T. SUMEDHA Vs. COMMISSIONER OF CUSTOMS, TIRUPATHI

JUDGEMENT

(1.) THE appellant has been imposed a penalty of Rs. 10 lakhs in terms of Rule 209A of CE Rules, 1944. She was the proprietor of M/s. Rishitha Herbal Products, Mangalore. The department started investigation on the information that Shri Sathya Sai Herbo Care (P) Ltd., (SSSHCPL) situated in Chittor had manufactured and cleared clandestinely SINDHURA Brand Herbal face cream in packages/containers of 25/50 gms. As a result of these investigations, they visited the premises of the appellant to recover any goods of M/s. SSSHCPL procured by them without payment of duty. The officers went along with two mahazar witnesses and found 72 empty printed plastic containers in the premises. Statement of appellant was also recorded. In the mahazar as well as in her statements she categorically denied having any thing to do with the said 72 empty printed plastic containers. She denied having purchased the product "SINDHURA" brand herbal face cream from M/s. SSSHCPL of which her son Shri Ranjit was the Managing Director. She explained that Shri Ranjit who was also staying with her had brought these empty containers and kept it in the room. She was issued with a show cause notice. The demand raised against Smt. T. Sumedha Proprietrix of M/s. Rishitha Herbal Products on the allegation that she had dealt with the clandestine removal of goods of M/s. SSSHCPL and on that basis she has been imposed a penalty of Rs 10 lakhs under Rule 209A of the CE Rules. The Commissioner in his finding has noted that the appellant had .her above admission as evidenced in mahazar dated 20 -1 -2000 is a clear evidence of her acquiring and possessing the said empty containers which she had reason to believe, are liable to confiscation. Therefore, she is liable to penalty under Rule 209A of the CE Rules, 1944.

(2.) I have heard both sides in the matter. I have gone through the mahazar dated 20 -11 -2000. Nowhere in the mahazar it is recorded that appellant has admitted about her having acquired and being in possession of the said empty containers. Even if for argument sake, it is taken that she was in possession of empty containers that would not lead to any conclusion that she has purchased the herbal cream packed in the said containers. There is no corroboration at all. Even from her statement and the mahazar, it is clear that she has denied having any knowledge about the empty containers except the fact that the said containers were brought to her house by Shri Ranjit and kept there. This will not lead to the conclusion that she has been dealing with the goods manufactured and clandestinely cleared by M/s. SSSHCPL . The finding recorded by the Commissioner to say the least is not correct. Further more there is no justification for imposing a penalty of Rs. 10 lakhs for the value of containers which is negligible. The Rule 209A lays down penalty for evasion of duty on goods and on persons who have dealt with it. The goods in the present case is SINDHURA Brand herbal face cream in packages/containers. Which has been recovered from the premises of the appellants is mere empty containers which are not the goods which have been manufactured by M/s. SSSHCPL. There is no case made out against the appellant, as there is no evidence in the case. Therefore the imposition of penalty of Rs. 10 lakhs is unjustified and uncalled for. The same is set aside by allowing the appeal.