TaxTMI 
TaxTMI 
2025 (6) TMI 1601
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Daman Bhavanshu P Tandel (R-3) 45601000679 13,529.32 4. ICICI Bank, Daman Rekhaben P Tandel (R-1) 45601508856 8,136.00 5. ICICI Bank, Daman Pramod R Tandel (R-1) 45601508855 49,836.71 6. ICICI Bank, Daman S B Liquor (R-5) 45605500259 3,20,738.60 7. ICICI Bank, Daman Saibaba packaging 45605000663 73,611.37 8. HDFC Bank, Daman S B Liquor unlimited (R-8) 1308630000066 41,56,161.41 9. HDFC Bank, Daman S K Enterprises (R-7) 1308620000115 13,33,019.00 10. HDFC Bank, Daman K W Enterprises (Krishna Wines) 1308630000076 3,74,611.00 11. HDFC Bank, Daman Quality Wines (R-6) 1308620000108 3,11,969.19 12. SBI, Kavi Khabardar, Daman S K Enterprises (R-7) 36056093835 2,87,591.00 Total (A) 2,50,52,494.88 B) The following immovable properties: S. No. Description of Property Value in Rs. 1. Agriculture land admeasuring 1400 Sq. Mtrs. Situated at Survey No. 45/2 Part, Village-Naila Pardi, Daman, purchased in the name of Ms. Rekhaben Pramod Tandel (R-2) on 06.10.2009 170000 2. Agricultural land ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....R-2) on 15.07.2010 1161900 14. Residential admeasuring 1360 Sq. Feet, situated at Flat No. B-804, Pramukh Residency, Chala Vapi purchased in the name of Mr. Pramod Rama Tandel (R-1) on 30.06.2010 1746000 15. Plot No. 25, admeasuring 506 Sq. Mtr. Situated at Mormugoa, Goa, purchased in the name of Mr. Pramod R. Tandel (R-1) on 29.04.2013 under sale deed No. 673/2013 5060000 16. Land admeasuring 420 Sq. Mtr. situated at Survey 26. No. 11/42, Plot No. 8, Mormugao, Goa, purchased in the name of Mr. Pramod R. Tandel (R-1) on 17.07.2015 3360000 17. Plot No. 12 admeasuring 508 Sq. Mtrs. Situated at Mormugoa, Goa, purchased in the name of Mrs. Rekha Pramod Tandel (R-2)on 29.04.2013 under sale deed No. 673/2013 5080000 18. Land admeasuring 420 Sq. Mtr. situated at Survey No. 11/42, Plot No. 6, Mormugao, Goa, purchased in the name of Mr. Bhavanshu Pramod Tandel (R-3) on 16.06.2015 3360000 19. Land admeasuring 420 Sq. Mtr. situated at Survey No. 11/42, Plot No. 7, Mormugao, Goa, purchased in the name of Ms. Rekhaben Pramod Tandel (R-2) on 16.06.2015 3360000 20. Land admeasuring 370 Sq. Mtr. Situated at Survey No. 11/42, Plot No. 9....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 4. Jupiter Distillery 6,075 31,28,400 5. Jupiter(A.C) 1,450 14,11,000 6. Dharmesh Distillery 550 2,36,500 7. Silver Star 407 2,17,500 Total 1,10,217 7,34,21,600 Month January, 2010 S. No. Company Name No. of Books Amount 1. Royal Distillery (RD) 43,200 2,59,20,000 2. Khemani Distillery 16,200 1,16,91,000 3. Krimpy Distillery 13,945 84,52,850 4. Jupiter Distillery 2,125 10,58,750 5. Jupiter(A.C) 1,350 12,90,750 6. Dharmesh Distillery 300 1,29,000 7. Silver Star 50 21,500 Total 77,170 4,85,63,850 The FIR further reflects that the stock purchased by Mr. Pramod Tandel was smuggled in the State of Gujarat through M/s Dhru Wines, Prakash Bar, Tejal Bar, Royal Bar, Sai Wines, Nayan Bar and VC Bar and other accomplices. On the basis of said FIR, ECIR No. 48/AZO/2010 dated 15.05.2010 was registered by appellant ED for the purpose of enquiry with respect to commission of offence of money laundering. After conducting enquiry appellant, ED passed the PAO No. 05/2017 dated 28.07.2017. Thereafter, ED filed Origi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 5. S K Enterprises HDFC Bank 1308620000115 1,34,83,500 09.05.2012 to 11.05.2013 6. K W Enterprises HDFC Bank 1308630000076 8,76,37,000 22.06.2012 to 30.03.2013 7. Quality Wines HDFC Bank 1308620000108 18,89,05,000 09.05.2012 to 11.05.2013 8. S K Enterprises SBI, Kavi Khabardar 36056093835 2,50,000 10.10.2016 to 19.11.2016 Total 503,05,09,300 After receiving the Original Complaint No. 810/2017, the Adjudicating Authority being satisfied issued the Show Cause Notice to all the respondents mentioned in the Original Complaint after recording the reasons to believe. After receiving the replies and the counter of the same and hearing the rival submissions, Ld. Adjudicating Authority declined to confirm the PAO. Aggrieved by the said order, appellant ED filed the present appeal. 3. During the arguments, Ld. Counsel for the appellant ED submitted that the Adjudicating Authority has taken a hyper-technical view of the Section 5 of the PMLA, 2002 and has failed to appreciate the broad meaning and intent of the section. In the present case, the Joint Director passed the PAO, because at t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he "Joint Director" and "Deputy Director" for the issuance of PAO. Therefore, any of the two officer is competent to issue a PAO and subsequently file the Original Complaint, being the authorized officers. The Section 5 (5) of PMLA refers to "officer who provisionally attaches the property under Sub Section (1)" is because so that any officer not authorized to file a PAO should not file the OC, and thus, it means that only a Joint Director or Deputy Director can file the OC. Further, whether it is the Joint Director or Deputy Director, both are filing the OC on behalf of the Government of India based on their designation and not in their individual capacity. Further, the Adjudicating Authority has grossly erred in holding the observation that those documents which were placed before Joint Director while issuing PAO were not sufficient to form 'reasonable belief'. However, the Joint Director had formed the reasonable belief referring to the material placed before him in the form of the bank accounts statements, correspondences and various statements of witnesses recorded under section 50 of PMLA, which includes statements of Mr. Kishordas Vithaldas Prajapati, Mr. Paresh N Tandel ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt of mens rea only. Further, a 30- day period to file the OC is given in the law so that the concrete evidence is gathered during this period by investigation (in 365 days) and the consequent filing of comprehensive complaint. Further, enough and substantial material was available before the Joint Director to form reasonable belief for passing the PAO. Moreover, the documents cited as additional material by the Ld. Adjudicating Authority are as under: - S. No. Description of the documents Page Nos. of RUD's 26. Letter F.No. 3/662/EXC-ADM/2017-18 dated 16.08.2017 of Deputy Commissioner of Excise Daman 338-339 35. Statement of Mr. Paresh N. Tandel recorded on 17.08.2017 under Section 50 of the PMLA, 2002 476-486 36. Statement of Shri Ketan Raman Tandel recorded on 18.08.2017 under Section 50 of PMLA, 2002 487-531 Out of these documents, one is a letter in reply to, one of the letter by the Deputy Commissioner of Excise Daman (RUD-26), which is in response to the letter dated 25.07.2017 (Exhibit-I) of the appellant, which is merely the clarification with regard to the license numbers issued in the name of M/s Quality Wines, and therefore, in no ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....from the Daman based distilleries and smuggling the same in the Gujarat, in his statement recorded under Section 50 PMLA, 2002. iv. During the period of 2013 to 2015, the defendant had supplied liquor worth Rs.10 crores to one Mr. Ramesh Jagubhai Patel (accused in ECIR/02/STSZO/2017) and the same has been affirmed by Mr. Ramesh Jagubhai Patel's (employee) statement under Section 50 PMLA, 2002. v. As per the statement recorded under Section 50 PMLA, 2002, Mr. Rohit Ishwar affirmed that he smuggled liquor by sea route for the defendant during period 2000 to 2008. Further, during the period 2008 to 2012, there are eight cases of smuggling of liquor, booked by Nausari Police under provisions of Gujarat Prohibition Act, 1949, against defendant Mr. Pramod Tandel, wherein, Rohit Ishwar is also one of the accused in the charge sheet filed by LEA. Further, the appellant contended that regarding the issue that the FIR No. 12/2010 was registered on 01.02.2010 and ECIR was recorded on 14.05.2010 and after lapse of more than seven years, the PAO was issued attaching the properties, Ld. AA erred in stating that there is no reason to believe that the defendant would not alien....
X X X X Extracts X X X X
X X X X Extracts X X X X
....w prevailing at that time, thus Prevention of Money Laundering Act, 2002 before the amendment of the year 2013 would prevail which requires that the property to be attached should be charged of scheduled offence as provided under Section 5 (1) (b) of the PMLA, 2005 (prior to amendment of 2013). However, in respect of proviso (b) to be applicable, it is submitted that this proviso operates in emergency situations and as was held in the case of Haryana State Co-operative Land Development Ltd. v. Haryana State Co- operative Land Employees Union and Anr. (JT 2003(10) SC 383), a proviso cannot extend the purport of the main section. Thus, the provisions of PMLA have nothing to do with the present matter because had they been involved in keeping the proceeds of crime, they would have been charge sheeted by CBI but no such charge sheet is filed till date in the present case. Further, as per Section 5 (1) (a) & (b) PMLA, 2002 the person whose property is sought to be attached, must be in possession of proceeds of crime and such person should be charged of having committed a scheduled offence, but the respondents in present case have not been charged with any offence. Further, it also viola....
X X X X Extracts X X X X
X X X X Extracts X X X X
....provisional attachment of the properties made on 28.07.2017 is within the ambit of law and the respondent has wrongly referred to and relied upon the judgment in Haryana State Co-operative case (supra), in order to mislead the Hon'ble Tribunal. ii. Further, the respondents have been provided ample opportunities to appear before the Investigating Officer to co- operate in the investigation, however, they deliberately chose to ignore the summons. Further, the averment of the respondent regarding violation of his fundamental right under Article 20 of the Constitution does not hold good as even prior to the amendment of PMLA, 2002 in 2013, the second proviso to Section 5 allowed the directorate to attach the properties of any person under a reasonable belief to avoid the frustration of proceedings under PMLA, 2002 and the same is produced as under: "provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorized by him for the purposes of this section has reason to believe (the reasons for such belief to be record....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as per Section 2 (1) (y) of PMLA, 2002; is material evidence for the role of the respondents in illegal purchase and smuggling of liquor and thereby, generating proceeds of crime related to schedule offence. iv. The averment regarding absence of reason to believe for attaching the property is baseless as the Joint Director has gone through all the statement of witness's bank account statements, correspondences etc. to form a reasonable believe as stated in detail in the grounds of appeal above. 6. On the basis of the submissions made by both the parties, following issues emerge for decision: (i) Whether Joint Director of ED is empowered to provisionally attach the properties, in absence of Deputy Director, ED? (ii) Whether the documents placed before the Joint Director were not sufficient to form 'reasonable belief' for issuing PAO? (iii) Whether the documents not placed before the Joint Director at the time of passing the PAO cannot be relied upon while filing Original Complaint before the Adjudicating Authority? (iv) Whether the PAO was rightly set aside by Ld. AA on account of non- filing of chargesheet by Police (as PAO is silent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed persons namely Pramod Rama Tandel and his accomplices for commission of various offences, including the predicate/scheduled offences, as detailed in para no. 2 above. The said allegations prima facie reflects the involvement of respondents in commission of crime, in the manner as stated therein, and thereby, generated huge proceeds of crime. The allegation mentioned in the said FIR is a sufficient ground for initiating the attachment proceedings, after recording of ECIR. The 'reason to believe' is apparent on record from the said allegations, in the mind of the authorized officer/ Joint Director for passing the Provisional Attachment Order. The standard to form 'reason to believe' for provisional attachment cannot be equated with standard for conviction of the culprits. Issue No. 3 9. Since investigation is a continuing process and it cannot be compartmentalized in the before or after the PAO, therefore, evidences gathered after the PAO cannot be discarded by the Ld. Adjudicating Authority. Moreover, in the present case, enough and substantial material was available, which includes the record of balance sheet from the pen drive, bank statements and the corresponding statem....