AI Drafter 
TaxTMI 
TaxTMI 
2025 (7) TMI 1270
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....rts made by these firms; investigation revealed that the above firms/companies had exported the goods of low quality declaring them as Gear Cutting Tools of Cobalt bearing High Speed Steel, Heat Resistant Rubber Tension Tape and Gaskets under Drawback/ incentive schemes; investigations were also conducted against some other exporters, namely, Sh. Vinod Garg and N. D. Garg, under six companies namely M/s. Garg Forging & Casting Ltd., M/s. SRG Forge Overseas Ltd, M/s. SRG International, M/s. Ragini Steels, M/s. Garg Con-cast and M/s. Goodwill Impex belonging to them who have exported similar/ identical goods; it was found that goods cleared as gear cutting tools of cobalt bearing high steel and heat-resistant rubber tension tape had been mis-declared; in his statement 22.06.2000, Shri Vinod Garg replied that he had no association with the Appellants; on completion of the investigation, Show Cause Notice dated 29.03.2004 was issued to i.e. M/s. Contessa Commercial Co (Pvt.) Lid, M/s Varun Enterprises, M/s. A.S.K. Exports and M/s. S.R.M. (Pvt) Ltd seeing to confiscate goods, exported by them, valued at Rs.3,00,91,466 Rs.2,79,65, 455 Rs. 3,04,95,133 and Rs. 59,54,315/- respectively unde....
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....ality of gaskets; allegations upon the Appellant is solely based upon the statements which are not corroborated; findings based on such presumptions and assumptions without any tangible evidence will be vitiated by an error of law as held by the Hon'ble Supreme Court in the case of Oudh, Sugar Mills Ltd 1978 (2) ELT (J 172) and by the Tribunal in the case of Poly Printers 2002 (139) ELT 295. 4. Learned Counsel for the appellants submits also that the suppliers from whom the Appellant purchased the goods were existent and had issued valid bills/ invoices for the goods sold by them; the suppliers, in some cases, had two valid addresses as mentioned in their respective invoices/ bills; department had not made inquiries at both the addresses; had the department made proper inquiries, it would have come to know about the genuineness of such suppliers of the Appellant. He submits that the gaskets were never seized and were not subjected to any testing or market survey. 5. Learned Counsel for the appellants submits also that the Appellant has sought for the cross examination of various persons whose statement have been relied upon against the Appellant; statement of Mr. Gautam Mukhe....
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....of the persons whose statements have been relied upon, following the procedure prescribed under Section 138B of the Customs Act; the entire impugned adjudication order falls and is liable to be quashed and set aside, due to insufficient evidence. He relies on • Ambika International (2016) SCC Online P&H 4559 • Andaman Timber Industries (2016) 15 SCC 785 • G-Tech Industries (2017) 42 GSTR 153 • R. A. Castings P. Ltd., 2010 SCC Online All 2983 7. Learned Counsel for the appellants submits also that the Appellant's shipping bills were duly assessed, and drawback/MEIS was allowed by the Assistant Commissioner without objection; the assessments have attained finality; Department, instead of invoking the proper review or appeal mechanisms under the Customs Act, has attempted to reopen the same via an audit objection, issuing a separate show cause notice; such a collateral challenge is not legally tenable; the established legal principle is that once a shipping bill has been assessed and drawback has been allowed by the competent authority, it cannot be subsequently recovered without first challenging the original assessment ord....
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....h intermediaries like Alok Mukherjee; his initial claims of ignorance were contradicted by DRI evidence showing his direct involvement in settling rates with N.D. Garg and managing export documentation; kishorpuria's confessions were pivotal in corroborating the findings and implicating the Kolkata based exporters. 10. Learned Authorised Representative, rebuts the arguments of the appellants and submits that claim by appellants that DRI lacked authority under Rule 16 of Drawback Rules, is nullified by amendments to Section 28(11) of the Customs Act. He submits on the request to cross-examine Shri Gautam Mukherjee (IIC Container) that Hon'ble Supreme Court in the case of Kanungo & Co held that corroborative evidence without cross-examination. On the plea that no gaskets were seized or tested, Learned AR submits that the very sourcing of the gaskets from non-existent; shell firms and diversion of shipments to Dubai, proves modus operandi. He supports the imposition of redemption fine stating that Section 125 permits fines in lieu of confiscation for exported goods liable for confiscation. He submits that the impugned order in remand is correct and legally tenable as the Gaskets we....
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.... authority after due verification, without challenging the order, in violation of the principles laid down by Supreme Court in the case of ITC Ltd(supra). 12. we find that the Adjudicating Authority, in the first round of litigation, vide Order-in-Original No. 37/Cus/05 dated 06.01.2006, categorically found that there was no seizure of Gaskets and there was no report evidencing mis-declaration of gaskets in terms of description, content and fictitious invoices. 13. We find that the adjudicating authority, while passing the order in remand, in the second round of litigation, observes as following. 4.4. I find that the original Adjudicating Authority vide Order in Original No. 37/Cus/05 dated 6.1.2006 confirmed the recovery of the inadmissible drawback claimed fraudulently by declaring the export goods to be Gear Cutting Tools of Cobalt bearing High Speed Steel and Heat-Resistant Rubber Tension Tape. The said demand has been confirmed by the CESTAT vide its order No. C/A/56729-56746/2013-CU(DB) dated 25.6.2013 and has been upheld by the Hon'ble Punjab & Haryana High Court, Chandigarh vide its order dated 8.9.2014 while dismissing the appeal [CUSAP No. 28 of 2013(0&M)] ....
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.... on the shipping documents; moreover, Shri Vinod Garg in his statement dated 22.06.2000 replied, to a specific question, that he had no association with the Appellant or its associated persons/ firms; as it was alleged that Shri Vinod Garg and N. D. Garg had mis-declared their goods, the Appellant had also exported their respective goods by mis declaring the same. We find that it is not the case of the department that the test report, in respect of the goods exported by the Appellants, indicated any mis-declaration. The value was also accepted by the department and no market survey etc. was done. Moreover, the unmissable fact is that the goods were allowed to be exported after due examination by the officers. We find that there is no allegation of collusion etc. raised against the officers and the appellants. Under the circumstances, we find that the impugned order erred in extrapolating the findings in case of export of other goods by Shri Vinod Garg and N. D. Garg, to the goods exported by the appellants. 16. Regarding the non-existent suppliers as claimed by the revenue, the appellants submit that no independent enquiries were made and whereas, the invoices mentioned, more th....
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....an be made on the basis of uncorroborated oral evidence more so, when cross -examination was not allowed. We find that Reserve Bank of India has also issued a circular that obligation of an Indian Exporter would be completed the moment the goods are made over to the shipping Company and goods leave territorial water of India. 18. Another issue that is agitated by the appellants is that they sought for the cross examination of Shri Gautam Mukherjee and other persons whose statements have been relied upon against the Appellant; it was bounden duty on the part of the adjudicating authority to grant cross examination; We find that in a number of cases, it was held that procedure prescribed 138 B of the Customs Act, needs to be followed; adjudicating authority cannot straightaway rely on the statement recorded during investigation/inquiry before Central Excise officer, unless procedure prescribed in Section 138B of the Customs Act, 1962. We find that statements are the basis on which the present case has been set up by the Revenue against the appellant, cannot be relied upon for the want of examination in terms of Section 138B of the Customs Act and for want of cross-examination. We ....
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.... (1), makes it clear that, the provisions contemplated in the sub-Section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 25. The rationale behind the above precaution contained in clause (b) of Section 90 (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 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. 26. clearly, therefore, the of 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). ....
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....ance 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 of sub-section (1) of these two Acts shall apply to any proceedings under the Central Excise Act or the Customs Act as they apply in relation t....
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....e by any person aggrieved thereby. The expression "Any person" is of wider amplitude. The Revenue, as well as the assessee, can also prefer an appeal aggrieved by an order of assessment. It is not only the order of reassessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including that of self-assessment. The order of self-assessment is an order of assessment as per Section 2(2), as such, it is appealable in case any person is aggrieved by it. There is a specific provision made in Section 17 to pass a reasoned/speaking order in the situation in case on verification, self-assessment is not found to be satisfactory, an order of reassessment has to be passed under Section 17(4). Section 128 has not provided for an appeal against a speaking order but against "any order" which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts 22. 44. The provisions under Section 27 cannot be invoked in the absence of amendment or modificati....
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....3(g) of the said notification and which speaks of the Assistant or the Deputy Commissioner being obliged to record their satisfaction with respect to the correctness of the claim as well as the fact that goods cleared for export or services provided have actually been exported. According to learned counsel, it is only when such satisfaction is reached that the claim of the exporter of goods or services is liable to be granted in full or in part. 38. In view of the aforesaid, it was the contention of the respondents that a conjoint reading of section 11B of the Excise Act and rule 5 of the CCR would lead one to the irresistible conclusion of a power of determination inhering in the competent authority even at the stage where an application for refund may be made. ************************************** 67. We thus come to the firm conclusion that in the absence of the self-assessed return having been questioned, reviewed or re-assessed, the claim for refund of Cenvat credit could not have been denied by the respondents. When confronted with the application for refund, all that the respondents could have possibly examined or evaluated was whether t....