K. NARENDRA BABU Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THIS appeal is against the following order of the Commissioner of Customs:

(2.) THE facts of the case are briefly as follows;

(3.) M /s. Sri Sivam Entrprises, Proprietorship of Shri K. Narendra Babu (Appellant), filed Bill of Entry No. 422647 dated 26.2.2003 for clearance of a consignment of goods declared as 348 units of Toner Cartridges with a declared weight of 983 kg. and a declared value of Singapore Dollar 2.00 per unit. The total assessable value declared in the Bill of Entry was Rs. 19,762.47 as per invoice No. 3099 dated 25.2.2003 raised by the supplier, M/s. Alltek Technology Pte Ltd., Singapore. The amount of duty payable on this value was Rs. 11,231 which was paid by the importer on 27.2.2003. However, any "out of charge" order was not given as the Customs authorities suspected misdeclaration of the goods and its value. The consignment consisted of 29 cartons and a visual examination thereof revealed that 8 cartons were serially numbered from 1 to 8 and the rest of the cartons were not numbered. The goods were taken up for a thorough re -examination (the Customs authorities in the Air Cargo Complex having initially examined three cartons which were found to contain only Toner Cartridges). It was found on re -examination that the serially numbered eight cartons contained 12 "Canon" brand Toners each. Barring these 8 x 12 = 96 Toners, there was no Toner in the entire consignment as the remaining 21 cartons contained only various goods of foreign origin other than Toners. The goods contained in these 21 cartons included Mobile Phones, Digital Cameras, LCD Projectors, SD RAMs/DD RAMs and other electronic components. The contents of each of the 29 cartons were inventorised and detained (for further investigation) in Mahazar proceedings on 27/28.2.2003 in the presence of independent witnesses. After estimating the value of the goods, the Customs authorities seized the detained goods under a Mahazar dated 6.3.2003. The total value so estimated was Rs. 2,18,25,411 as against the value of Rs. 19,762.47 declared by the importer. The premises of M/s. Sri Sivam Enterprises were subsequently searched, but no incriminating documents relating to the import were available. Further investigations revealed that one Shri K.S. Nagaraju, one Shri G.V. Seshadri Reddy, both employees of M/s. Supreme Freight Services, Bangalore (Customs House Agent) had assisted Shri Narendra Babu in documentation and other customs formalities in relation to the subject import. Statements of these persons were recorded and their residential premises were searched. Both of them stated that they had rendered assistance to Shri Narendra Babu for clearance of the consignment. The office premises of M/s. Geologistics Private Limited (Console Agent), who had sent the Cargo Arrival Notice to the appellant, were also searched and certain documents such as cargo arrival notice -cum -invoice, House Airway Bill etc. were recovered under a Mahazar. Statement of one Shri R. Rahul, Deputy Manager in the office of M/s. Geologistics Pte Ltd. was also recorded. Statements of certain other persons were also recorded. The investigators received a letter dated 20.3.03 from M/s. Alltek Technology Pte. Ltd., Singapore, stating that they were regularly supplying Toners to M/s. Sri Sivam Enterprises, that they had planned to send 348 Toners packed in 29 boxes to them on 25.2.2003 and that, due to mix up, certain other electronic goods like Digital camera, Mobile Phone etc. were wrongly sent alongwith 8 boxes of Toners. The letter further stated that they were willing to take back the materials wrongly sent. Meanwhile, the appellants moved the Principal Sessions Judge's Court, Bangalore for anticipatory bail and the department opposed the bail application. The Court allowed the bail application as per order dated 18.3.03 on certain conditions, which were to the effect that Shri Narendra Babu should co -operate with the Customs investigations. Subsequently, Narendra Babu's statements were recorded. In one of these statements he stated, inter alia, that all his imports were from M/s. Alltek Technology Pte. Ltd., M/s. Tonerindo Mitra -Jaya (S) Pte Ltd. and M/s. TLS International, Singapore. Statements were also recorded from the partners of the CHA firm (Supreme Freight Services) and also from the driver of a Tempo which used to be hired by the CHA for transportation of cargo. Enquiries were also made through Indian Embassy, Singapore to ascertain the genuineness of the consignment and the nature of business of the supplier. A report dated 5.5.03 received from the Indian High Commissioner, Singapore stated that M/s. Alltek Technology Pte. Limited (Singapore) and M/s. Tonerindo Mitra -Jaya (S) Pte. Ltd., Singapore were in existence. It further stated that M/s. Alltek Technology Pte. Limited were an importer/exporter/distributor/dealer of copier parts while M/s. Tonerindo Mitra -Jaya (S) Pte Limited, Singapore was a wholesaler. It also reported that M/s. Alltek Technology Pte. Ltd seemed to be operating from a residential premises while M/s. Tonerindo Mitra -Jaya (S) P. Ltd. were operating from the office premises of a legal firm. The bail application was eventually dismissed by the Sessions Court and consequently the appellant was arrested on 12.8.03 and produced before the Court of Economic Offences, Bangalore, which granted him bail. 3. From the results of investigations, it appeared to the department that the appellant had misdeclared the contents of the import consignment and grossly under -valued the Toners with intent to evade duty. It was felt that the appellant's commissions and omissions rendered the goods liable for confiscation under various clauses of Section 111 of the Customs Act and that the appellant had rendered himself liable for penalty under Section 114 A of the Act. A show cause notice was, therefore, issued to the appellants proposing to confiscate the goods and to penalize him, apart from seeking to recover appropriate duty on the goods. These proposals were contested. It was in adjudication of this dispute that the impugned order was passed by the Commissioner.