TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 556
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....Riyals 10,000/-,two mobile phone sets and one Esteem Car bearing No.PB-29-F-5131 from Shri Basant Singh and his two sons namely,S/Shri Sukhvinder Singh and Jagdeep Singh. This amount was received by these persons from a person of Delhi on the instructions of one Shri Billu, a resident of Phillipines, which was to be distributed to various persons in India on the instructions of this Billu of Phillipines. Shri Basant Singh and his sons were engaged in illegal racket of receipt&distribution of compensatory payments in India on the instructions of persons residing abroad. The said Shri Basant Singh in his statement dated 29.10.2005 recorded under Section 37 of Foreign Exchange Management Act, 1999, stated that he used to receive instructions besides others from one Shri Balwant Singh Maan R/o of Canada, for receipt & distribution. The above said Shri Balwant Singh Maan, NRI, R/o Canada, who was on a personal visit to his native village during June, 2007 to attend Bhog Ceremony of his father, was examined under Section 37 of Foreign Exchange Management Act, 1999 and his statement was recorded on 20.06.2007, wherein hestated that Shri Suresh Saluja @ Pappy Saluja was his agent, who use....
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....ons was issued to Shri Suresh Saluja subsequently, but he did not appear in the office. Dr. Naginder Khera of Jalandhar, a 'Hawala' racketeer during investigation conducted by this office, in his statement dated 06-10-2006 recorded under section 37 of Foreign Exchange Management Act, 1999, stated that he received amounts totaling to Rs. 3,00,00,000/- from one Shri Pappy Saluja of Ludhiana having mobile no. 9814000091 on the instructions of Shri Ravi Sharma, a resident of Canada during the year 2002 & 2003. Canara Bank, Bharat Nagar Chowk, Ludhiana vide their letter dated 09-10-2006 intimated that they have credited the following exports proceeds in the account of M/s Shivam Overseas and enclosed copies of invoices and GR forms as per details given below: S. No. Name of Overseas buyers LC amount in INR/US $ Name of Exporter Date of invoice LC No. 1. M/s OOO Marillon 2000, Moscow Rs. 88,96,860 M/s Shivam Overseas 09.01.2003 8271 2. M/s OOO Marillon 2000, Moscow Rs. 88,96,860 M/s Shivam Overseas 09.01.2003 8335 3. M/s OOO Marillon 2000, Moscow Rs. 58,57,500 M/s Shivam Overseas 07.07.2003 8395 4. M/s OOO Marillon 2000, Moscow Rs. 55,02,500 M/s Shiv....
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.... of export proceeds: - S. No. Name of Overseas buyers Date Amount in USD Amount in INR 1. M/s OOO Marillon 2000, Moscow 25.07.2003 19,970 9,21,339 2. M/s OOO Marillon 2000, Moscow 29.07.2003 14,972 6,89,461 3. M/s OOO Marillon 2000, Moscow 29.07.2003 1,05,524 52,37,220 Total 1,40,466 68,48,020 As per overseas enquiry report of Embassy of India, Trade Wing, Moscow received vide their letter No. Mos/Trade/551/01/2004-Inv. dated 30-04-2004, it has been reported that M/s. OOO Business Kant, Moscow, a buyer of M/s. Shivam Overseas, Ludhiana was registered at the given address, but they did not conduct any import/export operation during the relevant period i.e. 2001-2003. In response to query regarding export of garments by M/s. Shivam Overseas, Baddi(H.P.) to Russia via Kotka Port in Finland by DRI, New Delhi, the High Commission of India, London vide their letter dated 29-06-2006, inter-alia, intimated that as per the Finnish Customs Authorities, they could find only one export from India to Russia via Kotka; the most of the ships do not come to Finland and the relevant containers are discharged somewhere else in Europe for onwards transmission to their actual ....
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....a was receiving orders from overseas buyers. They used to export their goods through ICD, Tuglakabad and Mumbai Port. The readymade garments exported consisted of cotton T-Shirts and Track Suits and no exports were made to any other country than Russia. The cost of T-Shirts varied from Rs.200/- to Rs.250/- and cost of Track Suits was Rs.550/- and above. M/s. OOO Merrillin, Russia, was one of the buyers in Russia. The office of M/s. Shivam Overseas was situated at Hazuri Road, Ludhiana, which was owned by Shri Suresh Saluja or his father. The exports were made against Letter of Credit or against documents through banking channels and the payments were being received from overseas buyers in bank accounts of M/s. Shivam Overseas with State Bank of Bikaner and Jaipur, Madhopuri Chowk, Ludhiana and Canara Bank, Bharat Nagar Chowk, Ludhiana. He was not aware whether overseas buyers were sending payments to them from Russia or through any other country. Further in his statement dated 16-06-2005,Sh. Harish Batra, stated that M/s. OOO Merrillin and M/s. OOO Classic Impex were their main buyers in Russia. On being asked as to how he managed to get LCs opened in the nameM/s. Business Kant of....
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....e Bank of Bikaner and Jaipur, Madhopuri; account no.14131150 of M/s. Bharat Fabrics was got opened in Bank of Punjab, Chaura Bazar, Akal Market, Ludhiana. Shri Suresh Saluja got his signatures on all the cheques books issued by the Bank of Punjab in blank for the account of M/s. Bharat Fabrics and kept with himself (Suresh Saluja). Suresh Saluja asked him to open M/s. Bharat Fabrics and offered him 0.50% of the transaction amount as commission. Neither he printed any bill book of M/s. Bharat Fabrics, nor did he issue any bill. In his further statement dated 05.12.05 stated that he had made transactions of Rs. 60 lacs in M/s. Bharat Fabrics with M/s. Shivam Overseas. He was paid Rs. 30,000/- approx. as his commission in cash from Shri Suresh Saluja. Sh. Rajinder Singh of M/s. Preet Fabrics, Shop No. 27, Gujarat Complex, Rainak Bazar, Jalandhar having account No. 14441510 with Bank of Punjab, Jalandhar, in his statements dated 09.03.06 and 30.04.2007 recorded in the presence of his advocate Shri R.K. Bajaj (dated 09.03.2006), who also witnessed the said statement and further, in an affidavit dated 06.11.03, filed by Rajinder Singh duly sworn before Notary Public, Jalandhar in the pr....
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....per Rs.100/- of sale value of the invoice. Shri Suresh Saluja was a close relative of Duggals, who introduced him to Shri Suresh Saluja and asked him to issue invoices to firms of Shri Saluja without sending any goods and he would be paid at the rate of Rs.0.25 per Rs.100/- of the value of sale bill. He never sold any goods to the firms of Shri Suresh Saluja, but he issued invoices only in the favour of the firms of Shri Suresh Saluja. He personally used to visit office of Shri Suresh Saluja at Hazuri Road, Madhopuri Chowk, Ludhiana to hand over bogus sale invoices of fabrics to Shri Suresh Saluja. M/s. Pradhan Fabrics, Guru Gobind Singh Complex, Madhopuri Kucha No.1 Ludhiana suppliers of raw material to M/s. Shivam Overseas was also under investigation of DRI, Ludhiana. One Shri Malkit Singh was its Prop. who could not be traced by them. Bank records of this firm revealed that Malkit Singh was introduced in the bank for opening of account of M/s. Pradhan Fabrics, Ludhiana by Shri Ram Das Saluja i.e. father of Shri Suresh Saluja. M/s. Pradhan Fabrics is having current account No. 05050021198 with State Bank of Bikaner and Jaipur, Ludhiana. In his statement dated 10-04-2007 record....
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....ese firms. Both firms were opened by Pappy Saluja. He did not have any bank account in State Bank of Bikaner and Jaipur, Madhopuri and Citi Bank, Ludhiana and that he never supplied any material to the units of Pappy Saluja. Perusal of letter dated 22-03-2007 of Centurian Bank of Punjab, Ludhiana revealed that in account no. 99058 of M/s. Shivam Overseas payments to the tune of US $ 262700 has been deposited on 07-08-2003 by the fake/forged CDF sent by their buyer M/s. OOO Marillin 2000, Moscow, Russia through their representative Mr. Abdarayf Passport No. A1280137 (Russia) against order No. 201/03. Enquiries made with office of the Foreigners' Regional Registration Officer, 237 Acharya Jagdish Chandra Bose Road, Kolkata revealed that no person in the name of Mr. Abdarayf arrived at NSCBI airport, Kolkata from 01.08.2003 to 30.08.2003. On verification of the Currency Declaration Forms (CDFs) which were received from Punjab National Bank, Chandigarh Road Branch, Ludhiana vide their letter dated 23.07.2004 and from DRI, Ludhiana vide their letter dated 27.01.2011 and Centurian Bank of Punjab, Kalsi Nagar, Ludhiana, vide their letter dated 22.3.2007 claimed to have been submitte....
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....h Saluja @ Pappy Saluja and Harish Batra unauthorisedly acquired foreign exchange outside India to the tune of/equivalent to Indian Rupees 11,75,52,227/- & US $ 4,38,660 (4,98,32,820 +3,67,57,960+2,41,13,427+68,48,020=11,75,52,227/- & US $ 4,38,660) (Rupees Eleven Crores seventy five lacs fifty two thousand two hundred twenty seven only & USD Four Lac Thirty Eight Thousand Six Hundred Sixty Only) and transferred and deposited the same in different bank accounts through TTs/LCs as per details in paras 7, 8, 9 and 10 above in the aforesaid manner. Accordingly, Assistant Director filed complaint against M/s Shivam Overseas and its partners,namely, Suresh Saluja @ Pappy Saluja (herein appellant), and Harish Batra for contravention of Section 3(a), 3(b), 4 and 4(2) of Foreign Exchange Management Act, 1999 read with regulations 369 and 16 of Foreign Exchange Management Act (Export of Goods and Services) Regulation 2000. After going through the said complaint, the Adjudicating Authority issued Show Cause Notice dated 10.06.2013 to show cause in writing within 30 days why adjudication proceedings under Section 13 of FEMA should not be initiated against them, for contravention of the afore....
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....ises of the Suresh Saluja/appellant and seized documents and diary. The Respondent also recorded statement of the present appellant under Section 37 of the Act read with Section 132 of the Income Tax Act, 1961, wherein he stated that he was doing business of export of garments from his firms namely M/s Shivam Overseas and M/s Rimps Exports. Same were closed in the year 2004-05. The income of M/s Shivam Overseas was about 50 lakhs, and thereafter, he did not do any business in the firm. On 06.10.2006, the Respondent searched residential premises of Dr. Naginder Khera and recorded his statement under Section 37 of the Act, wherein he stated that he received 3 crores from the Suresh Saluja on the instructions of Sh. Ravi Sharma resident of Canada during year 2002 & 2003. Respondent got information from the banker(s) of the Appellant as well as Directorate of Investigation (for brevity 'DRI') also during investigation and opined that the Appellant violated provisions of the Act and issued Show Cause Notice dated 10.06.2013 (Annexure A-1) to show cause as to why penalty under Section 13(1) of the Act should not be imposed. The relevant excerpts of Show Cause Notice are as unde....
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....Enforcement, Mumbai 2018, TIOL-2054-SC-MUM-FEMA, wherein it is held that - "39. In the facts and circumstances before us, we have found, from a perusal of the show cause notices and the complaint, based on which they have been issued, that the adjudicating authority expressly relies upon these statements, which have been referred to in Annexure II and given by the persons whose names have been enlisted in the show cause notices. It is undisputed before us that these statements have been recorded by the authority so empowered under the FEMA. These statements have been recorded in connection with the violations and breaches of FEMA and its rules. They have been recorded in connected with and have direct nexus to the IPL, which was conducted in South Africa. The persons connected with the affairs of the BCCI and others, who have given these statements, are referred to with names in the annexure. This is not a merely referred material. These statements are proposed to be expressed relied upon. If they are relied upon, then, it is incumbent upon the first respondent to allow the petitioner to cross-examine these persons during the course of the adjudication. 40. We are not in agreem....
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....e any other person. The request of the appellant to cross-examine Shri Rajeshwar Singh, Assistant Director, the complainant based on material gathered by the respondent. No purpose would be served by putting him to cross-examination as is sought by the appellants. Though we have allowed the appellant to cross-examine the witnesses, we are conscious of the fact that the appellant may be intent on delaying the proceedings. We cannot help noting that the appellant has been filing on the application or the other at various stages of adjudication as noted by the learned Single Judge. Keeping in view the nature of the matter, we direct that the appellant be permitted to cross-examine the three witnesses, namely, Shri Ahmad Shakir, Shri Pratap Ghose and Shri K. Vasudeva. The learned adjudicating authority shall fix an appropriate date for cross-examination of the said three witnesses. The said dates should be fixed within one month from today and steps for presence of the witnesses be taken. The cross-examination may be done on a day-to-day basis and may be concluded by the learned adjudicating authority preferably within a period of 10 working days from commencement. These directions are....
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....ab Police of P.S. Nihal Singhwala, with cash of Rs. 59,75,000/- along with incriminating documents, one currency note- Irani Riyals 10,000/-, which were seized along with his two mobile handsetsand one Esteem Car bearing No.PB-29-F- 5131.Accordingly, he submitted that cross examination of Basant Singh is not going to serve any purpose for the appellant, as he was apprehended by police with huge cash and incriminating documents, as mentioned above. He further pointed out that Dr. Nagender Khera only stated that he received cash of Rs. 3 Crore from Pappy Saluja (herein appellant) having mobile no. 9814000091. He argued that cross examination of this witness is also not going to serve any purpose for the appellant. Ld. Counsel for the respondent ED argued that the case against the appellant Suresh Saluja @ Pappy Saluja is for contravention of Section 3 (c), Section 3 (b), Section 3 (a) read with Section 42 of FEMA read with regulation 4 of FEMA, & Section 4 read with Section 42 of FEMA, i.e. for receiving the payments in India otherwise through and authorized persons, by order on behalf of persons resident outside of India to the tune of Rs. 54.2 Crore; making payments to the persons....
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....ut the said export consignments never reached Russia, but appellant was able to procure the remittances against the alleged exports through unauthorized channels to falsely show the same as export proceeds. Ld. Counsel for responded contended that during investigation statement of Harish Batra and Suresh Saluja partners of M/s Shivam Overseas was recorded wherein they stated that they used to purchase the raw material from Ludhiana based firms/concerns namely, M/s. Preet Fabrics, Jalandhar; M/s. Roopika Fabrics; M/s. Rahul Fabrics; M/s. S.Kumar and Company; M/s. Anupama Fabrics; M/s. Crystal Knit Fab; M/s. Pradhan Fabrics; M/s. Anubhav Fabrics; M/s. Arvind Sales Corporation; M/s. Bhagwati Trading Corporation; M/s. Shakti Industrial Corporation. Suresh Saluja during interrogation stated that they used to receive export order on phone & fax, whereas payments from the overseas buyers were received through banks. Harish Batra during investigation stated that they used to export consignment to M/s OOO Merillon Russia and he is not aware whether M/s OOO Business Kant was in business or not, but LCs were opened in the name of said company M/s OOO Business Kant. Ld. Counsel for responden....
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....him. He never supplied any material to Shivam Overseas. The bank account of these two fake firms were not opened by him and the same are fake firms opened by Pappy Saluja. Ld. Counsel for respondent further pointed out the letter dated 22-03-2007 of Centurian Bank of Punjab, Ludhiana, which reveals that in account no. 99058 of M/s. Shivam Overseas payments to the tune of US $ 262700 has been deposited on 07.08.2003 by the fake/forged CDF sent by their buyer M/s. OOO Marillin 2000, Moscow, Russia, through theirrepresentative Mr. Abdarayf Passport No. A1280137 (Russia) against order No. 201/03. Enquiries made with office of the Foreigners' Regional Registration Officer, 237 Acharya Jagdish Chandra Bose Road, Kolkata revealed that no such person in the name of Mr. Abdarayf arrived at NSCBI airport, Kolkata from 01.08.2003 to 30.08.2003. The Additional Commissioner of Customs, NSCB International Airport, Kolkata vide his letter F. No. CX-1/2001 AP(Pt-II) dated 26.12.2006 informed that the said Currency Declaration Forms (CDFs) in question had not been issued by them. The name of the Superintendent mentioned in the stamp on said CDF was fake. Accordingly, he asserted that bogus rem....
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....ant to join the adjudication proceedings. 5. After hearing the rival submissions, I have given my thoughtful consideration to the same. As per Section 16 (5) of Foreign Exchange Management Act, 1999, "Every Adjudicating Authority shall have the same powers of a Civil Court which are conferred on the Appellate Tribunal under sub Section (2) of Section 28......" . Now coming to Section 28 (2) of FEMA, 1999, its states that- "The Appellate Tribunal and the Special Director (Appeals) shall have for the purposes of discharging its functions under this Act, the same powers as are vested in a Civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely,: - (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on affidavits; (d) subject to the provisions of sections 123 & 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or copy of such record or document from any office; (e) issuing commissions for the examination of witnesses or documents; (f) reviewing ....
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....ty given to them to rebut and explain the same was a substantial compliance with the principles of natural justice. That being so there was and could be no prejudice to the appellants, nor was any demonstrated by the appellants before us or before the courts below. The third limb of the case of the appellants also in that view fails and is rejected." Similarly, in the present case apart from the statement of the witnesses recorded during investigation u/s 37 of FEMA, there is huge documentary evidence, which corroborates the same, as pointed out by Ld. Counsel for respondent in the preceding para. As per the allegation against the appellant Suresh Saluja @ Pappy Saluja, he made the bogus purported exports (of sub-standard goods) to Russia with inflated invoices for the purpose of obtaining export benefits under DEPB and Duty Drawback Schemes. The said consignments never reached Russia, as per investigation conducted by DRI, however, appellant procured the remittances through unauthorised channels. It is also revealed during investigation that appellant Suresh Saluja instigated number of persons for floating bogus firms/concerns in order to show the purchase of material to complete....