Atul Dhawan Vs Commissioner of Customs (CESTAT Delhi)
CESTAT Delhi held that Revenue has not brought any evidence on record to allege that the goods found and seized in the premises of the appellant are smuggled goods. It is onus of the Revenue to give evidence for allegation that the goods are smuggled in nature.
Facts-
It was alleged by the revenue that the goods imported by the appellant vide bill of entry no. 7050683 and 700535 via Customs House Agent M/s. Unique International has some mis-declared/un-declared goods. Accordingly, the goods were seized and detained in the port area before out of charge.
During investigation, statement of Mr. Vivek Bansal, Proprietor of M/s. Dee Vee Posters was recorded, who, stated that he procures the goods by personally visiting China or on email. For some of the goods like spectacles and its accessories, orders were placed by concerned persons, who were known through his CHA or other contacts. Further he stated that in some cases, he was not aware of the actual price of the goods and such goods were directly purchased by the buyers in India and he facilitates for the import and delivery. He also stated that Atul Dhawan of Atul Traders (appellant) was mainly a buyer of lens, whom he knew through one Arora of Arora Opticals.
Thereafter, follow-up search was made in the premises of the appellant and certain documents/ mobile phone and one CPU were seized. The stock found in the godown valued at Rs. 2,13,56,690/- was also detained alleging non-production of register at the time of search.
Pursuant to investigation, show cause notice was issued demanding customs duty of Rs. 24,50,416/- on the allegation that the appellant is the ‘beneficial importer’ and have willfully suppressed the actual import value with intent to evade duty and as such, the duty is recoverable under Section 28 of the Act by invoking the extended period of limitation.
Conclusion-
Evidently, no panchnama was drawn by Revenue for retrieval of data or documents from the CPU/mobile of the appellant. I find that reliance placed by Revenue on the statement of Mr. Vivek Kumar Bansal, Proprietor of M/s. Dee Vee Posters is bad on facts as the statements are self- I further find that Revenue has not brought any evidence on record to allege that the goods found and seized in the premises of the appellant are smuggled goods. It is onus of the Revenue to give evidence for allegation that the goods are smuggled in nature. The appellant have stated before the officer that he deals with imported goods and also Indian goods, but the goods were arbitrarily seized under Panchnama without recording reasons as to how the proper officer had reason to believe that the goods were liable to confiscation, at the time of seizure. Thus, I find that the seizure is bad under the provisions of Section 110 of the Act. I also find that the show cause notice is vague as it does not specify the particular clause of Section 111, under which the goods are liable for confiscation. Further, in the facts and circumstances, I find that imposition of penalty under Section 112 and 114 AA is bad.
FULL TEXT OF THE CESTAT DELHI ORDER
The issue involved in this appeal is whether the appellant is the importer and whether the duty and penalty have been rightly demanded from him.
2. The brief facts are that Revenue inspected the goods imported by M/s. Dee Vee Posters (IEC No.0508019923) having its office at 38 B, Coronation Building, Fatehpuri, Delhi, who were engaged in importing and trading in goods. The goods imported vide bill of entry no.7050683 dated 13.10.2014 and bill of entry no.700535 dated 08.10.2014 through their Customs House Agent – M/s. Unique International were inspected under Panchnama on 17.10.2014 and 24.10.2014 respectively. It appeared to Revenue that there are some mis-declared/un-declared goods, like the goods which were declared as Adhesive Tapes but on examination, the goods appeared to be PTFE Tapes. Further, the items like reading glasses (optical) of ‘D & G’ brand, SAIFI Brand with optical case and 3 D Dharmik pictures were found. Accordingly, the goods were seized and detained in the port area before out of charge.
3. During investigation, statement of Mr. Vivek Bansal, Proprietor of M/s. Dee Vee Posters was recorded, who, inter alia, stated that he procures the goods by personally visiting China or on email. For some of the goods like spectacles and its accessories, orders were placed by concerned persons, who were known through his CHA or other contacts. After import and receipt of the goods, he used to sell such goods by issuing invoice/bills in the name of different buyers, who placed orders for such goods and /or in the open Further, states that he was adding 5% margin on the goods. Further states that in some cases, he was not aware of the actual price of the goods and such goods were directly purchased by the buyers in India and he facilitates for the import and delivery. He also states that Atul Dhawan of Atul Traders (appellant) was mainly a buyer of lens, whom he knew through one Mr. Arora of Arora Opticals.
4. Thereafter, follow-up search was made in the premises of this appellant and certain documents /mobile phones (Samsung – DUOS Model GT-19082) and one CPU (Make Odyssey) were seized for further The stock found in the godown valued at Rs.2,13,56,690/- was also detained alleging non-production of register at the time of search. Statement of Shri Atul Dhawan was recorded, who, inter alia, stated that he was engaged in trading of optical frames and glasses and optical accessories and was registered with Sales Tax and also had IEC No.0595005454; that he had made last import in the month of July, 2013 and also stated that for procurement of goods, he also visited China to select the goods from the manufacturers as well as to inquire the rates. Thereafter, he places the orders for purchase through M/s. Dee Vee Posters, who import the goods and after loading their commission, sales the goods to him. Further, stated that he did not import in his own name as it was convenient and cheaper to import through M/s. Dee Vee Posters. He paid advance for the goods to Mr. Vivek Bansal, in case required or paid through RTGS at the time of purchase from M/s. Dee Vee Posters. He usually dealt in CR 39 glasses and frames, both imported as well as Indian. Further, stated that the value of the lenses /glasses was not based on thickness but on the basis of the power. The appellant also submitted stock statement for the period 1.4.2014 to 11.11.2014 (till the date of search). Further, investigation was made by Revenue from the suppliers, who supplied the goods to the appellant. The statements were recorded of the suppliers and most of them agreed to have supplied the goods to the suppliers as per invoices. One or more suppliers did state that they supplied some other goods. However, details were not mentioned in the invoices. Further, statement of the appellant was recorded on 8.4.2015 and 8.5.2015, wherein after seeing some data produced by Revenue stated to be obtained from the email/messages, which were accepted by the appellant as true value of the goods purchased /imported during the previous 12 months.
5. Another search was conducted by Revenue in the premises of the appellant under Panchnama on 22.07.2015 for stock verification of the goods. Further, statement of the appellant was recorded on 1.9.2015, wherein, he was confronted with the price of the different sizes of the CR lens, which were found from the data retrieved from his CPU /mobile.
6. Pursuant to investigation, show cause notice dated 10.11.2015 was issued demanding customs duty of Rs.24,50,416/- on the allegation that the appellant is the ‘beneficial importer’ and have willfully suppressed the actual import value with intent to evade duty and as such, the duty is recoverable under Section 28 of the Act by invoking the extended period of
7. The show cause notice, inter alia, alleged as follows:-
(i) M/s. Atul Traders failed to prove the lawful possession of goods detained at his shop i.e. M/s. Atul Traders, 6434, Katra Balyan, Fatepuri, Delhi. Hence, it appears that he has procured the goods without any cover of Bill/Invoice and duty paying document, out of goods imported illegally in the country and which was the stock found in the possession of M/s. Atul Traders on 11.11.2014.
(ii) No stock register has been maintained by M/s. Atul Traders as per statement of his chartered accountant i.e. Dinesh Kumar Gupta, it appears that the said goods were either being purchased without bill or in other words unaccounted means or illegal imports.
(iii) All suppliers of M/s. Atul Traders as attributed in his stock statement dated 07.01.2015, has declined that they had supplied the specific types of lenses which were attributed to them in his stock statement submitted to Customs
(iv) The investigations revealed that M/s. Atul Traders had illegally procured the goods detained on 11.11.2014 at his shop i.e. M/s. Atul Traders, 6434, Katra Balyan, Fetehpuri, Delhi for which invoices furnished by him were found to be manipulated and suppliers had denied having supplied the goods, as claimed by Atul Traders in his stock statement, and which was admitted by him in his statement under Section 108 of the Customs Act, 1962 subsequently, and the value of same is required to be determined at Rs.1,12,49,769/- (Rupees One Crore Twelve lakhs forty nine thousand seven hundred sixty nine only) being the actual transactions value (as per the rates found in emails and DGOV circulars) under the customs valuation (Determination of value of imported goods) Rules, 2007.
(v) The above said goods are required to be assessed in view of aforementioned allegations at Rs.1,12,49,769/- (Rupees One Crore Twelve lakhs forty nine thousand seven hundred sixty nine only) and the total duty of Rs.24,50, 416/- (Rs.Twenty Four lakhs Fifty Thousand Four Hundred and sixteen only) is required to be recovered from them under Section 28(4) of the Customs Act, 1962.
(vi) M/s. Atul Traders because of their willful acts of omission and commissions in the evasion of duty have rendered themselves liable to penal actions under Section 114A and 114AA of Customs Act, 1962.
(vii) The goods in the instant case have been imported by means of suppression of facts and mis-declaration of value with an intent to evade payment of customs duty by M/s. Atul Traders and therefore, the customs duty amounting to Rs.24,50,416/- (Rupees Twenty Four Lakhs Fifty Thousand Four Hundred Sixteen only) is liable to be demanded and recovered from M/s. Atul Traders under Section 28(4) of the Customs Act, 1962. Besides, the interest is also liable to be demanded and recovered from M/s. Atul Traders under Section 28(4) of the Customs Act, 1962. Besides, the interest is also liable to be demanded on the delayed payment of the said differential duty under Section 28AA of the Act ibid. The importer had submitted false/ fabricated stock statement to justify his illegal imports to evade the customs duty. This act of omission and commission rendering the impugned goods liable to confiscation under Section 111 of the said Act. Therefore, the said M/s. Atul Traders are liable to penal action under Section 114 A and Section 114 AA of the Customs Act, 1962.
8. Show cause notice was adjudicated on contest vide order-in-original dated 2.1.2019 ordering confiscation of the goods under Section 111(m) valued at Rs.1,12,49,769/- with option to redeem the goods on payment of redemption fine of Rs.10 lakhs. Further, duty was demanded of 24,50,416/- with respect to the goods covered under Panchnama dated 11.11.2014 and 22.07.2015 under Section 28, along with interest under Section 28 AA of the Act. Further, penalty of Rs.5 lakh was imposed on Mr. Atul Dhawan, Proprietor under Section 112 of the Act. Further, penalty of Rs.24,50,416/- was imposed on Mr. Atul Dhawan, Proprietor under Section 114AA of the Customs Act.
9. Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals), inter alia, on the grounds that –
9.1 That duty has been wrongly demanded as the appellant is not the importer but only a trader, who buys or procures the goods from the local market as well as from the importer, who had imported the said goods. Admittedly, the appellant have not filed the bill of entry nor placed any order to the foreign buyer nor made any payment to any overseas supplier. Further, it is not the case of the Revenue that the importers, from whom the appellant purchased the goods, were dummy importers and imports made by them have been financed by the appellant. None of the suppliers/importers have stated so in their statements recorded by the Revenue. The duty demand is wholly on assumptions and presumptions basis treating the appellant as importer, which is not sustainable. Reliance is placed on the following case laws:-
