1. The application for condonation of delay of 35 days in filing the above appeal is allowed in view of the explanation given by the Proprietor that he had suffered heart attack on 7^th January 2004 and thereafter under went angiography and advised surgery.
2. The adjudicating authority has imposed penalties of Rs. 2 lakhs on M/s. Sahil Industries, Rs. 3 lakhs on M/s. Kiran M. Choksi, Rs. 10,000/- on Shri Satyendra Sawant, Proprietor of Sahil Industries and penalty of Rs. 50.000/- on Shri Pragnesh Jain. CHA employee. The case of the department is that Sahil Industries obtained advance licence for import of Polyester Fabrics/Cotton Fabrics/HDPE. falsely declaring themselves as manufacturer-exporter, that they imported a number of consignments of polyester fabrics/cotton fabrics/HDPE and cleared them duty free against Advance Licence and then sold them in the domestic market, contrary to the condition that duty free import was permissible only for use of the imported materials in the manufacture of export goods. The order covers Bill of Entry No. 159 dated.3.10.2002. for import of 111 bales of Spuntex Polyester fabrics. Penalty has been imposed on Sahil Industries and its Proprietor as it is Sahil Industries which filed the relevant bill of entry. Penalty has been imposed on Kiran M. Chokshi on the ground interalia that he had master minded the conspiracy of import of goods under advance licence and disposal of the same in the domestic market without fulfilling any export obligations and for which purpose he has been found to have lured Satyendra Sawant into import business. The case against Kiran M Choksi is made out on the basis of statement of Shri Vinod Chaudary, broker of Grey Powerloom Cloth of Shri Satish Desai, Proprietor of M/s.P.M. Contracts Corporation who introduced Shri Satyendra Sawant to Shri Kiran M. Choksi. Penalty has been imposed on Shri Pragnesh Jain on the ground that he had long outstanding association with Kiran M.Choksi and therefore could not plead ignorance of the activities of the Kiran M. Choksi and the fact that the goods imported duty free were being diverted to local market.
3. We have heard Shri Anil Balani, Id. Counsel for Shri Kiran M. Choksi and Shri V.S. Nankani. Id. Counsel for Shri Pragnesh Jain and Shri Satyendra Sawant appeared in person. The appeal of Sahil Industries has been dismissed as withdrawn and therefore we are only concerned with applications of Shri Kiran M. Choksi, Shri Satyendra Sawant and Shri Pragnesh Jain.
4. The contention of the Id. Counsel for Shri Choksi that the order has been passed in contravention of the principle of natural justice as prima facie is not acceptable as undisputedly show cause notice proposing imposition of penalty on his involvement that goods covered by bill of entry No. 159 was received by him and notice of personal hearing was also received. Although the show cause notice reference in the hearing note dated 31.12.2003 may not have been correct and may have shown the number of show cause notice issued in the other case relating to imports covered by 28 bills of entry which is also the subject matter of there appeals before us, it cannot be prima facie held that the applicants did not have an opportunity of defending himself particularly when prima facie all the relied upon documents were furnished along with the show cause notice and the noticees were also informed that they could inspect and take copies of any other documents which are relied upon, with the prior permission of Deputy Director of Customs which opportunity was not availed of by Shri Choksi. Shri Choksi has not filed any reply to show cause notice. We note that the Commissioner was required to decide the case within the time frame under the directions of the Hon'ble Mumbai High Court, while disposing of petition filed by M/s. Tripasa Industries Ltd. the foreign supplier of the goods who had sought report of the same. We also do not find prima facie merit in the plea that provisions of Section 111 (d) and 111 (o) which should have been invoked for the purpose of confiscation of the goods are not attracted and therefore penalty Under Section 112(a) can be imposed on Shri Choksi as duty free import was permissible only subject to the condition that imported goods were to be used in the manufacture of export goods which they were not. We are, therefore, of the view that strong prima facie case for the total waiver has not been made out by Shri Choksi. We, direct pre-deposit of Rs. 50,000/- by Shri Choksi.
5. As regards Shri Satyendra Sawant there is a clear admission on his part that he agreed to act as an importer as bidding of Shri Choksi as, he was in need of money. Therefore no prima facie case is made out by him. Having regard to totality of the facts and circumstances of the case, we direct Shri Satyendra Sawant to deposit Rs. 2,000/- towards penalty imposed on him.
6. Shri Pragnesh Jain has made out a strong prima facie case for total waiver as the finding in para 108 of the impugned order that because he had long outstanding association with Shri Choksi he cannot plead ignorance of Shri Choksi's activities and of the fact that the goods imported duty free were being diverted to local market is prima facie not for holding him liable to penal action, in the absence of any evidence that he had knowledge of the clearance of duty free imported goods being sold in the local market. We are, therefore, waive the pre-deposit of penalty imposed on Shri Pragnesh Jain.
7. Time for pre-deposit by Shri Choksi and Shri Satyendra Sawant is eight weeks from today. Failure to comply with this direction for pre-deposit shall result in vacation of stay and dismissal of appeals without prior notice. Compliance to be reported on 28.02.2005.