THIRD MEMBER ON REFERENCE : SHRI CHITTARANJAN SATAPATHY, MEMBER (T) CHAMPAKLAL P. DESAI Vs. COMMISSIONER OF CUSTOMS, KANDLA

JUDGEMENT

(1.) THE brief facts of the case are that one M/s. Efficient Exports are alleged to have obtained six advance licences by submitting manipulated documents against which goods like HDPE granules were imported which instead of being used for manufacture of export goods were sold off in the domestic market. Some of the imports were cleared under above advance licence which were sold at a premium to one Shri Ravi Mittal of M/s. East West Enterprises and others. The licences were sold to Shri Ravi Mittal by one Shri Mahesh Ganatra who knew that the licenses were obtained by manipulation but sold them at a premium to Shri Ravi Mittal and others. Shri Ravi Mittal was introduced to Shri Mahesh Ganatra by Shri Champaklal Prabhudas Desai who also acted as a broker and got a premium of Rs. 1.5 lakhs in cash for selling the said licences as his commission. The Show Cause Notice was accordingly issued to all concerned including Shri Champaklal Prabhudas Desai who is the appellant before us. The role of Shri Champaklal Prabhudas Desai is that he acted as a broker for the sale of licence which he knew was non -transferable and could not be sold and there by associating himself with the illegal sale of the advance licence abetted the sale of goods which were imported against the licence in violation of conditions of Notification 30/97 dated 1 -4 -97 and there by rendered himself liable for penal action under Section 112(a) of the Customs Act, 1962.

(2.) THE learned advocate for the appellant submits that he is not licence broker and is not engaged in any import export business and has not directly dealt with Shri Ravi Mittal but has only helped his friend who was bed ridden to complete the transaction which Shri Mahesh Ganatra his friend has undertaken. For this act he got Rs. 25,000/ - as his commission and not Rs. 1.5 Lakh as stated in the order. He has no knowledge that the licence could not be transferred until the export obligation was fulfilled and that he was not concerned in any manner that the goods which were cleared duty free against the said licence could not be sold and therefore he was not liable to any penalty under Section 112(a). In this regard reliance was placed on the Tribunal decision in the case of Commissioner of Customs, Mumbai v. M.D. Corporation - 2001 (127) E.L.T. 270 (Tri. -Mum.) where in it was held that Customs have no jurisdiction to impose penalty on the broker for illegal trading for non -transferable advance licence under the import policy.

(3.) THE learned DR Shri Umashandar however submits that this was a case of conspiracy where all the brokers of the licences and the various other noticees conspired to import duty free goods against advance licences which were illegally procured by manipulation of documents which Shri Mahesh Ganatra knew and to whom Shri Ravi Mittal was introduced by the appellant Shri Champaklal Prabhudas Desai and accordingly penalty was imposable under Section 112(a) of the Customs Act, 1962. He referred to the decision of the tribunal in the case of Nandlal Kishandas Khemani v. Commissioner of Customs (Import), Mumbai - 2005 (179) E.L.T. 316 (Tri -Mumbai) wherein it was held that penalty was imposable on broker as his involvement is with evasion of duty and not as a licence broker.