AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2019 (10) TMI 457
X X X X Extracts X X X X
X X X X Extracts X X X X
....aud A Dawood under Section 112(a) of Customs Act, 1962. 2.1 Appellants had imported 224 MT of HDPE of Korean Origin and sold the same on high seas to M/s Taneja Exports. The goods were got cleared by the M/s Taneja Exports after filing the Bill of Entry and completion of import procedures and formalities. The goods were cleared against the License No P/K/L/M/353/226 dated 20.07.93 and DEEC Book No 092892 dated 20.07.93, without payment of duty. 2.2 On the basis of investigation undertaken by the SIIB of the Custom House at port and Jaipur it was found that the Licence and Deec book against which the goods had been cleared was not issued by the ADGFT Jaipur and was fraudulently manipulated by the appellants and other concerned with imports. A show cause notice was issued to the importers (filing the Bill of Entry) and the appellants. 2.3 Commissioner proceeded to adjudicate the case against the and held goods were liable for confiscation, allowed them to be redeemed against redemption fine and also confirmed the duty demanded. Against this order appellants had filed the appeal before tribunal, which was allowed by the tribunal and matter remanded back vide CESTAT Final Orde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sioner order in which all the efforts made to produce the persons for cross examination have been recorded and stated that after making all the efforts Commissioner has proceeded to decide the case on the basis of the evidences available on record and cross examinations conducted. • Evidentiary value of the statements made by conoticee cannot be discarded as has been held by the Apex Court in case of Surjeet Singh Chabbra [1997 (89) ELT 464] • Further Hon'ble Supreme court has in case of K I Pavunny laid down the test for admitting any statement recorded under Section 108 in evidence against the accused person. In view of the above decisions the approach of Commissioner cannot be faulted with. 4.1 We have considered the impugned order, submissions made in the appeals and during the course of argument of appeals. 4.2 Admittedly the matter has been readjudicated by the Commissioner in remand proceedings. While remanding the matter CESTAT has directed for cross examination of three persons who had given the statements under Section 108. Commissioner has in impugned order as directed allowed the cross examination of the persons as directed. However S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ating that since Mr. Tanna is a co notice in the SCN, he cannot be compelled to subject himself for cross examination, accordingly his presence may not be insisted. This office vide letter dated 01.03.06 addressed to Shri Jayesh Tanna had requested him to cooperate with the department in order to mitigate the grievances of the notices M/s. PIL and Mr. Dawood and therefore requested him to be present for cross examination on 08.03.2006. This letter was written to Shri Jayesh Tanna in addition to the intimation vide letter dated 22.2.2006, requesting him to attend the personal hearing on 08.03.2006. 33. Next personal hearing was fixed on 08.03.06 and intimations vide letter dated 22.2.06 were sent to i) Shri Deepak Ganatra, ii) Shri Jayesh Tanna, iii) Shri K.L. Sharma, iv) M/s. PIL, v) Shri Dawood and vi) M/s. Rashmi Shipping Agency. The intimation sent to Shri Deepak Ganatra returned with a remark that the addressee is unknown. 34. On 08.03.2006, Shri K.L. Sharma did not appear for hearing and Cross Examination. Shri C.R. Hirani, advocate on behalf of Shri Sharma had given a letter dated 8.3.2006 and requested for further 2 weeks time to ascertain the position with....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... clearly proves that Mr. Jayesh Tanna has, in connivance with Ganatra, Pritipal Singh and Kisen Sharma jointly conspired to evade the duty. It also appears that one Mr. Pradeep Borana is also equally guilty as an abettor. Hence, it is very clear that Jayesh Tanna and Deepak Ganatra appear to be responsible for disposal of the goods and the penalty has been rightly imposed on them. d. In fact, they should be asked and directed to pay the Customs duty also. Your Honour will also appreciate that my clients have agitated these issues from a long time and they have fully co-operated with the Adjudication proceedings. Hence, it is prayed that the Show Cause Notice, proposing penalty against my clients, may be discharged vis-à-vis my clients, in the interest of justice and for this act of kindness, my clients shall as in duty bound for ever pray." 37. Another personal hearing / cross-examination was fixed on 25.04.06 and intimations vide letter dated 04.4.06 were sent to i) Shri Deepak Ganatra, ii) Shri Jayesh Tanna, iii) Shri K.L. Sharma, iv) M/s. PIL and v) Shri Dawood. The intimation sent to Shri Deepak Ganatra returned with a remark that the addressee is unkno....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r recording the issues raised for cross examination and formulating the issues for his consideration of evidences on record Commissioner has proceeded to determine the questions before him by recording as follows: "41. One of the submissions of the learned advocate on behalf of M/s. PIL and Shri Daud A. Dawood is that his clients have sold the goods on high seas to M/s. Taneja Exports, that as per the cross examination, it is evident that Shri Jayesh Tanna on behalf of M/s. Taneja Exports had dealt with the CGA directly and arranged for clearance of the goods, that Mr. Tanna has undertaken to pay whatever Government Revenue has been evaded. It was also submitted that duty liability is on the Importer and his clients having sold the goods to M/s. Taneja Exports are not liable for the payment of duty on these goods. I find that the facts of the case are not as simple as the same are made out to be. I tried to reason whether the High Sea Seller (M/s. PIL) is not related to the High Sea Buyer (M/s. Taneja Exports) and had nothing to do with the goods subsequently cleared by the High Sea Buyer as is expected to be in a commercial High Sea Sale Transaction? I find that the relat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l use) by the importer. Thus, the High Sea Seller taking back the goods after clearance shows that the goods have not been used by Actual user and thereby the goods are liable for confiscation and are confiscated under section 111(o) of Customs Act, 1962. 44. I do not consider the claim of Shri Kantawala, that since no cross examination is done, no credence can be placed on their statements recorded. I find that these statements are recorded under section 108 of Customs Act, 1962 and not retracted till date. The statement recorded under section 108 of the Customs Act, 1962 has evidentiary value. It has been held in various judgments and more specifically quoted 2008 (226) ELT 183 (Raj.) in the case of Ramesh Khatnani Vs Union of India dated 9.7.2009 that "Statement of a person under Section 108 ibid in adjudicatory proceedings against him cannot be discarded". I consider the statement of Shri Daud A. Dawood who himself agreed that he dealt with M/s. Taneja Exports (High Sea Buyers) and has received 176 MT of HDPE back after clearance in lieu of consideration. Further, it is also not that the whole case is decided only on the basis of these statements as discussed herein ab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all the evidences. Hon'ble Supreme Court has in case of Vinod Kumar Vs State of Punjab [2015 (3) SCC 220] expressing anguish over the state and manner in which the cross examination of the witness is used to stall the proceedings observed as follows: "41. Before parting with the case we are constrained to reiterate what we have said in the beginning. We have expressed our agony and anguish the manner in which trials in respect of serious offences relating to corruption are being conducted by the trial courts. Adjournments are sought on the drop of a hat by the counsel, even though the witness is present in court, contrary to all principles of holding a trial. That apart, after the examination-in-chief of a witness is over, adjournment is sought for cross-examination and the disquieting feature is that the trial courts grant time. The law requires special reasons to be recorded for grant of time but the same is not taken note of. As has been noticed earlier, in the instant case the cross-examination has taken place after a year and 8 months allowing ample time to pressurize the witness and to gain over him by adopting all kinds of tactics. There is no cavil over t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ires to be adverted to is whether testimony of a hostile evidence that has come on record should be relied upon or not. Mr. Jain, learned senior counsel for the appellant would contend that as PW- 7 has totally resiled in his cross-examination, his evidence is to be discarded in toto. On a perusal of the testimony of the said witness, it is evincible that in examination-inchief, he has supported the prosecution story in entirety and in the cross-examination he has taken the path of prevarication. In Bhagwan Singh V. State of Haryana[(1976 (1) SCC 389], it has been laid down that even if a witness is characterised has a hostile witness, his evidence is not completely effaced. The said evidence remains admissible in the trial and there is no legal bar to base a conviction upon his testimony, if corroborated by other reliable evidence. In Khuji @ Surendra Tiwari V. State of Madhya Pradesh[(1991) 3 SCC 627], the Court after referring to the authorities in Bhagwan Singh (supra), Rabindra Kumar Dey V. State of Orissa[(1976) 4 SCC 233] and Syad Akbar V. State of Karnataka [(1980) 1 SCC 30], opined that the evidence of such a witness cannot be effaced or washed off the record altogether, b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....illegality in the order of confiscation of foreign currency and imposition of penalty. There is no ground warranting reduction of fine." K I Pavunny [1997 (90) ELT 241 (SC)] "In Naresh J. Sukhawani V/s. Union of India [(1995) Supp. 4 SCC 663] a two-Judge Bench [to which one of us, K. Ramaswamy, J., was a member] had held in para 4 that the statement recorded under Section 108 of the Act forms a substantive evidence inculpating the petitioner therein with the 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 vs. Union of India [1997 (89) ELT 464], 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 cross-examination contending that reliance on the statements of those witne....