ORDER
P.G. Chacko, Member (J)
1. Ld. Commissioner of Customs, in the impugned order, imposed a penalty of Rs. 5 lakhs on the appellants under Section 112(a) of the Customs Act. This penalty is based on the following finding :-
I observe that Shri T.P. Rajmohan has successfully evaded contact with and apprehension by the Customs officers and has not responded to the Summons issued by the Customs. His conduct since the detection of the case not only confirms his wilful acts of masterminding the fabrication of the documents and abetting the mis-declarations which rendered the impugned goods liable to confiscation but also projects that he is a seasoned operator in illegal smuggling activities. He is thus liable for penalty under Section 112(a) of the Customs Act, 1962 for fraudulently aiding and abetting the illegal import of the goods which rendered the goods liable for confiscation under Section 111(m) of the Customs Act, 1962. He deserves to be substantially penalised.
The charge leveled against the appellant in the show-cause notice was that he had aided and abetted the acts of fabrication of documents and misdeclaration of Shri K. Jayaram. The SCN had proposed a penalty on Shri K. Jayaram also under Section 112(a) ibid. This proposal, however, was dropped by the Commissioner. Nevertheless, Id. Commissioner proceeded to impose penalty on the appellant under Section 112(a).
2. After examining the records and hearing both sides, I find that M/s. Maluram Enterprises Pvt. Ltd. (MEPL, for short) had imported a consignment of ‘hair care and dental care products’ from Korea and filed Bill of Entry dated 25-9-2003 for clearing the goods. Shri K. Jayaram was the Managing Director, of the above company. The invoice filed with the Bill of Entry had shown the value of the goods as US $ 67,627.60. In keeping with this value, M/s. MEPL had declared M.R.P of the various items of the consignment, in the Bill of Entry. Later on, from a letter received by the Customs authorities from HSBC bank, Chennai (bankers of the importer), it appeared to the department that the correct invoice price of the goods was US $ 1,70,047 and not US $ 67,627.60. The department received a copy of the supplier’s invoice mentioning this amount of US$ 1,70,047, also from the bank. Statements of Shri K. Jayaram and the CHA were recorded by the officers of Customs. On the basis of the results of the investigations, the department issued the aforesaid show-cause notice, wherein Shri K. Jayaram was alleged to have fabricated the invoice showing US$ 67,627.60 as the value of the imported goods and misdeclared the value in the Bill of Entry. In the SCN, the appellant was alleged to have abetted Shri K. Jayaram’s offence. In the impugned order, Id. Commissioner dropped the charge against Shri K. Jayaram but sustained the charge against the appellant. Ld. counsel for the appellant has prayed for vacating the penalty imposed on the appellant, by submitting that, where the charge against the main offender was dropped, there was no question of sustaining the charge of abetment of that offence. Ld. SDR has reiterated the findings recorded in the impugned order.
3. After giving careful consideration to the submissions, I have to accept the counsel’s plea. The adjudicating authority cannot impose a penalty on any person on a ground different from the one raised against that person in the SCN. In the present case, the Commissioner imposed penalty on the appellant after upholding the allegation (raised in the SCN) that the appellant had abetted Shri K. Jayaram’s act of fabrication of documents and of misdeclaring the value of the goods in Bill of Entry. He, however, exonerated Shri K. Jayaram from penal liability under Section 112(a). It is, thus, obvious that Id. Commissioner went into a misconception. Paragraphs 17 & 18 of his order would expose his error of judgment, which are reproduced here under :-
17, It appeared from the statement of Shri K, Jayaram, Managing Director of the importing company given before the Customs Officer that he had instructed Shri T.P. Rajmohan to change M.R.P of the items and that the invoice and other documents were fabricated and Bill of Entry No. 535834 dated 25-9-2003 was filed using these documents. Shri K. Jayaram, who has attempted to clear the above said consignment by under valuing the goods with the help of fabricated invoice and reduced M.R.P., thus rendering the goods liable to confiscation as aforesaid appeared to be liable for penalty under Section 112(a) of Customs Act, 1962.
18. Shri T.P. Rajmohan.. who has aided and abetted in the aforesaid acts of fabrication of documents and mis-declaration of Shri K, Jayaram appeared to be liable for penalty under Section 112(a) of Customs Act, 1962.
4. It is clear from the above part of the impugned order that, when the appellant was considered to be abettor, Shri K. Jayaram was the main offender in the Commissioner’s mind. The offence, if any, of Shri K. Jayaram was overlooked and he was exonerated from penal liability. In the circumstances, there was no question of the appellant being held to have abetted the main offence. In other words, any penalty under Section 112(a) on the ground of abetment was not warranted against the appellant. The impugned order is set aside insofar as it relates to penalty on the appellant, and the appeal is allowed with consequential relief.
(Dictated and pronounced in open court)