Case Law Details
Rakesh Aggarwal Vs Commissioner of Customs (CESTAT Kolkata)
Introduction: In a recent case before the Customs Excise and Service Tax Appellate Tribunal (CESTAT) Kolkata, the appellant, Rakesh Aggarwal, challenged the imposition of a penalty of Rs. 5.00 Lakhs by the Commissioner of Customs. The penalty was imposed on the grounds of his alleged involvement in the invalid importation of a BMW M5 Car. This article provides a detailed analysis of the case and the tribunal’s verdict.
Detailed Analysis: The case revolved around the importation of a BMW M5 Car in the name of Mrs. Sadhana Aggarwal, the wife of the appellant. While Mrs. Sadhana Aggarwal settled the duty, interest, and penalty related to the car through the Settlement Commission, Rakesh Aggarwal faced penalties imposed by the adjudicating authority and upheld by the Commissioner (Appeals).
The appellant argued that he had no role in the importation of the car apart from making payment on behalf of his wife. However, the adjudicating authority contended that the appellant had admitted his involvement in negotiating the deal for the importation of the car.
Upon careful consideration of the evidence and arguments presented by both sides, the tribunal found that Mrs. Sadhana Aggarwal had already been penalized for the offense related to the importation of the BMW M5 Car. Furthermore, there was no concrete evidence implicating the appellant in the commission of the offense, apart from his payment towards the car.
Conclusion: Based on the lack of corroborative evidence proving the appellant’s involvement in the invalid importation of the BMW M5 Car, the Customs Excise and Service Tax Appellate Tribunal (CESTAT) Kolkata ruled in favor of Rakesh Aggarwal. The tribunal set aside the penalty imposed on him, emphasizing the importance of substantial evidence before penalizing an individual. This case underscores the significance of due process and the burden of proof in matters of customs violations.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The appellant Shri Rakesh Aggarwal has filed this present appeal against imposition of penalty of Rs.5.00 Lakhs on him vide Order-inOriginal dated 05.11.2012 passed by the Additional Commissioner of Customs, Kolkata, which has been upheld by the impugned Order-inAppeal dated 24.04.2018, by the Ld. Commissioner (Appeals).
2. The appellant submits that the issue involved in the present case is importation of one BMW M5 Car in the name of Mrs. Sadhna Aggarwal, wife of the appellant. The appellant submits that Mrs. Sadhana Aggarwal has filed an application before the Settlement Commission and the duty, interest and penalty in respect of the above said car imported in the name of Mrs. Sadhana Aggarwal has been settled by the Hon’ble Settlement Commission vide order dated 19.07.2012, wherein the Hon’ble Settlement Commission has made the following observations regarding the other persons in this case.:-
Miscellaneous – There are other notices to the SCN apart from the applicant who have not approached the Commission for settlement of the case against them. Accordingly, no part of these proceedings relate to anyone of them and the Revenue is at liberty to take action against them as deemed fit.
3. On the basis of these observations, the adjudicating authority passed the impugned order, wherein he has imposed penalty of Rs.5.00 Lakhs against the appellant on the ground that the appellant has abetted the commission of the offence and the same has been upheld by the Commissioner (Appeals).
4. The Ld.Counsel for the appellant submits that the appellant has no role in the importation of the BMW M5 Car by his wife Mrs. Sadhana Aggarwal, except making payment for the car on her behalf. The adjudicating authority has not given any categorical finding about the role played by the appellant in the offence warranting imposition of Accordingly, he prayed for setting aside the penalty imposed on him.
5. The Ld.AR submits that all the negotiations pertaining to the importation of the BMW M5 car was done by the appellant. The appellant has admitted his involvement in the importation of the car in his statement dated 16.04.2009 wherein he has categorically stated that he has negotiated the deal with Mr.Haren Choksey. Accordingly, he justified the imposition of penalty against the appellant in the impugned
6. Heard both sides and perused the appeal documents.
7. I find that the BMW M5 car was imported in the name of Mrs. Sadhana Aggarwal. She has already filed an application before the Settlement Commission regarding the duty involved and settled the issue vide order dated 19.07.2012, wherein she has been imposed a penalty of Rs.25,000/- by the Settlement Commission for the commission of the offence.
8. I find that the adjudicating authority has given the following findings in the impugned order regarding the role of the appellant:-
“Now coming back to the charges, there is no denial about the importation of the car and that is also in the manner it has been described in the show cause notice as the importer and her husband, a co-noticee, had agreed about the happenings and paid the duty and interest as demanded. The issue has also been settled by Hon’ble Settlement Commission in its final order No.F-325/Cus/12-SC(KB) dated 19-07-12. Now only point to be proved is the role played by Shri Haren Choksey. The show cause notice is based on the statements of noticee himself and the co-noticees and other evidence collected by the DRI. The statements have been recorded under section 108 of the Customs Act, 1962 which had evidential value in the eyes of the law. These statements have not been retracted except a small portion. Even that portion do not affect the facts of the case and role of Shri Choksey remains as described in the show cause notice as this case do not fall in the category of denied portion. Shri Haren Choksey denied any involvement where as there is a statement dt. 16-04-09 of Shri Rakesh Agarwal wherein he had categorically mentioned that, “As regards the Range rover vlgue of BMW M5, the same were imported by me, in my name and in the name of my wife respectively, through one Shri Haren Choksey of Mumbai”. “He informed me that he can arrange for import of any vehicle at a very competitive price and also arrange for customs clearance in India”. “I contacted Haren Choksey when he informed me that instead of BMW 7 series he has BMW M5 readily available” “….I negotiated the deal with Haren Choksey…. ” “He agreed to provide me complete package for all import formalities including customs clearance ……………………. ”. “He asked me to make the remittance towards the purchase price of all the three vehicles to M/s. Pride City General Trading LLC, Dubai.” “…. M/s. Pride City are his suppliers and they have a tie up with the DSAa (Direct selling agents) of various manufacturers of vehicles around the world. These excerpts from the statement of Shri Rakesh Aggarwal clearly indicate that it was Shri Choksey who dealt with Shri Aggarwal in the purchase and clearance of the vehicle from the Customs. This statement has not been retracted and even Hon’ble Settlement Commission while settling the case for the importer has taken cognizance of it and decided accordingly. During the personal hearing advocate raised the point about the correspondence with BMW Agency in Delhi and pointed that date do not tally with DVLA date. The reason for non-tally is given in the show cause notice, moreover the same fact has been verified by the importer from the BMW Agency and found, as presented by DRI. The advocate further submitted that I did not create any fake invoice and did not produce or use such document. Further the document produced for clearance is not proved as fake. It is already proved that Shri Choksey arranged everything for the importer including the documents and it is on record that the importer had agreed about the transaction value and accordingly paid the differential duty and the interest than the documents arranged by Shri Chjoksey are not true/correct, hence fake. Thus, charges against him are proved beyond doubt and he is liable to penal action as proposed in the show cause notice.”
8. From the above, I observe that the appellant has imported another Range Rover car in his name for which separate proceedings have been initiated and it is still pending. Along with importation of his car, he has dealt with importation of BMW M5 car in the name of his wife. The offence related to BMW M5 car has been settled by the Settlement Commission by settling the duty, interest and imposing the penalty of Rs.25,000/- and fine of Rs.1.00 Lakh in lieu confiscation of the vehicle. Thus, I find that Mrs. Sadhana Aggarwal, importer of the BMW M5 car, has already been penalized for the offence related to importation of the said BMW M5 car. There is no evidence brought on record against the appellant regarding his involvement in the commission of the offence other than payment towards the car by the appellant, being the husband of Mrs.Sadhana Aggarwal. As Mrs.Sadhana Aggarwal has already been penalized for the offence related to importation of the BMW M5 Car, I find no reason to impose penalty against the appellant for the same offence. Accordingly, I hold that the penalty imposed on the appellant is liable to be set aside.
9. In view of the above discussion, I set aside the penalty imposed on the appellant and allow the appeal filed by the appellant.
(Dictated and pronounced in the open Court.)
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