Per Gowri Shankar :

These appeals are taken up for disposal, with the consent of both sides, after waiving deposits.

2. By the order impugned in these appeals, the Commissioner has demanded duty of Rs. 9.92 lakhs approx. from Swem Industries (appeal 284/01), imposed a penalty of equal amount under Section 114A of the Act, imposed a penalty of Rs. 1.00 lakh on Fahod Safi Motiwala, its partner, ordered confiscation of three tempo vans each owned by Salimbhai Gulam Hussain Shaikh, Jafar Mohd Usmangani Khoji and llyasbhai Shaikh, with an option to redeem it on payment of fine of Rs. 1,000/- each, and imposed penalties of Rs. 10,000/- each on them, and also on Dayaram Prajapati, who was present in the tempo owned by llyasbhai Shaikh.

3. The facts on the basis of which the Commissioner has come to his conclusion are these. The officers of the Directorate of Revenue Intelligence intercepted two of the tempo vans on the highway near Surat, and found them to be loaded with polyester yarn of foreign origin. Investigation by them led them to Swem Industries where they found a third tempo van loaded with such yarn ready to leave. Their enquiries resulted in the conclusion that the yarn in question have been imported by Swem Industries. This unit was a 100% Export Oriented Unit and had cleared the yarn without payment of duty in terms of the exemption contained in Notification 53/97. Enquiries also disclosed that the yarn found on the third tempo van have been sold to various buyers located in Kim which was the destination of the third tempo.

4. The common counsel for the appellants does not dispute these facts, and the liability to confiscation of the yarn or the liability to penalty of Swem Industries. He contends however that the duty that has been determined to be payable on the yarn and therefore the penalty imposable on Swem Industries under Section 114A of the Act is incorrect. The duty of Rs. 9.92 lakhs had been arrived at by applying the rate of duty applicable to yarn at the time of importation (and at the time of removal from the warehouse, there being no change between the two) on the market value of the goods at Rs. 110/- per kilogram as mentioned in the panchanama. The contention of the counsel for the appellants is that the value of these goods ought to be the assessable value under Section 14 of the Customs Act.

5. This contention has to be accepted. Although the departmental representative relies upon the reasoning of the Commissioner's order, we are not able to find any reason in that order which would justify adopting the market value for levy of duty. Since the goods became liable to duty, either because the condition of the notification was not complied, or because they were removed from the warehouse without paying duty thereon the value of these goods is the value determined in accordance with the provisions of Section 14. The Commissioner does not really give any reason at all for not considering this value, although he says that the value as shown in the panchanama it is not disputed. It is not the market value of the goods that is to be taken for assessment. The claim therefore has to be accepted. It would then follow that the penalty imposed on the firm under Section 114A has to be redetermined.

6. We however do not find any ground for confirming the penalty on Fahod Safi Motiwala. It has been a consistent view taken, in accordance with the long decisions of the Tribunal, that penalty upon the partner of a firm cannot be imposed in addition to the penalty on the firm. We therefore set aside the penalty of Rs. 1.00 lakh imposed on Fahod Safi Motiwala. The driver (who also is the owner of each of the tempo vans) stopped by the officers on the highway had professed their ignorance of the facts that the yarn in question was being removed from the premises of Swem Industries contrary to law and had also emphasised that one of the tempo vans which were travelling together, carried an employee of this firm. There was als