by a common order. Relevant facts that arise for consideration are all the appellants herein (who are categorized as importers and their employee, Tank Storage Terminal and their employees, CHA and their employees, Authorized Signatories for CHA, etc.) are held liable for penalty under the provisions of Sec. 112(a) of the Customs Act, 1962 on the ground that they had engaged in defrauding of Cus -toms Duty to the exchequer. On an investigation, it was noticed by the authorities that Shri Malleshwar Rao and Shri Jayesh were engaged in forging the signatures of the cashier of the Customs Dept. on the TR6 challans and forging signatures of Customs Officers on the reverse of photocopy of the duplicate copy of Bill of Entry and cleared consignments from the tank terminals. The modus operandi of Shri Malleshwar Rao to forge signature of the cashier of Customs on TR6 challans against the demand draft which were received by him and utilized the said demand drafts for clearance of consignments of various other importers by encashing the amounts indicated on the demand drafts by collecting the cheques from the importers on various names. The Adjudicating Authority has in OIO clearly recorded that the main brain behind this fraudulent activity and forging is Shri Malleshwar Rao in cohoots with Shri Jayesh. It is also recorded in the impugned order that the importers had made up the customs duty to the Govt. of India. Adjudicating Authority has held against all the appellants herein and imposed penalties on them. For brevity sake, I categorize the appellants as importers their employees, Storage terminal and their employees, CHA's or employees of CHA.

(2.) THE learned Counsel appearing for importers would submit that the Adjudicating Authority has erred in imposing penalty on them under the provisions of Sec. 112(a) of the Customs Act, 1962 inasmuch as, they had paid the customs duty to CHA who had defrauded by forging the documents. It is their submissions that in any case they have discharged the entire customs duty taking a double blow. It is their submission that the judgment of Hon'ble High Court in the case of M. Sashikant & Co. - : 1987 (30) E.L.T. 868, judgment of Tribunal in the case of MNS Exports Pvt. Ltd. -, 2007 (219) E.L.T. 649, Hetero Drugs Ltd. - : 2004 (168) E.L.T. 211, ITW India Ltd. - : 2006 (198) E.L.T. 117 are relied upon to submit that the importers had no idea of fraud being committed by the individuals hence they cannot be penalised and they cannot be convicted.

(3.) LEARNED Counsel appearing on behalf of the CHA's and individuals would submit that the Adjudicating Authority in the impugned order has specifically recorded that the entire mastermind of forging the signature of the customs officer and cashier of Customs is one Shri Malleshwar Rao and it also recorded that Shri Malleshwar Rao has admitted to such activity on his part. It is his submission that the penalties imposed on their clients is incorrect as they would not be aware of the forgery committed by Shri Malleshwar Rao.