TaxTMI 
TaxTMI 
2025 (6) TMI 553
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....orate of Revenue Intelligence DRI. Statement of various persons, including the appellant, were recorded and ultimately a show cause notice dated 04.12.2000 was issued to 26 persons including the appellant. 3. The case setup by the department in the show cause notice is that Sundram Export exported 96,800 pieces of CD-ROMs at highly inflated Freight on Board FOB value of US 19$ per piece. Another exporter, by name of Netcompware, also exported a consignment of 40,000 pieces of CD- ROMs at overvalued price of US 19$ per piece. The 5 shipping bills covering the above exports were filed under the DEPB Scheme. According to the department, the overvalued export was used by the exporter to fraudulently procure DEPB scrips from the Directorate General of Foreign Trade DGFT and subsequently these DEPB scrips were sold in the open market and were thereafter used by companies to import goods without payment of duty. It is also the case of the department that the 40,000 CD-ROMs exported by Netcompware to Hong Kong were subsequently re-imported and cleared by M/s. Arvind International Arvind International under a Bill of Entry dated 08.09.1998. It is said that the appellant was involved in t....
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....knew Shri Arjun Amla and Shri Sanjay Sachdeva for the last 10 years; that Shri Deept Sarup Aggarwal was working with Mr. Arjun Amla and Mr. Sanjay Sachdeva and had relations and contact with them. (c) Shri Davender Lal, in his statement dated 07.01.99 stated that Shri Arjun Amla was known to him as he had cleared export consignments of M/s Govardhan India (P) Ltd. (a company of Shri Arjun Amla) when he was working with M/s Shree Venkatesh Shipping Services Pvt. Ltd.; that for the clearance of CD ROM's under Shipping Bill NO. 39286 dt. 28.12.98 by M/s Netcompware Pvt. Ltd., Shri Arjun Amla had handed over the goods to him on 6.1.98: that he brought the same to Air Cargo Terminal and in the past he had cleared one or two consignments of M/s Netcompware Pvt. Ltd. through M/s Shree Venkatesh Shipping Services Pvt. Ltd. and the goods were handed over by Shri Arjun Amla on those occasions also. (d) The involvement of Shri Arjun Amla is further corroborated with the averments made by Shri Raminder Mohan Singh @ Sunny Singh during his cross examination by Shri Rupesh Kumar, counsel for Arjun Amla on 15.11.2002 in which he deposed that h....
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.... Netcompware or the import of 40,000 CD- ROMs and the finding to the contrary has been recorded by the Commissioner only on the basis of statements made under section 108 of the Customs Act. 6. Shri Rajesh Singh, learned authorized representative appearing for the department, however, supported the impugned order and made the following submissions: (i) The order passed by the Commissioner is a detailed order and has taken into consideration all the relevant facts; (ii) DGFT by order dated 18.07.2000 cancelled the DEPB License dated 30.06.1998 issued to Netcompware; (iii) The case involves fraudulent activities by various individual and entities regarding misuse of DEPB scrips and gross over-invoicing; (iv) The appellant facilitated the export of CD-ROMs and import of 40,000 CD-ROMs through Arvind International; and (v) Penalty has been correctly imposed upon the appellant in view of the statements of the appellant and other persons. 7. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 8. A perusal of the impugned order, s....
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....o form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the interests of justice. Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons making them would be of relevance for the purpose of proving the facts which they contain." (emphasis supplied) 10. After examining various judgments of the High Courts and the Tribunal, the Tribunal observed: "28. It, therefore, transpires from the aforesaid decisions that both section 9D(1)(b) of the Central Excise Act and section 138B(1)(b) of the Customs Act contemplate that when the provisions of clause (a) of these two sections are not applicable, then the statements made under section 14 of the Central Excise Act or under section 108 of the Customs Act during the course of an inquiry under the Acts shall be relevant for the purpose of....
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....atements. Therefore, all the statements are not relevant to the proceedings. 15. It has been held in a catena of judgments including Jindal Drugs Pvt. Ltd. versus Union of India [2016 (340) E.L.T. 67 (P&H)] that section 9D is a mandatory provision and if the procedure prescribed therein is not followed, statements cannot be used as evidence in the proceedings under Central Excise Act. The relevant extracts are as follows: "13. Once the ambit of Section 9D(1) is thus recognized and understood, one has to turn to the circumstances referred to in the said sub- section, which are contained in clauses (a) and (b) thereof. 14. Clause (a) of Section 9D(1) refers to the following circumstances : (i) when the person who made the statement is dead, (ii) when the person who made the statement cannot be found, (iii) when the person who made the statement is incapable of giving evidence, (iv) when the person who made the statement is kept out of the way by the adverse party, and (v) when the presence of the person who made the statement cannot be obtained without unreasonable delay or expense. 15. Once discretion, to ....
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.... behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the Gazetted Central Excise Officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. 19. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a Gazetted Central Excise Officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The rigour of this procedure is exempted only in a case in which one or more of the handicaps referred to in clause (a) of Section 9D(1) of the....