SUSHIL AGARWAL Vs. COMMISSIONER OF CUSTOMS (IMPORT)

JUDGEMENT

(1.) Whether the CESTAT was justified in directing the appellant-assessee to make pre-deposit of Rs. 1 crore for entertaining the appeal filed by the assessee, is the question raised in this appeal. It is the case of the appellant that in the year 1984-1985 he started the unit in the name of M/s. Ashok Industries Pvt. Ltd. and was engaged in the assembly and subsequent sale of colour/Black and White Televisions, Video Cassette Players and Video Cassette Recorders in the local market. The appellant used to import certain components required for the assembly. In the year 1999, the appellant created M/s. Aashna Electronics Pvt. Ltd. and his wife along with the Appellant were the directors. It is the case of the appellant that due to financial constrains in the year 2001-2002, M/s. Aashna Electronics Pvt. Ltd. entered into the business of assembling and trading of car cassette players, car CD Players, Car amplifiers, car stereo systems, Music system, VCD players, LCD screens etc. Till 2006, the said company was engaged in trading of electronic goods/parts. On 30th April, 2005, appellant ceased to be a working partner of Mr. Jayant Bachetta in respect of the partnership established in the name of M/s. Mytri Enterprise in April 2002. It is the case of the appellant that Mr. Jayant Bachetta had established a proprietary concern in the name of M/s. Parth Marketing. The Appellant undertook to sell goods imported by M/s. Parth Marketing in the Indian market. It is the case of the appellant that he had no interest whatsoever in M/s. Parth Marketing or M/s. Chinmay Corporation which was established by Mr. Pragnesh Shah.

(2.) On 3rd/27th November, 2007, the Directorate of Revenue Intelligence (for short "DRI") gathered information that M/s. Chinmay Corporation was evading payment of customs duty on account of undervaluation of imported electronic goods. Accordingly its office and godown premises were searched. The DRI recorded the statement of the appellant and various other persons under Section 108 of the Customs Act, 1962. The computers of the appellant were seized by the DRI in the anticipation that same contains incriminating evidence against the appellant. According to the appellant, the goods were imported by M/s. Parth Marketing and M/s. Chinmay Corporation and were seized on the ground of alleged undervaluation and duty evasion.

(3.) On 2nd May, 2008 the DRI issued a show cause notice and called upon various parties including the appellant. It was stated in the show cause notice that the appellant, director of M/s. Aashna Electronics Pvt. Ltd. was mastermind and the controlling person of the imports of M/s. Parth Marketing and M/s. Chinmay Corporation and had full knowledge about the undervaluation of the goods at the time of their importation and had knowingly and consciously failed to declare the correct value before the Customs Authorities at the time of import with the sole intention to evade payment of duty in connivance with the overseas suppliers. The appellant was called upon as to why penalty should not be imposed upon him in terms of Section 112(b) of the Customs Act, 1962 and to why duty on such import be not levied against the appellant. The appellant replied to the said show cause notice.