S.S. ORGANICS LTD. AND ANR. Vs. CC

JUDGEMENT

(1.) THESE two stay applications & appeals arising from order -in -original No. 61/99 dt. 17.9.1999 by which the Commissioner of Customs, Madras -I has confirmed duty demand of Rs. 62,40,052/ - under proviso to Section 28(1) of the Customs Act along with interest due thereon. There is a penalty of Rs. 10 lakhs imposed on the company and personal penalty of Rs. 1 lac on Shri D. Sadasiva Reddy, Director of the Company under Section U2(a) of the Customs Act.

(2.) THE importers had imported "2, 4, Dichloro 5, Fluoro Acetophenon, Dimethyl Carbonate, Sodium Hydride and Piparazine Anhydrous" (hereinafter called "imported goods") against Advance Licenses whose numbers are given in the impugned order which were required to have been used in the manufacture of final product to be manufactured in terms of licence granted and to export the same. As there was a clear violation in as much as that the manufactured final product instead of being exported to the extent of 1400 Kgs. out of 2000 Kgs were removed to the domestic market on payment of Central Excise duty, therefore proceedings were initiated to enforce the bond executed to the department at the time of clearance of the inputs for manufacture of the final product in terms of the advance licence. The imported goods had been cleared under the bond and were not available for confiscation. Therefore, the Commissioner in terms of Section 111(o), for its violation, imposed a fine of Rs. 20 lakhs. The benefit of the notification No. 80/95 dt. 31.3.1995, as a consequence, has been denied on the quantum of 1400 kgs of final product which had not been exported and hence Customs Duty was confirmed.

(3.) IT was further pleaded that penalty imposed on Shri D. Sadasiva of Rs. 1 lac is not sustainable. He had pleaded that it was not his decision to clear the goods in the domestic market but the decision was taken by the Board of Directors and as a servant of the company, he had to implement the same. They had relied on large number of judgments as reported in ; to seek for waiver of penalty on the M.D. However, the Commissioner has not accepted the pleas and has not given findings on the ratio of these judgments, which clearly laid down that, in a similar circumstances of a matter like the present one that no penalty on the Managing Director can be imposed but the Commissioner merely held that Shri Sadasiva Reddy could have as well disclosed about the decision taken by the Board of Directors at the time of recording the submissions.