TaxTMI 
TaxTMI 
2020 (6) TMI 321
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....an option to the appellant to redeem the same on payment of redemption fine. Similarly, the respondent imposed penalties upon the appellant on account of smuggling of cigarettes. The respondent also demanded duty on the past consignments of cigarettes by holding that the appellant imported cigarettes by concealing them with Aluminum scrap and cleared for home consumption. Since the goods were not available for confiscation, the respondent demanded duty and imposed penalty for past consignments. The respondent in the matter of KETAN C. GUJJAR, Proprietor of M/s. Shivanjali Corporation held 5,76,000 sticks of "Gudang Garam" branded cigarettes and 80,000 sticks of Black brand cigarettes were smuggled by the appellant by concealing them with aluminum scrap and cleared for home consumption by filing Bills of Entries. Since the goods were not available for confiscation under Section 111(f) and 111(l) of the act, the respondent demanded duty and imposed penalty upon the past consignments. In the matter of M/s. Sahaj Metals with respect to past consignments held 432000 stick of "Gudang Garam" cigarettes smuggled by concealing them with aluminum scrap and cleared them for home consumption u....
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.... id [email protected] wherein the details as mentioned at page No. 15 of the impugned order was retrieved. Based on this email, statements of Shri Bharat Patel, proprietor of M/s. Sahaj Metals were recorded which were inculpatory. It has been held based on email and statements of the appellants and the co-appellants that both the appellants (M/s. Dwarkesh Recycling and M/s. Shivanjali Corporation) smuggled cigarettes along with aluminum scrap and the consignments imported in past. Being aggrieved by the impugned orders, the appellants filed the present appeal. 2. Shri Hardik Modh, Learned counsel appeared for Shri Dharmendra Rathor & Ketan C. Gujjar and Shri Rahul Gajera, Learned counsel appeared for M/s. Sahaj Metals and Shri Bharat Patel. Shri Modh submits that the respondent erred in demanding duty and imposed penalties on the past consignments for the following reasons:- A) The entire demand has been confirmed based on the email message dated 15.08.2016 sent by HKM Trading Co. from the email id [email protected] to [email protected] wherein details regarding one to one co-relation of transaction by transaction provided by M/s. HKM in their email vis-à-vis Bi....
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....0%. Where EDI with Risk Management Module (RMM) is operational, the percentage of examination will be determined by the RMM. (vi) Imported metal scrap in unshredded, compressed or loose form not accompanied by the prescribed pre-shipment inspection certificate will be subject to 100% examination apart from stringent penal action for violation of provision of FTP. The examination may be done in the presence of police authorities, if considered necessary by the Commissioner, at the risk and cost of the importer. 2.1 He further submits that the appellant imported consignments of aluminum scrap accompanied with Pre inspection certificate and the entire consignments were examined in respect of past imports in respect of Bill of entry No. 6920436 dated 30.09.2016 has been annexed to the appeal No. C/11723/2018 in the case of Shri Dharmendra N. Rathor. Similarly, the custom authority examined the goods in terms of the above circular in respect of past consignments imported by M/s.Shivranjini Corporation and issued examination orders which is annexed to the appeal filed by Shri Ketan C. Gujjar, Proprietor of M/s. Shivranjini Corporation. He submits that when the consignments we....
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....email ID without following the due procedure of law as required to be followed under Section 138C(2). He submits that the appellant raised this issue at the time of adjudication but the respondent discarded the submissions in the terms that the email of M/s. HKM Trading Co. was retrieved from email ID of Shri Bharat Patel there is no need to get further evidence. He submits that there is no explanation of the procedure prescribed under section 138 C for retrieving any electronic data to use as evidence therefore, without following procedure laid down under section 138 C, the email cannot be used as evidence. In this regard he takes support from the judgment S.N. Agrotech Vs Commissioner of Customs-2018 361 ELT 761. He also submits that as regards the statements relied upon in the Adjudication Order in terms of Section 138 b of the Customs Act. It is an obligation upon the Adjudicating Authority to examine the witness before relying upon their statements. In the present case the respondent failed to comply with the procedure as required to be followed under Section 138 B for relying upon the statements. Therefore, the statements recorded by the Investigating Authority has no evident....
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....ement dated 12.12.2016 of Mr. Bharat Patel does not name the person who retrieved the print of the email message or the manner in which such attachment was retrieved/printed. Secondly, such print out is not made part of the statement dated 12.12.2016 in which retrieval of the said email message is recorded. He submits that as per sub-section 4 of section 138 C for taking print out of electronic data a certificate is must. Since under statement, print of email message was not attached there is a violation of Section 138 C of the Act/ 65 b of the Evidence Act. This has been interpreted by the Hon'ble Supreme Court in the case of Anwar PV vs. VK Basheer, 2017 352 ELT 416 (SC) in a manner that such statement (email print out) must accompany the certificate referred in sub-section 4 of section 138 C. He further submits that the statement by which the retrieval of email message as recorded has been retracted by Mr. Bharat Patel and in any event the incriminating statements of the deponents cannot be relied upon in as much as the said deponents have not been examined/ cross examined in terms of Section 138 B of the Act. He also submits that there is no evidence of smuggling of cigarettes ....
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....On the other hand, Shri Vinod Lukose, Learned Superintendent (Authorized Representative) appearing on behalf of revenue submits that as regard the submission of the appellant on admissibility of email as evidence in a combined reading of section 65B and section 2(t) of the Information Technology Act, 2000 it becomes evident that since electronic email was not stored in the computer and as the said computer in the DRI Office only acted as an intermediary which was used for retrieval of electronic mail. The conditions stipulated in Section 65 B(2), would not be attracted. He placed reliance on the judgment of Hon'ble Supreme Court in the case of SHAFI MOHAMMAD vs THE STATE OF HIMACHAL PRADESH (SLP Criminal No. 2302 of 2017). He further submits that electronic mail are stored on the servers of Google/In Cloud and the DRI Officer has recorded the statement who was not in possession of the said server. The requirement to produce the certificate cannot be insisted upon. Accordingly, the electronic mail relied has the evidence for establishing smuggling in respect of past consignment and it is admissible evidence. He also reiterates the finding of the impugned order. 7. We have careful....
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....ing examination the officers did not find the cigarette concealed under the said scrap. After examination the goods for past imports were allowed clearances for home consumption without any hindrances. This shows that the procedure as required under Section 47 which is mandatory has been complied with. 8. In view of the examination of the goods, it is important to note that examining officers have not been questioned about the manner of examination of the past consignment. If this be so, the examination report cannot be discarded. If at all there is any lapse on the examination officer, some action should have been taken by the department. In this fact in one hand department accepted the examination of goods and on the other hand solely relying on an email held that appellants have smuggled cigarettes concealing under Aluminum scrap in past consignment, which cannot be accepted 9. The respondent also heavily relied upon the statements given by various persons related to importer firms, we find that the statements were not examined in terms of provision of Section 138B of the Customs Act. It is incumbent on the Adjudicating Authority for use the statement as evidence, it is ne....
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....itnesses for relying upon their statements. Moreover, in the present case as discussed above since the goods were physically examined and Custom officer did not find the cigarettes concealed with the consignment of aluminum scrap. Hence the statements given by the witnesses found to be incorrect. In these circumstances, the documentary evidences i.e. Examination Order will be the prevailing evidence over the statements recorded under Section 108 of the Customs Act. Therefore, as per the facts of the present case, the statements have no evidentiary value therefore, on that basis it cannot be concluded that the appellants have smuggled cigarettes concealed under the past consignment of aluminum scrap. It is further noticed that as regard the past import by M/s. Dwarkesh Recycling there is no reference made in the email retrieved from email ID of Shri Bharat Patel. Therefore, in any case in respect of past import made by M/s. Dwarkesh Recycling it cannot be disputed particularly on the basis of email. 11. The appellant submitted that on the issue that the documentary evidence prevail over the oral evidence, various judgments were passed. In the case of PHILIP FERNANDES vs COMMIS....
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....res to the letter dated 29-41998. Although the Revenue disputes receipt of this letter on 27-41998 which Shri Fernandes claims was the date of its receipt we find from the original shown to us shows the date of receipt as 27-4-1998. Further copy of this letter was sent to the department again in July, 1998 and on 21-8-1998 prior to the issue of the show cause notice in September, 1998. No arguments are put forth by the learned DR to dislodge the findings of the Commissioner on the basis of the above documentary evidence. The plea of the learned DR is based upon the detailed statement of Shri Philip Fernandes and statements of Shri Nilesh Popat and Shri Praveenbhai Kheni. We find that in addition to the retraction of Shri Philip Fernandes on 16-3-1998, there is one more reason to doubt the inculpatory statement of Shri Fernandes and that the statement of Shri Nilesh Popat which was recorded on 16-31998 is stated to have been shown to Shri Philip Fernandes at the time of recording his initial statement on 15-3-1998, which is an impossibility. It is in the statement of Shri Nilesh Popat that Shri Pravinbhai Kheni comes into picture. Shri Popat has retracted his statement on 3-5-1998 w....
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....es (P) Ltd. to show local purchases of some items which also go for manufacture of Draw Texturising Machines. All these local purchases of components are either after or during the period, when subject items were being imported. The transport receipts issued by M/s. Suresh Transport Co., for transport of material purchased from Lumia Export (P) Ltd. to M/s. R.P. Industries at Daman Industrial Estate near Vapi are also produced. Significantly all these documents are recovered from the office of M/s. R.P. Industries, when search was carried out and they form part of the documents referred to in the show cause notice. Subsequent fabrication of these documents therefore cannot be suspected. The investigation does not seem to have been extended upto those suppliers so as to delink them from the subject import or from the seized machines. The documentary evidence, thus provides a positive indication to probabilise the stand taken by the appellants. Though this positively goes contrary to what has been stated by Mr. R.P. Mehta, and Mr. M.M. Manglic but when a glaring evidence in the form of documents, the genuineness of which is difficult to be doubted, as they appear to have been existin....
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....are carried out and the cargo disappears into the market. At least if the clearance of goods, in the past containers had taken place without following any of the procedures, there could be some logic to contend that the smuggled goods escaped the clutches of law. But today there are no allegations that the procedure prescribed by law was not followed while clearing the past containers. 18. Even as per the Orders-in-Original, the goods in the past containers were cleared under Section 47, after carrying out examination of random cargo. The 2nd respondent has extracted in Paragraph 135 of the impugned order, the examination order and the examination report. Paragraph 135 reads as follows: "......I have perused the examination orders and examination reports relating to the past containers. The examination order in general is as under. Open and inspect 5% of cargo or more packgs. Verify desc wrt org import documents/bank attested documents verify the brand verify RSP declaration‟ The examination report in general is as under "opened and inspected selected pkgs. Verified desc wrt org import documents and found in order, verified the bra....
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....pellant also argued that the amount of penalty and redemption fine were imposed disproportionately on the fact that the appellant had not ordered for supply of cigarettes and therefore they were not interested to clear the said cigarettes. The penalty was also imposed towards confiscation of aluminum scrap for which there was no fault of the appellant as there was no mis-declaration. As regard the aluminum scrap the import documents are also for import of aluminum scrap therefore, penalty with respect to aluminum scrap should not have been imposed. We find some force in this argument of the appellant. Accordingly, the appellants deserve for some reduction in redemption fine and penalty. 13. Shri Bharat Patel in his appeal submits that in view of the examination order case of department in respect of past consignment does not sustain and in live consignment of M/s. Dwarkesh Recycling there is no any mention in the email. It is the submission that except email there is no documentary evidence to show that Shri Bharat Patel was a master mind in the entire smuggling of cigarettes. We find that we have already taken and decided that the demand of duty and penalties in respect of past....
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....) Appeal No. C/11723/2018 filed by Shri Dharmendra N Rathor (i) Absolute Confiscation of 13,68,000 sticks of "Gudang Garam" brand cigarettes is upheld. (ii) Confiscation of 28340 Kgs of Aluminum Scrap valued Rs. 50,91,208/- is upheld, however redemption fine is reduced from Rs. 20 Lacs to Rs. 5 Lacs (iii)Penalty under Section 112a(i) relating to absolute confiscation of 13,68,000 cigarettes is reduced from Rs. 25 Lacs to Rs. 10 Lacs. (iv) Penalty of Rs. 10,000/- imposed under Section 112(a)(ii) is set aside. (v) Demand of custom duty of Rs. 8,06,640/- ,interest and equal penalty of Rs. 8,06,640/- is set aside (vi) Penalty of Rs. 25 Lacs imposed under Section 114AA is set aside. (vii) Appeal is partly allowed in the above terms with consequential relief, if any arise, in accordance with law. (2) Appeal Nos. C/11724/2018 (Ketan C. Gujjar), C/12355/2018 (Shri Bharat Patel) and C/12447/2018 (Sahaj Metal) are allowed with consequential relief. (Dictated & Pronounced in the open court on 12.6.2020) ============= Document 1 Indian Customs EDI System Imports V1.5R001 ICD SABARMATI KALIGAM SABARMATI AHMEDABAD....
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....Ambalal Patel Dated:23/05/2016 CHA ABOFS1766LCH005) Examination order PLEASE INSPECT IN THE PRESENCE AND SUPERVISION OF SHED AC/DC AND AS PER THE PROCESS PRESCRIBED IN THE CBEC CIRCULAR NO. 56/2004-CUS DTD. 18A.10.2004 ISS UED FROM F.NO. 450/108/2004-CUS -IV PLEASE CHECK AND VERIFY THE DESCRIPTIO N, QUANTITY, WEIGNHT AND ISANRI GRADE WITH REFERENCE TO INVOICE, PACKING LIS T. PSIC, BILL OF LEADING AND DECLARATION IN BILL OF ENTRY. PLEASE VERIFY AND ENSURE THAT NO SHELL/CARTRIDGE ARMS AND AMMUNITION OR AN Y SERVISABLE ARTICLES CONTAIN IN THE CARGO AND GOODS ARE ONLY METAL SCRAPE O DECLARED GRADE FOR RE-MELTING PURPOSE. By 10010371 on 23/05/2016 at 02:55P.M. IEC CCR Examination Instructions: Compulsary Compliance Requirements : 1 Mandatory Compliance Requirements Examination Instructions (CTH) 76020010 FOR PRESCRIBED ALUMINIUM & ALUMINIUM ALLOY MIXED NON-FERROUS METAL, HEA VY FRACTION SCRAP (BASEL NO. B101081050 OF PART D OF SCHEDULE III) EXCEPT PROHIBITED WASTES OF SCHEDULE II, VEY PSIC WITH RANDOM INSPN OR TEST REPORT MOEF PERMISSION, MOVEMENT DOCUMENT IN FORM 9 & TEST REPORT OF ANALYSIS FRO M ....