AJAY PAUL Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) ALL these three appeals arise from a common OIO No. 11/99/Commr/Adjn dated 28 -01 -2000 imposing penalty on the appellant company M/s. Annes Collection Pvt. Ltd. (ACPL) of Rs. 5,00,000/ - and another Rs. 5,00,000/ - imposed on Shri Ajay Pal, Managing Director of the appellant company. There is a penalty of Rs. 2,00,000/ - on Ms. Merenla Tzudy, Assistant Designer. There is also a penalty of Rs. 1,00,000/ - on Shri Jivraj Rathi of M/s. Finesse Prints for having purchased the Silk Yarn imported duty free under DEEC scheme by M/s. ACPL, the appellant Company. The duty has been confirmed in the matter but it is not stated on whom the same would be recovered. The duty confirmed is on the imported fabric printing machine, imported under EPCG scheme by the appellants availing concessional rate of duty. However, the said machine was found to have been sold to one M/s. Finesse Prints, Bangalore. The same has been granted redemption on payment of fine of Rs. 2,00,000/ -. The purchaser, M/s. Finesse Prints, Bangalore have been imposed with a penalty of Rs. 75,000/ -. The imported Mulberry Silk which was sold in the market to M/s. Digvijay Silk Traders, Bangalore have been imposed with a penalty of Rs. 1,00,000/ - and 81.96 Kgs. of Mulberry Raw Silk detained at the premises of M/s. Digvijay Silk Traders was directed to be confiscated but granted redemption on payment of fine of Rs. 81,000/ -. M/s. Finesse Prints, Bangalore and M/s. Digvijay Silk Traders, Bangalore have not filed their appeals.

(2.) WE have heard the learned Advocate Shri Laxminarayana for the appellants M/s. ACPL, its Managing Director and Ms. Merenla Tzudy. The learned Counsels submission is that although there are demands made by M/s. APCL pertaining to sale of the machinery which had been imported under the EPCG Scheme, but the evidence in terms of minutes of the meeting of the Board of Directors of the Appellant company disclosed that the imported machine had been shifted to another Directors place who was knowing M/s. Finesse Prints, Bangalore. M/s. Finesse Prints had admitted in their statements that they had purchased the machinery under an invoice and paid the same consideration by cheques but it was not correct as the amounts paid by M/s. Finesse Prints was towards the share capital. He submits that in the circumstances, the imposition of penalty on the company and Managing Director is not justified. He further pointed out that no role was played by Ms. Merenla Tzudy, Assistant Designer. She was only an employee of M/s. ACPL and had not committed or rebutted Ajay Pal in selling the silk yarn and, therefore, imposition of penalty of Rs. 2,00,000/ - on her is totally unjustified. He has not admitted about the role nor there was any inculcatory statement of Ajay Pal involving her in the matter. He pointed out that the Commissioner also wrongly come to a conclusion that Ms. Merenla Tzudy had admitted in her statements that she had only stated about the raw silk yarn sold by the company in open market. She had not admitted any of her roles in procuring the apparatus for sale or playing any role in the sale, but had only mentioned about the sale done by the company in which she has no role. Therefore, she prayed for setting aside the penalties in the matter. The learned Counsel submitted that the imported machinery was seized from M/s. Finesse Prints and they had paid the duty, penalty and fine and redeemed the goods. Therefore, the demand of duty and encashment of bank guarantee towards the duty from the appellant is not justified as it amounts to double payment and prayed for a direction to the Commissioner to refund the excess amounts collected from the appellant towards duty.

(3.) THE learned JDR pointed out to the admissions made by Ajay Pal with regard to the sale of the machine. The statements of Jivraj Rathi, Managing Partner, M/s. Finesse Prints were also recorded who admitted having purchased the imported machine under an invoice and paid the sale price. Therefore, the contention of the appellant that the money was paid towards share capital is totally uncorroborated and has been rightly rejected. He submits that as the appellants had shown the imported mulberry silk yarn and also had sold the imported machinery, therefore, the penalty imposed on the company and its Managing Director is justified. He also pointed out that Ms. Merenla Tzudy made admissions about the sale of mulberry silk yarn in the market and therefore, she was to be penalized for having abetted in the offence.