INTER TRADE Vs. COMMISSIONER OF CUSTOMS, CALCUTTA

JUDGEMENT

(1.) ARGUING on the stay petitions Shri P.K. Das, ld. Advocate submits that the entire duty amount of Rs. 6,61,371.94 already stands deposited by them even prior to the confirmation of demand by the Commissioner of Customs, Calcutta. He is making a prayer for dispensing with pre -condition of penalty of Rs. 1 lakh imposed on M/s. Inter Trade which is proprietory unit and an equal amount imposed on Shri Nirmal Kr. Saraswat, who is proprietor of the said firm. He submits that the penalties have been imposed by the Commissioner on the ground that the appellants, who imported Mulberry raw silk against advanced licences did not fulfil export obligation and instead diverted the material for home consumption at huge profits in violation of the condition of the Notification No. 80/95 -Cus., dated 31 -3 -1995. The appellants contention is that the Mulberry silk yarn in question was sent to the job workers at Bangalore who did not return the material in time and as such licence expired in the meanwhile. He had applied for extention of export obligation period to the Joint Director General of Foreign Trade, but no intimation had been received from him. The Commissioner has not accepted the above contention of the appellants by observing that the job workers to whom the material has been allegedly said to have been supplied by the appellants have denied any involvement with the appellants or any dealings with the importing firm. Investigations made by DRI also established that the job workers were not having any connection or transactions with the appellants. As such by observing that the conditions of Notification No. 80/95 -Cus. have been violated inasmuch as export obligations have not been fulfilled within the prescribed time limit, the duty has been confirmed against the appellants along with interest and penalties, as indicated above have been imposed. Shri Das submits that the appellants have already suffered on account of job workers who have merely denied their transactions with the appellants so as to avoid the Customs enquiry. He draws our attention to the challans under which the material was sent to the job workers. He submits that the Collector has not taken into consideration and has not discussed the above documentary evidence at all. He further argues that in any case and in any view of the matter imposition of separate penalties upon the proprietory concern as also on the proprietor of the said firm was not justified, as is the settled law. In view of these submissions he prays that after dispensing with the condition of pre -deposit of penalties, the appeals itself may be taken up for disposal inasmuch as he is not challenging the duty confirmation part of the order but is only advancing submissions on the imposition of penalties upon the appellants.

(2.) SHRI J.M. Kenedy, ld. JDR countering the arguments draws our attention to the observations made by the Commissioner. He submits that the appellants claim that the Mulberry raw silk in question imported duty -free under advanced licence were supplied to supporting manufacturer was factually not established. In any case the fact remains that the goods imported were not processed in the manufacture of resultant export products and the export obligation were not fulfilled. As such the findings of the Commissioner that the imported material has been diverted for home consumption at huge profits stand duly substantiated and penalties imposed upon the two appellants are justified. As regards the issue of imposition of separate penalties on the proprietor firm as also on the proprietor, he leaves the matter to the discretion of the Bench.

(3.) WE have considered the submissions made from both the sides. After dispensing with the condition of pre -deposit of penalties imposed upon the two appellants, we take up the appeals itself as the duty confirmed by the Commissioner is not being challanged by the appellants and the same stands duly deposited by them. It is admitted fact on record that the export obligation in respect of the imported Mulberry raw silk under advanced licence have not been fulfilled by the appellants. The job workers to whom the appellants claim to have sent the material for conversion have denied having received the said material or any connection with the importing firm. On a query from the Bench Shri Das has not been able to tell us as to what civil steps the appellants have taken to recover their material from the said two job workers to whom they have sent the goods. We are also informed by Shri Kenedy that import of Mulberry raw silk was a restricted item and for which the appellants required an import licence. As such it stands established that benefit of DEEC scheme has been mis -utilised. As such we do not find any reason for interfering in the quantum of personal penalty imposed on M/s. Inter Trade. However, we agree with the ld. Advocate that imposition of separate penalties on the proprietor firm as also on the proprietor is not justifiable. It is well settled proposition of law that separate penalties cannot be imposed on the proprietor firm as well as on the proprietor. Accordingly penalty on the proprietor Shri Nirmal Kr. Saraswat is set aside. As the other portions of the order are not being challenged before us, no orders are being passed in respect of the same.