East Line Aviation Ltd. Vs. Commissioner of Central Excise, - Court Judgment

Excerpt:
1. through these stay applications, the appellants have sought waiver of the pre-deposit of the penalty amounts as imposed on them and detailed in the impugned order-in-original by the commissioner of customs.2. the commissioner has imposed penalty of rs. 20 lakhs each on appellants no. 1 and no. 2 (m/s. east line aviation ltd. and m/s. sam aviation (p) ltd.) and rs. 10 lakhs on appellants no. 3 (sh. jaideep mirchandani) on account of confiscation of 178 packages of leather jackets, leather goods, semi precious stones from the chartered flight no. dmo-2868 scheduled for departure to moscow on 9-2-1997, belonging to the appellants. it was admitted by a general representative of appellants no. 1 that 408 packages were loaded in the aircraft in excess of the declaration. the packages were got unloaded and identified from the 75 passengers who were to board the flight. those baggages which were identified by the passengers were then loaded in the aircraft and the excess 167 baggages being exported illegally in contravention of section 41 read with relevant regulations of the customs act were seized. no export manifest in form iii was also found to have been filed in respect of those baggages. when this process was on, i.e. of unloading, identification, reloading and retention of 167 packages, another 30 packages were attempted to be brought inside gate no. 8 for loading in the aircraft. but those were also intercepted and seized through panchnama. on completion of the investigation and after hearing the appellants, the commissioner of customs passed the impugned order.3. the learned counsel has contended that out of the penalty amount of rs. 20 lakhs on appellants no. 1, rs. 10 lakh for which they furnished a cash security during investigation, had already been appropriated by the customs authorities and as such the appellants no. 1 deserve to be allowed total waiver of the pre-deposit of the balance penalty amount.for other two appellants, the learned counsel has contended that there is no material on the record to prove that they had any mala fide intention to export the packages in a clandestine manner and that it was only a bona fide lapse on their part in loading the excess packages. therefore, they also deserve to be allowed total waiver for the pre-deposit of the penalty amounts.4. on the other hand, the learned sdr has simply reiterated the correctness of the impugned order.6. from the bare perusal of the impugned order, it is evident that an attempt was made by the appellants jointly to board 167 excess packages containing leather jackets, leather goods, semi precious stones etc.and in respect of those packages manifest in form iii as required under the regulation 3(c)(iii) of the export manifest (aircraft) regulations, 1976 was not filed. even an attempt was further made to bring another 30 packages lying on the trolley inside gate no. 8 of the airport for loading in the aircraft. the commissioner has recorded detailed reasons while imposing penalty on the appellants no. 2 & 3, and we do not find any sufficient ground, at this stage, to disagree with his findings, especially when it is not the case of the appellants that excess packages were never seized or that they had been falsely involved in the episode. therefore, we do not find any strong, prima facie, case in favour of the appellants for allowing their stay applications unconditionally.7. however, keeping in view all the facts and circumstances of the case and the issue involved, the appellants no. 1 is allowed waiver of the pre-deposit of the balance penalty amount as out of the total penalty of rs. 20 lakhs, rs. 10 lakhs already stands paid by them, as observed above. the appellant no. 2 is, however, ordered to make pre-deposit of rs. 5 lakhs (rupees five lakhs only), and appellant no. 3 of rs. 1 lakh (rupees one lakh only) on or before 14-3-2002. on making these deposits, the requirement to pre-deposit the balance penalty amounts by both these appellants shall stand waived and recovery stayed till the disposal of the appeals. it is made clear that if the terms of this stay order are not complied with by them within the stipulated period, then their appeals shall become liable to be dismissed under section 129e of the act without any further reference to them.8. to come up for reporting the compliance and further orders on 20-3-2002.

Judgment:
1. Through these stay applications, the appellants have sought waiver of the pre-deposit of the penalty amounts as imposed on them and detailed in the impugned order-in-original by the Commissioner of Customs.

2. The Commissioner has imposed penalty of Rs. 20 lakhs each on appellants No. 1 and No. 2 (M/s. East Line Aviation Ltd. and M/s. Sam Aviation (P) Ltd.) and Rs. 10 lakhs on appellants No. 3 (Sh. Jaideep Mirchandani) on account of confiscation of 178 packages of leather jackets, leather goods, semi precious stones from the chartered flight No. DMO-2868 scheduled for departure to Moscow on 9-2-1997, belonging to the appellants. It was admitted by a General Representative of appellants No. 1 that 408 packages were loaded in the aircraft in excess of the declaration. The packages were got unloaded and identified from the 75 passengers who were to board the flight. Those baggages which were identified by the passengers were then loaded in the aircraft and the excess 167 baggages being exported illegally in contravention of Section 41 read with relevant Regulations of the Customs Act were seized. No export manifest in Form III was also found to have been filed in respect of those baggages. When this process was on, i.e. of unloading, identification, reloading and retention of 167 packages, another 30 packages were attempted to be brought inside gate No. 8 for loading in the aircraft. But those were also intercepted and seized through Panchnama. On completion of the investigation and after hearing the appellants, the Commissioner of Customs passed the impugned order.

3. The learned counsel has contended that out of the penalty amount of Rs. 20 lakhs on appellants No. 1, Rs. 10 lakh for which they furnished a cash security during investigation, had already been appropriated by the Customs authorities and as such the appellants No. 1 deserve to be allowed total waiver of the pre-deposit of the balance penalty amount.

For other two appellants, the learned counsel has contended that there is no material on the record to prove that they had any mala fide intention to export the packages in a clandestine manner and that it was only a bona fide lapse on their part in loading the excess packages. Therefore, they also deserve to be allowed total waiver for the pre-deposit of the penalty amounts.

4. On the other hand, the learned SDR has simply reiterated the correctness of the impugned order.

6. From the bare perusal of the impugned order, it is evident that an attempt was made by the appellants jointly to board 167 excess packages containing leather jackets, leather goods, semi precious stones etc.

and in respect of those packages manifest in Form III as required under the Regulation 3(c)(iii) of the Export Manifest (Aircraft) Regulations, 1976 was not filed. Even an attempt was further made to bring another 30 packages lying on the trolley inside gate No. 8 of the airport for loading in the aircraft. The Commissioner has recorded detailed reasons while imposing penalty on the appellants No. 2 & 3, and we do not find any sufficient ground, at this stage, to disagree with his findings, especially when it is not the case of the appellants that excess packages were never seized or that they had been falsely involved in the episode. Therefore, we do not find any strong, prima facie, case in favour of the appellants for allowing their stay applications unconditionally.

7. However, keeping in view all the facts and circumstances of the case and the issue involved, the appellants No. 1 is allowed waiver of the pre-deposit of the balance penalty amount as out of the total penalty of Rs. 20 lakhs, Rs. 10 lakhs already stands paid by them, as observed above. The appellant No. 2 is, however, ordered to make pre-deposit of Rs. 5 lakhs (rupees five lakhs only), and appellant No. 3 of Rs. 1 lakh (rupees one lakh only) on or before 14-3-2002. On making these deposits, the requirement to pre-deposit the balance penalty amounts by both these appellants shall stand waived and recovery stayed till the disposal of the appeals. It is made clear that if the terms of this stay order are not complied with by them within the stipulated period, then their appeals shall become liable to be dismissed under Section 129E of the Act without any further reference to them.

8. To come up for reporting the compliance and further orders on 20-3-2002.