John Miranda Vs Commissioner of Customs (CESTAT Kolkata)
Conclusion: In present facts of the case, demand of Custom duty was dropped as Bill of Entries were in the name of some different entities but the penalties were confirmed as the Appellant were actively involved in import of the goods and undervalued the same.
Facts: In present facts of the case, an Intelligence was gathered by DRI, Ahmedabad, indicated that the importer, were indulging in evasion of Customs duty by resorting to gross undervaluation in the import of electronic goods viz, Car audio items viz. Car Speaker, CD Players, Amplifiers etc. imported by them through Kolkata Port. The intelligence indicated that the importer was manipulating the actual value of the imported consignments in collusion with the supplier firm and was declaring lower value before Indian Customs for assessment of duty thereby paying lesser amount of Customs duty. The intelligence also indicated that the imports were being made by the Appellant in the name of their own firms as well as by using the IEC of other firms.
The appellant submitted that the period involved in both the cases is March, 2007 to March, 2008 and the show-cause notice has been issued on 1st March, 2012 & 27th March, 2012 respectively. He also submits that the demand of duty from the appellants is un-sustainable ex-facie being contrary to Section 28 of the Act. As per the provisions of the Act, duty not paid or short paid or not levied or short levied erroneously refunded can be demanded and recovered only from the importer within the meaning of Section 2 (26) of the Act. There is no dispute, as none can be, that all the relevant documents including bills of lading, bills of entry, packing list etc. were in the name of some another entity as importer. The assessment of the said goods and clearance thereof, upon payment of assessed duties of Customs was also made in the name of the said importer. There is no provision in the Act for providing for any deemed importer of goods for demanding or recovering of duty of Customs allegedly evaded from any other person except the importer on record. Therefore, duty cannot be demanded from the appellant.
The Revenue, referred to the various statements of the appellants during the course of investigation and submitted that it was the case of under-valuation and it was been admitted by the appellants that they have paid the money to the overseas suppliers having their office in India. Therefore, the penalties on the appellants are rightly imposed.
The Hon’ble Tribunal after taking submissions of both sides into consideration observed that the duty cannot be demanded from the appellants as it is the fact on record that the appellants, as they were not the real importers. In fact, the Bills of Entry has been filed in the name of another entities and the respective Bills of Entry were assessed and the goods were cleared to those importers. Therefore, the demand of duty from the appellant was not sustainable.
With regard to the imposition of penalty, it was observed the Appellant were using IEC Code of various IEC holders for import of car electronic goods by under-valued the same and the differential amount has also been paid to the overseas suppliers through their office in India by illicit means.
Therefore, the Appellants were actively involved in import of the impugned goods and undervalued the same. Therefore, penalties imposed on the Appellants were confirmed.
FULL TEXT OF THE CESTAT KOLKATA ORDER
1. The Customs Appeal Nos.C/75240/2014 & C/75241/2014 are arising out of Order-in-Original No.Kol/Cus/Port/26/2013 dated 19.11.2013 and remaining three Customs Appeal Nos.C/75242/2014, C/75243/2014 & C/75244/2014 are arising out of Order-in-Original No.Kol/Cus/Port/29/2013 dated 21.11.2013. As all the appeals are arising out from a common investigation, therefore, all are being disposed off by a common order.
Customs Appeal No.75242 of 2014
Customs Appeal No.75243 of 2014
Customs Appeal No.75244 of 2014
2. The facts of the case are that an Intelligence gathered by DRI, Ahmedabad, indicated that M/s. Creative Enterprise, Chamber No. 209, Reshab Shree House, Ranjit Nagar Commercial Complex, West Patel Nagar, New Delhi – 110008, having an IEC No: 0506076814 (hereinafter referred to as the importer for the sake of Brevity), were indulging in evasion of Customs duty by resorting to gross undervaluation in the import of electronic goods viz, Car audio items viz. Car Speaker, CD Players, Amplifiers etc. imported by them through Kolkata Port. The intelligence indicated that the importer was manipulating the actual value of the imported consignments in collusion with the supplier firm and was declaring lower value before Indian Customs for assessment of duty thereby paying lesser amount of Customs duty. The intelligence also indicated that the imports were being made by Shri jhon Miranda and Shri Rakesh magoo in the name of their own firms as well as by using the IEC of other firms.
2.1 Searches were conducted on 26.07.2008 at the office premises of Shri John Miranda situated at 3rd Floor, Madhuban Building, S.B.Singh Road, GPO, Mumbai, the residential premises of Shri Rakesh Magoo, situated at J-221, LIC Colony, Paschim Vihar New Delhi as well as the office premises of Shri Rakesh magoo situated at GH-9/638, Paschim Vihar, New Delhi. In the course of the searches, documents, hard disk and computer relevant to the investigation were seized under panchnama in the presence of independent witnesses.
2.2 Statement of Shri Rakesh Magoo, Proprietor of M/s. A.S Enterprises New Delhi, was recorded under Section 108 of the Customs Act 1962 on 26.07.2008 wherein he stated inter alia that, he was engaged in the business of trading of Electronics for the preceeding 15 years and had started his firm- M/s A.S Enterprises which was initially engaged in trading and importing of electronic components for past 5 years; that, since, last 2 years, he had been importing Car Audio Speakers in the name of M/s A.S Enterprises and the said firm was engaged in trading & import of Car Audio Speakers only; that, he agreed with proceedings of Panchnama drawn by officers of DRI, New Delhi on 26.07.2008 under which documents relating to imports & trading done by the said firm and a Computer Hard Disk was recovered during search conducted at M/s A.S Enterprises; that ,they had also imported Car speakers through others firms i.e. M/s Balaji Enterprises and M/s J.N.S Enterprises, Delhi; that, Shri John Miranda of Bombay was his business friend / partner and Shri John Miranda was known to him for the preceeding 15 years; that, they interchanged their imported goods as per requirement of their buyers and the accounts of those transactions were settled by them by payment in cash; that, he had imported Car Audio Speakers through his firm or through other firms from overseas suppliers M/s Cosmo, Hong Kong and M/s Farle, Singapore; that, all communications and negotiations were done and orders placed through Mr. Vijay Kumar in case of import from M/s Cosmo, Hong Kong and all communications & negotiations were done and orders placed through Ms. Belinda in case of import from M/s Farle, Singapore; that, all the imports made by him at Kolkata Port were handled by CHA M/s R.S Arunachalam and all the imports made by him at Mumbai Port were handled by CHA, M/s. Sai Dutta Clearing; that, all the goods imported by him were undervalued and they made the payment of differential amount to the representative of the overseas supplier in India; that, they were informed telephonically about the visits of the overseas supplier to India and the payments of differential amount were made to them. He agreed to deposit the amount of differential duty voluntarily on the goods imported and undervalued by them.
2.3 Statement of Shri John Miranda, Proprietor of M/s. Jojojem International was recorded under Section 108 of the Customs Act, 1962 on 26.07.2008 wherein he stated inter alia that, he had imported goods in the name of M/s. M.R. International, New Delhi, however, there was no firm known as Venus Enterprises in so far as his business was concerned and he did not know any M/s. Venus Enterprises; that, he was the sole proprietor of M/s. Venus International, having office at 305, 3rd floor, Madhuban Building, 23, Cochin Street, 323, S.B. Singh Road, Mumbai-400 001; that, he did not having any IEC number and therefore was not connected with import and export at all; that, he was the sole proprietor of M/s Jojojem International (IEC No: 0304015059) having office at 5B, Gr. Floor and 9B, 2nd floor, Vithal Niwas, Jacob Circle, Mumbai- 11 and they were importing various electronic goods like Speakers, Amplifiers, Twitters etc; that, he placed the order on the foreign supplier and thereafter contacted Custom House Agent M/s. Sai Dutta Clearing Agency Pvt. Ltd. for clearance of the goods and the said goods were transported to Delhi through transporter M/s Godhara Road Lines or by Rajdhani Courier; that, it was true and correct that one Shri Rakesh Magoo was his business partner in the import and trading of car audio items; that, Shri Rakesh Magoo used to make payments towards clearing charges and transporting charges; that, they had been using various other import Export Codes (IECs) of various other fictitious firms to hide their identity as actual importer / beneficiary; that, they were using the Import Export codes of various firms including the following firms for effecting the import and trading of car audio items.
