TaxTMI 
TaxTMI 
2024 (5) TMI 143
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..... Noble Enterprises imported items declaring them as sunglasses but on investigation, it was found to be readymade garments, which fact is not under dispute and accordingly, the value for these mis-declared goods was redetermined at Rs.41,18,73,552/- and the differential duty was Rs.16,20,12,083/-. Show-cause notices issued to these three importers were not responded to because these were dummy IECS being misused without the knowledge of the IEC holders on the strength of the stolen identity and these documents were used for carrying out illegal importation of goods. The main culprits in these cases were Shri Krishna Naik, Shri Dinesh Gowda assisted by the appellants in the present appeals. 2. The appellants have defended themselves only on the ground that the goods were not liable for confiscation and therefore, the entire order is of no legal basis. It is also submitted that cross-examination of witnesses were not allowed and in view of the various decisions, the undervaluation cannot be sustained only based on statements. It is also submitted that department had investigated only two importers though there were many such cases where such instances have happened. It is also st....
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....Representative on behalf of the Revenue reiterated the findings of the Commissioner. 4. Heard both sides. The fact that 3 consignments were detained from the Custodian Air India SATS and when examined were found to be branded readymade garments as against the declared items '1500 pieces of packing materials (sunglasses and 920 pieces of sunglasses (unbranded)', is not under dispute. The so-called importers M/s. Maxco Traders, Shri Mimoh Balu Bhawar, Proprietor, 24 years old and educated only up to 10th Standard when contacted informed that he was not aware of the name of the company and how his name and other details were misused was not known to him and he knew none of them whoever was involved in these illegal imports. Similar was the case of other importers who claimed that they were not aware that their documents were being misused by floating these companies. After assessment, the out of charge and other documents were found to be with Shri Krishna Naik who was a 'H-cardholder' working for the Customs House Agent (CHA) M/s. Avenue Logistix. It was also found that the bank accounts mentioned in the IEC documents were fake as confirmed from the respective banks. 5. The app....
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....ellant for smuggling branded imported garments which culminated into levying a personal penalty on him. In yet another case, the Air preventive Unit had detained for another case of misdeclaration where penalty was imposed on him. In 2017, he was involved in a case of undervaluation and many other cases where his active involvement is found and investigations clearly proved and penalties were imposed on him. None of these have been disputed in his grounds. The appellant's claim that the goods were not liable for confiscation itself speaks the interest they have in the goods that were misdeclared. Moreover, the goods were seized from the custodian within the customs area and therefore, they were liable for confiscation. The statements of Shri Krishna Naik from whom the documents were recovered corroborated with the appellants statements and the witnesses who have corroborated the events were none other than the employees of the airways, custodian and his own colleagues who were party to the offence. Therefore, he has committed an offence under Section 112(a) and (b) by abetting and mis-declaring the goods and violated provisions of Section 114AA by knowingly and intentionally mis....
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....of evidence to prove that the goods were not mis-declared and there were no attempts made by them to evade customs duty by mis-declaring the goods. Therefore, the investigations which culminated to prove that dummy IECs were arranged by Shri Dharaneesh Raju Shetty with the assistance of Shri Nasir which was admitted by Shri Krishna Naik in his statement cannot be ignored. The records show that the payments for actual goods as per Airway Bill and invoices were arranged by Shri Dharaneesh Raju Shetty and Shri Sahil Moiz Zafar is also not disproved with any evidences on record. Shri Dharaneesh Raju Shetty's involvement in Mumbai has been proved by various witnesses as discussed above. From the records and various statements and from the detailed call records, it is very clear that Shri Shail Moiz Zafar was partner along with the Shri Dharaneesh Raju Shetty in mis-declaring the goods and misusing the names of unknown persons for importing the mis-declared goods. Accordingly, he is also liable for penalty under Section 112(a) and under Section 114AA of the Customs Act, 1962. 8. The Hon'ble High Court in the case of Rama Nagappa Shetty Vs. Commissioner of Customs: 2020 (374) E.L.T. 68....
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....collected by Customs officials under Section 108 of the Customs Act. That material incriminates the petitioner inculpating him in the contravention of the provisions of the Customs Act. The material can certainly be used to connect the petitioner in the contravention inasmuch as Mr. Dudani's statement clearly inculpates 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 warranting reduction of fine." 10. The Supreme Court of India in the case of K.I. Pavunny vs. Asstt. Collr. (Hq.), C. Ex. Collectorate, Cochin Dated 3-2-1997. 1997 (90) E.L.T. 241 (S.C.) held that: "17. It would thus be clear that the object of the Act empowering Customs Officers to record the evidence under Section 108 is to collect information of the contravention of the provisions of the Act or concealment of the contraband or avoidance of the duty of excise so as to enable them to collect the evidence of the proof of co....
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....ulpability of the appellants. 12. Taking into consideration duty evasion to the extent of Rs.6.68 crores and in view of the above observations, the penalties imposed on Shri Dharaneesh Raju Shetty and Shri Shail Moiz Zafar is upheld. Accordingly, the impugned order is upheld and the appeals are dismissed. (Order pronounced in open court on 10.01.2024.) Per: P. A. AUGUSTIAN 13. Appellants in the present appeals are challenging the penalties imposed under various provisions of the Customs Act, 1962. Appellant in Appeal No. C/20310/2020 hereinafter referred as "First appellant", is a commission agent and purchasing consumer goods on wholesale basis from various importers. Appellant in Appeal No. C/20311/2020 hereinafter referred as "Second appellant" is an indenting agent who places orders for various importers. Alleging that various importers including M/s. Maxco Traders, M/s. Samrath Enterprises and M/s. Noble Enterprise had imported goods by mis-declaring the value, proceedings were initiated. Show-cause notices were issued to various persons including Appellants herein and thereafter, Adjudicating Authority vide impugned order imposed penalties on appellants. Aggrieved....
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.... noticees held that they are major players in the syndicate. It is admitted that Second Appellant had procured goods from China but he was not involved in illegal import of branded goods as alleged. The Learned Counsel for the Second Appellant further submits that he had appeared before the DRI office on 05.01.2018 and no statement was recorded as there was no substantial evidence against him though he was detained under COFEPOSA and the detention order was quashed by Hon'ble High Court. In the absence of any statement recorded from the Appellant or any specific question regarding his involvement in alleged illegal activities, only based on the statement of co-accused which was retracted later, no presumption could be drawn that he had abetted illegal import as held by Adjudication Authority. 16. The Learned Counsel for the Appellants also draws our attention to the findings of the Adjudicating Authority that the correlation of the statement of the First appellant from the statement of other co-noticees was not a mere coincidence but clinching evidences gathered during investigation against the appellants. Such finding is given only based on the statements recorded from him on 0....
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....hich would lend adequate assurance to the court that it may seek to rely thereupon. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention but we must also notice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded. {See Pon Adithan v. Deputy Director, Narcotics Control Bureau, Madras [(1999) 6 SCC 1]} 34. A person accused of commission of an offence is not expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as an outcome of threat, etc. if the same is to be relied upon solely for the purpose of securing a conviction. With a view to arrive at a finding as regards the voluntary nature of statement or otherwise of a confession which has since been retracted, the Court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the ma....
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....rices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them." 20. Learned counsel for the Appellants further submits that in the matter of M/s. Basudev Garg vs. Commissioner of Customs reported in 2013 (294) E.L.T 353 (Del), it is held that: "14. The Division Bench also observed that though it cannot be denied that the right of cross-examination in any quasi judicial proceeding is a valuable right given to the accused/Noticee, as these proceedings may have adverse consequences to the accused, at the same time, under certain circumstances, this right of cross-examination can be taken away. The court also observed that such circumstances have to be exceptional and that those circumstances have been stipulated in Section 9D of the Central Excise Act, 1944. The circumstances referred to in Section 9D, as also in Section 138B, included circumstances where the person who had given a statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained with....
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....rt Code Number holder. Learned counsel for the respondents categorically made a statement that he is not able to place any such prohibition in law except Section 7 of the Foreign Trade (Development and Regulation) Act, 1992, which reads as follows :- "7. Importer-exporter Code Number. - No person shall make any import or export except under an Importer-exporter Code Number granted by the Director General or the officer authorised by the Director General in this behalf, in accordance with the procedure specified in this behalf by the Director General". The expression "import" occurring in the said section means bringing into India of goods as defined under Section 2(e). There is nothing in the law which requires an importer to be either the consumer or even the buyer of the goods also. Even otherwise, we are of the opinion that it is a matter of common sense that no importer would consume all the materials imported. Necessarily, the goods imported are meant for sale to the consumer, in which case, if an importer, who enjoys the facility of I.E. Code imports certain goods in the normal course of business on the strength of a contract entered by such importer with ei....
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....ce of abetment" made punishable by law. Further even mere "awareness that a crime was being committed is not in itself an intentional aid". However, a person could be punished as aider or abettor "if he knew all the circumstances which constituted the offence" and "his intention was to aid an offence or to facilitate the commission of an offence"; In other words "if the person who lends his support does not know or has no reason to believe that the act which he was aiding or supporting was in itself a criminal act, it cannot be said that he intentionally aids or facilitates the doing of the offence". 23. Learned Counsel for the Appellant further submits that as per the judgment of Hon'ble High Court of Madras in the matter of CC (Sea) Chennai-I vs. M/s. M R Associates (2013 (297) E.L.T 504 (Mad.), it is held that: "13. We do not accept such contention of the learned counsel for the assessee. Even if such concession made by the assessee, was for the purpose of clearance, yet, the fact remains that the assessee had not produced contemporaneous documents to substantiate the value. However, for the purpose of invoking penal provisions, we do not think such a concession made....
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....able in view of the facts of the instant case, where allegations levelled in the SCN are proved by examination of consignments itself and various other corroborative evidences". It is further held that "Noticees failed to provide any cogent and valid reason for the cross-examination of statements of persons/co-noticees/officers which were recorded under Section 108 of the Customs Act, 1962." Law is well settled that cross-examination in any quasi-judicial proceeding is a valuable right given to the accused/Noticee as these proceedings may have adverse consequences to the accused. In the present appeal, no cogent and valid reasons have been brought out by Adjudication Authority to deny cross-examination. 27. Regarding evidentiary value of the WhatsApp messages retracted during investigation, in spite of specific contention taken by the appellants, there is no finding given by adjudication authority as why it can be considered as admissible evidence. Regarding evidentiary value of such documents in the matter of S.N. Agrotech (supra), after considering the statutory provision and judgments of Hon'ble Supreme court, Tribunal held that unless the requirement of Section 65B of the Ev....
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....Authority is to put an end to smuggling which was an effect on disturbing the National economy. In the present case, 3 importers declared the goods as sunglasses and other unbranded dress material whereas on investigation, it is found that branded sunglasses, garment accessories, lady tops, T-shirts, etc. It is an admitted fact that none of the goods were found prohibited/restricted to import. Even after alleging that the goods consisting branded products which are regularly imported, no attempt was made to ascertain the value of lowest among contemporaneous import. Against the declared value of Rs. 14,70,176/-, based on statement and WhatsApp messages, the value was loaded to Rs. 24,66,75,552/- and duty demanded accordingly. As against the importer M/s. Noble Enterprises, though there is no declaration made by the importer, presuming that the importer will resort undervaluation at the time of filing the Bill of Entry, goods were seized and loaded the value as Rs. 16,51,98,000/-, thus the total assessable value of the goods is more than Rs. 41 crore and duty evasion alleged is more than Rs. 6 crores. Considering the findings in the impugned order, the market value of the goods shou....
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....w of the provisions under Section 138(c) of the Customs Act, 1962 read with Section 65(B) of the Evidence Act, 1872. (ii) Whether denial of cross-examination as sought by the appellants is considered as violation of natural justice. (iii) Whether the confession statement of first appellant under Section 108 of the Customs Act, 1962 which stood retracted is substantially corroborated by other independent and cogent evidences to sustain the allegation against first appellant. (iv) Whether the findings of the adjudicating authority regarding role of second appellant in illegal import is sustainable considering the fact that during investigation, in spite of appearing before the investigating officer, no statement is recorded from the second appellant under Section 108 of the Customs Ac, 1962. The above Differences of Opinion are referred to the Hon'ble President for referring the same to Third Member to be appointed by him. (P. A. AUGUSTIAN) MEMBER (JUDICIAL) (R. BHAGYA DEVI) MEMBER (TECHNICAL) ORDER [Per : Ms. Sulekha Beevi. C.S] The above matter was heard as per the reference made by the Hon'ble President dated 20.02.2024. I have perused the....
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....mining under Rule 12 of Customs Valuation (Determination of value of Imported Goods) Rules, 2007 to Rs.3,34,36,726/-. The differential duty of Rs.77,80,771/- has been then demanded on account of the goods imported being branded under Annexure-I. Similarly, in respect of Annexure-III, the declared value is Rs.11,99,682/-. This has been enhanced to Rs.18,79,40,880/- by the department alleging that the goods are branded in nature. However, it is not stated in the order as to what is the brand of the each type goods or the readymade garments or the sun glasses. So also, there is no steps taken by the department to check the brand by calling the representatives of the respective brand or to ascertain whether these goods belong to the brand of the company. Generally, the department has to take such steps to check whether there is IPR violation. In the impugned order, the adjudicating authority has stated that the value has been enhanced on the basis of price available from website. However, there is nothing forthcoming from the adjudication order as to what is the model of the brand and the difference in the price for enhancement of the value. The entire enhancement of value as well as t....
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....hatsApp retrieved from phones cannot be considered in evidence without complying the provisions under Section 138C. The law contained in Section 36B of Central Excise Act, 1944, as well as Section 138C of Customs Act, 1962 are safeguards against arbitrary actions for the reason that it is very easy to fabricate or tamper with material contained in electronic items. 5. The second point of difference is whether the denial of cross examination amounts to violation of natural justice. Section 138B of the Customs Act, 1962 provides for examination in chief as well as cross examination of the witnesses. This provision is pari materia to Section 9D of Central Excise, 1944. Though the statement recorded before the Customs Officer may be admissible in evidence, it has to be noted that in the present case all the noticees have retracted their statements at the earliest. Further, the statement of Sahil Moiz Zafar was not recorded at all. Even though he is a co-noticee the said appellant has been implicated on the basis of call records and the statement of other noticees. When the noticees have retracted their statement it was incumbent upon the adjudicating authority to allow cross examina....