TaxTMI 
TaxTMI 
2023 (3) TMI 1124
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....posed penalty of Rs. 5 lacs under Rule 26 of Central Excise Rules, 2002. 02. Shri R. Subramanya, learned Counsel appearing on behalf of the appellant submits that the appellant have acted as a professional under bona fide belief. He submits that the appellant has charged nominal fees of Rs. 1500/- for certificate and he was not aware of any misuse of the certificate therefore, he should not be penalized under Rule 26. He further submits that the appellant have not dealt with any goods which is liable for confiscation. Moreover, there is no charge of confiscation of goods in the show cause notice as well as in the order therefore, without charge for confiscation of goods, the penalty under Rule 26 cannot be imposed. 03. Shri G. Kirupanandan, learned Assistant Commissioner (AR) appearing on behalf of the revenue reiterates the finding of the impugned order. He pointed out from the records that the appellant have not admitted the offence moreover, he has admitted that if he would have known such gravity of the revenue involved, he would have charged more as against the Rs. 1500/- per certificate. This clearly shows mala fide of the appellant. He submits that for the identical of....
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....ned in original of both the Solvency Certificates, but they were not signed by any Chartered Accountant; that he had not verified their authenticity and he failed to verify the authenticity of the same. It was also stated by him that he never visited the factory premises of M/s. Spectrum Fabrics. (ii) On behalf of Shri Mahesh Patel, the consultant Mr. Mithil Dave had made submissions as detailed at para 18** in this order. The contentions are broadly that Shri Mahesh Patel is a qualified Chartered Accountant and is having his practice since 1996 in Surat, he is not directly or indirectly concerned in any way with M/s. Spectrum Fabrics or any of the notice and their firms, that Shri Patel is qualified to issue Solvency Certificate and/or Export Performance Certificate and whatever he has done has been done in his professional capacity and after proper verification of the documents produced before him by Shri Yogesh Chalthanwala. It was also claimed that in the statement dated 12-6-2003 of Shri Mahesh P. Patel under Section 108 of the Customs Act, 1962, "Certificates were issued without verifying the correctness of books of revenue" was written by the officers in place of "c....
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.... removal of manufactured goods. This case doesn't apply to the subject matter before me because as far as the role of Shri Mahesh Patel in the whole fraud of M/s. Spectrum Fabrics is considered, it is limited to issue of certificates without proper verification of the documents (fabricated by other noticee) leading to issue of advance licenses resulting in fraud. The proposed penal action is not based on suspicion but the statement of Shri Patel himself in which he has accepted the fact of issuing the certificates to M/s. Spectrum Fabrics by not verifying the correctness of books of revenue. Another citation 1988 (37) E.L.T. 269, dated 4-7-1988 was also referred which was on identical issue as the one discussed above, therefore the facts and circumstances being different, the case has been quoted out of context. (d) Regarding imposition of penalty or otherwise on Shri Mahesh Patel, other cases cited were M/s. M.M. Raikhanna [2005 (186) E.L.T. 322], CCE v. Shal Dalitchand Kapoor Chand & Co. [1989 (41) E.L.T. 167], Shri Kaigaontar & Ors. v. Gold Control Adm. [1986 (23) E.L.T. 523 (Tribunal)], Smt. Vidyawati v. State [1988 (37) E.L.T. 341 (Del.)] and Laxmi Packaging (P) L....
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.... per the role described by the adjudicating authority, it is clear that the appellant Shri Mahesh P. Patel was knowingly involved in facilitating M/s. Spectrum Fabrics for entire fraud. Therefore, we do not see any reason to take any lenient view. Hence the penalty of Rs. 5 lakhs imposed on Shri Mahesh P. Patel is justified and no interference is required. Accordingly, we uphold the penalty imposed under Section 112(a) on Shri Mahesh P. Patel. 4.2 Similarly, as regards the penalty imposed on Shri Sudesh D. Nanaware, we find that he is a consultant for obtaining the advance licence from DGFT. As per his advice, the entire fraud was committed. The adjudicating authority has given a detailed finding in the impugned order as regards the role of Shri Sudesh Nanaware, which is extracted below :- "32. (i) Shri Sudesh Dagadoba Nanaware, Proprietor of M/s. Tejal international, in his statement recorded by the DRI under Section 108 of the Customs Act, 1962 on 20-9-2004 stated that it was pre-decided by him and Shri Jatinbhai Pancholi that he (Shri Sudesh Nanaware) would do consultancy work for issue of Advance Licenses in the name of M/s. Spectrum Fabrics, Surat, and Shri J....
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.... role in the whole plan (for fraud) of duty evasion, one cannot take shelter saying the he was not involved in taking it to the logical conclusion. The fact of the matter is that, had there been no role of Shri Nanaware in obtaining the advance licenses by fraudulent means, there would never have been any duty free import by M/s. Spectrum Fabrics nor any diversion of the goods. The fraud started by obtaining the advance licenses by way of fabricating false documents and Shri Nanaware performed his role to perfection by obtaining the advance licenses in the name of M/s. Spectrum Fabrics." 4.3 From the above finding, it can be seen that the appellant Shri Sudesh Nanaware, being a consultant, has admitted the pre-decided plan for committing the fraud. Therefore, he was rightly imposed the penalty under Section 112(a). Accordingly, we uphold the said penalty. 5. As regards the Revenue's appeal, we find that the Revenue has sought to impose penalty under Section 114A for equal amount of the duty demand confirmed against M/s. Spectrum Fabrics. In this regard, we find that in the show cause notice, penalty under Section 114A was proposed. However, the adjudicating au....