TaxTMI 
TaxTMI 
TaxTMI 
2014 (3) TMI 678
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....Rs. 50 lakhs on each of the Appellants respectively. Background Facts 2. M/s. Jain Engineering Co. ("JEC"), M/s. Munni Export House ("MEH") and M/s. International Auto Suppliers ("IAS"), are three firms in which Mr. Sital Prasad Jain along with his three sons were partners. The case against them was that they were importing tractor parts at highly under-invoiced values from the suppliers in the United Kingdom ("UK") and Italy. It was stated that the main suppliers in the UK, M/s. Gen Diesel, UK and M/s. Mayphil Limited, were arranging low value invoices for the purposes of transactions through the bank. However, the balance amount of the true value invoice was later paid by the importing firm to the importer over a period of time in cash by the representative of the aforementioned firms when they visited the UK. The Italian suppliers also followed dual invoicing with the balance payments made to them by the importers through their foreign banks in other countries. 3. By a letter dated 31st July 1997 written by H.M. Customs and Excise, London to the First Secretary, High Commission of India, London it was stated that the priced quoted by M/s. Mayphil Limited in its invoice No. 90....
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....they have sending us only one invoice which we have submitted to the Customs at the time of clearance of goods". On his part, Mr. Ravinder Kumar Jain made his statement on 27th March 1998 and stated that "it is wrong to say that M/s. Gen Diesel Products Ltd, England was sending us two invoices. He was only sending us one invoice, which we submitted you at the time of clearance of goods." It appears that both set of invoices were nevertheless shown to Mr. Ravinder Kumar Jain and in his answer he stated that "I am signing on the invoices as a token of having seen them today only." He then proceeded to confirm that there was a substantial difference in the prices and that they pertained to the goods of identical description. 6. Likewise, when two invoices were shown to Mr. Sital Prasad Jain he stated that he was signing on these invoices as a token of having seen them "today." He too confirmed that the values in the two invoices were different although the description of the goods was identical. 7. Meanwhile on 21st December 2000 the DRI wrote to the Deputy Commissioner of Customs (Prev.) stating that enquiries were conducted with the Italian companies with regard to the imports mad....
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....at three firms and the three partners filed forty eight applications dated 4th December 2001 before the Settlement Commission ("SA"), Customs and Central Excise. These applications were considered by the SA which passed the final order on 20th June 2002. In the said final order it was noted in para 5 as under: "5. In the applications filed by the Applicant they have accepted the allegations made in the show cause notice and also accepted the additional duty liability as demanded by the Revenue in the show cause notices in question. In column No. 12 of their application, it is stated by the Applicant that the Settlement Commission may kindly determine the additional amount of duty payable on the basis of the evidence on record and the Applicant undertake to pay the amount of duty so determined. During the hearing for admission on 7th February 2002, when the position of disclosure of duty liability required to be made by the Applicant in his application was explained to the advocate for the Applicant, he readily submitted that they accept the full differential duty liability as demanded in the show cause notices issued in Annexure "A" to this order and also accepted that they have m....
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....how that there has been any contravention of the provisions of the said Act or that any payment was settled for the imports in question through illegal channels. We have also noted that the Directorate of Enforcement have issued an Opportunity Notice and therefore, considering the facts of the case, it would not be in the interest of justice to grant any immunity for offences, if any, which may have been committed under FERA." 12. Thereafter in para 11, the deliberate contrivance adopted by the Appellants was noticed and it was held that "such deliberate contrivance adopted by the Applicant resulting into undue financial accommodation to them should not be allowed to be settled without inflicting a reasonable amount of interest. We are, therefore, inclined to grant only a partial waiver of the interest liability and order that the Applicant shall pay interest at the rate of 10% per annum on the amount of duty which became payable after the enactment of Finance (No. 2) Act, 1996. The Applicant shall calculate the interest amount from such date to the date of actual payment and have it certified by the Jurisdictional Customs authorities and make payment thereof within 30 days from t....
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....8) ELT 366 (Del). 17. In the considered view of the Court, there is no merit in the above contention of the Appellants. From the documents placed on record, it appears that simultaneous with the initiation of proceedings under the CA for recovery of the differential duty, the DRI was seeking documents from abroad for the purposes of examining whether the transactions involved money laundering activities. The FERA was in force at the time when the imports in question were made, i.e. in 1997 and 1998. The SCNs issued under the CA formed the basis for the SCNs under FERA. It is not possible on the facts of the present case to hold that the cause of action that formed the basis of the proceedings under FERA arose only after its repeal in 2000. The SCNs issued under FERA during the sunset period i.e. prior to 31st May 2002 were a continuation of the proceedings in relation to alleged contravention of Section 8 (1) FERA arising out of the imports of tractor parts by the Appellants in 1997-98. Documents collected from abroad not authenticated 18. It was next submitted that there was no valid evidence to prove the allegations in the SCNs. Although the allegations were based on documents....
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....ssed by the learned ACMM, no documents were in fact received. Surprisingly in the AO it is noted by the Commissioner: "Further I observe that the documents from the overseas suppliers have been obtained in terms of the Letter of Rogatory dated 5th January 2001 issued by Additional Chief Metropolitan Magistrate, New Delhi in terms of this Letter of Rogatory, the documents to be collected pursuant to this letter have to be true copies of the corresponding entries or of documents. This Letter of Rogatory does not stipulate that original documents be supplied and accordingly the documents supplied in consonance with the terms set out under the Letter of Rogatory are an admissible piece of evidence." 20. The above observations were factually erroneous and contrary to the record. The AO next proceeded on the basis that the statement recorded under Section 40 FERA and Section 108 CA are judicial proceedings and therefore admissible in evidence. What the AO failed to note that in both statements there is no admission by the Appellants of the fact that the invoices were sent by the importers to them, one reflecting the transaction value and the other true value. As noticed hereinbefore, t....