JUDGMENT
Jyoti Balasundaram, Member(J)
1. The above applications for waiver of pre-deposit of penalty of Rs.50 lakhs imposed on Shri Rajesh Desai and of Rs.1,00,000/- on Shri V.K.Mehta arise out of the order of the Commissioner of Customs and are taken up together and disposed of by this common stay order.
2. Penalty has been imposed on Shri Rajesh M Desai holding that he was a front for import of KDPE/PP/LDPE by M/s. Tristar Exports of which Shri Viresh B.Kamdar was the proprietor, the duty free goods imported by which against the Actual User Advance Licence were not utilised in the manufacture of export product but diverted by sale in the domestic market instead of being utilised in the manufacture of export product in violation of the condition of the Notification No.204/92 dated 19.5.92, claimed by M/s. Tristar Exports. It is the contention of Shri H.R.Shetty, ld.counsel for Shri Rajesh M.Desai that his client is in no way connected with the import by M/s. Tristar Exports and in no way involved in any mis-use of actual user condition of the licence, and therefore, no penalty could be imposed upon him. In support of this contention, he relies upon the applicant’s statement and also submits that no one other than Shri Kamdar has implicated him and in particular the statement of the Customs House Agent is also not against the applicant. Pleading on financial hardship, he submits that the applicant has a meager income of commission, and therefore, pre-deposit would cause undue hardship.
3. The argument of Shri V.K.Mehta is that he is the bonafide seller for value after having imported the goods in question and sale by him on high seas basis does not in any way link him will any alleged offence of violation of condition of Notification No.204/92 by M/s. Tristar Exports. He submits that there is no evidence on record to hold that he was dealing in goods having knowledge or reasonable belief that the goods were liable to confiscation. He, therefore, seeks waiver of pre-deposit and stay of recovery of the penalty amount imposed upon him pending the appeal.
4. The prayer is opposed by the ld.departmental representative Shri Gupta. According to him, the case against Shri Rajesh M.Desai is brought out clearly from the material on record and in particular the detailed statement of Shri Kamdar who is the proprietor of M/s. Tristar Exports. He submits that Shri Rajesh M.Desai was the real person behind the entire scheme of mis-use of Notification No.204/92. As regards Shri Mehta, it is the submission of the departmental representative that although he has stated in his statement that he has sold the goods imported by him to CHA, the CHA’s statement denying having purchased the goods from Shri Mehta is sufficient to hold that Shri Mehta knew that the goods which he has sold were liable to confiscation. He, therefore, justifies the imposition of penalty on both the applicants.
5. We have considered the rival submissions of both sides. We find that as far as Shri Rajesh M.Desai is concerned, it cannot be said that he has made out a case for total waiver of the penalty amount in view of the material available on record and in view of the statement of Shri Kamdar who has clearly implicated Shri Rajesh M.Desai as a front in all the illegal activities. Having regard to the above and the totality of the facts and circumstances of the case, and further, having regard to the value of the goods imported in this case viz. approximately of Rs. 36 lakhs, we are of the view that pre-deposit of Rs. 5 lakhs towards penalty by Shri Rajesh M.Desai would meet the ends of justice and we, therefore, direct pre-deposit of the amount of Rs. 5 lakhs (Rupees Five lakhs) within a period of 8 weeks from today. On such payment, the pre-deposit of balance penalty amount shall be dispensed with and stay of recovery thereof granted pending the appeal filed by Shri Rajesh M.Desai, Failure to comply with this direction shall result in vacation of stay and rejection of appeal without further notice. Compliance to be reported on 5.2.02.
6. As regards Shri Mehta, prima facie there is no material on record to hold that he had knowledge or reasonable belief that the goods which he had imported and sold were liable to confiscation. Therefore, we waive the pre-deposit of penalty amount and grant stay of recovery thereof, pending his appeal.
(Dictated in Court)