BHAGAWATI ELECTRICAL Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) These appeals are against Order -in -Original No. 1/2004 - Cus dated 13.1.2004 passed by the Commissioner of Customs, Hyderabad -II Commissionerate.

(2.) The facts of the case are as follows; M/s. Bhagawati Electrical Enterprises (BEE) had filed a Bill of Entry No. 769 dated 5.12.2000 through its CHA Shri V.K. Singh. The goods were Ball Bearings. The declared CIF value was Rs. 30,54,147 However, the Deputy Commissioner, Customs rejected the transaction value and fixed the Assessable Value at Rs. 41,64,494. M/s. BEE appealed to Commissioner (Appeals), Hyderabad. The Commissioner (Appeals) in his Order -in -Appeal No. 01/2001 dated 18.1.2001 accepted the Transaction Value declared by M/s. BEE and allowed their appeal. The department preferred an appeal in the CESTAT against that order of the Commissioner (Appeals) which was numbered as C/146/2001. Even when the departmental appeal was pending before the Tribunal, further investigation was carried out. A prayer was made before the Tribunal for permitting to raise additional grounds, in the light of new evidences. However, the Tribunal in its Miscellaneous Order No. 492/2002 dated 12.11.2002 rejected the additional evidences, since the same was subsequent to the passing of the impugned order. The bench posted the hearing of the appeal on 14.11.2002. When the matter came up for hearing, the department sought permission to withdraw the appeal earlier filed. The bench passed Final Order No. 1465/2002 dated 14.11.2002, dismissing the Revenue's appeal as withdrawn. Meanwhile the DRI took up the investigation. The investigation revealed that the actual importer of the Ball Bearings is not M/s. BEE, but one Shri Rajnish Aggarwal. A statement of Shri Rajnish Aggarwal was taken under Section 108 of the Customs Act, 1962. Further it was found that the overseas supplier and Shri Rajnish Aggarwal were related. Under these circumstances, the Transaction Value cannot be accepted. Other alleged shady dealings of Shri Rajnish Aggarwal came to department's notice. It was also seen that M/s. BEE is only a name lender to Shri Rajnish Aggarwal. Even the IEC Code Number of M/s. BEE was found to be fictitious. In view of this, a second Show Cause Notice dated 6.12.2001 was issued. This Show Cause Notice treated Shri Rajnish Aggarwal as the real importer. There was a proposal to enhance the value of the imported goods in the second Show Cause Notice. Penal provisions under Section 111(d), 111(m), 112(a) and 114 A were invoked on Shri Rajnish Aggarwal, M/s. BEE, Shri Sunil Kumar Gupta the proprietor of M/s. BEE, and Shri V.K. Singh, the CHA. The Commissioner of Customs, adjudicated the case and passed the impugned order. In the impugned order the Ball bearings have been valued at Rs. 56,79.032. The goods have been confiscated under Section 111(d) and (m) of the Customs Act, 1962. However, an option has been given to redeem the same on payment of Redemption Fine of Rs. 38,00,000 to Shri Rajnish Aggarwal, who is held to be the actual importer. A penalty of Rs. 30 lakhs on Shri Rajnish Aggarwal under Section 114(A) of the Customs Act, 1962 has been imposed. A penalty of Rs. 20 lakhs on M/s. BEE have been imposed under Section 112(A) of the Customs Act, 1962. A penalty of Rs. 5 lakhs have been imposed on Shri V.K. Singh. The impugned order has been strongly challenged by the appellants.

(3.) Shri B. Kumar, learned Sr. Advocate appeared on behalf of the appellants and Shri R.N. Viswanath, learned SDR appeared for the Revenue.