ORDER
J.H. Joglekar, Member(T)
1. These 4 applications relate to 4 appeals arising out of the same order and, are, therefore, taken up together for disposal.
2. We have heard Shri D.H. Shah advocate for the applicant Shri Naresh A. Shah and Shri J.C. Patel, advocate for the applicants Shri Jayesh Tanna and Shri Pradeep C. Borana. None appeared for the applicant Shri Mahesh Ganatra.
3. The facts in brief are that two Advance Licences were obtained in the name of A-Z Enterprises, Masjid, Mumbai, the Proprietary concern owned by one Shri Ashok Malhtra. In fact, one Deepak Ganatara who had the broker’s business in the premises with his brother Mahesh Ganatara. These two licences were sold to Shri Jayesh Tanna and Ashwin Shah through two brokers viz. N.A. Shah and Deepak Ganatara. The goods were imported by some other persons but were purchased on high seas sale basis by A-Z Enterprises. After clearance, the goods were disposed of in the market and nothing was used in the manufacture of goods. M/s. Chetna Plastic who were shown as supporting manufacturers themselves were not aware that their name had been shown in the application for licence as supporting manufacturer nor were they the party to manufacture the goods scheduled to be exported. Acting on intelligence, the Customs uncovered the conspiracy. After issuing show cause notices and hearing the available persons, the impugned order was passed confirming the duty against A-Z Enterprises and imposing penalties on 9 persons including A-Z Enterprises. The penalties on the present applicants are as follows:
Shri Naresh A. Shah Rs. 10 lakhs
Shri Jayesh Tanna Rs. 20 lakhs;
Shri Pradeep C Borana Rs. 20 lakhs and
Shri Mahesh Ganatara Rs. 25 lakhs.
4. Shri Naresh A. Shah was the broker in dealing with import licence. His admission was not retracted. Shri D.H. Shah relied upon an earlier order passed by the Tribunal in Appeal No. C/923,1077 & 1079/98 BOM (Order No.C.II/1652-1654/99 WZB dated 7.7.1999). In dealing with the involvement of the same brokers, the Tribunal made the following order:- “As regards the two brokers, we find merit in the legal argument that the subject provision namely Section 112(b) of the Act wold come into play only where the person charged thereunder is physically concerned with the goods. The two persons were connected with this case at the stage much prior to the physical importation of the goods and therefore no penalty can be imposed upon them under this provision. We also adopt with approval the learned Single member’s finding sin the cited case. The Bench held that mere knowledge of the possibility of misuse would not result in the penal provision being attracted. We give unconditional stay and waiver of the penalties imposed upon Shri Mahesh Ganatra and Shri Naresh Shah.”
5. Shri Choubey, JDR for the department opposes strongly and interprets the provisions of Sec. 112(a)(b) of the Customs Act.
6. We find that the Tribunal in the cited case had held in that manner on perusal, analysis and understanding of the provisions of the particular Section and at the stage of consideration of such application had passed the stay orders. When the cases are finally head, the Revenue would have adequate opportunity to got o the interpretation of the said section and to establish the argument that even at the stage where the importation of the goods is a possibility in the far future, a broker involved in the transfer of licence can be brought under the punitive Provisions of the Section. At this stage, we follow this interim order and grant waiver of pre-deposit of penalty in the case of the applicants Shri naresh A Shah and Shri Mahesh Ganatara. As regards Shri Pradeep C Borana his statement had not been recorded. There is no prima-facie establishment that he had any conscious role in the purchase of the licence r the importation of the goods or subsequent sale in the market. WE, therefore, grant waiver of pre-deposit of the penalty imposed on Shri Pradeep C. Borana.
7. Shri Jayesh Tanna not only purchased the licence but also organised the purchase of the good sand their sale in the market in the face of the knowledge that his actions were not in terms of the law. Shri J.C. Patel submitted that Shri Jayesh Tanna was not the buyer. The goods were imported by other persons and were purchased on high seas sale basis by A-Z Enterprises. Shri Jayesh Tanna was merely representing the original importers and in that capacity had organised the clearance from the Docks. We find that the facts establish that the licence was purchased by Shri Jayesh Tanna. Shri J.C. Patel submits that Shri Jayesh Tanna has no movable or immovable property and he had no means to deposit the penalty.
8. We find that Shri Jayesh Tanna’s action to be different from those of others. At this stage, on primafacie findings, we hold that no strong case has been made in favour of Shri Jayesh Tanna and direct him to deposit a sum of Rs. 5 lakhs (Rupees Five lakhs) within eight weeks from today as a condition to hearing to his appeal. In the event of failure, his appeal shall be dismissed without further notice.
9. Post for compliance on 23.7.01.
(Dictated in Court)