TaxTMI 
TaxTMI 
2021 (12) TMI 252
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....one on 05.02.2010 at the address of Maa Shakti as per their import export code certificate. No firm was found at the given address at J-44, Site-C, Surajpur Industrial Area, Noida. The security man present at the premises stated that although he was working for the last six months as Security Guard, but he was not aware of any such firm and further stated that this premises belonged to one Shri Abhay Mitra. On follow up search at the address of Shri Makhan Kant Sharma, Prop. of Maa Shakti at B-4/166, Yamuna Vihar, Delhi-53, as mentioned in the IEC, it was found that Shri Makhan Kant Sharma was staying as a tenant at the said address from 2006 to December, 2008 and thereafter have moved to some other address. 4. The Additional Commissioner, Central Excise, Kanpur by letter dated 05.02.2019 informed that examination of Bill of Entry No. 004 dated 29.01.2010 in respect of container No. TRLU 5705768 has already been done on first check basis on 01.02.2010 and out of 12300 pcs. of sports shoes, 8900 pieces found to be embossed with brand names like Nike, Adidas and Puma. The goods were of Chinese origin. The examining officer had recommended for a thorough examination of the containe....
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....41 dt.06.01.2010 Footwear Shoes, Mobile batteries & cigarettes 3 CLHU 8447321 IGM No. 24017 dt. 28.01.2010 APLU 051132706 dt. 14.01.2010 Footwear Shoes, Mobile batteries & cigarettes 4 FCIU 8116039 IGM No. 24056 dt. 03.02.2010 APLU 051132839 dt. 20.01.2010 Footwear Shoes, Mobile batteries & stickers of Mobile batteries 6. Further, with respect to goods declared in Bill of Entry No. 004 -Maa Shakti has declared as men's casual shoes 'unbranded'. It further appeared that during the preliminary examination of container by the Customs Officers on 01.02.2010, branded shoes alongwith unbranded shoes were discovered in the container, which was supposed to contain only unbranded shoes, the word 'branded' was typed on the bill of entry by the importer/ Customs Officers. It further appeared that out of the nine Bills of Entry filed at ICD, Agra/ Kanpur during the financial year 2009-10, in eight Bills of Entry the goods was declared as Men's casual shoes unbranded. With respect to the aforementioned four containers, there appeared to be a case of mis-declaration as the goods in containers found were - Mobile batteries, Cigarettes, stickers for mob....
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.... • He used to go with Shri Makhan Kant Sharma for the clearances at ICD Agra and all the expenses including the conveyance were borne by Shri Rajesh Bihari. • Shri Rajesh Bihari had provided him hard copy of Bill of Lading and country of origin certificate in respect of one of the container at ICD Agra, and had also provided soft copy of unsigned commercial invoice and packing list in pen drive for filing bill of entry in respect of that container, and he took hard copy of Invoice and Packing list and after signing these documents on behalf of supplier, filed Bill of Entry number 004 dated 29.01.2010 at ICD Agra. • He took Shri M. K. Sharma, the Proprietor of M/s Maa Shakti Industries to Agra for signing the import documents for the container No. TRLU 5705768 for which the Bill of Entry had been filed with the local Customs. • He informed Shri Rajesh Bihari that the container at ICD Agra had been detained by DRI Lucknow and then Shri Rajesh Bihari informed him that three more containers in the name of M/s Maa Shakti Industries are on the way to Agra. He (Gajraj Singh Baid) informed him (Rajesh Bihari) that in the present circumstance....
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....vali Kunj, Sector-13, Rohini, Delhi, was conducted on 03.05.2010 and some documents were resumed. The documents resumed contained one diary in which appellant has made some entry against the name of one Rajesh Bhai/ Rajesh A/c Agra. On scrutiny of the diary it appeared that amounts like 4 lakh, 1 lakh, 25,000/- etc. was received from Rajesh Gupta @ Rajesh Bihari for the purpose of custom duty and other expenses. It appeared to revenue that appellant used to manage the funds received from Rajesh Gupta @ Rajesh Bihari. 12. Follow up search was also conducted at the office premises of M/s New Globe International, Sector -9, Rohini, New Delhi through which the appellant used to give consultancy regarding import and export. One file was resumed from the said premises. On scrutiny of which, two airway bills were found on which mobile number of the appellant was mentioned below the name of Maa Shakti. It appeared to Revenue that appellant is working as the representative of Maa Shakti. 13. The appellant again appeared before the Senior Intelligence Officer of DRI, Lucknow on 10.05.2010 for recording of his statement wherein he inter alia stated as follows:- • Shri Rajes....
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....which have been cleared in past. On summons, the Associate Director of CHA firm Shri Vinod Mehrotra appeared and recorded his statement on 08.10.2010, wherein he inter -alia stated as follows:- • His firm M/s Balaji Mariline Pvt. Ltd., had filed five Bills of Entry at ICD Kanpur for M/'s Maa Shakti Industries for which Gajraj Singh Baid had contacted him. • Gajraj Singh Baid had met him as the authorised representative of M/s Maa Shakti Industries. • He had never met the proprietor of the firm - M/s Maa Shakti Industries, and had contacts only with Gajraj Singh Baid. • On being asked whether their firm has received payments from M/s Maa Shakti Industries, he submitted the account statement of M/s Balaji Mariline Pvt. ltd., wherein they had received amounts through fund transfer from account number 08661930001220 and had marked the amount received for the services rendered to M/s Maa Shakti Industries. On enquiry of account number (08661930001220) from HDCFC Bank, it was found that the said account number belonged to Gajraj Singh Baid and Manjula Baid." 15. In the course of further enquiry from Shri Kuldeep Singh Sikarwar, Termi....
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....llegal and punishable under Customs Act and such goods can be seized. • He was very well aware that Gajraj Singh Baid used to import illegal goods through his firm and was aware that this time mobile batteries and cigarettes were also brought without declaring in the IGM, along with the declared goods. • He was very well aware that wrong declaration of goods for evasion of Customs duty is illegal and punishable under Customs Act and such goods are liable for confiscation. • He admitted that B/E for remaining three containers were not filed as DRI had already detained the first container, and all the remaining three containers also contained undeclared goods. • He admitted that Gajraj Singh Baid had told him to stay underground till the enquiry is on. 18. Pursuant to recording of the statement, Shri Makhan Kant Sharma was also arrested on 13.04.2010 and was remanded to judicial custody by the Special CJM (Economic Offences), Lucknow, where he was released on bail vide order dated 07.06.2010 on the condition that he will deposit Rs. Four crores as differential customs duty, shall furnish a personal bond of Rs. 5 crores and two su....
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.... Sharma (H card holder at ICD Agra) for examination. • He had asked Shri Ajay Sharma to create a passage in the container, so that the container can be examined till the end of the container. But the laborers told that it was not possible to create a passage. Hence, Shri R. C. Shukla, Superintendent suggested to remove the cartons from top and the cartons such removed were randomly examined in the presence of the Superintendent. • On examination it was found that the cartons contained Branded Shoes besides Unbranded Shoes. • "Branded" word was found added in the B/E no. 04 dated 29.01.2010 when he arrived in the office on 02.02.2010, which was not there when the B/E was marked to him for examination. • Examination report was dictated to him (Shri Santosh Kumar) by Shri R. C. Shukla, Superintendent and Shri O.P. Shukla, Superintendent. • He further stated that for the last 18 years he has done his entire work in Hindi only, whatever work he has done in English, that is either dictated by somebody or copied, this evidence is with the department. • "on the first check basis" was also added by the Superintend....
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....nd returned him the B/E.; He had written "on first check basis" by another pen. • He does not know why Shri Ajay Sharma presented the container for examination, though the B/E was filed on self basis. • He does not remember whether the B/E was filed for Unbranded shoes or for both i.e. Unbranded/ Branded shoes. • He does not know that the said party was called by Shri O.P. Shukla Superintendent at ICD Agra and had never told Shri Santosh Kumar, Inspector that the party was brought byShri O.P. Shukla, at ICD Agra. • He has not dictated the examination report to Shri Santosh Kumar, Inspector, as alleged by him (Santosh Kumar) • On being shown the note sheet of the file B/E no. 04 dated 29.01.2010 and asked to identify the signatures on it, he said that the note sheet was put up by Siri Ashok Gupta, Inspector (Processing) and forwarded by Shri S. D. Srivastava, Superintendent (Processing) and approved by the Deputy Commissioner. • He also told that there was practice at ICD Agra to give the examination order and examination report on the triplicate copy of the B/E. • He was not present during th....
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....¢ On being asked who had filed the B/E, he said that he does not know who had filed the B/E and the file related to the said B/E was sent by the noting section to him. • He does not know Shri Makhan Kant Sharma or Shri Gajraj Singh Baid.; He had not opened the docket file of M/s Maa Shakti Industries.; He had not received any orders from the Deputy Commissioner relating to processing of the B/E. 24. Further statement of Shri Ajay Sharma (H card holder) of M/s Lara Exim Pvt. Ltd., was recorded on 27.10.2010, who inter alia stated that he had not received any directions from the CHA firm regarding presenting the container of Maa Shakti for examination. He knows Shri Gajraj Singh Baid. He further stated that Shri Gajraj Singh Baid had requested in the morning of 01.02.2010, to present the container for examination, as he will be delayed to reach ICD, Agra. Accordingly, he presented the container before Shri Santosh Kumar, Inspector and accordingly put his signature on the Bill of Entry by endorsing - presented one container for examination. He further stated that Shri Gajraj Singh Baid had promised Rs. 1,000/- for the work. He further stated that presenting the contai....
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....h Notification No. 47/2007-Cus (NT) read with Section 111 (m) and Section 156 of the Customs Act. The branded shoes which are undeclared quantity of 11,117 pairs, being counterfeit are liable to confiscation, valued at about Rs. 1,11,17,000/-. Mobile phone batteries which are also undeclared, though not counterfeit, quantified at 4,82,700 pcs., having estimated value of Rs. 7,24,05,000/-, amount to smuggling in order to evade payment of customs duty, are liable to be confiscated. Further, duty amount on the undeclared mobile phone batteries is chargeable, quantity 4,82,700 pcs., having estimated value at Rs. 7,24,05,000/-. Further in absence of the declaration of value, the value has been determined under Rule 6 of the Valuation Rules, 2007. Further observed that lower value of Rs. 99.60 per piece to be considered in view of import of similar goods vide Bill of Entry No. 717854 dated 25.01.2010 at Delhi Air Cargo, Delhi. Accordingly, duty is worked out to Rs. 1,72,23,312/-. Unbranded men's casual shoes initially declared in Bill of Entry No.004 dated 29.01.2010 as 12,300 pairs, further on physical examination only 2243 pairs were found, which have actually been used for concealing ....
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.... by the Commissioner, Customs, Central Excise and Service Tax vide order-in-original dated 09.02.2016. The show cause notice was contested by all the noticees except Shri Rajesh Kumar Gupta @ Rajesh Bihari. So far this appellant is concerned, in order to contest he prayed for supply of 'relied upon documents' and 'non-relied upon documents' vide letter dated 21.11.2015. Thereafter, learned Commissioner by his letter dated 04.12.2016 wrote to DRI, Lucknow for supply of non-RUDs. Further, RUD No. 4 was supplied to this appellant on or about 14.01.2016. This appellant again informed non receipt of non-RUDs and also stated that for personal reason he is unable to attend the office of DRI on 18.01.2016, the date fixed for collection of non-RUDs was prayed to be re-fixed to another date. Learned Commissioner observed that this is nothing but delay tactics, and proceeded to adjudicate ex-parte against this appellant. Learned Commissioner framed the following issues:- (i) Whether the branded shoes, which were concealed within the consignment which were undeclared and counterfeit in nature are liable to be confiscated; whether duty on these is liable to be demanded and recovered un....
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....n lieu of confiscation and further duty payable of Rs. 5,66,00,542/- under Section 28 of the Act. Further observing that as the mobile phone batteries have already been sold being perishable in nature for Rs. 1,66,50,000/- and not available for confiscation as such, ordered the sale proceeds towards appropriation. (d) Confiscation of 13,220 pairs of unbranded shoes, valued at Rs. 16,34,259/- under Section 111(f) and (m) read with Section 119 of the Act, with option to redeem on payment of fine of Rs. 1,63,426/- alongwith customs duty of Rs. 4,67,975/- under Section 28 of the Act. (e) Absolute confiscation of 81,50,000 branded cigarettes under Section 111 (d) (f),(i), (l) and (m) read with Rule 6 of IPR, 2007 read with Notification No. 47/2007-Cus. with further order for disposal by way of destruction. (f) Confiscation of 3 packages containing stickers for mobile phone batteries totally valued at Rs. 3,000/- with option to redeem the goods on payment of redemption fine of Rs. 300/- as well as customs duty of Rs. 706/-. (g) No penalty has been imposed on the Departmental Officers (co-noticees) namely Shri O.P. Shukla, Shri R. C. Shukla, Su....
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.... thereby show cause notice issued by DRI has been held non-est and bad in law, being issued without jurisdiction. Reliance is placed upon the judgment of the Hon'ble Gujrat High Court in case of CMR Chiho Industries India Pvt. Ltd. Vs. UOI (R/Special Civil Application No. 10521 of 2020) and Quantum coal energy (p) ltd. Vs. The commissioner, office of the Commissioner of Customs, Custom House, Tuticorin reported in 2021 (3) TMI 1034. The ratio laid by the Hon'ble Supreme Court in Canon India Case (supra), has been further followed by the CESTAT also in case of M/S Shri Rajendra Seksaria, Balaji Solutions Pvt. Ltd Vs. CC (Acc & Import) Mumbai reported in 2021 (6) TMI 628 - CESTAT Mumbai and M/s. Sattva CFS & Logistics Private Limited Vs. Commissioner of Customs reported in 2021 (7) TMI 634 - CESTAT Chennai. On the issue of jurisdiction of DRI, further reliance is also placed upon the judgment of the Hon'ble CESTAT in case of Hemchand Gupta & Sons Vs. Commissioner of Cus. (ICD), New Delhi reported in 2015 (330) E.L.T. 161 (Tri-Del.) which travelled to the Supreme Court and has been affirmed in favour of assessee. (iv) The learned adjudicating authority, in the impugned order,....
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....ant was continuously recorded for 2 days i.e.29.3.2010 and 30.3.2010 and just after recording of statement of appellant, he was arrested by the DRI Officers on 30.3.2010. The appellant was summoned for recording of statement but kept under custody of DRI Officers for two days and was not allowed to go outside, during which period the alleged statement was recorded by the DRI officers as per their dictates and wishes, and immediately thereafter, the appellant was arrested. (viii) It is also pertinent to mention that soon after bail granted to the Appellant on 3.4.2010, DRI officials filed an application i.e, on 26.4.2010 for cancellation of bail of the appellant. Said proceeding went up to Hon'ble Supreme Court and finally bail was granted by the Hon'ble Supreme Court. It is pertinent to mention that before the Hon'ble Supreme Court, the department filed counter-affidavit, where they made averments only on the basis of statements of the appellant. The appellant filed rejoinder to counter-affidavit and brought the fact of coercion and pressure exerted by the departmental officers to the notice of the Hon'ble Supreme Court. The appellant also produced the record of proceeding....
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.... the Customs Act, 1962 are not admissible. (x) It is submitted that a different yardstick has been applied towards the appellant vis-à-vis the departmental officers in the present case. It is pertinent to mention that apart from Appellant, customs officers were also made noticee in the present case, who gave incriminating statements. But, at one place, on the basis of statements, the learned adjudicating authority implicated the appellant and imposed huge penal liability while on the other hand, exonerated the customs officers implicated in the show cause notice, by discarding the statement of Shri Santosh Kumar, Customs Officer. It is not understandable as to why the statement of the appellant has been treated as gospel truth, though the same was recorded under threat, pressure and coercion. However, the statement of Shri Santosh Kumar, Inspector Customs has been treated as unreliable, though the same was a voluntary statement as there is no such contention by Shri Santosh Kumar that the statement was given under any pressure. It is apparent from the finding of the learned adjudicating authority given in respect of the Customs officers exonerating them, that he wil....
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....he container is containing undeclared and counterfeit goods which is apparent from the extract of statement of appellant, mentioned in the paragraph F of grounds in Appeal-Memo. Therefore, no penalty under section 112(a) is sustainable against the Appellant. Penalty has been imposed on the appellant alleging knowledge on the part of appellant with respect to impugned goods. But, no evidence has been adduced by the department as to how the appellant was knowing about the same. It is submitted that Section 112 (a) provides for penalty in case of any act or omission rendering the goods liable to confiscation or abetment in doing so. The allegations are based on the statements which cannot be relied upon as explained above. There is no act of omission on the part of Appellant rendering the goods liable for confiscation. Further, as far as abetment is concerned, it is submitted that there are twin requirement to prove abetment. One, pre-knowledge of the alleged activity and pre-supposition of undue benefit likely to arise from the alleged activity. There is nothing in the show cause notice showing any knowledge/awareness on the part of Appellant. There is nothing adduced in the show cau....
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....t or omission to act, which has led the goods becoming liable for confiscation cannot be made liable unless some knowledge is attributed to them. Therefore, it is to cover such cases that Section 112(a) of the Act also includes a person who abets the act or omission to act which has rendered the goods liable to confiscation. Imposing penalty upon an abettor without any mens rea on his part would bring all business to a halt as even innocent facilitation provided by a person which has made possible the act or omission to act possible could result in imposing of penalty. To illustrate innocent transferee of a license which enabled the purchaser of the license to misuse the license could be imposed with penalty. This could never be the intent or objective of Section 112(a) of the Act". (emphasis supplied). (xiv) Further, the learned Adjudicating Authority completely erred in not appreciating the statutory provisions properly in as much as, fifth proviso of Section 114A itself clearly provides that where any penalty has been levied under this section, no penalty shall be levied under Section 112 and Section 114. But, the learned Adjudicating Authority has invoked all the pe....
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.... cannot be equated with the same. Detailed submissions relying upon the report of the Parliamentary Standing Committee, have been made in para H-4 of the Appeal Memo. It is submitted that the Hon'ble Supreme Court in case of Loka Shikshana Trust v. CIT reported in AIR 1976 SC 10, Indian Chamber of Commerce v. Commissioner of Income Tax reported in AIR 1976 SC 348, Additional Commissioner of Income Tax v. Surat Art Silk Cloth Manufacturers' Association reported in AIR 1980 SC 387 Novartis AG v. Union of India (2013) 6 SCC 1, relied upon the speeches made by the Finance Minister for the purpose of ascertaining what was the reason for introducing a particular clause. In view of Constitution Bench Judgment of the Hon'ble Supreme Court, in case of Kalpana Mehta Vs. Union of India & Ors. (W.P. (C) 558 of 2012), Parliamentary Committee Report is to be considered to see the purpose for which a statutory provision has been brought in. Thus, in view of parliamentary standing committee report on introduction of Section 114AA, penalty cannot imposed on the Appellant under Section 114AA. (xvi) That in view of above, it is submitted that the impugned Order-in-Original passed by the learned A....
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.... Shri Makhan Kant Sharma has stated similar facts that he was in personal financial difficulty as his earlier business was stopped due to misfortune, and he was trying for some other business and accordingly own his volition with the help of this appellant got introduced to Shri Rajesh Kumar Gupta to facilitate the imports made by him. Further, we find that Shri Makhan Kant Sharma has admitted that he was consciously importing the goods for Shri Rajesh Kumar Gupta for remuneration. Neither Shri Makhan Kant Sharma nor this appellant was aware that Shri Rajesh Kumar Gupta was importing goods by resorting to mis-declaration and suppression, which amounted to smuggling. Revenue places reliance on some documents which have been allegedly taken from the pen drive, alleged to have been given to appellant by Shri Rajesh Kumar Gupta. However, we find that no proper procedures for recovering the pen drive or taking extracts from pen drive have beed followed. In fact, even a Panchnama was not drawn. Under the circumstances, reliance placed on such documents, loses evidentiary value. 34.2. We further find that the impugned order heavily depends on statements rather than the statements suppo....