AI Drafter 
TaxTMI 
TaxTMI 
2022 (12) TMI 1341
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....? (ii) Whether, the Tribunal was justified in dropping the penalty on the respondent under Section 114 of the Customs Act, 1962 without examining the controversy in proper perspective and recorded perverse finding? (iii) Whether, the Hon'ble CESTAT was correct in holding that in view of Section 1(2) no penalty is to be levied under Section 114 of the Customs Act, 1962? 2. Heard Shri. M.B. Nargund, learned Additional Solicitor General for the Revenue and Shri. Phanindra, learned Senior Advocate for the Respondent. 3. Brief facts of the case are, a firm by name M/s. SLN Overseas Traders ('SLN' or 'exporter' for short), owned by one Suresh Prabhu, situated in Kundapur, Udupi, had exported 21 consignments of ladies garments during August 2007 and May 2009, through New Mangaluru Port to Dubai. According to the Revenue, the Garments were made of inferior quality fabric but, declared to be made of Corduroy/Denim/Viscose fabric to fraudulently avail duty free import credit. The exporter had falsely claimed fulfillment of export obligation against the corresponding DFIA Scrips obtained by making fraudulent exports. Based on the Intelligence, DRI (Dire....
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.... statements recorded under Section 108 of the Act and implicated the respondent in the case. Respondent did not appear before the Customs Authorities. The ED (Enforcement Directorate.) investigated the issue of money laundering and a Red Alert notice has been issued against the respondent and hence, his statement could not be recorded; • the respondent is one of the main accused involved and has played a major role in the export fraud. He has been colluding with his counterparts and associates operating from India, causing damage to Indian economy; • respondent is an Indian National and holds an Indian Passport. He has indulged in illegal activities, both in India and abroad, in designing, planning and execution of illegal activities in India. The authority in C.K. Kunhammad Vs. CCE (1992) 62 ELT 146 relied upon by the CESTAT, is not applicable to the case on hand; • respondent did not respond to the summons and has been absconding; his statements could not be recorded. He is the henchman of Suresh Prabhu and has arranged for sending money illegally from Dubai to India under the cover of subject exports of M/s SLN by way of inward remittances ....
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.... Question No: 1. 11. The principal contention urged on behalf of the respondent is that charges against him are baseless even when there are corroborative evidences like statements of co-noticees. 12. Section 108 of the Customs Act, 1962 reads as follows: "108. Power to summon persons to give evidence and produce documents- (1) xxx (2) xxx (3) All persons so summoned shall be bound to attend either in person or by an authorized agent as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject, respecting which they are examined or make statements and produce such documents and other things as may be required: Provided that the exemption under section 132 of the Code of Civil Procedure, 1908 (5 of 1908), shall be applicable to any requisition for attendance under this section. (4) xxx" 13. In Romesh Chandra Mehta Vs. State of West Bengal 1970 AIR 940., it is held that a Customs Officer under the Act is not a police officer within the meaning of Section 25 of the Evidence Act and the statements made before him by a person who is arrested or against whom an inquiry is made are no....
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....lpates not only himself but also the petitioner. It can, therefore, be used as substantive evidence connecting the petitioner with the contravention by exporting foreign currency out of India. Therefore, we do not think that there is any illegality in the order of confiscation of foreign currency and imposition of penalty. There is no ground warrantaing reduction of fine." (Emphasis Supplied) 19. We have perused Suresh Prabhu's statement. He has admitted that the respondent was making full payment through the bank and asked him to pay specified amounts to specified individuals. It is also stated that the Respondent was not only recovering the excess payment but was also ensuring the transfer of money to his associates in India through non-banking channel. 20. Therefore, the statements made by Suresh Prabhu should be considered not as a confessional statement of a co-accused, but as an independent piece of evidence. It is thus evident from his statements that the respondent was involved in the offence. Hence the contention of Shri Phanindra that other independent evidence is required, is untenable and liable to be rejected. Re: Question No. 2: 21. The question involve....
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....e Court in Collector of Customs, Madras & Others vs. D. Bhoormull: 1983 ELT 1546 (SC), all that is required to be established is such a degree of probability that a prudent man may, on its basis, believe in the existence of the act in issue." (Emphasis Supplied) 25. On the facts of that case, the Delhi High Court has taken the following view, which is similar to facts in the instant case: "19. The facts and the circumstances of the present case show that the appellant was a party to the conspiracy, pursuant to which customs duty was being evaded by clearing dutiable goods, without sending the parcels, containing those goods, to the Foreign Post Office for the purpose of examination and he also intentionally aided in evasion of duty. The evidence available on record in the form of statement of the appellant recorded under Section 108 of Customs Act, coupled with the statement of Kishori Lal is sufficient to prove the complicity of the appellant in evasion of customs duty." (Emphasis Supplied) 26. Feroz Khan in his statement dated October 01, 2009, given before the officers of DRI, has admitted that the respondent is also involved in sending money through SLN Acc....
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....to the MRTP Commission to have jurisdiction with regard to that part of trade practice in India which is restrictive in nature then it will mean that persons outside India can continue to indulge in such practices whose adverse effect is felt in India with impunity. A competition law like the MRTP Act is a mechanism to counter cross border economic terrorism. Therefore, even though such an agreement may be entered into outside the territorial jurisdiction of the Commission but if it results in a restrictive trade practice in India then the Commission will have jurisdiction under Section 37 to pass appropriate orders in respect of such restrictive trade practice." (Emphasis Supplied) 35. In Ajay Aggarwal Vs. Union of India (1993) 3 SCC 609, it is held as follows: "25. A conspiracy thus, is a continuing offence and continues to subsist and committed wherever one of the conspirators does an act or series of acts. So long as its performance continues, it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity. A crime is complete as soon as the agreement is made, but it is not a thing of the moment. It does not end with the ....
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....e Customs Act, 1962 states that: "Liability of principal and agent. - (1) Where this Act requires anything to be done by the owner, importer or exporter of any goods, it may be done on his behalf by his agent. (2) Any such thing done by an agent of the owner, importer or exporter of any goods shall, unless the contrary is proved, be deemed to have been done with the knowledge and consent of such owner, importer or exporter, so that in any proceedings under this Act, the owner, importer or exporter of the goods shall also be liable as if the thing had been done by himself. (3) When any person is expressly or impliedly authorised by the owner, importer or exporter of any goods to be his agent in respect of such goods for all or any of the purposes of this Act, such person shall, without prejudice to the liability of the owner, importer or exporter, be deemed to be the owner, importer or exporter of such goods for such purposes including liability therefore under this Act." 40. Records of this case disclose that respondent was functioning in India through his agent who used to collect money by showing a currency note of a specified number to Sure....