TaxTMI 
TaxTMI 
2013 (11) TMI 1394
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....made. 1.1 On chemical testing of the goods declared as gear cutting tools of cobalt, that was found to be made of low carbon steel as per IS226 i.e. mild steel and were without cobalt. The CTL Mumbai's report dated 05.09.2000 in respect of seven samples drawn from the goods declared as heat resistant rubber tension tape stated as follows: Each of seven samples is in the form of cut piece of grey coloured tape. Each is composed of natural rubber, carbon black, in organic filters and additives. It breaks when stretched. Each is not vulcanised. Therefore, the sample is considered as compound of pre-vulcanised compound rubber. 1.2 It was found that all the four exporter appellants had made export of inferior quality of goods and aggregate value thereof was as depicted in column (3) of the Table below. Duty Drawback to the extent indicated against each appellant as per Column (4) of the Table below was paid to them while certain claims of drawback of the value by each such appellant as depicted in column (5) of the Table remained pending sanction as mentioned against each: Sr. No. Name of the Firm/Company Total Export Value (FOB) in Rs.) DBK avai....
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....st Revenue. 1.9 When the investigating authority found all the above persons in Table-5 hereinafter were 'concerned' and intimately connected with each other to defraud Customs making fraudulent claim of drawback through mis-declaration of description of goods, they were brought to adjudication along with appellants 5, 6, and 7 of Table-1 who were their directors/partners of appellants 1 to 4 of that Table for appropriate consequences under law. DIFFERENT APPEALS AGAINST ADJUDICATION CONSEQUENCES 2.1 Learned Adjudicating Authority examining various evidence on record completed adjudication against all the above concerns and persons by common adjudication order No. 37/Cus/05 dated 06.01.2006 dated 6.1.2006. 2.2 Appeals as depicted in the following Table-1 below were preferred by the exporter appellants as against order of adjudication: TABLE-1 S. No. Name of the Party (1) (2) 1. M/s Contessa Commercial Co. (P) Ltd. 2. M/s ASK Exports 3. M/s SRM (P) Ltd. 4. M/s Varun Enterprises 5. Shri Raj Kumar Kishorepuria 6. Shri Anil Kumar Kishorepuria 7. Shri Sunil Kumar Kishorepuria ....
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....f goods on which draw back claim is pending Amt. of drawback claim is pending. (1) (2) (3) (4) (5) Contessa Commercial 55,72,163 22,86,000 14,31,688 10,10,700 ASK Export 60,77,432 32,43,600 Nil Nil SRM (P) Ltd. 6,44,489 4,95,000 Nil Nil Varun Enterprises 25,75,499 14,55,300 11,07,625 5,35,500 TOTAL 1,48,69,583 74,79,900 25,39,313 15,46,200 (ii) Aggregate duty drawback claim amounting to Rs. 81,09,720/- (Rs. 65,63,520+Rs.15,46,200 appearing in Column 5 of Table 2 and 3 above) made by M/s. Contessa Commercial Co (Pvt.) Ltd, M/s S.R.M. (Pvt.) Ltd. and M/s Varun Enterprises as mentioned in para 96(i) of adjudication order was disallowed. Gaskets valued at Rs. 2,92,31,936/- detailed in para 95(iv) of adjudication order were not confiscated and recovery of duty drawback of Rs. 38,00,000/- claimed and availed was dropped. Drawback claim of Rs. 7,98,000/- pending on account of Gaskets was ordered to be sanctioned, if otherwise admissible. (iii) Aggregate duty drawback amounting to Rs.2,30,31,323/- (Rs.155,51,423+Rs.74,79,900 appearing in Col.3 of Table 2 and 3 above) availed by Appe....
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....first three Appeals of Revenue, its grievance is that learned Adjudicating Authority should not have dropped proceedings on Gasketagainst the Respondents. These Respondents were represented by Sri Prabhat Kumar, Advocate In appeals at sl. No. 4 and 5 of the Table, grievance of Revenue is that proceedings against these two respondents should not have been dropped in adjudication by the Authority without bringing them to penal consequences of law. These were represented by none. 4. Following appellants appearing in Table-5 below being concerned and connected with questionable exports, facing penalties of the quantum mentioned against each u/s 114 (iii) of Customs Act, 1962 came in appeal before Tribunal and they were represented by Shri Kamal Jeet Singh, advocate: TABLE-5 Sl. No. Name of the party Penalties imposed u/s 114(iii) of Custom Act 1962 1. Sh. Vinod Kumar Garg 8,00,000 2. Sh. N.D. Garg, 8,00,000 3. Sh. Sanjeev Kumar 1,00,000 4. Sh. Shambu Kumar 1,00,000 5. Sh. Vaneet Kumar 1,00,000 6. Sh. Manjit Singh 2,00,000 INVESTIGATION AND RESULT THEREOF Enquiry revealed that the 4 exporter appellants ....
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....ial Co. (P) Ltd. ASK Exports, M/s Varun Enterprises and M/s SRM (P) Ltd. was admitted by Sri N.D. Garg to be undue as that was much more than the market price of the goods. (F). Sh. Sunil Kishorepuria, Chief Executive/Partner of the aforesaid four concerns i.e., in sl. No.1 to 4 in Table-1 in his voluntary statements dated 21-08-2002 & 22-08-2002 admitted commitment of fraud in connivance with S/Sh. Vinod Garg and N.D. Garg of Ludhiana exporting above-referred mis-declared goods in consideration of commission of 3% of total import turnover and allowing Sh. N.D. Garg to use the names of above four appellant concerns in the export and defrauded Revenue. He not only admitted the fraud committed but also surrendered all the pending claims of drawback (which was worked out to be Rs. 89,07,720/-) in column 5 of the Table appearing under Para 4.1 aforesaid. He admitted to pay back the drawback already claimed fraudulently on the mis-declared exports which was worked out to be Rs. 2,68,31,323/- (Ref: as appearing in Column 4 of the Table under Para 4.1 aforesaid) Admitting such fact, he also partly returned Rs. 49,30,000/- for the illegal claim of drawback amount received. (G). Sh. V....
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..../Sh. Vinod Garg and N.D. Garg of Ludhiana and a part of which was seized by DRI on May-June 2000 and on chemical test those were found to be cut pieces of mild steel and prevulcanised rubber with a value much lower than declared by the exporter. S/Sh. Sunil Kishorepuria, Manjit Singh and N.D. Garg admitted such fact in their statements. (L). Manjit Singh, an authorised person of Sh. Vinod Garg dealing with central excise matters was found to be director in various concerns of S/Sh. Vinod Garg and N.D. Garg. In his voluntary statement dated 06-08-2002 and 07-08-2002 he admitted that he was also getting the goods cleared from Customs on behalf of four concerns of Kishorepurias of Kolkata. (M). There was evidence of reverse payments to Sh. N.D. Garg by M/s Jyoti Steels through bearer cheques number 623535 and 623536 both dated 18-01-2000 for Rs. 4,83,800/- and Rs. 5,16,200/- respectively from their account number 20103 maintained in State Bank of Hyderabad, Ludhiana showing nexus between them. (N). Sh. Vinod Garg and Sh. N.D. Garg in collusion with S/Sh. Raj kumar Kishorepura, Anil Kumar Kishorepuria, Sunil Kumar Kishorepuria, Sanjeev Gupta, Vineet Kumar, Shambhu Kumar, Kumar....
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....s and failed to draw samples from each consignment/shipping bill acted in violation of the instructions as sample was required to be drawn from goods covered by each shipping bill where the amount of drawback per shipping bill was Rs. 1 lakh and above and where admissibility of the drawback could not be decided on the basis of visual examination of the case. As the consignment exported was declared as gear cutting tools of cobalt bearing high speed steel, heat resistant rubber tension tape and gaskets which were entitled to one of highest rates of export incentives and which on visual examination could not be confirmed as per declaration, the instructions for drawl of samples from each shipping bills as given in circular number 34/95-Cus dated 6.4.95 issued under F. No. 609/34/95-DBK by the Govt. of India, Ministry of Finance, Department of Revenue, New Delhi, were not followed. False claim of drawback by the exporters was abetted by Customs officers which was corroborated from the statement of Manjit Singh, an employee of Vinod Garg and N.D. Garg. (S). The claimants submitted fake Bill of Ladings to Customs authorities for claiming drawback payments as M/s IIC Container Line Pv....
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....bills invoices and black money earned was routed through the bank accounts of above benami concerns who accounts were maintained with State Bank of Hyderbad by name lenders. This has been brought out clearly when account of different concerns as tabulated below were examined by investigation: Name of the firm Account No./Date of Opening Proprietor Introducer Date of closing of account Jindal Alloys, Kanganwal Road, VPO-Jugiana, Ludhiana 20125 29.7.2000 Shambhu Kumar S/o Jagdish Poddar N.D. Garg 21.08.02 Jindal Alloys, Plot No.11358, Gali No.3, Partap Nagar, Near Sangeet Cinema, Ludhiana 25037 15.02.2000 Vineet Kumar S/o Vasudev Saggar N.D. Garg 29.05.00 Jyoti Steels 684-Industrial Area-B, Ludhiana 20103 04.01.2000 Sanjeev Kumar S/o Gian Chand N.D. Garg 29.05.00 Rama Krishna Steel Traders, 11358, Gali No. 3, Partap Nagar, Near Sangeet Cinema, Ludhiana 25039 15.02.2000 N.G. Garg S/o Sh. Shri Ram Manjit Singh 29.05.00 Krishna....
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....dal Alloys had issued fabricated invoices showing goods misdeclared as gear cutting tools of cobalt bearing high speed steel to Kishorepuria group of companies. Similar, Krishna Hardware & Mills Store had issued fabricated invoices showing sale of goods misdeclared as gear cutting tools of cobalt bearing high speed steel and heat resistant rubber tension tapes to Kishorepuria group of companies. 7.11 Materials on record proved issuance of fictitious invoices by above non-existent trading concerns and goods were misdeclared as gear cutting tools of cobalt bearing high speed steel and heat resistant rubber tension tapes. Kishorpuria group of companies made false claim of high drawback while the goods meant for export were found to be inferior quality goods on testing technically. Which were subject matter of fictitious purchases from above concerns under fake invoices. Claiming the misdeclared goods purchased from fictitious firms, the exporting company/concerns procured inferior goods from different sources and those goods were meant for export to make undue claim of high rate of drawback. 7.12 Fictitious firm having been created by Vineet Kumar Garg and N.D. Garg they were ma....
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....ter and the Directors/Partners thereof cannot be imputed to charge at a later stage alleging that they had hand in glove with each other to export inferior quality goods. Cross examination asked for was not allowed and the averments came out in cross examination in the cases examined were not considered by the Adjudicating Authority. 9.2 In was further submitted by Sri Prabhat kumar that CRCL Report cannot be relied upon evidence by Revenue as none of the customs officers examining the goods proved the exports to be misdeclared to claim undue drawback and failure to allow cross examination of the witnesses of Revenue, adjudication does not sustain. 9.3 It was also argued by learned Counsel that suppliers did not speak against the appellant exporter of Director/Partners thereof. All the export realisation were made and came through bank account. Even all the four suppliers of the exported goods appeared before the learned Adjudicating Authority to explain that the entire supply was bona fide and no inferior goods were supplied by them. Therefore all the appeals in sl. No. 1 to 7 of Table-1 to this order may be allowed. 9.4 So far as appeals of Revenue against Respondents in....
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....ere proved to be fake and fabricated. Testimony of various witnesses lent credence to the case of Revenue. Benami Bank Accounts were operated by both the Gargs with their conscious knowledge to impress Revenue that there were real transaction made while all fake transactions were only made to defraud Revenue. All the assessee appellants had hand in glove to be enriched at the cost of Revenue. The appellant in sl. No.5 to 7 of Table 1 were gainer of undue claim of drawback and fostered misdeclared goods to be exported. So also they were consciously involved in the undue claim of drawback. Therefore, all the 7 appeals in Table-1 to this order may be dismissed. 11.2 It was also submission of Revenue that drawback should not have been allowed on gaskets by learned Adjudicating Authority for which Revenue has been aggrieved. When there was export of inferior gaskets made by respondent exporters at sl. No.1 to 3 of Table-4 to this order learned Authority should not have dropped the proceedings against them. Similarly, exonerating Respondents 4 and 5 of that Table i.e., Shri Kumar Gupta and Shri P.N. Pandey from penal consequences of law was unwarranted as they were conduits to facilit....
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....ts in sl. No.3 to 6 of Table 5 were found to be involved in the entire team of racketeers to defraud Revenue and they hand tools of appellants 1 and 2 of Table - 5. None of the appellants in Table 1 and 5 proved to be innocent and failed to lead cogent evidence to disturb adjudication finding. They did not repel any of the arguments of Revenue with cogent evidence. Forceful argument of Revenue established adjudication finding to be fair and justified and remained uncontroverted by the appellants in Table 1 and 5 aforesaid. 14.1 Apex explaining the term concerned appearing in section112 of the Customs Act, 1962 in the case of Sachidananda Banerji V. Sitaram Agarwala 1999 (110) ELT 292 (SC) laid down the law holding that the term concernedis to be given wide interpretation and even if a person has no physical connection with the offending goods, he is liable if he is interested or consciously takes any steps to promote an illegality. It has been held by apex Court in the case of RadhaKishan Bhatia V. UOI - 2004 (178) ELT 8 (SC) that it is immaterial what meaning be attributed to the word 'concerned'. It can have the meaning 'interested' and it may also have the meaning 'involved' ....
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....ording to the Proof, which it was in the power of one side to prove and in the power of the other to have contradicted. Since it is extremely difficult, if not absolutely impossible for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused, it is not obliged to prove them as part of its primary burden. 14.6 The standard of proof in a civil case is preponderance of probabilities. In a civil case there is no burden cast on any party similar to the one in a criminal proceeding. Following the ratio laid down in CIT v. Durga Prasad More - 82 ITR 540, 545-47 (SC) it may be said that science has not yet invented any instrument to test the reliability of the evidence placed before a Court or a Tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities. Human minds may differ as to reliability of a piece of evidence. But in that sphere the decision of the final fact finding Authority is made conclusive by law. The normal rule which governs civil proceedings is that a fact can be said to be established if it is proved by a preponderance of probabilities. A fact is said t....
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....ard of High School and Intermediate Education - AIR 2003 SC 4268 has held that no court in this land will allow a person to keep an advantage which he obtained by fraud. 14.9 White collar crimes committed under absolute 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.). 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. 14.10 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 deceiv....