TaxTMI 
TaxTMI 
2019 (4) TMI 947
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....Penalty of Rs. 87,48,710/- (rupees Eighty Seven Lakhs Forty Eight Thousand Seven Hundred and Ten only) on M/s Divine Impex under Section 114 (iii) of the Customs Act, 1962. iii. I impose a Penalty of Rs. 87,48,710/- (rupees Eighty Seven Lakhs Forty Eight Thousand Seven Hundred and Ten only) on Shri Yagnesh Trada under Section 114 (iii) of the Customs Act, 1962. iv. I impose a penalty of Rs. 1,00,00,000/- (Rupees One Crore Only) on Shri Yagnesh Trada under Section 114AA of the Customs Act, 1962." 2.1 Appellant 1 is an 100% Export Oriented Unit and Appellant 2 is partner in the said unit. They had filed two Shipping Bills 9355475 & 9355476 dated 11.02.2011 for export of the consignments of Brass Electrical Earthing Accessories. 2.2 After examination of goods and investigations carried the goods covered by the Shipping Bills were seized. The seized goods were subsequently provisionally released to Appellant on execution of a Bond and Bank Guarantee of Rs. 20 lakhs. 2.3 A show cause notice dated 16.08.2011 was issued to the appellants alleging that they- a. Indulged in the act of fraudulently exporting "MS Earth Rods Copper Coated", in the guise of Brass Electrical Earthing Ac....
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.... ASIEH/104/10 dated 04.12.2010. (iii) They have exported Electrical Earthing Accessories under the shipping Bill No 9355475 & 9355476 both dated 11.02.2011, ARE-1 No 012/2011-12 and 13/2011-12 both dated 31.01.2011 and Invoice No DI/Exp/12/2010-11 and DI/Exp/13/20101-11. Irrespective of the evidences produced by the revenue the said consignments had reached the port and were presented for export. (iv) The challan No 164/01.02.2011 recovered from Shri Nilesh Chudasama driver of the truck along with the invoice No 19/01.02.2011 of M/s Shaan Cement do not do not app0ear to be genuine for following reasons- a. No reference of debit entry No of PLA or RG23A part II on the said invoice. b. No mention of truck no on the invoice. c. Consigner copy forwarded by M/s Shaan Cement is not signed by any of authorized person of transporter. d. These documents were never tallied with the original documents of M/s Shaan Cement P Ltd. (v) Complete reliance has been placed on the Statement dated 18.07.2011 of Shri Duiyesh Rameshbhai Goswami, owner cum cleaner of the Truck No GJ10W 5540, stating that the brass rods arrived in the unit of appellants in 12 to 14 Chakras and offloaded and then....
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....y pecuniary benefit and the export Is against a free shipping bill without claiming any export incentive. (v) Since goods are not liable for confiscation, no penalty can be imposed. 4.3 Arguing for the revenue learned Authorized Representative supported the order of the Commissioner and stated- (i) The goods have been held liable for confiscation, as they misdeclared to the extent, that they were not the same goods as described on the export documents. Also they were misdeclared vis a vis manufacture and clearance. These goods were not manufactured and cleared by the Appellant in their 100% EOU, but were procured from outside, (from M/s Swastik Enterprises Ahmedabad). (ii) The allegations made in the Show Cause Notice are well corroborated with the other evidences recovered during the course of investigation, in form of statements recorded. (iii) Gujarat High Court has in case of Jasmat Parshottam Ganesh [1995 (76) ELT 545 (Guj) has held that "statement of person concerned recorded under Section 108 of CA can be relied upon to lend assurance to other evidences". (iv) Hon'ble Supreme Court has in case of Ilias {1983 (13) ELT 1427 (SC)] held that "Confessions made before Custo....
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....issions. He admitted to the shortages noticed in the stock and the sale of raw material and finished goods in local market These statements were corroborated by the various documentary evidences. To specific question in respect of the consignments under consideration the response was as follows: "Question 3. Why were unable to explain the location of export goods shown removed by you from your unit under Export Invoice Nos DI/EXP/012/2010-11 dated 31.01.2011 and DI/EXP/013/2010-11 dated 31.01.2011? You have faciled to produce any evidence showing transportation of the goods from your unit to JNPT, Mumbai as covered under above said two export invoices. Do you admit to the fact that no such goods were dispatched from your unit? Answer 3. I admit that I am unable to present any transport documents and also failed to prove the transportation of goods from our unit to JNPT, Mumbai. However I have to say that the goods shown removed under the above said two export invoices for exports have been manufactured in our unit however the receipt thereof at JNOPT, Mumbai by our CHA will be confirmed within two days by me." 5.4 The above statement is in respect of the consignments cleared o....
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....s Rods, which are not shown in any of your finished goods stock register, then how you showed exporting the same under S/B No 9355475/11.02.2011 and 9355476/11.02.2011 from JNPT Nhava Sheva? Where have you purchased the stock of Brass Rods which were sent to JNPT in Truck No GJ-10W 5540? Answer 2. I agree that we do not manufacture Brass Rods, however the goods for export of which S/B No 9355475/11.02.2011 and 9355476/11.02.2011 filed by us are called Part of Puddle Flange which was produced by us. Question 3. What you have declared in the S/B, ARE-1 and corresponding invoices? Answer 3. We have declared Electrical Earthing Accessories in the export documents. Part of Puddle Flange is known as Electrical Earthing Accessory." 5.6 From the facts as stated above it is the clear case of the misdeclaration and appellants have just went on manipulating the records and clearances to cover up. They had shown clearance of the export goods against the two invoices dated 31.01.2011 declaring the goods as "Earthing Electrical Accessories", without actually clearing anything. When they got confronted in respect of these clearances the manipulated the consignment through local procuremen....
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.... documents recovered during investigation. Even Apex Court has in case of D Bhoormal [1983 (13) ELT 1576 (SC)] held- "31. The other cardinal principle having an important bearing on the incidence of burden of proof is that sufficiency and weight of the evidence is to be considered to use the words of Lord Mansfield in Blatch v. Archar (1774) 1 Cowp. 63 at p. 65 "According 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 exceedingly 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. 32. Smuggling is clandestine conveying of goods to avoid legal duties. Secrecy and stealth being its covering guards, it is impossible for the Preventive Department to unravel every link of the process. Many facts relating to this illicit business remain in the special or peculiar knowledge of the person concerned in it. On the principle underlying Section 106, Evidence Act, the burden to establish those facts is cast on the person concerned : and if he fails to establ....
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.... packages. He could not give a satisfactory account as to how those packages came into his shop. At first, he said that some next-door unknown broker had left them outside his shop. Some days later, he came out with another version viz. that one Bhoormull had left them there. Eight days after, one mysterious person who gave out his name as Bhoormull laid claim to these goods. Despite repeated requisitions Bhoormull did not furnish any information regarding the source of the alleged acquisition of the goods. He never appeared personally before the Collector. He remained behind the scenes. He did not give addresses or sufficient particulars of the brokers who had allegedly sold the goods to him on the 3rd June. Whatever cryptic information was given by him, was also conflicting. Despite two show-cause notices, Bhoormull intransigently refused to disclose any further information. Apart from making a bare claim, he did not furnish evidence of his ownership or even juridical possession of the goods. The totality of these circumstances reinforced by the inferences arising from the conduct of Baboothmull and Bhoormull could reasonably and judicially lead one to conclude that these goods h....
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....vidence that the gold had been smuggled after March 1947, it was held that a finding to that effect could be reached by referring to "the conduct of the appellant in connection with (a) the credibility of the story about the purchase of this gold from three parties, (b) the price at which the gold was stated to have been purchased which was less than the market price and (c) the hurry exhibited in trying to get the gold melted at the refinery with a small bit of silver added so as to reduce the fineness of the gold and thus approximate the resultant product to licit gold found in the market"." 5.9 This contention with regards the statements and documentary evidences raised by the Appellants have been considered by Commissioner in para 46 and 49 of his order wherein he observes as follows: "46. Their contention was that the statement of Shri Jayantibhai Karia could not be relied upon, as there was no documentary evidence. I find that the contention has no basis. The facts narrated in the statement of Shri Jayantibhai Karia was corroborated by the statements of Shri Piyush Shah and Shri Karsanbhai. There were also documentary evidences (letter of M/s. Divine Impex) on record to pr....
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....n no specific reasons were given for cross-examination." 5.11 It is settled law that statements recorded under section 108 of Customs Act, 1962 are admissible piece of evidence and need not be further corroborated. In case of K I Pavunny [1997 (90) ELT 241 (SC)], Hon'ble Apex Court laid down as follows: "19. Next question for consideration is : whether such statement can form the sole basis for conviction? It is seen that, admittedly, the appellant made his statement in his own hand-writing giving wealth of details running into five typed pages. Some of the details which found place in the statement were specially within his knowledge, viz., concealment of the 200 biscuits in his earlier rented house till he constructed the present house and shifted his residence and thereafter he brought to his house and concealed the same in his compound; and other details elaboration of which is not material. The question then is : whether it was influenced by threat of implicating his wife in the crime which is the sole basis for the claim that it was obtained by threat by PW-2 and PW-5? In that behalf, the High Court has held that it could not be considered to be induced by threat that his ....
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....he contravention of the provisions of the Customs Act as he had attempted to export foreign exchange out of India. The statement made by another person inculpating the petitioner therein could be used against him as substantive evidence. Of course, the proceedings therein were for confiscation of the contraband. In Surjeet Singh Chhabra v. Union of India - 1997 (89) E.L.T. 646, decided by a two-Judge Bench to which one of us, K. Ramaswamy, J., was a member the petitioner made a confession under Section 108. The proceedings on the basis thereof were taken for confiscation of the goods. He filed a writ petition to summon the panch (mediater) witnesses for crossexamination contending that reliance on the statements of those witnesses without opportunity to cross-examine them, was violative of the principle of natural justice. The High Court had dismissed the writ petition. In that context, it was held that his retracted confession within six days from the date of the confession was not before a Police Officer. The Custom Officers are not police officers. Therefore, it was held that "the confession, though retracted, is an admission and binds the petitioner. So there is no need to call....
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....oing paras. He was the mastermind behind this fraud and actively involved in the said fraud. In the Panchanama dated 03.02.2011 and in his statement dated 03.02.2011, he admitted to have illicitly sold the duty free imported brass scrap as well as finished goods viz. Brass Ingots prepared from the duty free imported raw materials. In his own version, Shri Yagnesh Trada vide his various statements admitted to have decided and executed all the transactions of the M/s. Divine Impex. Shri Yagnesh Trada has personally effected purchase and packing of 25 MT of "MS Earth Rods Copper Coated" (covering ARE-1 Nos. 012/10- 11 & 013/10-11 both dated 31.01.2011 and 014/10-11 dated 02.02.2011) from M/s. Swastik Enterprises, Ahmedabad and for which he himself dispatched the 40 Wooden Crates to the premises of M/s. Swastik Enterprises, under cover of the letter dated 01.02.2011 issued by him. The all above act were done by him with malafide intention to cause illicit exports of Brass Rods in the guise of Electrical Earthing Accessories. Being working under EOU scheme and well aware about the related provisions under the Exim Policy, Customs Act, 1962 and the Central Excise Act, 1944 and the Rules ....