Back
Supreme Court Of India
Arijit Pasayat,Mukundakam sharma
CARPENTER CLASSIC EXIM P. LTD.
Versus
COMMNR. OF CUSTOMS (IMPORTS) AND ANR.
Decided On : 02/12/2009
(b) Customs Act, 1962 – Section 114a – Discretion given to authorities – Provision not mandatory – However, no infirmity in quantum of penalty. (Para 8)
Facts of the case:
The business premises and the residential premises of the concerned persons were searched and incriminating documents were seized.
The investigations conducted revealed that shri R. Karumbaiah, his wife, Shri Thomas Mathew and his wife as Directors started m/s. Carpenter Classics Exim Pvt. Limited as a private limited company in the year 1995. The company decided to import their requirements of kitchens from Veneta Cucine of Italy.
Shri Karumbaiah and Thomas mathew hatched a conspiracy to undervalue their imports for increasing their profits in the local market. For this purpose, they had prepared the invoices of the foreign supplier and sent them to Italy. Thomas Mathew floated a front company in the name of Proma srl, the manipulated invoices were raised in the name of the above front company. These invoices were filed by the appellant before the Customs officials for assessment.
CCEPL presented the invoices prepared in the name of Proma SRL along with the Bills of Entry which showed substantially lower prices than what was actually charged by Veneta Cucine, in order to camouflage the entire conspiracy of under-valuation CCEPL collected a certain portion of their sales proceeds from certain customers in cash.
CCEPL substantially under-valued their import consignments in order to evade payment of customs duty. Similar modus operandi was adopted to import goods through Chennai Port also.
On the basis of investigation, show cause notices were issued to the noticees. The adjudicating authorities at Bangalore and Chennai passed orders which were assailed before CESTAT. Various stands were taken before the cestat.
The CESTAT noted the fact that the commissioner has observed that the main charge against the appellants is that of under valuation of the imported goods using a particular modus operandi. The CESTAT held that the conclusions were supportable as the evidence on record clearly established that there was under valuation to the extent of 65% with which Shri Thomas played crucial role in the nefarious activities. It was held that both Ravi Karumbaiah and Thomas Mathew were liable to penalty under section 112 (a) of the Act and the company was also liable to penalty under Section 114a of the Act. The differential duty was to be paid alongwith interest. The penalty however was deleted so far as Shri Sanjeev Kabbur is concerned.
Finding of the Court:
There is no infirmity in impugned decisions.
Result:
Appeals dismissed.
( 1 ) CHALLENGE in these appeals is to the judgment of Customs, Excise and Service fax Appellate tribunal, South Zone, Bangalore (In short the 'cestat' ). The orders in original passed by the commissioner of Customs, Bangalore and commissioner of Customs, Chennai were affirmed subject to certain modifications.
( 2 ) SEVEN appeals were filed against the order-in-Original No. 27/2004. dated 27. 7. 2004 by commissioner of Customs, Bangalore and order-in-Original No. 2724/2004 dated 30. 9. 2004 passed by the Commissioner of Customs, chennai. The details of the orders challenged before the CESTAT and the quantum involved are as follows: appeal No appellant Duty differentia Fine redemption penalty c/428/04 m/s. Carpenter Classic Exim (P) Ltd. Rs. 59,12,619/ rs. 15,00,000/ rs. 55,44,396/ c/429/04 -Ravi Karumbaiah, MD, CCEPL _ rs. 10,00,000/ c/433/04 sanjeev Kabbur _ __ rs. 1,00,000/-C/436/04 m/s. Carpenter Classic Exim (P) Ltd. Rs. 36,96,201/ rs. 9,61,506/-C/437/04 ravi Karumbaiah, MD CCEPL __ rs. 9,00. 000/-C/13/05 thomas Mathew rs. 5,00,000/-C/06/05 sanjeev __ __ rs. 7,00,000/-
( 3 ) BACKGROUND facts as noted by the CESTAT are as follows: The DRI Officers received intelligence regarding the under-valuation of imported goods by the appellants. The business premises and the residential premises of the concerned persons were searched and incriminating documents were seized. Statements of S/shri Ravi karumbaiah, Managing Director of M/s. Carpenter Classic Exim Pvt. Ltd. , V. S. Chandan, CADD Operator were recorded under Section 108 of the Customs Act, 1962 (in short the Act ). The residential premises of Shri Sanjeev Kabbur, Ex-Marketing manager of the company were searched and some documents were seized. Statement of sanjeev Kabbur was also taken. Ms. Jagruthy sevak was the Executive of the appellant company, her statement was also recorded. The investigations conducted revealed that shri R. Karumbaiah, his wife, Shri Thomas mathew and his wife as Directors started m/s. Carpenter Classics Exim Pvt. Limited (in short 'ccepl') as a private limited company in the year 1995. The company decided to import their requirements of kitchens from veneta Cucine of Italy who are reputed manufacturers. Shri Karumbaiah and Thomas mathew hatched a conspiracy to undervalue their imports for increasing their profits in the local market. For this purpose, they had prepared the invoices of the foreign supplier and sent them to Italy. Thomas Mathew floated a front company in the name of Proma srl, the manipulated invoices were raised in the name of the above front company. These invoices were filed by the appellant before the Customs officials for assessment. They made their first import in the year 1995 through ICD, Bangalore. The foreign suppliers invoice and packing list had been signed by Shri Thomas Mathew on behalf of m/s. Proma SRL. CCEPL communicated their requirements along with the drawing to Proma srl with a copy to Veneta Cucine. " sometimes the orders were communicated directly to Veneta Cucine. Proma SRL prepared the bill showing the actual price in lira and forwarded the drawings to Veneta cucine. Veneta Cucine in turn forwarded the confirmation order to Proma SRL and ccepl. These orders of confirmation indicated the actual price of the products ordered in Liras. Veneta Cucine at the time of loading of containers and shipment prepared their own packing lists showing the order numbers of CCEPL and the destination as CCEPL. CCEPL arranged for their representatives to be present at the time of loading of the containers at the factory premises of Veneta Cucine to ensure not only proper loading but also to relabel the packages to make it appear that the shipment had been affected by Proma SRL. CCEPL presented the invoices prepared in the name of Proma SRL along with the Bills of Entry which showed substantially lower prices than what was actually charged by Veneta Cucine, in order to camouflage the entire conspiracy of under-valuation CCEPL colle
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
