TaxTMI 
TaxTMI 
2024 (9) TMI 556
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....00/-incriminating documents, one note Irani 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 Sures....
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.... Nagar Chowk and Citi Bank, Ludhiana. Various summons 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 ....
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....82 16. 01.07.2004 5,04,000 17. 01.07.2004 4,99,500 18. 01.07.2004 4,99,100 19. 01.07.2004 4,97,000 20. 20.07.2004 5,42,000 21. 05.08.2004 17,71,917 Total 2,41,13,427 Details of Foreign Exchange credited in account of M/s Shivam Overseas with State Bank of Bikaner and Jaipur, Madhopuri Chowk, Ludhiana furnished vide their letter dated 19.09.2006 on account 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....
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....puri, Ludhiana (iv) M/s. Rose Marrie Knitt., Sunder Nagar, Ludhiana (Mr. Bhatia was the concerned person) (v) M/s. Roopika Fabrics (vi) M/s. Malwa Cotton who were supplying Sewing Thread (vii) M/s. Anupama Fabrics, Sunder Nagar, Ludhiana etc. Shri Suresh Saluja was dealing mainly with local suppliers at Ludhiana and he was looking after the work of production of readymade garments at Baddi. The exports were being looked after by Shri Suresh Saluja. He never visited Russia. Shri Saluja 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....
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..... 1000/-. They received payments in Indian rupees and as well as dollars. Statement of Davinder Kumar of M/s. Bharat Fabrics has been recorded under Section 108 of the Customs Act, 1962 on 01.12.2005, wherein hestated that in the year 2003, he started a firm in the name of M/s. Bharat Fabrics as a proprietorship firm from a rented premises at Gali No.2 Sardar Nagar, Basti Jodhewal, Ludhiana. The said firm was opened on the directions of Shri Suresh Saluja. The current account of M/s. Bharat Fabrics was got opened in the State 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 Ov....
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..... Shri Rajeev Bajaj S/o Shri Madan Lal R/o Gobind Colony, Street No.10, Jamalpur, Ludhiana, Prop. of M/s. Shiv Shakti Industrial Corporation, M/s. Bhagwati Trading Corporation both situated at SCO No.42, Aman House Link Road, Ludhiana, suppliers of knitted fabrics to M/s. Shivam Overseas, was examined and his statement was recorded on 18-06-2005 wherein, hestated that both the firms were started for the purpose of issuance of only invoices of fabrics to M/s. Duggal Exports, without supplying any fabrics and he was getting Rs.0.25 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, Mad....
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....Investigations of M/s. Anubhav Fabrics and M/s. Anupama Fabrics situated at 449/3 New Lajpat Nagar Noorwala Chowk, Ludhiana revealed that Shri Vijay Kumar Magoo was the Prop. of these two firms. Statement of Shri Vijay Kumar Magoo, Prop. of M/s. Ketan Fabrics, Ludhiana was recorded under Section 108 of the Customs Act, 1962 on 17-01-2007, wherein, he stated that neither these firms, nor the address of the firms belong to him. M/s. Anubhav Fabrics and M/s. Anupama Fabrics opened in his name were fake firms and he did not have any link with these 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 Foreigner....
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....ars that the above said M/s. Shivam Overseas and its Partners, S/Shri Suresh Saluja @ Pappy Saluja and Harish Batra acquired foreign exchange in India to the tune of US $ 2,62,700 as per details in paras 15 and 16 above in the aforesaid manner and deposited the same in bank account no. 99058 on 07-08-03 with Bank of Punjab, Kalsi Nagar, Ludhiana through fake/forged CDF(Currency Declaration Forms) in the aforesaid manner. From the foregoing, facts and evidences on record, it appears that the above said M/s. Shivam Overseas and its Partners, S/Shri Suresh 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 ....
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....han 50 crores to the appellant from 2002 to 20.06.2007 in the name of different Companies. He further stated that Suresh Saluja received amounts in India and distributed the same, as per his instructions to different persons in India. On 10.11.2005, the Respondent recorded statement of S.Kabul Singh an employee of S. Basant Singh under Section 37 of the Act, wherein he stated he brought Rs. 1,20,00,000/- from Suresh Saluja (herein appellant) during year 2004 for distribution. On the basis of above statements, on24.04.2006, the Respondent searched the residential premises 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 o....
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....&Investigating Officer is hereby not accepted being devoid of any merit. During the arguments Learned Counsel for the appellant contended that whole case of respondent ED is based on the statement of the said three persons, and hence, their cross-examination is essential to highlight the truth. He stressed that cross-examination is a valuable right of the appellant and also an integral part and parcel of the principal of natural justice. In support of his contention, he relied upon the judgment of Hon'ble High Court of Bombay in case Lalit Kumar Modi v. Special Director, Directorate of 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 co....
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.... right to cross-examination would be inevitable. If some real prejudice is caused to the complainant, the right to cross-examine witnesses may be denied. No doubt, it is not possible to lay down any rigid rules as to when in compliance of principles of natural justice opportunity to cross-examine should be given. Everything depends on the subject matter. In the application of the concept of fair play there has to be flexibility. The application of the principles of natural justice depends on the facts and circumstances of each case." "34. However, other than the three witnesses no grounds are made out to cross-examine 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 lea....
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....h, Balwant Singh Maan, and Dr. Naginder Khera. He pointed out that Shri Balwant Singh Maan is NRI and resident of Canada. It is practically not possible to procure his presence during the adjudication proceedings for the purpose of cross-examination. He pointed out that Shri Kabul Singh is an employee of Basant Singh, whose statement was recorded by ED, wherein he stated that during the year 2004, he had brought the funds totaling to Rs. 1,20,00,000/- for the purpose of distribution, from the present appellant, who is resident of Ludhiana. He pointed out that his employer Basant Singh was apprehended by police on 28.10.2005 by Punjab 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 Sa....
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....ng the relevant period i.e. 2001 to 2003 with M/s Shivam Overseas. He further pointed out that High Commission of India, London vide letter dated 29.06.2006 intimated that as per Finnish Customs Authority, they could not find any export from India to Russia via Kotka Port,in Finland. He further pointed out that DRI Ludhiana conducted investigation against M/s Shivam Overseas proprietorship firm of Suresh Saluja and it is revealed that sub-standard and spurious goods were procured from the market and thereafter, bogus export was made on inflated invoices and thereby claimed huge benefits under DEPB and Duty Drawback Schemes. He pointed out 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....
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....He argued that M/s Rahul Fabrics & M/s Rupika Fabrics have same address as of M/s Leena Knitwears of Anil Katyal. Anil Katyal during interrogation stated that he has not opened the said two firms and he does not know who is running the same. However, he stated that he never sold any material M/s Shivam Overseas. He never received any payment from Shivam Overseas. However, after going through the account opening form of M/s Rahul Fabrics, he revealed that said signatures were appended by him at the instance of Suresh Saluja. Sh. Vijay Kumar Maggu, proprietor of M/s Ketan Fabrics stated that M/s Anubhav Fabrics & M/s Anupama Fabrics does not belong to 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. Ab....
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.... Shivam Overseas and its Partners, S/Shri Suresh Saluja @ Pappy Saluja and Harish Batra unauthorisedly acquired foreign exchange outside India to the tune of/equivalent to Indian Rs. 11,75,52,227/- (4,98,32,820+3,67,57,960+ 2,41,13,427 +68,48,020=11,75,52,227/- (Rupees Eleven Crores seventy-five lacs fifty two thousand two hundred twenty seven only))& US $ 4,38,660 (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 of SCN. Prayer is accordingly made to dismiss the present appeal being devoid of any merits and thereby direct the appellant 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....
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....ellants, and the documents seized in the course of the search of their premises. But there is no dispute that apart from what was seized from the business premises of the appellants, the adjudicating authority also placed reliance upon the documents produced by Miss Anita Chotrani and Mr Raut. These documents were, it is admitted disclosed to the appellants who were permitted to inspect the same. The production of the documents is not subjected to cross-examination. Such being the case, the refusal of the adjudicating authority to permit cross-examination of the witnesses producing the documents cannot even on the principles of the Evidence Act be found fault with. At any rate, the disclosure of the documents to the appellants and the opportunity 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 i....