TaxTMI 
TaxTMI 
2025 (6) TMI 372
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....ond, redemption fine in lieu of confiscation was not imposed. The Additional Commissioner also ordered for recovery of the ineligible Focus Market Scrips from the appellant under section 28AAA of the Customs Act with applicable rate of interest. The amount of drawback under rule 16 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 has been dropped, but penalty has been imposed upon the appellant under sections 114AA and 114 (iii) of the Customs Act. 2. Customs Appeal No. 52124 of 2022 has been filed by Manish Dua, Partner of the appellant to assail that part of the order dated 09.03.2022 passed by the Commissioner (Appeals) that dismisses the appeal filed by Manish Dua and upholds the penalty imposed upon him by the Additional Commissioner by order dated 26.11.2018 under section 114AA and section 114 (iii) of the Customs Act. 3. The appellant is engaged in the manufacture and export of Ready Made Garments. It entered into contracts for supplying Ready Made Garments the Goods to companies based in U.A.E. To encourage exports to remote markets, the Government introduced the Focus Market Scheme FMS, designed to offset higher freight costs borne by buyers. Un....
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.... not exported to Panama. The appellant enquired with the buyer regarding change in the country of destination. It was informed by the buyer that they had directed Imran Mirza, proprietor of the Freight Forwarder, to deliver the consignments to Dubai. 7. The appellant further claims that during investigation it could not be established that the appellant was involved in changing the country of destination, except the statement of Imran Mirza. In his statements Imran Mirza stated that he made changes in the country of destination at the instructions of Manish Dua, Partner of the appellant manually to change the country of destination and Port of Discharge to Jebel Ali. 8. Manish Dua, Partner of the appellant company in his statement stated that all the export documents received by him mentioned the country of export as Panama and he did not instruct anybody to change the country of export. 9. A show cause notice dated March 10, 2017 was issued inter alia proposing to demand ineligible benefit availed under the FMS equivalent to Rs. 44,11,386/- under section 28AAA of the Customs Act with interest. It also proposed to impose penalty under section 114 and section 114AA of the Customs....
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....s. It is also evident that the Appellant were aware of change in destination and still availed inadmissible duty credit scrips from DGFT and returned that same only when investigation was Initiated. This clearly indicate the malafide intention of the Appellant. Any change in particulars in shipping bills without approval of the proper officer of the Customs attract action under the Customs Act, 1962. Thus, I find that, there is no reason to interfere with the Impugned Order. xxxx 5.5 So far as the imposition of penalty under Section 114 of the Act on the Appellant is concerned, I find that the Appellant had directed Sh. Imran Mirza to make those amendments. Its clearly indicates towards malafide intention of the Appellant in such unauthorised amendments and unauthorised diversion of export goods. Thus, the appellant actively concerned with the goods pertaining to the amended shipping bills. I find that this act of the Appellant had made, the goods liable for confiscation under Section 113 of the Act. Therefore, I find that the Adjudicating authority has rightly penalised the Appellant under Section 114(ii) & 114 AA of the Customs Act 1962. 5.6 The appellant has contended that....
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....(iii) and section 114AA of the Customs Act. 13. Shri Girijesh Kumar, learned authorized representative appearing for the department has, however, supported the impugned order and made the following submissions: (i) The DGFT has informed the concerned Commissionerate that they are in the process of taking action on the instrument though, the license has not been cancelled as yet. Even, otherwise, section 28AAA of the Customs Act would be applicable as the instrument was obtained by means of collusion or willful statement or suppression of facts; (ii) In any case, there is no requirement that unless the DGFT cancels the instrument, the customs officers will not have the jurisdiction to decide the matter; and (iii) The pre-requisite of DGFT cancelling the instrument is not warranted in a case where the issue of collusion, willful misstatement or suppression of facts exist and in the present case this fact has been proved beyond doubt. 14. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 15. The first issue that arises for consideration is whether jurisdiction under se....
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.... Director General on the licensing authority alone. It would thus be wholly impermissible for the customs authorities to either ignore the MEIS certificate or deprive a holder thereof of benefits that could be claimed under that scheme absent any adjudication or declaration of invalidity being rendered by the DGFT in exercise of powers conferred by either Rules 8, 9 or 10 of the FTDR Rules. The customs authorities cannot be recognised to have the power or the authority to either question or go behind an instrument issued under the FTDR in law. 106. Taking any other view would result in us recognizing a parallel or a contemporaneous power inhering in two separate sets of authorities with respect to the same subject. That clearly is not the position which emerges from a reading of Section 28AAA. Quite apart from the deleterious effect which may ensue if such a position were countenanced, in our considered opinion, if the validity of an instrument issued under the FTDR Act were to be doubted on the basis of it having been obtained by collusion, wilful misstatement or concealment of facts, any action under Section 28AAA would have to be preceded by the competent authority under the F....
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....s authorities to deprive the importer or the exporter of benefits. The view expressed by the Gujarat, Allahabad and the Bombay High Courts stands reiterated in the two subsequent decisions of Autolite and Jupiter Exports. The principles culled out in the aforenoted decisions are in line with what the Supreme Court had succinctly observed in Titan Medical Systems (P) Ltd. Vs. Collector of Customs. We are thus of the firm opinion that it would be impermissible for the customs authorities to either doubt the validity of an instrument issued under the FTDR Act or go behind benefits availed pursuant thereto absent any adjudication having been undertaken by the DGFT. An action for recovery of benefits claimed and availed would have to necessarily be preceded by the competent authority under the FTDR Act having found that the certificate or scrip had been illegally obtained. We have already held that the reference to a proper officer in Section 28AAA is for the limited purpose of ensuring that a certificate wrongly obtained under the Customs Act could also be evaluated on parameters specified in that provision. However, the said stipulation cannot be construed as conferring authority on t....
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....ould be seen section 14 of the Central Excise Act and section 108 of the Customs Act enable the concerned Officers to summon any person whose attendance they consider necessary to give evidence in any inquiry which such Officers are making. The statements of the persons so summoned are then recorded under these provisions. It is these statements which are referred to either in section 9D of the Central Excise Act or in section 138B of the Customs Act. A bare perusal of sub-section (1) of these two sections makes it evident that the statement recorded before the concerned Officer during the course of any inquiry or proceeding shall be relevant for the purpose of proving the truth of the facts which it contains only when the person who made the statement is examined as a witness before the Court and such Court is of the opinion that having regard to the circumstances of the case, the statement should be admitted in evidence, in the interests of justice, except where the person who tendered the statement is dead or cannot be found. In view of the provisions of sub-section (2) of section 9D of the Central Excise Act or sub-section (2) of section 138B of the Customs Act, the provisions ....
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....fficers has every chance of being recorded under coercion or compulsion and it is in order to neutralize this possibility that statements of the witnesses have to be recorded before the adjudicating authority, after which such statements can be admitted in evidence." 23. In this view of the matter, the statement of Imran Mirza made under section 108 of the Customs Act would not be relevant. 24. The learned authorized representative appearing for the department submitted that since fraud vitiates everything, the notice under section 28AAA of the Customs Act was validly issued for establishing fraud. To support the contention, learned authorized representative placed reliance upon the statement of Imran Mirza, which statement as noticed above made under section 108 of the Customs Act cannot be considered as evidence as Imran Mirza was not examined by the adjudicating authority nor was the statement admitted in evidence. 25. Learned counsel for the appellant submitted that the goods were exported on FOB and therefore, once the goods are put on board the vessel, the title of the goods is transferred to the buyer. Learned counsel also submitted that after the Let Export Order is iss....
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....sfactorily prove to RA concerned that goods have landed in/reached the Focus Market. 27. Clearly, if the exporter applied for FMS scrips, it is the responsibility of the exporter to ensure that the goods reach that market and to produce proof as above. The responsibility of the exporter does not end with obtaining the Let Export Order. In this case, neither side produced before us the documents which were produced as proof that the goods reached the Focus Market. The Customs authorities investigating the matter should have summoned the relevant documents from the DGFT. Either the goods must have reached the Focus Market or if they were diverted, the exporter may have submitted fake documents as proof of landing or the DGFT may have issued the scrips without obtaining the proof of landing. The impugned order, however, does not address this issue. 28. Section 114AA provides that if a person knowingly or intentionally makes, signs or uses or causes to be made, any material particular, in the transaction of any business for the purposes of the Customs Act, shall be liable to a penalty not exceeding five times the value of goods. The Principal Commissioner has relied upon the statemen....