S. SURESH Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE application is for waiver of predeposil and stay of recovery in respect of the amount of penalty of Rs. 25 lakhs imposed on the applicant (appellant) by the Commissioner. After examining the records and hearing both sides, we find that the appellant has been found, along with one Shri Vijayaraghavan and one Shri Thomas, as having abetted smuggling cigarettes of foreign origin ("Benson and Hedges") concealed in a consignment of computer tables. The relevant bill of entry was filed in the name of M/s. Om Export and Import, Kancheepuram, holder of I.E. Code No. 0401016706 owned by one Shri Rajaselvam. It was actually filed along with other import documents by Shri Thomas under instructions from the appellant (Shri S. Suresh) and his employee Shri Vijayaraghavan. None of these persons was a Customs House Agent. Investigations revealed that Shri Rajaselvam had not placed any order for import of computer tables or cigarettes. Shri Rajaselvam further stated that his I.E. code had been misused by one Shri Ravi alias Zialuddin. Shri Suresh and Shri Vijayaraghavan, in their statements, staled that the description of the goods in the consignment were fully known to them. Shri Vijayaraghavan proposed to clear the goods and Shri Suresh endorsed the same albeit with hesitation. As instructed by Shri Suresh, Shri Vijayaraghavan handed over import documents to Shri J. Thomas who filed the bill of entry with allied documents and secured clearance of the goods. It further appears from the records that M/s. ITC Ltd.; upon coming to know the above transactions, approached the department with a claim that they had the monopoly of importing and marketing "Benson and Hedges". The company eventually obtained an order from High Court injuncting the department from auction -selling the cigarettes. Learned Commissioner has noted that Shri Ravi was cited as the smuggler of cigarettes by Shri Suresh and Shri Vijayaraghavan in their respective statements. But neither of them furnished the exact identity of the so -called smuggler. For want of his identity, the Commissioner did not proceed further against Shri Ravi. On the basis of available evidence, he has found that Shri Suresh and Shri Vijayaraghavan were the main persons involved in the smuggling of cigarettes. This evidence comprises mainly the statements recorded by the DRI under Section 108 of the Customs Act. It is on this basis that the penalty of Rs. 25 lakhs was imposed on Shri Suresh (appellant) under Section 112(a) of the Act and a penally of Rs. 5 lakhs was imposed on Shri Vijayaraghavan under the same provision. After examining the records and hearing both sides, we have not found prima facie case for the appellant against penalty on him. It appears from the evidence on record that he was aware of the offending nature of the cigarettes when he, though hesitatingly, instructed his employee (Shri Vijayaraghavan) to clear the goods through Shri j. Thomas. The very fact that, in the beginning, the appellant was unwilling to take up the job of clearance of the contraband and he ultimately decided to do it and issued instruction for the purpose indicates metis rea. This fact is evidenced by the statements given by Shri Suresh and Shri Vijayaraghavan themselves. Hence prima facie the conduct of the appellant and his employee was in the nature of rendering the goods liable for confiscation under Section 111 of the Customs Act and, by such conduct, they rendered themselves liable for penalty under Section 112 of the Act.

(2.) THE role of Shri Suresh and Shri Vijayaraghavan in the whole episode is apparently comparable. However, while imposing a penalty of Rs. 25 lakhs on Shri Suresh, learned Commissioner chose to impose a lesser penalty on Shri Vijayaraghavan. For the purpose of Section 129E, we are asking Shri Suresh to predeposit this lesser amount. Accordingly, the appellant shall predeposil Rs. 5 lakhs (Rupees Five lakhs) within 8 weeks (this period being fixed as requested by Counsel) from today and report compliance on 2 -4 -2007.