Judgment:
1. Having challenged the order dated 28-8-1997 passed by the Commissioner of Customs, New Custom House, New Delhi, appellants have filed these applications seeking waiver of the requirement of pre-deposit of the amounts of penalty under Section 129E of the Customs Act, 1962.
2. M/s. Rahul Watches Pvt. Ltd. said to be a SSI Unit has a unit for assembling digital watches as seen from the certificate dated 2-8-1988 at page 14. The officers of the Customs Department visited the premises of the factory where some of the Directors also reside on 1-7-1996 and found 1,627 watches bearing the name "Tressa Swiss" and 3,000 pieces of watch movements of foreign origin. These goods as well as 52 records/documents were seized under the belief that the goods had been clandestinely imported without payment of duty. Show cause notice was issued to the company, the Directors and the Power of Attorney Holder of the company alleging clandestine import of the goods and evasion of duty and proposing absolute confiscation of the goods and imposition of penalty on all concerned. Appellants resisted the notice contending that M/s. Rahul Watches Pvt. Ltd. has been assembling watches, that 1,500 of the watches seized had been so assembled in the premises, that the remaining 127 watches had been assembled in the previous year and remained unsold and that 3,000 watch movements were from out of 14,335 watch movements imported in February, 1996. They also denied any clandestine import or evasion of duty. Overruling these contentions the Commissioner passed the impugned order absolutely confiscating the goods and imposing penalty of Rs. 5 lacs on the company and Rs. 1 lac each on Directors and Power of Attorney Holder.
3. Shri J.S. Agarwal, learned Advocate appearing for the appellants relying on the contentions raised in reply to the show cause notice as indicated above stated that the assembly of 1,500 watches is supported by documents. Import of 3,000 watch movements is also supported by documents. According to him the Commissioner was also in error in taking the value of each watch at Rs. 1,500 as against the actual selling price of Rs. 500/- as seen in the advertisement of the appellants. He further contended that the show cause notice did not indicate any lapse on the part of the Directors and Power of Attorney against whom order had been passed and therefore penalty could not have been imposed on them.
4. Rebutting the above contentions, Shri K. Srivastava, SDR pointed out that all the watches are "swiss tressa" as indicated by the name inscribed therein, that the appellants have no case that foreign brand name was being inscribed in the indigenously assembled watches.
According to him the company has been shifting its case from time to time. In the letter dated 2-7-1996 given by Mrs. Veena Wadhwa one of the Directors who also resides in the premises (letter written after telephonic conversation with her husband also a Power of Attorney Holder) she stated that the watches had been assembled in the premises using imported watch movements but sometime thereafter the company contended that 1,500 watches were purchased from M/s. Rama Watch Industries, Gujarat. It is also pointed out that there are excise records evidencing receipt of imported movements. Shri Agarwal referred to the invoice issued by M/s. Rama Watch Industries produced before us in support of the case of purchase. This is rebutted by the Department pointing out that this was a belated case not supported by any permission obtained from Commissioner or by other excise records.
5. Having considered the aspects placed before us, we are not satisfied that the company has made out a prima facie case for waiver of requirement of deposit of the entire amount of penalty levied on the company. Having regard to the circumstances and the dispute about value, we direct M/s. Rahul Watches Pvt. Ltd. to deposit a sum of Rs. 1,00,000/- within two months from today. So far as the individuals are concerned, in view of the absence of specific allegation in the show cause notice, we are of opinion that prima facie case has been made out for dispensing with the requirement of deposit of the penalty amount.