SANJAY GUPTA Vs. COMMISSIONER OF CUSTOMS, HYDERABAD

JUDGEMENT

(1.) THE short question that arises for consideration in this appeal filed by the Managing Director against Order -in -Original No. Cus -29/2002, dated 23 -5 -2002 is as to whether he can be imposed penalty of Rs. 2 lakhs under Sec. 112B of the Customs Act for the contraventions committed in not fulfilling the terms of Notification No. 13/81 -Cus., dated 9 -2 -81. The facts of the case are that M/s. Preyanshu Exports Ltd. an 100% EOU had obtained letter of permission from Government of India, Department of Industrial Approval for manufacture and export of garments and knitted fabrics and entered into legal agreement with Developmental Commissioner, VEPZ, Visakhapatnam on 2 -11 -94. They had imported the capital goods, raw materials as per the conditions stipulated in the Notification. However, due to reasons beyond their control they could not setup the factory and carry on the function of manufacture and export the items as required to be done by them. Therefore, the Department initiated proceedings for recovery of the customs duty and also for confiscation and imposition of penalty in the matter. It is their submission of ld. Counsel that the Managing Director has not committed any offence, which requires for imposition of penalty. In so long as he has not committed any offence personally involving himself in the allegations brought by the Department then penalty is not imposable. In this regard he relies on the following judgments, wherein penalty on the Managing Director has been set aside : -

(2.) LD . Counsel submits that the goods are still intact and the packages were not even opened and therefore there was no action of the Managing Director exposing himself for penal action.

(3.) LD . SDR submits that in the case of O.T. Inasu v. CC, Cochin [2002 (145) E.L.T. 481], this Bench had found that the Managing Director of EOU Company found guilty of not meeting export performance and penalty imposed had been upheld.