TaxTMI 
TaxTMI 
2002 (8) TMI 876
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....communication of the order. The Hon'ble Calcutta High Court in matter No. 285 of 1985 vide order dated 13-8-1986 vide para (g) had directed the appellant to file the appeals against the adjudication order passed by the Collector of Customs, Calcutta within one month from 13-8-86. The appellant had again approached the Hon'ble Calcutta High Court for the extension of time for the filing of appeal and vide order dated 12-9-86 the Hon'ble Calcutta High Court had extended the time for the filing of appeals till 31-10-86. Thus both the appeals filed in the tribunal are well within period of limitation prescribed under the Act. In terms of the provisions of Section 129A(3) the last date for the filing of the appeals was 8-11-86. 2. In view of Hon'ble High Court's directions the appellant had paid a sum of Rs. 22 lakhs in cash and had further furnished bank guarantee of Rs. 5 lakhs. In para (h) the Hon'ble Calcutta High Court vide its order dated 13-8-86. It was ordered that the deposit of Rs. 22 lakhs and furnishing of the bank guarantee for Rs. 5 lakhs in pursuance of the Hon'ble High Court's order may be treated as a deposit in terms of Section 129E of the Customs Act, 1962. Ac....
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....following additional endorsement all attested with the security stamp and rubber stamp impressions and signatures of the Controller of Imports & Exports, Shillong were seen on the said licence : - (i) The endorsement "Transferable" deleted and endorsed "Not Transferable". (ii) Below that a fresh endorsement "This licence is transferred in favour of M/s. Agrico Industries, G.S. Road, Garikhana, Shillong - 793002" was there. (iii) The description of goods "F.1.3. O.T.S. containers" deleted and instead the endorsement "as per list attached" was made. (iv) On the reverse of the licence the following additional endorsements was made. "Para 140 is replaced by Para 148 of the Import-Export Policy 1984-85. This licence is valid for import of items appearing in Appendix 5, Part A of A. M. '85 Policy as per list attached and shall be subject to the condition that the items to be imported are those as are required by the transferee in his own unit and the entire production shall be exported in terms of provisions in Para 148 of Import Policy A.M. '85". M/s. Agrico Industries, G.S. Road, Garik....
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.... P/L/3012892/C dt. 17-10-84 dt. 17-10-84 dt. 17-10-84 All the three consignments were, as per invoice issued by M/s. Eurinbel, Soctlte Anonyme, Belgium, A.P. Landowaks - Samis, Paris were shipped from the port of Antwerp. It revealed from the order dated 15-11-84 and 21-11-84 and also from the letter of credit No. 80792 and 80793, dt. 7-12-84 opened by M/s. G.S. Overseas Corporation that the importations were initially arranged against the following Import Trade Control licences : - 1. P/K/3074559, dt. 4-12-84 2. P/L/3075031, dt. 12-11-84 3. P/L/3075036, dt. 12-11-84 4. P/L/3075038, dt. 12-11-84 5. P/L/3074530, dt. 12-11-84 6. P/L/3074525, dt. 12-11-84 7. P/L/3074553, dt. 12-11-84 8. P/L/3074561, dt. 4-12-84 9. P/L/3074557, dt. 3-12-84 10. P/L/3074551, dt. 3-12-84 11.&nbs....
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....d the office of the Controller of Imports and Exports, Shillong on 13-3-85. The import licence No. P/L/3012892/C/XX/93/L/84, dated 17-10-84 was shown to Shri L. Kharmalong, Controller of Imports and Exports, Shillong. On perusal of the licence in question, he gave a written statement to the effect that all endorsements on the said licence transferring it in the name of Agrico Industries, G.S. Road, Garikhana, Shillong and making it valid for import of goods in terms of Para 148 of ITC Policy AM 85 seen as attested under the security seal, rubber stamp impressions of the Controller of Imports and Exports, Shillong and his signatures were not genuine and that all signatures, rubber stamp impressions and security seal impressions were fake and no such endorsement of Para 148 of AM 85 policy was made on the said licence by him or by his office in the name of Agrico Industries, Shillong. He also confirmed his statement by swearing in an affidavit with the 1st class Magistrate, Shillong. The Investigation Officers with the help of local Customs Authorities tried to trace out the firm under the name and style of M/s. Agrico Industries, Shillong and the inquiries conducted appeared to esta....
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....der Section 108 of the Customs Act, 1962 stated that he sold a few transferable REP licences including the licence No. P/L/3012892/C/XX/93/L/84, dated 17-10-84 to one Mr. Satyanarayan Agarwal of M/s. Agrico Industries on 20-12-84 and received the payment of commission on the same day by cash from him. He clarified that when he sold the REP transferable licences to Shri S.N. Agarwal or M/s. Agrico Industries, in whatever way it is taken, the licences were for importation of O.T.S. containers only and there was no endorsement of para 148 of A.M. '85 Policy neither those licences were "Not transferable". He also confirmed that in the trade/market Agrico Industries import licence were known as Shri S.N. Agarwal's import licences. One Shri Sushi1 Kumar Kayan, Director/Partner of M/s. Sita Casting, Kalyan Udyog and Ram Narayan Biswanath stated in his statement given under Section 108 of Customs Act, 1962 that he had procured few such licences from one Shri S.N. Agarwal of M/s. Agrico Industries. In the meantime it was understood that one bank account was being operated in the name of M/s. Agrico Industries in the Shyambazar Branch of the New Bank of India. On enquiries it was un....
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.... Accordingly, a summons was issued under Section 108 of the Customs Act, 1962 on 27-3-85 to Shri G.R. Agarwal, proprietor of M/s. G.S. Overseas Corporation. In his statement dated 28-3-85 he deposed that one Shri Satyanarayan Agarwal came to him along with one Shri Santosh Kanoria and introduced another person with description of "Dark complexion, fatty and bulging belly, roughly 5'4" in height, without spek and black hair" as Toshi Loya of Agrico Industries from whom he procured the letter of authority along with two import licences in question. However, he could not confirm whether the person named Toshi Loya was a person from hill tribe or not. That he had not placed any specific order for the subject goods for the licensee and the subject consignment was originally meant for some other party. Shri G.R. Agarwal deposed vide his statement dated 1-4-85 pursuant to the summons dated 28-3-85 that he will appear for further statement required by the Customs authorities. In his statement dated 6-4-85 Shri Agarwal stated that he procured the letter of authority from one Satyanarayan Agarwal who is known in the trade as the man of M/s. Agrico Industries. The goods in question were....
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....ure goods using the imported goods and would re-export to them. This means that under law M/s. G.S. Overseas Corpn are bound to hand ever the imported goods to M/s. Agrico Industries for manufacture and subsequent re-export of the end-product. Further, as per Para 383(1) of the Hand-book of Imports arid Exports Procedures 1984-85, the licence holder is given the authority to appoint persons as his agent for arranging the imports permitted by the licence. The licence should continue to be in the name of the licence holder and other provisions of the Import (Control) Order of 1955 in regard to the duties and obligations of the licence holder or letter of authority holder will continue to apply respectively to the persons concerned. Subject to these conditions and legal requirements, it will be open to the licence-holder to decide upon his own form of letter of authority. But the functions of the holder of such letter of authority shall be limited to place orders, to open letter of credit, to make remittance of payment for importing the goods, to arrange movements and to clear the same through the Customs having regard to Section 147 of the Customs Act, 1962, on behalf of the licensee....
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.... Act, 1947, as amended, read with Section 11 of Customs Act, 1962 and why penal action should not be imposed on them under Section 112(a) and (b) of Customs Act, 1962. The importers submitted their written reply to the above show cause notice on 5-8-86 at the time of personal hearing wherein they stated the following points for consideration :- (i) The show cause notice has been issued belatedly; (ii) That the importer is not responsible for the forgery on the import licence. (iii) That he produced an import licence different from that mentioned in the letter of credit since the need for the material by M/s. Agrico Industries was urgent; (iv) That no reliance should be placed on the statement of Shri L. Kharmawlong by the adjudi­cating authority since it was a procured one; (v) That no enquiry has been made at Arunachal Pradesh about the existence of M/s. Agrico Industries; (vi) That copy of statement of Satyanarayan Agarwal and Shri S. Kanoria had not been furnished to them. They also con....
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....ained the following declarations : Vessel's name Rot. No. Line No. No. of pkgs Qty Description of goods C.I.F. Value 1. Jala-gopal 123/85 12 90 116.082 M.T. Tin Plate waste Rs. 3,15,869.81 2. Jala-gopal 123/85 13 100 72.440 M.T. Tin Plate secondaries strips Rs. 1,40,338.81 3. Jala-gopal 123/85 14 108 128.740 M.T. Defective seconds CI Strips in coils with below 500 mm. Rs. 2,19,211.12 4. Jala-moti 135/85 37 172 294.960 M.T. Defective seconds CRCA Sheets Rs. 5,77,946.50 5. Jala-moti 135/85 38 168 496.860 M.T. Defective seconds CRCA sheets Rs. 6,99,573.00 Licence No. and date 1. P/L/0432104/C/30-11-84 2. P/L/0432104/C/30-11-84 3. P/L/0432104/C/30-11-84 4. P/L/0432104/C/30-11-84 5. P/L/0432104/C/30-11-84 On the same Import licence additional endorsements were made as follows : - "Para 140 is replaced by Para 148 of the Import-Export Policy 1984-85. This licence is valid for import of items appearing in Appendix 5, Part A of A.M'85 Policy as per list attached and shall be ....
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.... Industries. Shri Sen the ld. Sr. Advocate, has argued that there was no seizure of the imported goods by the Revenue and the show cause notice under Section 124 was issued almost after one year. Shri Sen has argued that the BEs were classified and assessed by the Appraiser under Section 17(4) of the Customs Act, 1962 starting from 20-2-85 to 6-3-85 and the same were countersigned by the Assistant Collector and BEs and licences were returned to the clearing agents. Shri Sen has argued that the ld. Collector in para 5.4 of his order (internal page 14 and page 72 of paperbook) has observed without any basis that the motive of the appellant was to import canalised items without the cover of the valid import licence and has produced a fake licence and has failed to explain the circumstances properly under which the licence and letter of authority in question was produced for the clearance of goods and thus the appellant had attempted to suppress the facts. Shri Sen has argued that this allegation by the Collector is without any base. He has argued that the Revenue authority had issued a notice under Section 108 of the Customs Act, 1962 and the appellant had challenged the same before t....
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....pointed out to give reasons for the decision. The Hon'ble Bombay High Court had further observed that they would have considered it fit to remand the matter for lower authority but they had followed the procedure which was followed in English Courts, that even where reasons are not given, if the reasons are disclosed in affidavit at the trial then the court looked into those reasons and consider those reasons as if they were the reasons embodied in the order itself. There they had a long and argumentative affidavit from the Collector which gave the reasons for the decision. Therefore instead of sending the matter back with a direction to the assessing authorities to give reasons for the decision, the Hon'ble judges of the Bombay High Court had agreed to consider the reasons given by the Collector in the affidavit as if they were the reasons embodied in the order. Shri Sen, the ld. Sr. Advocate has argued that in the present matter before the Tribunal the bills of entry filed by the appellant were duly assessed by the Revenue authorities and an assessment is an assessment and if at all the Revenue proposes to challenge that assessment, the Revenue should have taken recourse to the p....
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....e has referred to the ITC Policy for 1984-85 and has referred to appendix 2 clause 9. Shri Sen has argued that in terms of the provisions of this policy there is no contravention on the part of the appellant and as such the importation made by the appellant is authorised under the law. In support of his arguments he has referred to a judgment of the Hon'ble Supreme Court in the case of East India Commercial Co. Ltd. v Collector of Customs reported in [1983 (13) E.L.T. 1342 (S.C.) = AIR 1962 S.C. 1893] and has referred to para No. 35 in particular where the Hon'ble Supreme Court had held that "nor is there any legal basis for the contention that the licence obtained by misrepresentation makes the licence non est with the result that the goods should be deemed to have been imported without licence in contravention of the order issued under Section 3 of the Act so as to bring the case within clause (8) of the Sea Customs Act. Assuming that the principles of Law of Contract applied to a licence to be issued under the Act, a licence obtained by fraud is only voidable : it is goods till avoided in the manner prescribed by law : in the circumstances we must hold that when the goods were i....
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....ern set up there is a change in the outlook of the legislature in respect of economic offences and even the judiciary now takes the stringent views on the economic offenders. He has argued that in terms of the provisions of Section 123 of the Customs Act the onus to prove that the goods are not smuggled is on the party from whose possession the goods are recovered. In support of his arguments he has referred to a judgment of the Hon'ble Supreme Court in the case of State of Gujarat v. Mohan Lal Jitamal reported in 1987 (29) E.L.T. 483 where the Hon'ble Supreme Court had held that the community acting through the State and public prosecutor is also entitled to justice and for meeting the ends of justice the technicalities should not stand in way. The cause of the community deserves equal treatment at the hands of the court in the discharge of judicial functions. The community in the State is not a persona non grata whose cause may be treated with disdain. The entire community is aggrieved if the economic offender who ruins the economy of the State are not brought to book. These observations are to be found in para No. 6 of the Hon'ble Supreme Court's judgment. Shri Ghosh had argued ....
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....authority executed by Agrico Industries in favour of G.S. International which appears on page 79 of the paperbook. The letter of authority was executed by one Shri Toshi Loya the proprietor of the so called Agrico Industries which appears on page 79 of the Revenue's paperbook. He has also referred to page 75 of the paperbook which is a letter written by Shri Benoy K. Chowdhury, Advocate to the effect that at no point of time M/s. Krishna Udyog or M/s. Agrico Industries were in the occupation of the said premises. Shri Jatin Ghosh, the learned advocate has stated, that the goods had arrived on 26th March, 1985 whereas the sommons were issued to Shri G.R. Aggarwal, the present appellant on 16th March, 1985, the appellant had challenged the issue of summons in the Hon'ble Calcutta High Court by way of a Writ and as per directions of the Hon'ble Calcutta High Court the goods were warehoused under Section 49 of the Customs Act, 1962 on 1st April, 1985 and the SCN was issued on the 1st August, 1986. He has referred to the order-in-original appearing in appellants paperbook on pages 65 to 90 in the order-in-original. He has stated that the SCN was issued, to Shri G.K. Aggarwal and M/s. Ag....
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....as his affidavit confirm the same. He has also gone through the statements of Shri G.R. Agarwal which appear from pages 50 to 58 of the respondent's paperbook. Shri Jatin Ghosh has argued that the goods imported by the appellant appear in Appendix 5 part A of the ITC Policy for the relevant year 84-85. These are canalized items and could be imported by a canalized agency or Spl. REP Licences. He has relied on the Order-in-Original and has again argued that the import endorsement on the Import Licences are forged and the endorsements were made in favour of M/s. Agrico Industries which was not in existence at all. The present appellant Shri G.R. Agarwal is not the licence holder and also not the owner of the goods. He is alleged to be the letter of authority holder. The adjudication order is valid, correct, proper and in accordance with law and has again argued that the present appellant has no locus standi to file an appeal. He again reiterates the facts and states that the following dates are very relevant. From 16th February to 6th March, 85 - 8 B/Es were filed before the actual arrival of the goods. The assessments were made by 6th March, 85. Licences were produced. He has referr....
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..... He has referred to pages 61, 62 and 63 of the appellant's paper book viz. Order-in-Original (appeal No. 305/86). He has argued that the endorsements on the licence were made on 11th January, 1985. Shri Ghosh has referred page 76 of the appellant's paperbook where the Collector has observed that "the importers were allowed to take inspection of different records and statements relied upon in the SCN and the Advocates had taken inspection of various documents including statements and affidavit". This means that some original documents were duly shown to the appellants. Shri Ghosh has again referred to the adjudication order starting from pages 66 to 72 of the appellants paperbook and has also referred to the analysis of the statement recorded under Section 108. He has again argued that the importers were allowed inspection and states that the original bank's letter was not given to them. Shri Ghosh has again referred to the Statement of Shri G.R. Agarwal. He has argued that the letter of authority is dated 12th January, 1985 whereas the order for the supply of goods was placed much earlier i.e. on the 15th November, 1984. Shri Ghosh has referred to Shri Kharmawlong's statement whic....
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....tan Motors (5) 1983 (13) E.L.T. 1477 (S.C.) = AIR 1972 S.C. 689 Para 9 He has further argued that cross-examination was not necessary. In support of his arguments he has relied on the following cases : - (1) 1983 (13) E.L.T. 1486 (S.C.) = AIR 1972 S.C. 2136 (2) AIR 1968 Cal. 174 (3) AIR 1984 S.C. 273 (4) 1987 (29) E.L.T. 483 Shri Ghosh has argued that the appellant had utilized the forged licences intentionally. He concedes that no expert opinion was taken and the documents were not sent to the forsenic laboratory. He also conceded that the inquiries were conducted as to the existence of Agrico Industries only at Shillong and not at Cuttack and Miao. He further stated that the order was placed in November, 1984 whereas the Letter of Credit was opened on 7th December, 1984 through Bank of Baroda. He has argued that in the normal course of business the order is placed after the procuring of the letter of the authority. He has pleaded for the rejection of the appeal. Shri Sen, the learned Sr. Advocate, in reply st....
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....osh Kumar says that he will make further inquiries and no further enquiry has been made and no further statement of Shri Santosh Kumar was recorded and Shri Santosh Kumar is not a man of Garikhana Road and as such no reliance should be placed on his statement. He has argued that India is a federation and it is one of the fundamental rights that there could be free movement. He has referred to the provisions of Section 108 of the Customs Act, 1962 for the purpose of recording statement. Shri Sen has referred to Mr. Kharmalong's affidavit (pages 29 to 33 of the respondent's paperbook). Shri Sen has stated that the disputed licence number is P/L/0432104/C dated 30-11-84 which appears at Sl. No. 12 in Mr. Kharmalong's affidavit dated 14-6-85 and Shri Kharmalong in the affidavit has mentioned that no endorsement was made by him. Shri Sen has stated that how Shri Kharmalong could depose that the endorsements were not made by him especially when this licence was very much in the possession of the appellant and the affidavit has been given by Shri Kharmalong without even looking at the licence and without going through the endorsement and as such no reliance should be placed on the aff....
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.... course of arguments of Shri Sen stated that Shri Sen had referred to certain new points in the rejoinder and as such he should have been given an opportunity for replying to the same. To this Shri Sen fairly stated that he has got no objection to the same. Accordingly Shri Jatin Ghosh had put forward the following arguments. Shri Ghosh has argued that the judgments on the issue of denial of principles of natural justice reported at 1984 (18) E.L.T. 547, AIR 1973 S.C. 834 and AIR 1982 S.C. 1550 have got no application in the appellant's case. In support of his arguments Shri Jatin Ghosh had referred to the following judgments :- (1) 1983 (13) E.L.T. 1546 (S.C.) = AIR 1974 S.C. 859 para 30 - CC v. D. Bhoormal (2) 1983 (13) E.L.T. 1486 (S.C.) = AIR 1972 S.C. 2136 para 12 - Kanungo case (3) AIR 1984 S.C. 273 para 41 - K.R. Tripathi v. State of Bombay holding that it depends on the facts and circumstances of each particular case whether there was denial of principles of natural justice or not therefore Hon'ble Supreme Court had held that the rules of natural justice are flexible and....
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...., 1962. Sub-section (1) of Section 129A is reproduced below : - "(1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such orders - (a) a decision or order passed by the Collector of Customs as an adjudicating authority; (b) an order passed by the Collector (Appeals) under Section 128A; (c) an order passed by the Board or the Appellate Collector of Customs under Section 128, as it stood immediately before the appointed day; (d) an order passed by the Board or the Collector of Customs, either before or after the Appointed day, under Section 130, as it stood immediately before that day: Provided that the Appellate Tribunal may, in its discretion, refuse to admit an appeal in respect of an order referred to in Clause (b) or Clause (c) or Clause (d) where - (i) the value of the goods confiscated without option having been given to the owner of the goods to pay a fine in lieu of confiscation under Section 1....
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....section (3); but if it is found sub-sequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty. Section 28. - Notice for payment of duties not levied short-levied or erroneously refunded. - (1) When any duty has not been levied or has been short-levied or erroneously refunded, the proper officer may, - (a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, within one year; (b) in any other case, within six months; from the relevant date, serve notice on the person chargeable with the duty which has not been levied or which has been so short-levied or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : Provided that where any duty has not been levied or has been short-levied or has been erroneously refu....
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....ad enhanced the same and the appellant had accepted the same. So at the worst it can be said for the sake of arguments if at all the appellants case falls for reassessment it falls within the definition of "otherwise". Shri Bhola Nath Sen, the ld. Advocate had argued that if at all the Revenue authorities wanted to reassess the imported goods, the Revenue authorities should have resorted to the provisions of Section 28 of the Customs Act, 1962 and should have issued a notice for payment of duties not levied or short-levied or in the alternative should have resorted to the provisions of Section 129D of the Customs Act, 1962 which confers the powers on Board or Collector of Customs to pass certain orders. Shri Sen has stated that since the Revenue authorities did not resort to the provisions of Section 28 of the Customs Act or to Section 129D of the Customs Act, it was not open to the Collector to allocate the matter to himself for assessment. In support of his argument he has relied upon the following judgments :- (1) 1986 (26) E.L.T. 873 - Ajay Export & Another v. CC, Madras (2) 1987 (28) E.L.T. 63 (Bom.) - Union ....
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....tion or testing of the goods or otherwise, that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be reassessed to duty". The judgments cited by the ld. Advocate [reported at 1986 (26) E.L.T. 873, 1987 (28) E.L.T. 63 and 1982 (10) E.L.T. 418] do not help the appellant as in all these judgments the goods were different, the goods were ordered to be cleared for home consumption in terms of Section 47 of the Customs Act, 1962 whereas in the matter before us there was no order as to the clearance of goods for home consumption under Section 47 of the Customs Act, 1962. Accordingly we do not find any force in the argument of the ld. Sr. Advocate. The judgment of the Hon'ble Bombay High Court in the case of Glaxo Laboratories India Ltd. v. A.V. Venhad also does not help the appellant. There also the clearances were effected. Accordingly we hold that under the law there was no requirement of resorting to the provisions of Section 28 and 129D of the Customs Act, 1962. Accordingly the reassessment proceedings could have....
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....s Act, 1962, he had deposed that "I have no knowledge about Agrico Industries for which I have heard the name today itself. I do not have any knowledge whether Agrico Industries is/was located at G.S. Road, Garikhana, Shillong". In his statement he has mentioned that he had been living in Shillong for the last 25 years and he was having knowledge of all the firms dealing in iron and steel business in the locality and this is for the first time he was hearing the name of the firm Agrico Industries and there was no firm to the best of his knowledge and belief under name and style of Agrico Industries in the locality. He had further stated that he would make further inquiries and would give full details if any firm by the name Agrico Industries existed in Shillong or not. The Revenue authorities had sent registered letter at Garikhana, Shillong address which was returned by the postal authorities with the remarks that there was no firm by such name whereas the appellant in reply to the show cause notice had agitated that the firm was very much in existence. In support of his argument for the existence of the firm Agrico Industries, he had relied on the following documents : - ....
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....as to premises No. 13/1D, Balram Ghosh Street, Calcutta. The appellant in support of the existence of the concern Agrico Industries, Shillong had relied on documentary evidence which was duly attached with the reply to show cause notice and the Revenue has no evidence to controvert the same Undoubtedly all the documents attached with the reply to show cause notice as to the existence of Agrico Industries pertain to the period 1981 to 1984. The appellant has not attached any documentary evidence to prove that whether the concern Agrico Industries was in existence at the time of importation viz. in the year 1985. The Revenue had made inquiries only at Shillong Branch and no inquiries were conducted at the head office or at the other branches. The learned adjudicating authority also did not make any effort to controvert the evidence filed by the appellant as a result of which it cannot be conclusively said that the first Agrico Industries was not in existence. Documentary evidence is always superior to oral evidence. Accordingly benefit of doubt must be extended to the appellant in this regard. Now coming to the question of forgery on import licence. The Revenue has relied solely o....
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....ding a rubber stamp impression of Controller of Imports and Exports, only Shillong and a metal seal mark indicating Sl. No. 118 of the office of A.C.I & E, Shillong have been shown to me. I have carefully examined the said Import Licence bearing No.P/L/3012892/C/XX/93/E/84, dated 17-10-84. From the B/E No. 1331 mentioned above it is seen by me that the above said licence was produced to the customs authorities for the clearance of 141.380 M.T. Tin Plate Secondaries imported Ex Jalagopal. I do hereby confirm the following after thorough scrutiny of above mentioned Import Trade Control Licence and on careful verification of my office records : - (a) That I have not seen licence No. P/L/3012892/C/XX/93/E/84, dated 17-10-84 in the past. That I am seeing this licence for the first time, when it is shown to me by Mr. A.S.R. Nair, Deputy Collector, Customs. (b) Three metal stamp impressions reading "Sl. No. 118 of A.C.I & E Shillong" appearing on the front page of the licence No. P/L/3012892/C/XX/93/E/84, dated 17-10-84 are not of this office. (c) Three ru....
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...., rubber stamp and signature referred to paras (h), (i) and (j) above and also seen in the list attached with the I.T.C. Licence No. P/L/3012892/C/XX/93/E/ 84, dated 17-10-84 are not of this office and not signed by me. (l) That the endorsement "List of items to be imported - All seconds/ secondgrades/defectives/cuttings/circles of sheets/ plates & coils/ strips in any shape section/form not elsewhere stated in coated/ plated or uncoated condition including tin/ zinc/aluminium/ aluminium alloy coated/plated and commodity marketed as tin free steel in the descriptions above stated. Tin plate waste waste" in the list attached with the aforesaid I.T.C. licence was not given by this office. (m) That in conclusion, it appears to me the endorsements on all the pages of I.T.C. Licence No. P/L/3012892/C/XX/93/E/84, dated 17-10-84 and on the list attached with it are not genuine and signatures, rubber stamps and metal stamp impressions on the body of the licence and on the list attached showing those to be of this office are fake. As desired, I am putting below :- 1. My signature - Sd/- 2....
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..../84. G.30 & G.2/1, dated 10-12-84, No. P/L/3055601/C/XX/ 93/B/83, dated 15-10-84 and No. P/L/0432194, dated 30-11-84. Solemnly affirmed on this day of Tenth June Nineteen Hundred Eighty-five". Affidavit of Shri Kharmawlong dt. 14-6-85 : "I, Shri Leastarwell Kharmawlong son of Shri Stenley Syiemlich aged about 34 (thirty-four) years working as Controller of Imports & Exports, Government of India, Ministry of Commerce, Shillong solemnly affirm and say as follows : 1. That I am the Controller of Imports & Exports, Shillong and have been working here since February, 1984 and on additional charge (tour basis) from November, 1980. 2. That no endorsement under para 148 of Import and Export Policy, 1984-85 have been made by me on the following import Trade Control Licences : 1. P/L/0431609 dated 10-11-84 2. P/L/0431640 dated 9-11-84 3. P/L/0431620 dated 9-11-84 4. P/L/0421856 dated 19- 11-84 5. P/L/0431639 dated 9-11-84 6. P/L/0431854 dated 19-11-84 7. P/L/3054505 dated 17-10-84 8. P/L/3053837 ....
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....m that mentioned in the letter of credit since the need for the material by M/s. Agrico Industries was urgent; (iv) That no reliance should be placed on the statement of Shri L. Kharmawlong by the adjudicating authority since it was a procured one; (v) That no enquiry has been made at Arunachal Pradesh about the existence of M/s. Agrico Industries; (vi) That copy of statement of Satyanarayan Agarwal and Shri S. Kanoria had not been furnished to them." Shri G.R. Agarwal, the present appellant, had filed a writ petition before the Hon'ble Calcutta High Court challenging the summons issued by the revenue authorities under Section 108 of the Customs Act, and during those proceedings both the sides had filed affidavits before the Hon'ble High Court. Copies of those affidavits have been filed before us during the course of arguments. Shri Kishori Mohan Mandal, the Assistant Collector had filed a very detailed and comprehensive affidavit before the Hon'ble High Court on behalf of the revenue. Para Nos. 5, 6 and 7 of the said affidavit relate to the disputed import licences. The said paras a....
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....ted goods for individual importers. A copy of the said licence is annexed hereto and marked with the letter "A". 7. The Special Investigation Branch of the Customs House received an information from its intelligence source that the special endorsements made on the licence in favour of M/s Agrico Industries, were not genuine. On the basis of the said information a team of Customs Officers were sent to Shillong to verify the authenticity of the endorsements made on the said licence by the Controller of Imports & Exports, Shillong. On enquiry Shri L. Kharmawlong, Controller of Imports & Exports, Shillong confirmed that his office had not made any special endorsement under para 148 of the Import & Export Policy April/March 1985 on the licence bearing No. P/L 3012392, dated 17-10-1984. He further confirmed that the metal seal impression and rubber stamp impressions of the Controller of Imports & Exports, Shillong and his signature as appearing on the said licence are fake.' Shri Krishna Kumar Pradhan, Assistant Collector had also filed an affidavit before the Hon'ble High Court in July, 1986 and in para 9 had referred to the alleged forged licence. Para No. 9 from the s....
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.... The practice of the customs authorities is and it be also their duty to check the genuineness of import licence and signature of the Controller appearing thereon before assessment of the Bill of Entry. In fact the customs authorities of Bombay after verifying the genuineness of import licence makes an endorsement on the reverse of the licence that signature has been verified and licence checked. As a specimen two of such import licence verified by Bombay customs is annexed hereto and marked with the letter 'A'. The Customs Authorities at Calcutta do not put such endorsement on the reverse of import licence as done by the Bombay Customs Authorities. I have reason to believe that Calcutta Customs to check and satisfy themselves about the genuineness of the signature appearing thereon which is their duty also. Had the customs authorities told me that they had any reason to suspect the genuineness of import licence before issuing the order for clearance of the goods on 23rd February, 1985, I would have immediately, asked the holder of the import licence to arrange for submission of another import licence for clearance of the goods. By issuing the order of clearance on 23rd February, 1....
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....st be in writing and but no copy thereof has been disclosed. I deny and dispute the correctness and bona fide of the confirmation alleged to have been given by the Controller of Imports & Exports, Shillong. The alleged statement is obviously procured and significantly not on oath. I deny and dispute the correctness of the purported statements which is not in any event inadmissible. I have not other import licence signed by Shri L. Kharmalong about which there has been no dispute whatsoever and against which goods have been cleared without any demur. As a specimen, I am enclosing some of such import licence in Annexure 'B'. In view of the doubt now expressed in this affidavit I have taken the opinion of handwriting expert regarding the signature now sought to be disputed which I crave leave to produce at the time of hearing. I had no reason to doubt or inspect the genuineness of the special endorsement appearing on the said import licence and the signature of the controller. I deny that any doubt really exists in the minds of customs authorities of Calcutta. I have reason to believe that this case is an after thought in an attempt to humiliate and harass me. It is most curious that ....
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....usion against a person, statement of any other person is to be relied on the same as to be decided by allowing cross-examination. Shri Jatin Ghosh, the learned Sr. Advocate for the respondent had opposed the contention of Shri Bhola Nath Sen, ld. Sr. Advocate as to the denials of principles of natural justice in not allowing the cross-examination of Shri Kharmalong and other witnesses. In support of his arguments he had referred to the following judgments :- (1) CC v. D. Bhoormal - 1983 (13) E.L.T. 1546 (S.C.) = AIR 1974 SC 859 [Para 30] (2) Kanungo case - 1983 (13) E.L.T. 1486 (S.C.) = AIR 1972 SC 2136 (3) K.R. Tripathi v. State of Bombay - AIR 1984 SC 273 [Para 41] where it was held that it depends on the facts and circumstances of each particular case whether there was denial of principles of natural justice or not and the Hon'ble Supreme Court had held that the rules of natural justice are flexible and cannot be put to any rigid formula. In order to sustain a complaint of violation of principles of natural justice on t....
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....passed :- The petitioner waives service of the show cause notice for the proposed adjudication. The respondents will initiate the adjudication proceedings by the 1st August, 1986. The respondents will give a hearing to the petitioner on the 5th August, 1986 without any further notice at 11.30 A.M. at the office of the Collector of Customs. The proceedings will be completed by 7th August, 1986 and the order will be passed by the 8th August, 1986 before 12 noon. These applications are adjourned till 8th August, 1986 and will be taken up at 3 p.m. when the orders will be passed. It is further ordered that the order of adjudication will abide by the decision of this Court. The adjudication order will not be given effect to without further orders of this Court." Both the sides complied with the order passed by the Calcutta High Court and adjudication was completed by the respondent as per time schedule ordered by the Hon'ble Calcutta High Court. In the writ proceedings affidavits were filed by S/Shri K.K. Pradhan and K.M. Mondal, Assistant Collectors on behalf of the respondent and the appellant had filed an affidavit in response to the affidavit filed by Shri K.M. ....
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....8 by A.N. Saha, 2nd Edition 1982 published by Debooks, Eastern Law House, Calcutta). (3) AIR 1977 NOC 282 Calcutta - East India Hotel v. Chand Prakash We would also like to observe that the remanding of the matter at this stage will mean providing of opportunities to fill in the lacunas of their cases. Neither the appellant nor the respondent has made any prayer before us for granting of permission for the production of additional evidence. The Hon'ble Supreme Court in the case of Natha Singh & Others v. Financial Commissioner, State of Punjab reported in 1976 SC 1053 had held that the Supreme Court did not experience any inherent lacuna or obscurity which was required to be filled up or removed or any other difficulty in rendering the judgment on the material already available before the court. Instead it felt that the prayer for adducing additional evidence had been made merely to fill up gaps on the basis of some revenue record which had been found by the revenue authorities to be spurious. We feel that both the sides have placed sufficient evidence on record in the form of affidavits before the Hon'ble Calcutta High Court in the writ proce....
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....elief that the same was genuine. While I had no means of verifying the genuineness of the import licence, the customs authorities do have complete machinery for verifying and checking the genuineness of any import licence." Shri G.R. Agarwal in his statement dated 28-3-85 had deposed that one Shri S.N. Agarwal came to him along with one Santosh Kanoria and introduced another person with description of dark complexion, fatty and bulging valley, roughly 5 '4" in height without a spec and black hair as Toshi Loya. In another statement on 6-4-85 Shri G.R. Agarwal stated that he had procured the letter of authority from one Shri S.N. Agarwal who is known in the trade as man of M/s. Agrico Industries. Keeping in view the totality of the facts and circumstances of the case we are of the view that Shri G.R. Agarwal, the appellant before us, had acted as a letter of authority holder in good faith and the forged endorsements in favour of M/s. Agrico Industries do not confer any title on M/s. Agrico Industries. Since Shri G.R. Agarwal had acted as a letter of authority holder and had filed the bill of entry on behalf of M/s. Agrico Industries, we feel that the fine and penalty imposed are ....
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.... Agarwal at Rs. 1 lakh and Rs. 4 lakhs. He has not filed any appeal and as such we are not passing any order in this regard Except for this modification in the orders, the appeals are otherwise rejected. Before we part with this matter, we would like to express our regrets to Hon'ble Calcutta High Court, for not delivering the judgment earlier as the matter required extensive study and thought. We also express our thanks to Shri Bhola Nath Sen, learned Sr. Advocate and Shri Jatin Ghosh learned Sr. Advocate for rendering valuable assistance to the Bench. Sd/-(Harish Chander)Member (J) 6. [Contra per : S.K. Bhatnagar, Member (T)]. - With due respects to learned Member (Judicial), I am unable to agree with the order passed by him. My analysis of the case and my order is as follows :- 7. I find that in these cases a number of interesting and important points are involved. 8. First and foremost among them is the question of jurisdiction and the propriety of these proceedings. 9. Since this is a threshold point, a decision in this respect is necessary before proceeding further in the matter. 10. The appellants have in this connection ch....
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....entry system the paper work regarding processing of the bill of entry is undoubtedly completed before the arrival of the goods but the examination of goods, which is an essential part of the process of assessment is completed subsequently. 18. The assessment of duty under the Customs Act involves two essential steps :- (1) Scrutiny of documents; (2) Examination of goods; And the process is not complete unless both the steps have been duly taken and concluded. 19. [However, the sequence of the above steps is interchangeable, i.e., the goods can be examined first and documents later or the other way round.] 20. In fact, Section 17(a) of the Customs Act, 1962 makes it abundantly clear that prior to their examination or testing of the goods the duty may be assessed (that is to say, classification, valuation and rate of duty may be indicated) on the basis of the declaration of the importer but this action is subject to the examination of goods. In other words, it is tentative or provisional in character and, therefore, if as a result of examination of goods any modification is required to be done such 're-assessment' could be carried out straig....
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....t, it is evident from the submissions of the appellants themselves and the documents (including Bills of Entry) before us that the goods were ultimately passed out of Customs charge only after adjudication when they were handed over to them (as rightly pointed out by the learned Counsels for the respondents). 24. In other words, no order under Section 47 had been passed till the date of issue of the show cause notice and, therefore, in this view of the matter also, the department was free to proceed in terms of Section 11 and other provisions of the Customs Act read with the Section 3 of the Imports Exports Trade Control Act and a notice could be issued under Section 124 of the Customs Act, 1962 and the Collector could adjudicate the case. 25. In view of this position, it was not necessary to go into the question regarding the nature of orders obtained fraudulently or on the basis of forged or fake documents and the controversy regarding void or voidable character of such documents at this stage. 26. It was apparent that the department was justified in issuing a notice under Section 124 and the Collector was the proper authority to adjudicate the case. 27....
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....ip'). On the other hand, the appellants have stated that two searches and seizures were Conducted one at the Clearing Agent's premises and that during the course of the second search (at the Clearing Agent's premises), no panchnama was drawn and the documents were taken away without completion of necessary formalities. In this connection, our attention has been drawn by both the sides towards two affidavits filed in the Hon'ble High Court - one by Shri K.M. Mondal, Assistant Collector and another By Shri K.K. Pradhan, Assistant Collector. (Photocopies do not indicate the number and dates) 31. I observe in this connection that in respect of the search conducted in the premises of the appellant, which is admitted by both the sides, it would have been better if the officers concerned had drawn a detailed list of the documents seized. It was not enough to indicate that 104 documents were seized and it was desirable to indicate the nature and types of the documents which were so acquired; All the more so, when the case was suspected to be that of forged....
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....ed to be resubmitted to the Group after payment of duty. Therefore, there is a high probability of the department's contention being correct. This belief is further strengthened by the fact that this licence has also been referred to in the secret D.O. by the Collector to D.I.G., C.B.I. No. S. 121-27/85/SIB, dated 4-4-85 and the affidavit of Controller of Imports and Exports Shri Kharmalong. The appellants have also not produced any positive evidence to show that this licence was still in their possession on the date Shri Kharmalong claims to have seen it. 33. In view of the totality of the circumstances and particularly the fact that the processing of the bills of entry had not been completed, I am inclined to hold that the department has been able to show that this licence (dated 17-10-84) remained in its possession and was shown to Shri Kharmalong and Shri Kharmalong has given his statement only after seeing the same. 34. As regards the second licence (No. P/L 0432104, dated 30-11-84) both the sides have accepted before us that the licence was returned to the appellants before doubts arose and remained throughout in the appellant's possession. However, Shri Kharm....
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....le of possibility. Therefore, it is not clear as to why the department did not await C.B.I. report. The learned Counsel's plea of shortage of time is not convincing as the Collector could always request the Hon'ble High Court for more time if that was necessary. [It is also not clear as to why an application under Rule 23, CEGAT Procedure Rules, 1982 was not filed if C.B.I. enquiry had thrown more light on the case and some evidence had come in the possession of the department]. 39. Further, it is common knowledge that for making or seeking any endorsement or modification in the conditions of the licences originally issued an application is required to be made and the request is to be allowed by the proper authority and then and then only the conditions could be modified or endorsements could be made by the authorised officer. However, I notice that no effort had been made by either of the two sides to enlighten the Court in this respect of the matter. A perusal of the order of the Collector also shows that the learned Collector has also not paid any attention to this aspect. 40. It is also not clear as to why the learned Collector did not allow cross-examinat....
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.... or other Central/State/District authorities particularly when being Customs officers they were, (I presume), aware that factories engaged in manufacturing goods are required to be declared to the Central Excise authorities and also to State/District Authorities or DGTD, particularly, if they are also engaged in import/export business and wish to avail of the benefits of ITC/ETC provisions; And why having gone upto Shillong the officers could not proceed further and see for themselves whether there was any factory in Miao or any office at Kanuabri in Arunachal Pradesh. 46. In any eventuality, when it was later found that correct address had not been disclosed to the bank authorities and a temple was found at the Calcutta address - a fact which undoubtedly creates a strong doubt or suspicion, and prima facie shows that something was amiss, it was all the more necessary to extend the enquiry to all the known addresses and cross-check the facts with other agencies to clinch the issue : Why the department chose not to do so is not very clear. 47. It is, however, abundantly clear that the appellants had submitted photocopies of official documents showing that this firm w....
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....me and refrain from examining the implications thereof. 50. The plea of the learned Counsels for the respondent that the documents produced being merely photostat copies were not looked into, is not acceptable as it was always open to the Collector to demand production of original documents or to verify the genuineness or correctness thereof by referring the matter to the issuing authorities. 51. In view of the above position, I find that the learned Counsels for the appellants were justified in pleading that all the submissions made by them before the Collector were not duly considered, I consider that it was neither fair nor proper on the part of the Collector to do so. 52. I also observe that the question of conspiracy and the role of the appellants is inextricably linked with the answer to the aforesaid issues. It is necessary to remember in this respect that as questions regarding physical existence (or otherwise) of a firm and a person were involved, it will not be appropriate or advisable to leave the matter in doubt and a definite finding was called for. The charges of floating a fictitious firm, forgery and conspiracy to commit fraud are very ....
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.... authority to take additional evidence. Hence, even in the absence of a request from either side (and even in the face of opposition from them, if needs be), the Tribunal could on its own examine the sufficiency or otherwise of the evidence and order re-examination of the matter with directions to allow additional evidence to be taken if the interests of justice so demanded. I may also mention that this Bench has in the past remanded matters for de novo adjudication and on several occasions allowed the parties to adduce additional evidence during remand proceedings. 54. In view of the above discussions, I set aside both the orders of the Collector and remand these cases to him for de novo adjudication in accordance with law and direct him to allow both the sides to adduce additional evidence, if necessary, and ensure that the principles of natural justice are duly observed. Sd/-(S.K. Bhatnagar)Member (T) Dated : 22-2-1988 Third Member Decision 55. [Order per : Archana Wadhwa, Member (J)]. - The following Difference of Opinion between Member (Judicial) and Member (Technical) has been referred to me as a Third Member :- (i) ....
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.... has observed that number of documents have not been considered by the Department which were required to make further enquiries and cross-check the facts with the Deputy Chief Controller of Imports & Exports and Directors of Industries of Assam and Arunachal Pradesh and the District Officers etc. Such a cross-checking was all the more necessary when the results of a Customs enquiry were at variance with the Circular issued by the Deputy Chief Controller of Imports & Exports. By observing so, he has remanded the matter to the Commissioner for fresh adjudication in accordance with law with liberty to both sides to adduce additional evidences. 59. Shri Sudhir Mehta, ld. Advocate appearing on behalf of the appellants submits that the imports were made in the year 1985. It has taken a long time for dispute to be settled at the Tribunal level inasmuch as the Third Member appointed after the Difference of Opinion between the two Members did not give a final verdict inspite of High Court's direction to do so and retired without passing the final order. He submits that the appellant have suffered a lot and they do not want to pursue remedy of de novo adjudication in terms of order o....