TaxTMI 
TaxTMI 
2017 (12) TMI 244
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.... fine of Rs. 15,00,000 in lieu thereof and imposing penalty of Rs. 50,00,000 under section 112 of Customs Act, 1962. Goods valued at Rs. 63,58,455 were imported vide bill of entry no. 736946/23.4.2002 filed at JNCH, Nhava Sheva, at Rs. 8,17,587 imported vide bill of entry no. 51-52/6.5.2002 filed at Air Cargo Complex, Kolkata, at Rs. 12,74,297 imported vide bill of entry dated 6.6.2002 filed at Seaport, Kolkata and at Rs. 64,13,374 imported vide bill of entry no. 271611/21.6.2002 filed at New Customs House, Mumbai 2002 for installing a coal washery at concessional rate of duty as provided for in notification no. 84/97-Cus dated 11th November 1997. 2. The establishment of the coal washery with funding by the World Bank as Industrial Pollution Prevention Project (Loan No. 3779-IN & 3780-IN, Credit No. 2645-IN) was approved by the Government of India in Department of Economic Affairs, Ministry of Finance. The notification supra enables availment of concessional duty for imports intended for use in "a project financed (whether by loan or grant} by the World Bank, Asian Development Bank or any other international organisation other than those listed in the Annexure and the said proje....
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.... their ignorance of the void caused by dereliction on the part of Ministry of Finance to nominate the Line Ministry for their project. 5. With a narration of these circumstances, Learned Counsel for appellant made three submissions on denial of eligibility for benefit of notification, viz., > that their entitlement to the benefits of notification No. 84/97-Cus is not deniable as the project fulfills the eligibility requirements and the nominated Line Ministry had agreed to approve the certificate once the criminal prosecution is concluded; it is further contended that the goods not being dutiable are not liable for confiscation and penalty is not imposable on them; > that they had no reason to believe that the certificate signed by Dr. Adarsh Kishore was not genuine and that the appellant, as well as M/s ICICI Bank Ltd, assumed that Ministry of Finance was competent was the authority to issue the certificate; > that in absence of any deposition that Shri Rakesh Yadav who had, admittedly, forged the certificates, had acted at the behest of the appellant, the consequent invalidity of the certificates was not a proper ground to deny the benefit of notification. 6. A further c....
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....nistry of Finance instead of being sent through the representative of the appellant for handing over Shri Rakesh Yadav to get these countersigned; the fabrication of the signature of Shri Adarsh Kishore on the certificates by Shri Rakesh Yadav was thus enabled. According to Learned Authorised Representative, this led the adjudicating authority to conclude, in paragraph 35 of the impugned order, that the Project Implementing Authority, i.e. M/s ICICI Bank Ltd, was also involved in the forgery and fabrication. 9. Refuting the plea of bar of limitation, Learned Authorised Representative contends that this has been properly dealt with in paragraph 40 of impugned order wherein the adjudicating authority held that there is no question of any bar on invoking the extended period as the goods had been cleared against forged documents furnished by appellant. Further, he submitted that limitation of time does not extend to confiscation proceedings under section 111 of the Customs Act, 1962 and that adjudicating authority could not be faulted for the finding that mala fides of the appellant in misleading the proper officer into accepting the credibility of the forged certificates to get undue....
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....CI/WB/IPPP/Customs/06 dated 24th April 2002, PIAC No. ICICI/WB/lPPP/Customs/07 dated 21st May 2002, letter IPPP/ 2456 dated 6th June 2002 addressed to Additional Secretary, Department of Economic Affairs, Ministry of Finance, Government of India with PIAC No. ICICI/WB/IPPP/ Customs/08 dated 4th June 2002, with request for returning copy of PIAC to them after countersigning by competent person in Department of Economic Affairs. ICICI Bank Ltd. charged JSPL Rs. 1 Crore as loan processing fee. PIAC No. ICICI/WB/IPPP/Customs/04 dated 4th April 2002 addressed to Commissioner of Customs, JNPT, Nhava Sheva, PIAC Nos. ICICI/WB/IPPP/Customs/05 dated 16th April 2002, ICICI/WB/IPPP/Customs/06 dated 24th April 2002 and PIAC No. ICICI/WB/IPPP/Customs/07 dated 21st May 2002 addressed to Commissioner of Customs, Kolkata Airport and PIAC No. ICICI/WB/IPPP/Customs/08 dated 4th June 2002 addressed to Commissioner of Customs, Mumbai Sea Port that were assumed to have been counter-signed by Additional Secretary (FB,ADB & Ext.Fin.) for Ministry of Finance were forged and he had not seen those documents during his tenure as Additional Secretary (FB,ADB & Ext.Fin.), Ministry of Finance, Govt. of India.....
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....hat they were entitled to the exemption, the extended period was liable to be invoked. The goods having been imported against documents that were not valid had failed to fulfill the conditions of import rendering the goods liable to confiscation under section 111 of Customs Act, 1962 and M/s Jindal Steel & Power Ltd liable to penalty under section 112 of Customs Act, 1962. M/s ICICI Bank Ltd was aware that the certificates required countersigning by the officer of 'Line Ministry' and, having sent the letters addressed to Additional Secretary, Department of Economic Affair, Ministry of Finance, Government of India along with the certificates to M/s Jindal Steel & Power Ltd for onward transmission for countersigning instead of desptaching it directly, enabled the availment of exemption under notification no. 84/97-Cus dated 11th November 1997 using forged/fabricated certificates that rendering the impugned goods liable for confiscation under section 111(o) and themselves liable for penal action under section 112(a) of Customs Act, 1962 for their acts omission/commission. Shri Rakesh Yadav abetted the evasion of Customs duty as he was, by his own admission, responsible f....
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....e, Govt. of India and Joint Secretary (FB), Department of Economic Affairs, Ministry of Finance, Govt. of India from the original signatures that were available in his office records; that he was aware that that PIACs forged by him had been utilized for evasion of Customs duty on the imports of the goods by respective borrowers of the loan under the World Bank/Asian Development Bank Loans and that he had committed an offence in abetting evasion of customs duty on the part of various firms that utilized the PIACs forged by him. 12. Dr. Adarsh Kishore, Secretary to the Govt. of India, Ministry of Heavy Industries & Public Enterprises, Udyog Bhavan, New Delhi in statement under section 108 of the Customs Act, 1962 recorded on 5th August 2004 deposed that had served as Additional Secretary to Government of India in the Ministry of Finance during the period from October 2002 to June 2003; that PIAC No. ICICI/WB/IPPP /Customs/04 dated 4.4.2002 addressed to Commissioner of Customs, JNPT, Nhava Sheva, PIAC Nos. ICICI/ WB/IPPP/Customs/05 dated 16.4.2002, ICICI/WB/IPPP/ Customs/06 dated 24/04/2002 & PIAC No. ICICI/WB/IPPP/Customs/07 dated 21/5/2002 addressed to Commissioner of Customs, Kolk....
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....al Manager - Corporate Finance, on 17.8.2004 JSPL recorded under section 108 of the Customs Act, 1962 he deposed that JSPL was engaged in the business of manufacturing sponge iron, steel and generation of power at Raigarh, Chhattisgarh; that JSPL imported equipments under the World Bank Line of Credit No:3780 - IN for Industrial Pollution Prevention Project funded by International Bank for Re-construction and Development (IBRD) of the World Bank group for which M/s ICICI Bank Ltd had been appointed as Project Implementing Authority; that imports had been effected through Mumbai Port, JNPT, Nhava Sheva Port and Kolkata Port; that JSPL had utilized PIACs issued by M/s ICICI Bank Ltd, countersigned by officials of Department of Economic Affairs, Ministry of Finance, Government of India for clearance of imported goods with full exemption of customs duty; that JSPL had approached M/s ICICI Bank Ltd for financing their blast furnace and coal washery projects at a estimated cost of Rs. 135 crores with term loan of Rs. 100 crores and internal accruals of Rs. 35 crore; that M/s ICICI Bank Ltd explained that they could avail of concessional funding from World Bank for coal washery project ; ....
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....eneral Manager in-charge of Technology Group his responsibilities included managing programmes, for technology development and health-care etc; that he was assisted by Shri Anil Malhotra, Chief Manager and other managers; that M/s ICICI Bank Ltd had signed a loan agreement with Asian Development Bank (ADB) under Urban Environment Infrastructure Facility Project (UEIP) for US $ 30 million with line of Credit No: 1720/IN available upto September 2004; that term loans under UEIP projects were extended to borrowers who undertook to execute projects that were approved by ADB under that category; that as per ADB terminology the borrowers who availed such loans from banks were called sub-borrowers; that as per practice, sub-borrowers submitted proposals to Business group of their bank which was appraised and evaluated before sanction and disbursal to the borrower; that the group sought approval of ADB for procurement of equipments covered, partly or wholly, by loans for projects covered by UEIP scheme; that under UEIF line of credit, M/s ICICI Bank Ltd had been designated as the Project Implementing Authority by the ADB; that the sub-borrower who availed loan under UEIP were entitled to e....
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....4/93 -FBIV dated 4.6.2002 and ICICI/WB/IPPP/Customs/08 dated 4.6.2002 along with letter D.O. No. 5/4/93-FBIV dated 14.6.2002 shown to her had not been issued by the Department of Economic Affairs; that this department was not authorized to countersign the certificates as per conditions of notification no. 84/97-Cus dated 11th November 1997: that the PIACs were to be countersigned by an officer not below the rank of Joint Secretary to the Government of India in the concerned Line Ministry ; that Department of Economic Affairs, Ministry of Finance was only concerned with initiating World Bank assistance and was not the implementing agency or Line Ministry for the World Bank assisted projects. 18. During investigation JSPL vide letter dated 13.08.2004 deposited Rs. 32,57,994/-, Rs. 32,30,095/-, and Rs. 10,62,677/-. 19. Having examined the submissions made by both sides, the adjudication order and records, we observe as under: * M/s Jindal Steel & Power Ltd cleared goods valued at Rs against five bills of entry at different gateways claiming the benefit of concessional rate of duty of 5% BCD extended by notification no. Cus dated for projects funded by specified international organ....
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.... of this submission, the eligibility being contingent upon essentiality of the goods for the project and approval of the Government of India which can be evidenced only by the countersignature of the designated official and such being non-existent in the impugned imports, the eligibility does not exist even till today. 21. The failure of the Government of India in the Department of Economic Affairs, Ministry of Finance to nominate a Line Ministry for the project at the time of import does not waive the requirement of compliance with the condition in the notification to evidence essentiality and approval. Neither does it condone the production of a forged certificate to accord it a sanctity that it fails to possess ab initio. 22. The role of Shri Rakesh Yadav in the fabrication of the certificates has been sufficiently established. That M/s ICICI Bank and M/s Jindal Steel & Power Ltd have a major financial stake in the execution of the project is axiomatic. Any delay in obtaining the countersignature of the designated officer in the certificate issued by M/s ICICI Bank would have repercussions for both that would motivate them to collaborate in submission of a certificate that was....