1. These applications pray for waiver of pre-deposit and stay of recovery in respect of the penalties of Rs. 2.00 crores, Rs. 25.00 lakhs and Rs. 15.00 lakhs imposed respectively on M/s. ICICI Bank Ltd., Rakesh Yadav and C. Nanda Kumar under Section 112(a) of the Customs Act by the Commissioner of Customs. The impugned order has demanded customs duty of over Rs. 5.40 crores from M/s. Madras Aluminium Co. Ltd. (MALCO for short) under Section 28(1) of the Act and has appropriated towards such demand the amount of Rs. 4.85 crores deposited by the company. The matter relates to import of machinery for the 'Industrial Pollution Prevention Project' of MALCO funded by the World Bank, for which 1CICI Bank is the project implementing authority. The importer claimed the benefit of Notification No. 84/97-Cus. dated 11-11-97 as amended by Notification No. 85/99-Cus. dated 6-7-99. One of the conditions for the exemption claimed under the Notification was that a certificate from the project implementing authority to the effect that the goods are required for execution of the project and that the project has duly been approved by the Govt. of India should be produced by the importer.
This certificate was required to be given by the executive head of the project implementing authority, M/s. ICICI Bank in this case, and was also required to be countersigned by an officer not below the rank of Joint Secretary to the Govt. of India in the concerned Line Ministry in the Govt. of India. The Notification defined 'Line Ministry' as the one engaged by the Govt. of India in the Ministry of Finance. MALCO obtained a certificate from the executive head of ICICI Bank and got it countersigned by an officer in the Ministry of Finance, which was obviously not the Line Ministry engaged for the purpose. The Commissioner in the impugned order found that the countersignature in the certificate issued by ICICI Bank was forged and accordingly it was held that the above condition was not satisfied by the importer. Hence the denial of the benefit of exemption to MALCO and the penalties on the appellants who were found to have abetted the above forgery for the purpose of securing undue benefit of exemption for the importer.
2. After examining the records and hearing both sides, we find that the project implementing authority had a pivotal role in the implementation of the project. That is why their certificate was required to be produced by the importer for the benefit of exemption from payment of duty on machinery imported for the project. An officer not below the rank of Joint Secretary to the Govt. of India in the 'Line Ministry' was required to countersign the certificate. This was to ensure that the certification by the project implementing authority was genuine and could be acted upon by the Customs authorities. In the present case, it is seen from the certificate of ICICI Bank that the bank themselves guided the importer to get the certificate countersigned by competent officer in the Ministry of finance. At the foot of the certificate, the bank made the following entries: It appears from the records that the bank went to the extent of engaging a person, by name C. Nanda Kumar, for taking the certificate to the Ministry of Finance for countersignature and such person got the signature countersigned in a fraudulent manner by one Shri Rakesh Yadav in the Ministry of Finance. Shri C. Nanda Kumar and Shri Rakesh Yadav are the other appellants before us. Learned Counsel for the bank submits that they were not aware of the identity of the 'Line Ministry' and hence cannot be made liable for any penalty on the ground of abetment of the offence found against the importer. This submission is unacceptable inasmuch as the bank themselves entered the name of the Ministry of Finance at the foot of the certificate. As a responsible project implementing authority, they ought to have had a close look at the definition of 'Line Ministry' given in the Notification itself. The presumption is that the bank did this, but yet they chose to conduct themselves in the aforesaid manner. As regards Shri C. Nanda Kumar, it is not in dispute that he carried the bank's certificate to Rakesh Yadav. As regards Rakesh Yadav, it appears from the records that he is presently under suspension for the above forgery. His counsel submits that he was under COFEPOSA detention for some time and was released on the recommendations of the Advisory Board. Learned Counsel has also shown us the order of the Advisory Board. That order is relevant to proceedings under the COFEPOSA and may not be relevant to the present proceedings.
3. Learned Counsel for the bank has cited a Stay Order of the West Zonal Bench (Order S/902-908/WZB/2006 dated 10-11-2006 [2007 (209) E.L.T. 204 (Tri. - Mumbai)]) which granted waiver of pre-deposit and stay of recovery in favour of the bank and Shri Rakesh Yadav in a case relating to a similar project import by M/s. Rashtriya Chemicals & Fertilizers Ltd. We have perused this order of the coordinate Bench and we find that any copy of the certificate issued by the bank to the importer was not produced before that Bench. In the instant case, we have seen the relevant certificate and, on that basis, prima facie, we have found the bank's involvement in the case. Thus, the case considered by West Zonal Bench is distinguishable.
4. None of the appellants has made out prima facie case against the penalty as rightly submitted by learned Jt. CDR. However, taking into account the plea of financial hardships raised by counsel for C. Nanda Kumar and Rakesh Yadav, we are not inclined to call for full deposit of the penalty amount. Insofar as the penalty imposed on the bank is concerned, prima facie, we think that its quantum is too much for the offence found against them. In the result, we direct M/s. ICICI Bank to pre-deposit Rs. 20,00,000/- (Rupees twenty lakhs only) and Shri Rakesh Yadav and Shri C. Nanda Kumar to deposit Rs. 2,00,000/- (Rupees two lakhs only) and Rs. 1,00,000/- (Rupees one lakh only) respectively.
These amounts shall be deposited within six weeks from today. Report compliance on 22nd January 2006.