T.P. RAJMOHAN Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) Ld. Commissioner of Customs, in the impugned order, imposed a penalty of Rs. 5 lakhs on the appellants under Section 112(a) of the Customs Act. This penalty is based on the following finding : -

(2.) After examining the records and hearing both sides, I find that M/s. Maluram Enterprises Pvt. Ltd. (MEPL, for short) had imported a consignment of 'hair care and dental care products' from Korea and filed Bill of Entry dated 25 -9 -2003 for clearing the goods. Shri K. Jayaram was the Managing Director, of the above company. The invoice filed with the Bill of Entry had shown the value of the goods as US 67,627.60. In keeping with this value, M/s. MEPL had declared M.R.P of the various items of the consignment, in the Bill of Entry. Later on, from a letter received by the Customs authorities from HSBC bank, Chennai (bankers of the importer), it appeared to the department that the correct invoice price of the goods was US 1,70,047 and not US 67,627.60. The department received a copy of the supplier's invoice mentioning this amount of US 1,70,047, also from the bank. Statements of Shri K. Jayaram and the CHA were recorded by the officers of Customs. On the basis of the results of the investigations, the department issued the aforesaid show -cause notice, wherein Shri K. Jayaram was alleged to have fabricated the invoice showing US 67,627.60 as the value of the imported goods and misdeclared the value in the Bill of Entry. In the SCN, the appellant was alleged to have abetted Shri K. Jayaram's offence. In the impugned order, Id. Commissioner dropped the charge against Shri K. Jayaram but sustained the charge against the appellant. Ld. counsel for the appellant has prayed for vacating the penalty imposed on the appellant, by submitting that, where the charge against the main offender was dropped, there was no question of sustaining the charge of abetment of that offence. Ld. SDR has reiterated the findings recorded in the impugned order.

(3.) After giving careful consideration to the submissions, I have to accept the counsel's plea. The adjudicating authority cannot impose a penalty on any person on a ground different from the one raised against that person in the SCN. In the present case, the Commissioner imposed penalty on the appellant after upholding the allegation (raised in the SCN) that the appellant had abetted Shri K. Jayaram's act of fabrication of documents and of misdeclaring the value of the goods in Bill of Entry. He, however, exonerated Shri K. Jayaram from penal liability under Section 112(a). It is, thus, obvious that Id. Commissioner went into a misconception. Paragraphs 17 and 18 of his order would expose his error of judgment, which are reproduced here under : -