TaxTMI 
TaxTMI 
2025 (6) TMI 692
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....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 the day to day affairs of Netcompware. 4. The impugned ord....
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...., 21.10.2000 and complaint filed on 05.09.2000 in the court of ACMM, Patiala House, New Delhi for non-appearance against summons. He expressed his inability to comply with summons due to ill health and poor financial conditions vide his letter dated 15.07.2000 whereas in the written submissions dated 28.09.2005 submitted by Shri Rupesh Kumar on his behalf stated "The noticee is no way concerned with day to day affairs of the company M/s Netcompware Pvt. Ltd. as he is permanently residing at Srinagar and due to tense situation there for the past so many years it is practically impossible to commute regularly to look after the affairs of the company". This clearly indicate that Shri Ashfaq Beig has deliberately avoided joining investigation. His role in the matter is clear as Shri Pankaj Soni had admitted in his statement that Shri Ashfaq Beig and Shri Anil Sethi contacted him to get the money withdrawn through the accounts of M/s. Harkishan Overseas and M/s Arvind International; that both Shri Ashfaq Beig and Shri Anil Sethi used to bring the pay order in favour of M/s Harkishan Overseas and M/s Arvind International which he deposited in Indian Overseas Bank; that he used to withdra....
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.... 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 was involved in the day to day affairs of Netcompware; and (v) Penalty has been correctly imposed upon the appellant in view of the statement made under section 108 of the Customs Act. 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, so far as it relates to the appellant, shows that it has placed reliance upon the statement made by Pankaj Soni on 03.04.2000 under section 108 of the Customs Act. 9. The statements made under section 108 of the Customs Act cannot be relied upon if the procedure followed under section 138B of the Customs Act is not followed. This is what was held by the Tribunal in M/s. Surya Wires Pvt. Ltd. vs. Principal Commissioner, CGST, Raipur Excise Appeal No. 51148 of 2020 deci....
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....y 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 proving the truth of the facts contained in them only when such persons are examined as witnesses before the adjudicating authority and the adjudicating authority forms an opinion that the statements should be admitted in evidence. It is thereafter that an opportunity has to be provided for cross-examination of such persons. The provisions of section 9D of the Central Excise Act and section 138B(1)(b) of the Customs Act have been held to be mandatory and failure to comply with the procedure would mean that no reliance can be placed on the statements recorded either under section 14D of the Central Excise Act or under ....
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....lowing 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 be judicially exercised is, thus conferred, by Section 9D, on the adjudicating authority, it is selfevident inference that the decision flowing from the exercise of such discretion, i.e., the order which would be passed, by the adjudicating authority under Section 9D, if he chooses to invoke clause (a) of subsection (1) thereof, would be pregnable to challenge. While the judgment of the Delhi High Court in J&K Cigarettes Ltd. (supra) holds that the said challenge could be ventilated in appeal, the petitioners have also invited attention to an unreported short order of the Supreme Court in UOI and Another v. GTC India and Others in SLP (C) No. 2183/1994, dated 3-1-1995 wherein it was held that the order passed by the adjudicating aut....
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....azetted 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 Act would apply. In view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaway rely on the statement recorded during investigation/inquiry before the Gazetted Central Excise Officer, unless and until he can legitimately invoke clause (a) of Section 9D(1). In all other cases, if he wants to rely on the said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudication proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice. 20. In fact, Section 138 of the Indian Evidence Act, 1872, ....