TaxTMI 
TaxTMI 
2023 (7) TMI 548
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....r Rule 10A/ Rule 12 of the Custom Valuation Rules 1988/ 2007 (as applicable) read with section 14 of the Customs Act, 1962 (b) I re-determine the CIF value of 122 consignments (118 used cranes and 04 consignments of accessories) imported in the name of M/s Govindji Gopalji & Sons, and high seas buyers thereof (Details as per 'Annexure-A-1', A-2', A-3', A-4', B-1 and -B-2' to the show cause notice) as Rs. 73,90,29,923/- (Rupees Seventy Three Crores Ninety Lakhs Twenty Nine Thousand Nine Hundred Twenty Three Only) under Rule 3 / Rule 8 of the Custom Valuation Rules 1988 or Rule 3 Rule 9 of Customs Valuation Rules, 2007 read with section 14 of the Customs Act, 1962 (as applicable). (c) I order for confiscation of 122 consignments (118 used cranes and 04 consignments of accessories) imported in the name of M/s Govindji Gopalji & Sons, and high seas buyers thereof (Details as per 'Annexure-A-1', A-2', A-3', A-4', B-1 and -B-2' to the show cause notice) having the re-determined CIF of Rs. 73,90,29,923/- (Rupees Seventy Three Crores Ninety Lakhs Twenty Nine Thousand Nine Hundred Twenty Three Only) under Section 111(m) of th....
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....cranes purchased on high seas basis by M/s Rangara Industries Pvt. Ltd (details as per Table 18 of the show cause notice") in terms of section 28 of the Customs Act, 1962, along with interest in terms of section 28AB of the Customs Act, 1962, as it existed at the material time (under section 28AA from 08.04.2011 onwards). (k) I confirm the duty demand of Rs. 17,86, 121/- for the used cranes purchased on high seas basis by M/s AKM Enterprises (details as per Table 18 of the show cause notice") in terms of section 28 of the Customs Act, 1962, along with interest in terms of section 28AB of the Customs Act, 1962, as it existed at the material time (under section 28AA from 08.04.2011 onwards). (l) I confirm the duty demand of Rs. 11,26,632/- for the used cranes purchased on high seas basis by M/s Huda C85160,85168,85914,85915/20155 Equipments (details as per Table 18 of the show cause) in terms of Section 28 of the Customs Act, 1962, along with interest in terms of section 28AB of the Customs Act, 1962, as it existed at the material time (under section 28AA from 08.04.2011 onwards). (m) I impose penalty under section 114A, equivalent to the duty amount of Rs.....
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....of Rs. 1,00,000/- (Rupees One Lakh Only) under section 112(a) of the Customs Act, 1962 on Shri. Nizar Rangara, Chairman-cum-Director of M/s Rangara Industries Pvt. Ltd. (t) I impose penalty of Rs. 1,75,000/- (Rupees One Lakh Seventy Five Thousand Only) under section 112(a) of the Customs Act, 1962 on Shri. Hakim Shaikh, Director of M/s Huda Equipments. (u) I impose penalty of Rs. 3,50,000/- (Rupees Three Lakhs Fifty Thousand Only) under section 112(a) of the Customs Act, 1962 on Shri. Madan Lalwani. (v) I impose a Penalty of Rs.1,00,00,000/- (Rupees One Crore Only) under Section 114AA of the Customs Act, 1962 on M/s Govindji Gopalji and Sons. (w) I impose a Penalty of Rs.1,00,00,000/- (Rupees One Crore Only) under Section 114AA of the Customs Act, 1962 on Shri. Dharmesh Vador, Managing Partner of M/s Govindji Gopalji and Sons. (x) I impose a Penalty of Rs. 50,000/- (Rupees Fifty Thousand Only) under Section 114AA of the Customs Act, 1962 on Shri. Dinesh Sharma, Proprietor of M/s Reetika Road Lines. (y) I impose a Penalty of Rs. 1,00,000/- (Rupees One Lakh Only) under Section 114AA of the Customs Act, 1962 on M/s Rangara Industri....
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....consignments imported Declared CIF Value Re-determined CIF Value Differential Duty demand under section 28 of CA, 1962 A B C D E F 1 M/s. Govindji Gopalji & Sons, Mumbai 32 6,69,91,799 13,70,33,060/- + 85 29,65,42,840/- 55,48,08,613/- 8,35,01,187/- 2 Shri Dinesh Sharma, proprietor of M/s Reetika Road Lines 1 26,61,721/- 35,73,000/- + 3 M/s Rangara Industries Pvt Ltd and Shri Nizar Rangara 1 1,48,92,500/- 1,16,30,654/- 9,43,508/- 4 Shri A.K. Mani, proprietor of M/s AKM Enterprises 2 1,38,25,118/- 2,00,00,000/- 17,86,121/- M/s Huda Equipments Pvt Ltd and Shri Hakim Shaikh 1 48,27,819/- 87,22,750/- 11,26,632/- Total 122 39,64,79,950/- 73,90,29,923/- 8,73,57,448/- + Differential duty of this crane being beyond 5 years period, is beyond time period under Section 28 of the Customs Act, 1962. However, differential duty having been deposited voluntarily, the same has been adjusted against duty evaded jointly and severally were called upon to show cause, as to why: (a) the respective declared value of the ....
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....against the government dues that may be adjudged under section 28 of the Customs Act, 1962 in relation to the aforesaid cranes. Each of M/s M. Dharamdas & Co. (CHA No. 11/100), Shri Madan Lalwani, M/s N.G. Bhanushali & Co., Shri Bharat Bhanushali, M/s Friends Syndicate Clearing Pvt Ltd, Shri V.R. Divakaran, M/s Lakka Transglobal India Pvt Ltd, Shri Krishnamurari Bhandari, is required to show cause, as to why: (a) penalty should not be imposed upon them under Section 112(a) of the Customs Act, 1962 in relation to the consignments, imported and cleared from Mumbai port, mentioned against their respective names In Table 17 supra; (b) penalty should not be imposed upon them under Section 114AA of the Customs Act, 1962 in relation to the consignments, imported and cleared from Mumbai port, mentioned against their respective names In Table17 supra; 2.2 This show cause notice was adjudicated by the Commissioner by the impugned order. Aggrieved by the order appellants have filed these appeals 2.3 We are having only the appeals of Shri Dinesh Sharma (C/85160/2015) (Appellant 1), A K Mani (C/85168/2015) (Appellant 2), Dhramesh Vador (C/85194/2015) (Appellant ....
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.... person. 3. Shri. Dinesh Sharma (hereinafter referred to as 'the noticee') is the Proprietor of M/s Reetika Roadlines The noticee is engaged in crane hiring services and had, interalia purchased one old Used Crawler Crane P & H 670WLC SR No 50380 from M/s Govindji Gopalji & Sons, Mumbai on High Sea Sales Basis under Bill of Entry No. 824766 dated 20/2/2007 with a declared CIF Rs. 26,61,721 - and entire clearance was handled by Shri Dharmesh Vador of M/s Govindji Gopalji & Sons, the High Seas Seller. 4. It is On 18/03/2013, a statement of Shri Dinesh Sharma, Proprietor of the Noticee firm was recorded by DR1 officer wherein it was recorded that a cash amount of Rs. 9,11,000/- was transacted over and above the cheque payments of Rs. 26,62,000/- and actual purchase value was Rs. 35,73,000/-. 5 Vide letter 18/3/2013 through his letter the noticee made advance revenue deposits of Rs. Rs. 5,10,015/- towards the liabilities which may arise in the matter. He was assured that with this payment his matter is closed. 6. However the noticee was issued a Show Cause Notice No. DRI/MZU/B/INV- 12/ 2010-11 dated 4/4/2013 proposing rejection of declared value and p....
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....t of Rs. 5,10,015/- including differential duty and interest. It is further submitted that proposed penalties do not stand in view of the bar of limitation provided in law. 11. It is submitted that since the entire transaction and clearance was handled by the High Seas Seller, the noticee had no occasion to deal with the goods till completion of clearance and therefore no penalty is imposable upon him under Section 112 or 114AA of the Customs Act 1962. 12 the noticee requested that he be kindly heard in person to explain his matter in person in detail. 27.(B) (ii)lt was further prayed that: The amount deposited by the noticee as 1. by the noticee as advance revenue deposits be kindly held as available before the adjudicating authority and the appropriation ordered in Para 27.1 of the SCN be kindly held as null and void as made at SCN stage in violation of principal of natural justice. 2. The used Crawler Crane P & I-1 670WLC SR No 50380 be held as not available for confiscation. 3. The penalties proposed in the show cause notice be dropped. 27 (E) M/s Govindji Gopalji & Sons submitted their rely to the show cau....
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....d in each of the years covered in the show cause notice would be sufficient to bring out the incorrect and irrational nature of the notice. 5. that, it is now a well settled position in law that, statements cannot be taken as evidence without giving an opportunity of cross-examination of such persons which statements are relied upon. 6. They need to cross examine the investigating officers who recorded then statements which according to them are incorrect and involuntary statements. RECORD OF PERSONAL HEARING 28.(i) Shri. V. R. Divakaran, Managing Director of M/s Friend Syndicate Clearing Pvt. Ltd Shri. K.B.Bhandari, Director, M/s Lakka Transglobal India Pvt. Ltd. and Advocate, Shri. S. K. Mathur attended the personal hearing on 10.06.2014 on behalf of M/s Friend Syndicate Clearing Pvt. Ltd, Noticee No. 13, Shri. V. R. Divakaran, Managing Director, Friend Syndicate Clearing Pvt. Ltd, Noticee No. 14, M/s Lakka Transglobal India Pvt. Ltd, Noticee No. 15 and Shri. K.B.Bhandari, Director, M/s Lakka Transglobal India Pvt. Ltd, Noticee No. 16. The advocate Shri. S. K. Mathur, submitted that: In the SCN there is no finding against M/s Friend Sy....
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....h, Director, M/s Huda Equipment Pvt. Ltd did not appear before me for personal hearing in spite of being afforded three opportunity spread over Seven months. This steadfast abstention from the personal hearing only serves to show that the noticee is not interested in PH and rather content with adopting dilatory tactics. Under Section 122A of the Customs Acts, 1962, it is laid down that the adjudicating authority shall not grant adjournment of hearing more than three times. I am therefore, constrained to decide the case based on available records, including noticee's written submissions. 30. From the investigation conducted, statements of the concerned persons and documents recovered and taken on record the following facts emerge: (i) There was a meeting of mind between Shri. Dharmesh Vador (Managing Partner of M/s Govindji Gopalji & Sons) overseas supplier, High Seas Buyers (i.e. Shri. Dinesh Sharma, Shri. Nizar Rangara, Shri. A. K. Mani and Shri. Hakim Shaikh) and Shri. Madan Lalwani and others towards defrauding the public revenue by resorting to mis-declaration of the transaction value of the secondhand cranes. (ii) Shri. Dharmesh Vador, Managing P....
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....date. However, I find that Section 28 of the Customs Act, 1962, provides that where an importer has by reasons of collusion or any willful misstatement or suppression of facts, had not paid any duty which could be issued upto five years from relevant date. However, it does not bar voluntary deposit of self-admitted duty for any imports beyond five years to be adjusted for duty and leviable against the said imports. The limitation with respect to the time only bars the department to issue demand notice under Section 28 of the Customs Act, 1962, it does not bar the importer to pay back the duty evaded on his own. Thus the duty amount and interest amount deposited voluntarily by the importer is therefore adjustable against the duty recoverable even for the period beyond five years. This has been upheld in the case of India Cements v/s CCE, Madras [1984(18)ELT 499 (TRB)] the special bench of CEGAT, New Delhi. M/s. Govindji Gopalji & sons had voluntarily made a payment of Rs. 2,85,00,000/- during the course of investigation, as detailed at para 7 to the show cause notice. This is accordingly adjusted against the duty of Rs. 2,10,54,129/- payable on the 32 cranes (details as per Sr. No.1....
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....e difference between the actual value of the crane and declared manipulated invoice value) through unofficial (hawala) to the overseas supplier I find that once the importer has admitted to undervaluation and made payment of differential duties, he cannot backtrack and change his stand. This view has been endorsed by the Tribunal in the case of American Eye Ltd. Vs Commissioner of Customs (Import), the Hon'ble CESTAT, Mumbai vide Order No. A/748- 749/12/CSTB/C-I dated 18.10.2012 wherein it has been held in principle that once the appellant has admitted to undervaluation and misdeclaration of goods and also discharged the duty liability willingly, he cannot turn around and now say that the valuation done by Customs is not sustainable in law. In regard to the assessment and examination carried out by the officers of the Customs for the impugned goods, I find that while allowing the goods for home consumption, assessments were made on the limited data available to the appraising officer and no detailed investigations were carried out, as of then. It was only during the course of detailed investigation carried out by the investigating agency that it was revealed a....
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....ation based on preponderance of probability - Witnesses found to be not innocent but well conversant with appellants' trade - Statements of witnesses voluntary and not retracted - Reply to show cause notice not filed and merely raised flimsy plea for cross-examination prematurely - Right to cross-examination can be taken away under certain circumstances - Cross- examination not required when circumstantial evidence providing reliable basis corroborating statements - Witnesses not having enmity with appellant and such witnesses not required to put to cross- examination No right to seek cross- examination on flimsy plea when burden of proof discharged by Revenue - Natural justice not violated". (g). It is also pertinent to mention here the decision of Tribunal in the case of Sudhir Sharma Vs CCE 2011 (265) ELT 243, the relevant paras of the said decision are reproduced below. 18.9 Though it cannot be denied that the right of cross- examination in any quasi- judicial proceeding is a valuable right given to the noticee as these proceedings may have adverse consequences, at the same time under certain circumstances, this right of cross-examination can be taken away....
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....tika Roadlines contended that the show cause notice was issued beyond five years of import therefore there is no duty liability, they further stated that the proposed penalties do not stand in view of the bar of limitation provided by the law. I agree with the contention of the noticee that no duty can be demanded under section 28 of the Customs Act, 1962 which were imported beyond five years from the relevant date. As discussed in above para it does not bar voluntary deposit of self- admitted duty for any imports beyond five years to be adjusted for duty and leviable against the said imports. The limitation with respect to the time only bars the department to issue demand notice under Section 28 of the Customs Act, 1962, it does not bar the importer to pay back the duty evaded on his own. Thus the duty amount and interest amount deposited voluntarily by the importer is therefore adjustable against the duty recoverable even for the period beyond five years. 31 (C) M/s Rangara Industries Pvt. Ltd. Noticee No. 4, Shri. Nizar Rangara, Chairman- Cum Director of M/s Rangara Industries Pvt. Ltd. Noticee No. 5, Shri. A. K. Mani, Proprietor of M/s AKM Enterprises, Noticee....
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....(89) E.L.T. 646, decided by a two-Judge Bench to which one of us, K. Ramaswamy, J., was a member the petitioner made a confession under Section 108. The proceedings on the basis thereof were taken for confiscation of the goods. He filed a writ petition to summon the panch (mediater) witnesses for cross- examination contending that reliance on the statements of those witnesses without opportunity to cross-examine them, was violative of the principle of natural justice. The High Court had dismissed the writ petition. In that context, it was held that his retracted confession within six days from the date of the confession was not before a Police Officer. The Custom Officers are not police officers. Therefore, it was held that "the confession, though retracted, is an admission and binds the petitioner. So there is no need to call Panch witnesses for examination and cross-examination by the petitioner". As noted, the object of the Act is to prevent large-scale smuggling of precious metals and other dutiable goods and to facilitate detection and confiscation of smuggled goods into, or out of the country. The contraventions and offences under the Act are committed in an organised manner ....
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....and the appellant made statement in unequivocal terms admitting the guilt. It is seen that in Barkat Ram's case, this Court accepted the retracted confessional statement and upheld, on that basis, the conviction. In Vallabhdas Liladhar's case and also in Rustom Das's case the retracted confessional statement found basis for conviction and in the latter the recoveries were relied as corroborative evidence. In Haroom Abdulla's case, this Court used the evidence of co-accused as corroborative evidence. 32. It is true that in criminal law, as also in civil suits, the trial Court and the appellate Court should marshal the facts and reach conclusion, on facts. In a criminal case, the prosecution has to prove the guilt beyond doubt. The concept of benefit of doubt is not a charter for acquittal. Doubt of a doubting Thomas or of a weak mind is not the road to reach the result. If a Judge on objective evaluation of evidence and after applying relevant tests reaches a finding that the prosecution has not proved its case beyond reasonable doubt, then the accused is entitled to the benefit of doubt for acquittal. The question then is : whether the learned Single Judge of the High Cour....
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....der No A/85324-85327/2022 dated 12.04.2022] b. Gopalji Hevy Lifters [2017 (357) ELT (537) T-Mum)] 4.5 Now coming to the case of Appellant 2. Relevant Excerpts from the impugned order are reproduced below "11.1 During the course of the investigations, it was revealed that M/s. Govindji Gopalji & Sons had sold some cranes on high seas and some cranes had been sold after clearances in their own name. It was further gathered that M/s. AKM Enterprises, Chennai had purchased two cranes from M/s. Govindji Gopalji & Sons on high seas and further two cranes after M/s. Govindji Gopalji & Sons had cleared them through Customs. Further, there are several other companies which purchased cranes from M/s. Govindji Gopalji & Sons on high seas. The statements of all these individuals are as under:- 11.2 (a) Statement of Shri A.K.Mani, Proprietor of M/s. A.K.M. Enterprises [buyer of 4 cranes from M/s. Dharmesh Vador] was recorded on 12.01.2011 under the provisions of Section 108 of the Customs Act, 1962. In the said statement, Shri A.K.Mani inter alia stated that he had about 22 trucks / trailers and 9 cranes in his fleet lying at his yard in Chennai. On being asked to ....
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....after bills of entry for clearance of the two cranes were filed on their behalf by CHA of Shri Dharmesh viz. M/s. Friends Syndicate Clearing Pvt. Ltd.; that the Customs duty of 13,96,476/- and 26,02,523/- respectively in respect of the aforesaid cranes was paid by them; that after clearance from Customs, the cranes were transported by him to Chennai on his expense; that he got the cranes registered with RTO authorities." 11.4 Similarly, statements of other buyers who had purchased cranes from M/s Govindji Gopalji & Sons., on High Sea Sale basis were recorded. The statements of all the high sea sale buyers are enclosed as relied upon document to this notice. The gist of the aforesaid statements as regards to cost, payments in cash and cheque is tabulated as under:- Table-3 S.No Name of the High Seas buyer Date of recording of the statement Descripti on of the crane purchased on high seas from Bill of Entry No./ Date Declared CIF value Actual purchase price Payment Details Payment made through cheque (i.e. the sale invoice value declared) (Rs.) Payment made in cash under stated value) (Rs.) 1 2 3 4 5 6 7 8(a) 9(b) ....
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....e TM 1275 W STD (YOM 1986) The above two cranes were also acquired from Dharmesh Vador. On my enquiry about crane of 100 tons and 200 tons capacity, Dharmesh sent me photographs of these two cranes. They appeared to be in good condition. I liked the cranes. Dharmesh offered to sell these two cranes to me on High Sea sale basis. He convinced me that I would be saving a handsome amount by way of sales tax if I buy these cranes on high sea sale basis. I had an Import Export Code in the name of my proprietary firm viz. A.K.M. Enterprises. The deal for these two cranes was finalized for Rs 2 crores. In addition, the Custom duty was to be paid by us. The custom clearing charges were to be borne by Dharmesh. While finalizing the deal with Dharmesh, he had informed me that they would be raising an invoice for USD 2,05,000/- plus 2% commission for Kruup 6275 crane and for USD 1,10,000/- plus 2% Commission for Grove TM1275. I arranged for a term loan of Rs 2 crores from my banker i.e. UCO bank. Within two to three weeks, the entire amount of Rs 2 crores was paid to Dharmesh through demand drafts/ RTGS. After about two to three days, I was informed by Dharmesh that my cranes have arr....