ORDER
Moheb Ali M., Member (T)
1. These application for waiver of pre-deposit and stay recovery thereof arose out of the order of the Commissioner of Customs (Preventive), Mumbai. In the impugned order, the Commissioner confirmed demand for differential duty amounting to Rs. 7,21,926/- on the consignment of beads and metal chains embedded with stones, confiscated the same, confirmed another amount of Rs. 87,34,122/- being the differential duty on similar goods already cleared, confiscated crystals, glass beads, glass stones etc. seized from the premises of one Shivkumar Agarwal, confiscated Indian currency amounting to Rs. 5,95,000/- seized from the factory premises of the above said person under Section 121 of the Customs Act, imposed a penalty of Rs. 25 lakhs on him, imposed a personal penalty of Rs. 2 lakhs on one Shri Bharat J. Barot and imposed a personal penalty of Rs. 10 lakhs on Shri Atun Chatwani. The goods under dispute are glass crystals, glass beads, cup chains studded with glass crystals, glass stones etc.
2. Briefly the facts are that on the basis of intelligence gathered by the officers of Airport Preventive Unit, Mumbai, that chatons and glass beads from Hong Kong were being illegally and unauthorisedly imported into the country by misdeclaring them as moulded beads and moulded chains and by undervaluing them, the officers kept a watch on the imports of such goods. They noticed one consignment declared to contain nine pieces of 293 kgs. of moulded beads and moulded chains consigned to M/s. Shreyas Enterprises, Rajkot, Gujarat. It was noticed that the consignment arrived from Hong Kong. The value declared was US$ 1226.870. On examination, the consignment was found to contain beads and metal chains embedded with stones. Shri Atul Chatwani, proprietor of M/s. Shreyas Enterprises, in whose name the bill of entry was filed, appeared before the officers. Enquiries revealed that in the past also several consignments were imported by him. Enquiries with the clearing agent seemed to have revealed that one Shivkumar Agarwal was the real person behind the past several imports and that Shri Atul Chatwani was only a front. Investigations seemed to have indicated that in the past also the goods were misdeclared and undervalued. The clearing agent who handled the consignment, stated that one Shri Bharat J. Barot was the one who handed over the importer’s declaration and other documents to the clearing agent. Shri Bharat J. Barot also accompanied the consignments to various destinations after clearance. After detailed investigation, a show cause notice was issued which resulted in the adjudication order by the Commissioner.
3. Heard both sides.
4. The main grouse of the applicants is that duty has been demanded by the Commissioner for the alleged past clearances from both Shri Atul Chatwani and Shri Shivkumar Agarwal jointly and severally, which is not permissible under law. The Commissioner should have decided as to who the importer is while adjudicating the case and should have demanded the differential duty from that person alone. The appellants relied on the decision of the Tribunal in the case of J.K. Pharma v. CC(I), Mumbai (2004 (166) ELT 407) wherein the Tribunal held that joint and several liability cannot be fastened on persons while demanding duty. They also relied on the decision of the Tribunal in the case of Orient Arts & Crafts v. CC(P), Mumbai (2003 (155) ELT 168) wherein the Tribunal held that the Commissioner having jurisdiction over the Customs House in which the import look place, should be the appropriate authority to conduct investigations and adjudication proceedings rather than the Commissioner (Preventive), Mumbai. In the present case, the goods were imported through Air Cargo Complex, Sahar, but the officers of the Customs (Preventive) Commissionerate, Mumbai, seized the goods and conducted further investigation resulting in the adjudication order passed by Customs (Preventive). They also pleaded that the penalties imposed on various persons without determining as to who is the person liable to pay duty, if any, are also not warranted.
5. The learned JDR, Shri K.K. Srivastava, submitted that the investigating authorities gathered sufficient evidence so as to warrant the confiscation of the goods under clearance as well as the ones already cleared and found at Shivkumar Agarwal’s premises. The goods in question as well as the ones cleared earlier were liable to confiscation as rightly held by the Commissioner under Section 111(d) & (m) of the Customs Act and the persons concerned are liable for penalty.
6. We observe that the Commissioner demanded the differential duty jointly and severally from the de facto and the de jure importers. The de jure importer is Shri Atul Chatwani and the de facto importer is Shri Shivkumar Agarwal. We agree with the applicants’ contention that the Commissioner was not sure as to who the actual importer was. Demanding duty from persons jointly and severally Prima facie is not envisaged under the Customs Act. It is further seen that the goods worth Rs. 23,04,000/- are in the custody of the department along with other goods seized from the premises of Shri Shivkumar Agarwal. In addition, the Commissioner also confiscated Rs. 5,95,000/- under Section 121 of the Customs Act alleged to be sale proceeds of smuggled goods. Keeping all these facts into consideration, we waive pre-deposit of duty and penalties and stay recovery thereof pending appeals as the appellants made out a story prima facie case in their favour.
(Operative part pronounced in court)