ORDER
Jyoti Balasundaram, Vice President
1. The case in brief is that M/s Wipro GE Medical Systems, Bangalore [herein after referred to as “WGEMS] imported Computerized Tomography Scanners Model E [hereinafter referred to as “CT/e] mis-declaring them as parts and fraudulently availed the benefit of concessional rate of duty applicable to parts for manufacture of CT/e in terms of Notification No. 16/2000 dated 01/03/2000. Duty demand was raised on the goods imported at Mumbai as well as at Bangalore and notice also proposed imposition of penalty in addition to the proposal for confiscation of the goods. The notice also proposed imposition of penalty on the appellants herein, who are CHA of the importers and employee of the CHA respectively on the ground that aiding and abetting M/s WGEMS in mis declaration of the goods as parts. The importers approached the Settlement Commission and in view of the order passed by that authority, the Commissioner in the present impugned order, dropped action both for recovery of duty and imposition of penalty and for confiscation. He imposed a penalty of Rs. 5 lacs on CHA and Rs. 2 lacs on its employee under the provisions of Section 112(a)(ii) of the Customs Act. He also directed that the question of suspension of CHA licence was to be decided after following the procedure as laid down under Regulation 23 of the CHA Licencing Regulations, 1984 by the appropriate authority. Hence these appeals.
2. We have heard both sides. The arguments are confined to the fact that since the Settlement Commission has dropped the proceedings for imposing penalty against the importers of the equipments in question, CHA and it employee cannot be visited with penalty in the light of the Tribunal’s order in the case of Shitala Prasad Sharma v. Commissioner of Central Excise, Mumbai-I wherein it has been held that the main accused stands absolved of penal consequences, no question of imposition of penalty on co-accused arise and on the decision of the Tribunal in the case of D.P. Kothari v. Commissioner of Central Excise, Jaipur-I 2001 (135) ELT 669 wherein the Tribunal held that since the principal noticee filed a declaration under Kar Vivad Samadhan (KVS) Sheme and issue was finally settled in their favour, penalty imposed on co-noticee does not arise [The Supreme Court in the case of Union of India v. Onkar S. Kanwar has held that settlement by main declarant under the scheme operates as full and final settlement in respect of other persons on whom show cause notice issued in respect of the same]. The other submission made by the appellants is that in the case of the importers, the Tribunal vide its order held that although by applying legal fiction of Interpretative Rule 2(a), import by M/s WGEMS of CAT Scan in CKD & SKD condition was to be treated as import of complete system, but for all practical purposes it is an importation of components/parts thereof and hence benefit of exemption in terms of Notification No. 66/68-Cus dated 1st March 1988 for parts is admissible. They therefore submit that M/s WGEMS cannot be treated as having mis-declared the goods and fraudulently availing the benefit under Notification No. 16/2000, which is also admissible for parts and since M/s WGEMS cannot be charged with mis-declaration, the appellants cannot be charged with aiding and abetting them so as to justify the penalties imposed upon them.
3. The Ld DR would reiterate the findings of the adjudicating authority and submit that from the statement of General Manager of CHA and the fact logistic services were provided by the CHA to the importer and the branch of CHA in China had sent an E-mail to the importer suggesting various ways of overcoming the regulations under the Customs Act and suggesting that a single MAWB be made to clear the goods as complete CT Scanner, it would clearly show the involvement of CHA by aiding and abetting the importers for mis-declaration of complete unit as parts for availing undue benefit of the Notification, which was not admissible to them. We accordingly consider the rival submission. We note that in the case of the importers, the Tribunal has extended the benefit of Notification to parts even though they have held that by application of legal fiction of Interpretative Rule 2A, the goods are to be considered as complete unit of CT Scanner system. It is not disputed before us that the goods covered by the earlier order are in any way different from the goods imported in the present case. The Tribunal’s decision has been upheld by the Supreme Court as seen from the order reported in 2001 (111) A54 (SC). Therefore, the Ld counsel is correct in his submission that M/s WGEMS itself cannot be held guilty for mis-declaration so as to hold that appellants herein have aided and abetted the importer. This being so, we set aside the penal action on these appellants and allow the appeals. However, we refrain from passing any order on action to be taken/taken against CHA in terms of CHALR 1984 as this is not the subject matter of the appeals.