Page 215 - ELT_1st July 2020_Vol 373_Part 1

2020 ] M.C. PUNJWANI v. COMMISSIONER OF CUSTOMS, MUMBAI (EXPORT-I) 125

Licences dated 27-7-1989. As per the lincences, the imported material was to be
utilized for manufacture of thread protectors for pipes to be supplied to the
O.N.G.C. The importer claimed and was granted benefit of duty exemption un-
der Notification No. 513/86-Cus., dated 30-12-1986 which allows import of raw
materials and components required for manufacture of goods supplied to
O.N.G.C. On certain specific information, D.R.I. investigated the matter and dur-
ing the course of investigation it was revealed that as required by licences, the
threads protectors supplied to O.N.G.C. were not made of Stainless Steel, and the
goods supplied to O.N.G.C. were ordinary Carbon Steel threads protectors,
which were procured locally by the importer. Out of the total imported quantity
of 547, 962 MTS, the importer sold 276.928 MTS in the open market and the rest
were seized by D.R.I. Based on investigation a Show Cause Notice dated 25-4-
1991 was issued to the importer and other co-noticees [including the Appellant
herein] whereby total duty of Rs. 7,18,95,049/- was demanded from the importer
with fine & penalty. The said show cause notice also alleges that the Appellant
herein had abetted the act of smuggling of S.S Plates by first certifying the re-
quirement of S.S. Plates, which were not required and then giving false con-
sumption certificate. Adjudicating Authority passed the Order-in-Original dated
26-11-1991 whereby demand for differential duty was confirmed and the same
was ordered to be recovered by invoking Section 142 of the Custom Act, 1962.
The seized quantity of 271.034 MTS was ordered to be confiscated, with an op-
tion to clear it on payment of fine of Rs. Ten Lakhs. Penalty was also imposed on
M/s. P.J. Pipes & others. By the same Order-in-Original a penalty of Rs.
1,00,000/- (Rupees One Lakh) was imposed on the Appellant which was subse-
quently reduced to Rs. 10,000/-, vide remand Adjudication Order dated 30-3-
2004 passed by Commissioner of Customs (Adjudication), Mumbai. On the other
hand, sanction for prosecution was accorded on 16-9-1992 by the then Collector
of Bombay under Section 135(1) of the Customs Act, 1962 against the Appellant
for his alleged role. Subsequently, a Criminal complaint was filed by DRI, Mum-
bai under Section 120B of Indian Penal Code, 1860 before the Court of Metropoli-
tan Magistrate, Esplanade, Mumbai being Criminal Complaint No. 330/CS/1992.
The penalty amount of Rs. 10,000/- as per the Adjudicating Order dated 30-3-
2004 was paid by the Appellant on 13-9-2004. Later on in the Year, 2005, com-
pounding and the Offences Rules, 2005 were enacted and thereafter vide Circular
No. 54/2005-Cus., dated 30-12-2005 guidelines were issued by the board exclud-
ing certain offences from the purview of compounding and offences under the
provisions of IPC was also mentioned therein. The Appellant filed an application
under the said Rules for compounding of offence on 10-2-2006 but since the of-
fence committed by the Appellant is punishable under Section 120B IPC r/w Sec-
tion 135 of the Customs Act, 1962 therefore the said application was not consid-
ered being outside the purview of the then Compounding of Offences Rules,
2005.
3. In the year 2009, C.B.E. & C. issued another Circular being Circular
No. 29/2009, dated 15-10-2009 by which guidelines for compounding of offences
under Customs Act, 1962 were issued amending the Compounding of Offence
Rules, 2005 and in the said amendment the exclusion of the offences committed
under IPC was deleted. When the Appellant came to know about the said
amendment on 10-10-2016, he filed another application for compounding of of-
fence under the amended Rules, 2005. The said application was considered and
rejected by the Learned Chief Commissioner of Customs vide impugned order

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