2004 (97) ECC 585 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

South Zonal Bench -- Chennai

Shri P.G. Chacko, Member (J) and Shri Jeet Ram Kait, Member (T)

Sri D. Ankineedu, Chowdry

Versus

Commissioner of Customs, Chennai

Appeals No. C/313-317/2002

[Arising out of Order-in-Original Nos. 26/2002 (ACC), 27/2002 (ACC), 28/2002 (ACC), 29/2002 (ACC) and 30/2002 (ACC) dated 26.3.2002, 30.3.2002, 29.3.2002, 29.3.2002 and 28.3.2002 respectively passed by Commissioner of Customs, Chennai]

Final Order No. 779 to 783/04, dt. 13.9.2004, 21.9.2004

Doctrine of `ejusdem generis'

Scope of, is that words of a general nature following specific and particular words -- Should be construed as limited to things which are of the same nature as those specified and not its reverse, that specific words which precede are controlled by the general words which follow.

[Para 6]

Penalty (Customs)

According to doctrine of `ejusdem generis', the meaning of the expression "in any other manner of dealing with" -- Should be understood in a sense similar or comparable to how the preceding words viz, carrying, removing depositing etc. are understood -- In other words, "any other manner of dealing" with the goods is also some physical manner of dealing with the goods -- In impugned order, no finding that appellant physically dealt with goods in question, nor was any allegation to this effect raised against him in relevant SCN -- Therefore, provisions of Section 112(b) -- Not applicable -- Penalty imposed on appellant, not sustainable on facts or in law, set aside -- Customs Act, 1962, Section 112(b).

[Para 6]

Appeal allowed

PRESENT :

Shri Murugappan, Adv. for the appellant.

Shri C. Mani, JDR for the respondent.

Case Cited :

Thakur Amar Singhji v. State of Rajasthan, AIR 1955 SC 504............................... [Para 6]

Per : Shri P.G. Chacko (Oral)

These appeals are against penalties imposed on the appellant by the Commissioner of Customs under Section 112 (b) of the Customs Act, 1962.

2. We have examined the records and heard both sides. The appeals are against separate orders passed by the Commissioner on similar sets of facts. The appellant's brother, D. Ramesh was a Customs House Agent and the appellant was admittedly looking after the affairs of his brother's business concern viz. M/s Farport International. A case was booked against the CHA and others including the appellant on the basis of results of investigation into clearances of certain imports made by various parties. Investigative results led the Department to two findings: (i) The imported goods (chemicals) were cleared without actual payment of duty, the duty payment endorsement on the relevant Bills of Entry for Home Consumption having been found to be fake; and (ii). The goods cleared under Bills of Entry for Warehousing were actually diverted without being warehoused and lime stone powder procured from the market was substituted for the chemicals for warehousing. Based on these findings of the Department, show-cause notices were issued to the CHA and others including the appellant and the same were adjudicated upon by the Commissioner, resulting in the impugned orders. The Commissioner has demanded duty from the CHA in some of the orders and from the importers in the rest of the orders. All the orders have held the imported goods to be liable to confiscation under Section 111 (j) of the Customs Act. The limestone powder has been held to be liable to confiscation under Section 111 (m) of the Act. While a penalty has been imposed on the CHA under Section 114 A, penalties have been imposed on the appellant and others under Section 112 (b).

3. Heard both sides. Ld. Counsel for the appellants submits that these appeals are liable to be allowed on the basis of the findings recorded by this Bench in Final Order No. 757/2004 dated 26.8.2004 in Appeal No. C/312/2002/MAS filed by the same party. It is pointed out that the ratio of the said order is squarely applicable to the instant cases inasmuch as the basic requirement for a penalty under Section 112 (b) of the Customs Act has not been fulfilled in any of these cases. Counsel has referred to various statements recorded under Section 108 of the Act and has submitted that no evidence has been brought out from any of these statements to support the Commissioner's finding that the appellant had knowledge of how the goods in question were going to be dealt with. According to the Ld. Counsel, it cannot be conclusively inferred from any of the said statements that the goods, whether chemicals or limestone powder, had been transported or used under the appellant's instructions. In the absence of evidence of the appellant having physically dealt, in any manner, with any of the goods confiscated by the Commissioner, it was not correct to impose any penalty on him under Section 112 (b) of the Customs Act.

4. Ld. DR, on the other hand, submits that the appellant's association with the affairs of the CHA's business is clear from the statements of Shri S. Saraboji (Driver of Shri D. Ramesh), Shri S. Mohammed Iqbal (Driver of Shri D. Ramesh) and Shri P. Ramesh (Clearing Clerk of Shri D. Ramesh) as well as from the appellant's own statement. It is argued that the said statements indicate that the appellant was concerned, one way or the other, in dealing with the goods confiscated by the Commissioner, which, according to Ld. DR, satisfied the requirement of penalty under Section 112 (b). Referring to our Final Order No. 757/2004, Ld. DR laments that, if the view taken therein is followed, it is impossible under Section 112 (b) of the Customs Act for the Department to bring most of the wrong-doers to book.

5. We have carefully considered the submissions. At the outset, we have noted that, in one of the impugned orders, the penalty on the appellant is shown as under Section 112 (a) of the Customs Act. Both sides agree that the penalty is purportedly under Section 112 (b) as the relevant findings are in relation to this provision. All other orders cite the provision as 112 (b). Hence, in all these appeals, we proceed to deal with the question whether any penalty was liable to be imposed on the appellant under Section 112 (b) in the facts and evidence in the cases.

6. In Final Order No. 757/2004 ibid, which was passed in an appeal of the same party against penalty of the same kind, we have examined the requirements of a penalty under Section 112 (b). In that case also, Ld. Commissioner had ordered confiscation of imported goods under Section 111 (j) of the Customs Act and had imposed a penalty on the appellant under Section 112 (b) of the Act. We found that the goods were correctly held liable to confiscation, and we proceeded to examine the legality of the penalty imposed on the appellant. Ultimately, we vacated the penalty after finding that the appellant had not physically dealt with the goods. The ratio of our decision is contained in the following extract from the above Final Order:

"........However, whether the above pe