COSMOS TRADING CO. Vs. COMMISSIONER OF CUSTOMS, KANDLA

JUDGEMENT

(1.) The challenge in the present appeal is to imposition of personal penalty of Rs. 50 lakhs imposed upon M/s Cosmos Trading Co. and of Rs. 25 lakhs imposed on Shri Nilesh Bansal, Partner of M/s Cosmos Trading Co., in terms of provisions of Section 112 of the Customs Act, 1962. Vide his impugned order, the Commissioner has confirmed duty against one M/s Systematic Corporation along with imposition of penalty upon them. However, their appeals are not before us.

(2.) AFTER hearing both sides duly represented by Shri K.I. Vyas, learned advocate appearing for the appellant and Shri D. S. Negi, learned SDR appearing for the Revenue, we find that the goods were cleared by M/s Cosmos Trading Co. under 5 bills of entry, in the name of M/s Systematic Corporation against advance release order, issued by M/s Systematic Corporation against advance licenes. As per the endorsement on the licenes, the name of the supporting manufacturer was declared as M/s Reliable Polyfab, Surat. The allegation against the appellant is that instead of clearing the goods to the said supporting manufacturer, the same stand cleared by them to the principal manufacturers godown at Bhiwandi, from where the same were diverted in the open market. As such, the Commissioner concluded that the appellants aided and abetted M/s Systematic Corporation in illegal diversion of duty free goods in the open market.

(3.) THE appellants have drawn our attention to a letter dt. 8 -3 -03, written by M/s Systematic Corporation to M/s Cosmos Trading Co., intimating them that the goods to be cleared against advance release order issued in their favour, should be dispatched to the godown of M/s Khandelwal Clearing Agency, Bhiwandi and not to their factory at Surat, as the material is to be given for manufacture on job work basis to other manufacturer. It is in view of these directions of M/s Systematic Corporation that the goods stand dispatched to the appellants Bhiwadi godown and not to their factory. It is the appellants case that this fact by itself, cant lead to conclude that they have intentionally aided and abetted M/s Systematic Corporation for the diversion of the goods in the local market. After going through the impugned order of the Commissioner, we find that duty stand confirmed against M/s Systematic Corporation on the finding that they have wrongly availed exemption in terms of Notification No. 43/2002, in as much as the material obtained by them does not stand utilized in the manufacture of final product in the factory of the supporting manufacturer and the same is diverted in the open market by them. As regards imposition of penalty upon the present appellant, he has observed as under :