TaxTMI 
TaxTMI 
2011 (2) TMI 689
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....-46 of 2009, Gee Dee International in Appeal Case No. C-47 of 2009, Jai Dev Gupta in Appeal Case No. C-48 of 2009 and Jai Dev Gupta in Appeal Case No. C-49 of 2009 faced following consequences : (i) Confiscation of the readymade garments of value Rs. 58,02,22,972/- exported by M/s. Hem Chand Gupta and Sons, and similar such goods of value of Rs. 71,59,35,844/- exported by M/s. Gee Dee International were done under Section 113(d) and 113(i) of the Customs Act, 1962 and the goods, ordered to be confiscated not being available physically for confiscation, fine of Rs. 6.00 crores (Rupees six crores) was levied on M/s. Hem Chand Gupta & Sons and fine of Rs. 7.25 Crores (Rupees seven crores twenty five lakhs) was levied on M/s. Gee Dee International, in lieu of confiscation. (ii) Demand and order recovery of drawback amounts of Rs. 6,58,22,845/- and of Rs. 7,96,78,663/- already availed by M/s. Hem Chand Gupta and Sons and M/s. Gee Dee International respectively, were made from them under Rules 16 and 16A of the Customs and Central Excise Duties Drawback Rules, 1995. (iii) Recovery of interest on above mentioned drawback....
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.... and he was also authorized signatory of M/s. GEE DEE International. It also came out that Shri Kapil Gupta who is brother of Shri Jaydev Gupta was Proprietor of M/s. GEE DEE International Both concerns were manned by relatives. 2.3 When the proof of reaching of goods was asked by investigation team to Shri Jaydev Gupta, he stated that terms of pricing of the export goods was FOB Mumbai for which he had no knowledge or proof of documents in order to explain about the onward transmission after Mumbai. It was stated by him that information in that respect may be obtained from Russian Buyers. Shri Jaydev Gupta being authorized representative of GEE DEE International was also examined on 24-2-2004 for the appellant, he revealed the Bank Accounts. Bill of lading showed port Rashid, Jabel Ali, Bander Abbas and Kotka as Ports of discharge and Rostoy/Russia was shown as final destination. 3. When Sri Jaydev Gupta revealed that information may be obtained from importers in Russia, enquiry was made with the Consulate General of India in Moscow Russia to find out whether the goods claimed to have been exported by above appellants have reached at the final destination. That res....
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....ccount titled as '000 Business Kant' to Indian company M/s. Gee Dee International as preliminary payment for delivery of goods During April - May 2003 that money was returned to the account of '000 Business Kant' as the goods. were not imported to Russia. (g) Total sum 22,00,00,000 INR (contract No. BUS-INR-146/03 dated 3-2-2003) during March-April 2003 was transmitted by a Russian company from the Account titled as '000 Business Kant' to Indian company M/s. Gee Dee International as preliminary payment for delivery of goods. Afterwards that money was returned to the account of '000 'Business Kant' as the goods were not imported to Russia. (h) Investigation and enquiry abroad revealed that the goods claimed to have been exported by the Appellants Hem Chand Gupta & Sons & Gee Dee International did not reach Russia. 4. By a communication dated 14-12-2005 the Consulate General of India informed as under :- (i) Value of goods declared at the time of import (in to Russia was too low compared to the declared value at the time of export (from India). (ii) Country of origin was chan....
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.... dated 27-4-2009 of the CESTAT were challenged. (2) The Hon'ble Delhi High Court observed that following points/issues were not considered by the Tribunal in its orders dated 27-4-2009, and therefore remitted the case back to the Tribunal for a fresh consideration : (a) Whether the decisions of Calcutta High Court in the case Terai Overseas Ltd., 2001 (129) E.L.T. 574 (CAL) and Hon'ble S.C. in the case of Collector of Customs v. Sun Industries [1988 (35) E.L.T. 241 (S.C.)] were applicable to the instant case. (b) Whether the scheme under which duty drawback was drawn required the export goods to reach Russia. (c) Whether there was overvaluation of the export goods. (3) With regard to the first point/issue, the Hon'ble Delhi High Court had observed (under paragraph 7) as under :- "The Judgment of Calcutta High Court in Terai Overseas Ltd. [2001 (129) E.L.T. 574 (CAL)] which was specifically cited by the appellant before the Tribunal but was not considered and with by the Tribunal at all. In the said judgment, the Calcutta High Court specifically held that for grantin....
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....991 (49 to 1991) and two provisos were inserted under the erstwhile Section 75(1). In terms of the second proviso so interested, it was stipulated that : "Where any drawback has been allowed on any goods under this sub-section and the sale proceeds in respect of such goods are not received by or on behalf of the exporters in India within the time allowed, such drawback shall be deemed never to have been allowed and the Central Government may, by rules made under Sub-Section (2), specified the procedure for the recovery or adjustment of the amount of such drawback.''        (Emphasis supplied) In view of the said amendment, while the original two conditions are necessary for grant of duty drawback in terms of the Section 75(1); namely that- (a) Goods have been entered for export. (b) An order permitting the clearance and loading thereof for exporting has been made under Section 51 by the appropriate officer. Such duty drawback granted to the exporter is liable to be recovered in case the sale proceeds in respect of the goods exported are not received within in the stipu....
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....specific Circulars 4 dated 19-5-1999 and 5 dated 31-5-1999 issued by the RBI. As per paragraph 1(vii) of the RBI Circular No. 4 dated 19-5-1999 (copy enclosed as per index) if is mandatory that such exported goods must reach Russian Federation and that no third country exports are permitted to be financed out of funds from such repayment of state credit. The relevant clause 1(vii) of the said circular is reproduced below for ready reference. "vii. Funds from repayments of State Credits are to be utilized for export of goods to Russian Federation only. No third country exports are permitted to be financed out of funds from such repayment of State Credits."           (Emphasis supplied) In view of the aforesaid mandatory clause while it was necessary in the case at hand to look into whether the export goods were received by the importers/consignees based in Russia or not, the same was not at all relevant in the case of Terai Overseas Ltd. v. Union of India [2001 (129) E.L.T. 574 (CAL)]. The facts of the case are therefore completely distinguishable. 4.2 It may be relevant here to mention that under the identical facts an....
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.... International in respect of contract no. BUS-INR-99/02, dated 1-10-2002. BUS-INR-108/02, dated 1-11-2002, and BUS-INR-127/02 dated 2-12-2002 (Rs. 52.30 crores) as preliminary payments towards delivery of goods were returned to the bank account of M/s. OOO Business Knat Moscow as the goods were not imported in Russia. As an illustration, attention is drawn to the S/B No. 1256407 dated 20-1-2003 filed by; M/s. Hem Chand Gupta & Sons enclosing therewith the invoices no. 1999/02-03, dated 20-1-2003 issued to M/s. OOO Business Kant Moscow. This invoice bears the reference of the contract no. under the column Buyer's Order No. & date as BUS-INR-109/02, dated 1-11-2002 4.3.3 Apart from the above the evidences in the form of overseas reports and mentioned in Paragraph numbers 15, 16, 17, 24.1,24.2, 24.3, 25.1 27 & 28 of the Show Cause Notice dated 27-3-2006 categorically indicate that the goods exported by these firms have never reached Russia and were diverted to other destination 4.3.4 Request was made to Punjab National Bank, International Banking Branch, DCM Building, 16 Barakhamba Road, New Delhi, to provide information on the receipt of payments against export by M/s....
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....demand. 6.1 M/s. Hem Chand Gupta and Sons M/s. Gee Dee International in the Civil WP No. 9581/2009 and 9582/2009 filed by them in the Hon'ble Delhi High Court respectively, had relied on the Order-in-Original passed by the Commissioner of Customs, Kolkata in the case of M/s. Amit impex. In this regard it is submitted that an appeal against the said order was filed by the Department in the Hon'ble Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench-Kolkata and the Hon'ble CESTAT vide their Order No. A-264/KOL/09, dated 19-5-2009 had set aside the said order and remanded the case to the Adjudicating Commissioner Kolkata for fresh decision. Copy of the Show Cause Notice issued to M/s. Amit Impex and others copy of the Order-in-Original No. KOL/CUS/PORT/53/2005, dated 23-3-2005 passed by the Commissioner of Customs Kolkata and the de novo Order dated 19-10-2005 passed by the Hon'ble CESTAT. 7. That full deposit of complete demand may be ordered to safeguard the interest of Revenue and in line with several judgments of the Apex Court and Hon'ble High Court pre-deposit as a condition for hearing the appeal. No case for undue financial hardship has been....
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....te secrecy shall not be exonerated from penal consequence of law following Apex Court judgment in the case of K. I. Pavunny v. AC, Cochin - 1997 (90) E.L.T. 241 (S.C.). Plea of the Appellants that no action was taken by any other agency till adjudication is untenable. 12. An act of fraud on Revenue is always viewed seriously. "Fraud" and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. It has been held by Apex Court in the case of Commissioner of Customs Kandla v. Essar Oil Ltd. - 2004 (172) E.L.T. 433 (S.C.) that by "fraud" is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from the ill will towards the other is immaterial. The expression "fraud" involves two elements, deceit and injury to the deceived. Undue advantage obtained by the deceiver will almost always call loss or detriment to the deceived. Similarly a "fraud" is on act of deliberate deception....