NARESH A. SHAH AND ORS. Vs. CC

JUDGEMENT

(1.) THESE three applications arise out of the same common order and are therefore dealt with in this single order.

(2.) THE facts as narrated in the proceedings are as below. Shri MD Ganatra, one of the applicants, persuaded Nandlal Khemani, another applicant, to apply for advance licences. On receipt, these licences were sold to one Minesh Shah through two brokers namely Naresh Shah and M. Ganatra. Some goods were imported under the licences by Minesh Shah and were sold in the market. The documentation of purchases and the clearance of goods through Customs were however in the name of Nandlal Khemani, a proprietary concern named as M/s. Nandlal Shivlaldas. After recording the statements of the concerned persons Show Cause Notice was issued alleging that the goods were liable to confiscation under Section 111(d) and also under Section 111(0) of the Customs Act, 1962, that the duty on the goods cleared duty free was liable to be recovered; that the interest on the Customs duty short levied was also recoverable, and that the noticees were liable to penalties under Section 112(a) and (b) and also under Section 114(a) of the Customs Act, 1962. After hearing the concerned persons the Commissioner of Customs passed the impugned order. In his order, the Commissioner did not pass any orders on the liability of the goods to confiscation. He confirmed the duty payable, noticed that certain amounts were deposited towards duty and directed the importer to pay the balance of Rs. 26,28,855/ -. He demanded interest on the sum. He imposed a penalty of Rs. 54,93,805/ - on Shri Nandlal Khemani under Section 114(a) of the Act but refrained from imposing any penalty on him under Section 112(a) of the Act. He imposed penalties of Rs. 5.00 lacs each on M. Ganatra, Naresh Shah and Minesh Shah. The appeals and the present applications arise out of this order.

(3.) SHRI V.M. Doiphode, the Ld. counsel arguing for Naresh Shah submits that his client was a broker in licence. When he dealt with the licence, the goods were yet to be imported. Section 112(b) of the Act under which penalty has been imposed upon his client requires a person to physically handle the goods. In these situation his client cannot attract penalty under this provision. He cites the Single Member judgement of the Tribunal reported in . In this case, the appellant was instrumental in securing space where some contraband was stored. It was held that even where the applicants had knowledge of such storage that knowledge simpliciter would not make for an offence under law. He submits that no penalty is leviable on this client.