TaxTMI 
TaxTMI 
2016 (4) TMI 607
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....e matter afresh on the basis of the facts mentioned supra. Since the matter is liable to be remitted to the file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, the substantial questions of law settled in the present Civil Miscellaneous Appeal need not be decided. 11. In fine, this Civil Miscellaneous Appeal is allowed without costs and the Final Order No.322 of 2010 passed in Appeal No.C/26/2008 by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai is set aside and Appeal No.C/26/2008 is remitted to the file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai and the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai is strictly directed to consider the factual aspects putforth on either side and also consider recent decisions rendered by the Hon'ble Apex Court and pass suitable orders on merits. Consequently, connected Miscellaneous Petition is dismissed." 2.0 In pursuance to the above directions of the Hon'ble High Court the appeal was heard and proceeding was recorded on 22.2.2016. 3.0 Investigation made allegation against the ....
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....nders pieces in 94 packages of gypsum boards were hidden for export.Ten crates of gypsum boards not concealing Red Sanders were meant for inspection of Customs Officers to obtainlet export order. 3.5 The red sanders hidden as above in gypsum board were sent toone M/s Raja Agencies CFS meant for export to Malaysia and Shipping Bill No. 1590098 dated 24.03.2006 was filed by Alexander in that behalf at Tuticorin Custom House on self assessment basis declaring that 104 crates of gypsum boards meant for export to Malaysia by M/s Freedom Impex, Tuticorin. Cargo was examined by Customs at M/s Raja Agencies CFS on 24.03.2006 and let export order was given.But such cargo was intercepted by DRI and they examined the contents thereof thoroughly. Upon such examination, 1500 pieces of Red Sanders were found to have been concealed in 94 packages of Gypsum boards. So also investigation found few Gypsum boards without concealing red sanders and some packing material weighing 6.318 MT were in the cargo. 3.6 Investigation found that above said preparations were made to commit attempt to export the red sanders of aforesaid description by Alexander under the instructions of the Appellant. Such g....
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....nd covered the same by gypsum board without cavity. (vii) he concealed 1500 numbers of red sanderpieces in 94 packages containing gypsum boards and strapped with steel for concealment; (viii) he made ten crates containing gypsum boards without concealing red sanders pieces therein to produce before Customs officers for physical inspection; (ix) he filed the Shipping Bill 1590098 dated 24.3.2006 with Tuticorin Custom House declaring 104 crates of gypsum boards were being exported to the address of the buyer in Malaysia given by Shri Manivannan; (x) the detailed examination conducted by the investigating officers at Raja Agency CFS found 1500 Nos. of red sander in three shapes weighing 1.650 MT were attempted to be exported in the guise of gypsum boards used for concealment and those boards were also seized; (xi) he knew that export of red sanders is an offence under the Customs Act; (xii) he confirmed the photograph shown to him by investigation was of Shri Manivannan of Perambur, Chennai, and admitted the Offence committed by him. All such depositions remained uncontroverted. 4.3 Adjudicating Authority found that John Alexander had a unit called M/s. Gilpa Agencies at Tuticorin.....
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.... in the presence of no incriminating materials seized 51-53 5 26.03.06 Statement under section 108 of the Customs Act, 1962 recorded from John Alexander * He details how came into contact with Appellant Mannivannan * How Mannivannan sent a contraband. * What was the remuneration given by Appellant for the work. He states that the total remuneration was Rs. 2 lakhs out of which Manivannan sent Rs. 40,000/- through a person who came with the Red Sanders in the Lorry and Manivannan deposited 60,000 into ICICI Bank Account No.613905014790 of his (not verified nor investigatged). * He had paid Rs. 1 lakh earlier (not verified). * The buyers addressed at Malaysia were sent through KPN Bus Courier (not verified). * Earlier to the present consignment, a test consignment of smaller lot sent under Shipping Bill No.1581521 dated 02.03.2006. 'Not verified'. * The buyer is one FG Global resources (no verification). * He implicates Manivannan stating that he had supplied that he had supplied the contraband and is residing at Perambur High Road having a Government manufacturing factory. He also states that he does not know the contact phone number of Manivannan....
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....d by filling Habeas Corpus Petition in High Court, Madurai Bench 114-129 20 25.09.06 High Court disposes of the above petition stating that the detention of the Appellant has since been revoked by the State Government on the basis of the report Advisory Board. 130-132 21 13.09.06 Show Cause Notice issued. Allegations at para 17(iii) proposal at para 17(ii) for penalty. 19-29 22 14.10.06 First reply to the Show Cause Notice. Disputes statements of John Alexander. Denies depositing money in Bank at Chennai for John Alexander account. States that Advisory Board opinion in COFEPOSA is unanimous that there is no material to connect the Appellant to the transaction. 133-135 23 30.10.07 Second reply to the Show Cause Notice. 136-137 24 30.11.07 Order in Original passed. 138-148 25 01.02.08 Appeal filed to this Honble Tribunal. 1-12 26 17.03.10 Tribunal rejects the appeal in Final Order No.322/2010. 27 June-10 CMA filed before the Honble High Court of Madras at Madurai Bench. 28 25.08.10 High Court admitting the appeal grants interim stay on the condition that the App....
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....person,whether there is any other evidence exists to negate suchretraction. On the basis of facts on record,Honble High Court has specifically directed that the matter is to be decided keeping in view the evidentiary value of the statement of the co-accusedand exculpatorystatement of the appellant. 5.3 It was further submitted on behalf of appellant that if a fair reading of statement of John Alexander is made that brings out the innocence of the appellant and because Revenue found the export misdeclared that shall not ipso facto create an evidence against the appellant. Revenue has failed to bring the sourceof procurement of red sander as well as mode of delivery of the goods by the appellant to Alexander. That rules out the alleged supply thereof by appellant to John Alexander. The consideration, if any, paid for the alleged supply was not corroborated by any bank account in absence of detection of such account by Revenue. How the goods moved is not proved by Revenue.That remainedin mystery without any evidence of purchaseof the impugned goods attaching the appellant to such goods, found. Adjudication is therefore baseless to penalise the appellant. The person who were connec....
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....dible evidence against any other accused. This is golden rule of criminal Jurisprudence.That is even extended to Customs proceedings in penalty cases which is quasi-criminal in nature. Therefore, levy of any penalty on the appellant shall be contrary to the basic rule of jurisprudence. 6.0 Learned Departmental Representative on the other hand submitted that appellants close association with Alexander was sufficient proof of supply of red sander to him which was seized by customs. Seizure itself is testimony of involvement of the appellant who sent offending goods to Alexander. Revenue need not prove its case with mathematical precision. Preponderance of probability is in its favour.Circumstances of commitment of offence speak for itself as to the involvement of the appellant in red sander smuggling. 6.1 To support the case Revenue, learned departmental representative relied on the decision in the case of Naresh J. Sukhawani Vs Union Of Indiareported in 1996 (83) E.L.T.258 (S.C.). According to Revenue,had this appellant been innocent, he would not have attached himself consciously to the offencesupplying the offending goods to Alexander nor been in close association with Alex....
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....nder was a smuggler on record of Customs from 1985. He was earlier connected with one Shri Santhanameeran of Chennai to exportsandalwoods. His contact with appellant was established through Shri Santhanameeran for export of the offending goods. Alexander categorically revealed that he was conduit for the appellant for the aforesaid consideration. Address of the importer in Malaysia was given by the appellant to Alexander. Such fact could not be ruled out by appellant in the course of appeal hearing. He also specifically stated before investigation that the Red Sanders were concealed in the Gypsum Boards which was discovered by investigation. The offending goods being prohibited for export and the appellant having sent that along with gypsum board to conceal the same for export, he could not detach himself from the commitment of the offence when conspiracy of illegal export was diffused by investigation. 7.5 Statements of Alexander were recorded before his arrest and even thereafter in the presence of the Jail Superintendent. That authority was an independent witness. His presence during recording of the statement under section 108 of the customs Act, 1962 was not challenged to r....
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.... to the appellant. Rather he was friendly since appellant asked him to find alliance for his daughter as was contended by appellant. But to save his skin, appellant behaved like a stranger as if he was unknown to Alexander. Therefore it cannot be said that the appellant was no way concerned with Shri John Alexander as a member of the red sander smuggling racket. 7.8 Appellant did not rule out cash payment of Rs. 40,000/- to Alexander through the carrier of the Red Sanders meant for delivery at the premises of Alexander. Law is well settled that evidence gathered under section 108 is credible and cogent and can be used against the author of the statement as well as against others. There is no material to show that belated retraction was made by appellant honestly and truthfully. In his statement dated 31.03.2006, appellant had also disclosed the source of procurement of Red Sanders in the past. Accordingly his dealing with the Red Sanders was nothing new. Various direct and circumstantial evidences as above question conduct of the appellant.Plea of retraction is a mere pretence and not truthful. His complacity is proved when he did not make any retraction before the Magistrate wh....
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....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 to be proved when the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case to act upon the supposition that it exists. The belief regarding the existence of a fact may thus be founded on a balance of probabilities. A prudent man faced with conflicting probabilities concerning a fact situation will act on the supposition that the fact exists, if on weighing the various probabilities he finds that the p....
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....deceived. Similarly a 'fraud' is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. (See S.P. Changalvaraya Naidu v. Jagannath [1994 (1) SCC 1]. 8.7 Fraud is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false'. This aspect of the matter has been considered by Apex Court in Roshan Deen v. Preeti Lal [2002 (1) SCC 100] Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education [2003 (8) SCC 311], Ram Chandra Singhs case and Ashok Leyland Ltd. v. State of T.N. and Another [2004 (3) SCC 1]. Suppression of a material document would also amount to a fraud on the court (see Gowrishankar v. Joshi Amha Shankar Family Trust, [1996 (3) SCC 310] and S.P. Chengalvaraya Naidu's case AIR-1994 SC-853. No judgment of a Court can be allowed to stand if it has been obtained by fraud. Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity. Mis-d....
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....r an abettor to such an evil as has been revealed from governing facts and circumstances of the case. Therefore, commitment of offence even without money trail is enough when conscious breach of law is patent. 9.3 Appellant also relied on para 14 of the judgment of the Hon'ble High Court of Madras in the case Commissioner of Customs, Chennai Vs. Sainul Abideen Neelam - 2014 (300) ELT 342 (Mad.) to make the proposition that evidence recorded under section 108 of the Customs Act, 1962 may not be necessarily accepted by Customs authorities in absence of further material to substantiate the contents of the statement. Appellant fails to succeed on this proposition for the reason that customs authorities are not the Police officers for which the statement recorded under section 108 of the Customs Act, 1962 is binding on the appellant. The appellant did not cooperate to investigation on few occasions when summon was issued against him, apprehending his guilt. Such an approach of appellant speaks his contumacious conduct trying to escape from the tests of the evidence gathered from Alexander. Therefore, he fails to be benefitted from the judgment. Appellant when failed to rule out that ....
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....al evidence was not the sole basis to inculpate the appellant,but there were other circumstantial evidence in the case to implicate him. 10.0 Evidence gathered under section 108 of the Customs Act, 1962 is not from an accused or accused person. The words 'accused' or 'accused person' is used only in a generic sense in law. Recording of the proceeding by customs being pre-accusation stage that is not extracted from an accused. Therefore, customs officer is not a police officer as is defined under Evidence Act and Code of Criminal Procedure. Accordingly, appellants plea that the exculpatory statement of the appellant has credence in evidences does not sound well when he had pre-meditated design to commit fraud against Revenue. Even though the customs officer has the power to arrest, he does not act like a police officer as may be appreciable when section 163 of the Code of Criminal Procedure is analyzed. The customs officer cannot be equated with the police officer although he files compliant under special Act. A police officer is recognized under section 73 of the Code of Criminal Procedure to file a complaint on behalf of the State before the Magistrate. But a customs office do....