TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 740
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.... Act]. The appellant is also aggrieved by that portion of the order that imposes a penalty of Rs. 7,50,000/- under section 112 of the Customs Act for acts and omission of the appellant. 2. Customs Appeal No. 50729 of 2020 has been filed by Chandrakant Jain [Chandrakant], partner in the appellant, to assail that part of the order dated 09.01.2020 passed by the Principal Commissioner that confirms penalty of Rs. 5 lakhs upon him under section 114AA of the Customs Act. 3. The appellant is a manufacturer of gold jewellery, which it not only exports but also sells in the domestic market. The period involved in these appeals is from 03.08.2015 to 05.10.2015. 4. The appellant availed the benefit of a Scheme called "Export Against Supply by Nominated Agencies" as contained in the Notification. Prior to 15.05.2015, the nominated agency, which in this case is the Bank of Nova Scotia, in terms of the Notification was allowed to import gold without payment of duty after executing a bond with the Assistant Commissioner of Customs. The gold imported by the nominated agency was then required to be exported in the form of jewellery or articles either by the nominated agency itself or thro....
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....atisfied that it is necessary in the public interest so to do, hereby directs that each of the notification of the Government of India in the Ministry of Finance (Department of Revenue), specified in column (2) of the Table hereto annexed shall be amended or further amended, as the case may be, in the manner specified in the corresponding entry in column (3) of the said Table, namely :- Serial number Notification number and date Amendments (1) (2) (3) ***** ***** ***** 5. 57/2000-Customs, dated the 8th May, 2000, G.S.R. 413 (E), dated the 8th May, 2000 In the said notification,- (I) in the opening paragraph (i) in clause (a), for the word, letter and figures "paragraph 4A.14", the word, letter and figures "paragraph 4.46" shall be substituted; (ii) in clause (b), for the word, letter and figures "paragraph 4A.9", the word, letter and figures "paragraph 4.41" shall be substituted; (iii) the second proviso shall be omitted; (emphasis supplied) 7. It would be seen that prior to 15.05.2015, in terms of the second proviso to the Notification, the importer had to in case of import of gold under the "Export Against Supply by Nominated ....
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.... "19.5 In view of the above, it is evident that M/s. Nikkamal Jewellers have failed to fulfill export obligation as per condition of Notification No. 57/2000-Customs dated 08th May, 2000 (as amended) in respect of 31 Kg (26.765 + 4.235) of duty free gold procured by them from The Bank of Nova Scotia. ***** 24 ***** (iii) Gold jewellery weighing 3774.700 Grams meant for export vide Shipping Bill no. 7461 dated 27.10.2015, which was to be hand carried by Shri Ranjit Kumar Hirachandji Jain to Hong Kong was intercepted by DRI officers on 27/28.10.2015 at IGI Airport, New Delhi. The said Shipping Bill, cash receipt issued by CWC and declaration on the letter head of M/s Nikkamal Jewellers were found in his possession. However, the gold jewellery which he was supposed to carry as per declaration in the export documents of Customs was not found with him. Instead he informed that he had already handed over the same to his accomplice, Shri Manoj Kumar Vaishnav who was going to take it to Mumbai as a domestic passenger. ***** ***** (vii) S/Shri Mukesh Kumar Sawalchand Bohra, Jinesh Kumar Jain, Ranjit Kumar Hirachandji Jain, Manoj Vaishnav @....
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.... Scotia 33,00,000 741970 dated 31.03.2016 Total paid 74,39,364.00 Total demand 76,76,474/- Amount appropriated as per order dated 09.01.2020 74,39,364.00 14. The Principal Commissioner did not accept the submissions made by the appellant and Chandrakant and confirmed the demand proposed in the show cause notice. The order proceeds on the footing that the appellant failed to fulfill the conditions contained in the second proviso to the Notification in as much as the appellant failed to export the gold jewellery manufactured from the duty free gold procured by the appellant from the Bank of Nova Scotia. The relevant portion of the order is as follows: "56. I find that the present proceedings are arising on account of non-fulfillment of the conditions contained in Notification No. 57/2000-Cus dated 08.05.2000 (relating to the export obligations cast upon the exporters) in as much as the fact that they have failed in exporting the gold jewellery manufactured from the duty free gold procured by them from the agencies nominated for the purpose of importing duty free gold. *****" (emphasis supplied) 15. The Principal Commissioner, thereafter, refe....
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....jewellery in his possession at the time of their interception, it became evident that the scheme is being violated and hence the department took the subsequent appropriate action to protect the govt revenue. It is not incumbent upon the department to enumerate as to what the noticee was going to gain but to ensure that no body should be unjustly enriched by abusing the given scheme. ***** 71. ***** Besides, DGEP's Circular No.28/2009-Cus dated 14.10.2009 applicable in the present case clearly prescribes a detailed procedure for implementing the provisions of notification No.57/2000-Cus dated 08.05.2000. Sub-para (ix) of para 4 of the said circular specifically provides that "the exporters intending to receive precious metal from the Nominated Agencies will register themselves with their jurisdictional Asstt. Commissioners who will issue them a one-time Certificate specifying therein the details of their units such as name and address of the unit and the head/owner of the organization. This certificate has to be produced to the Nominated Agencies while taking gold. The units shall submit an undertaking to the Asstt. Commissioner without bank guara....
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.... been made in terms of the conditions stipulated in the bond executed by the Bank of Nova Scotia in terms of the second proviso to the Notification. Learned counsel also submitted that penalty could not have been imposed upon Chandrakant. 17. Shri C. Dhanasekharan, learned special counsel appearing for the department, however, supported the impugned order and submitted that it does not call for any interference in this appeal. Learned special counsel submitted that the appellant had failed to fulfill the conditions stipulated in the Notification and, therefore, in terms of the bond that was executed, the appellant was obliged to pay the differential duty. Learned special counsel also submitted that penalty was correctly imposed upon the appellant and Chandrakant. 18. The submissions advanced by the learned counsel for the appellant and the learned special counsel appearing for the department have been considered. 19. The first issue that arises for consideration is whether the second proviso to the Notification had been omitted during the relevant period from 03.08.2015 to 05.10.2015. 20. The appellant has brought on record Notification No. 33/2015-Cus dated 15.05.....
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....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 to proceedings before a Court. What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has to 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 ....
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....evant to the proceedings only as per section 9D which lays down the procedure to be followed to make them relevant and the exceptions to such procedure. ***** 14. Evidently, the statements will be relevant under certain circumstances and these are given in clauses (a) and (b) of subsection (1). There is no assertion by either side that the circumstances indicated in (a) existed in the case. It leaves us with (b) which requires the court or the adjudicating authority to first examine the person who made the statement and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence. Of course, the party adversely affected by the statement will have to be given an opportunity to cross examine the person who made the statement but that comes only after the statement is, in the first place, after examination by the adjudicating authority, admitted in evidence. This has not been done in respect of any of the 35 statements. 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.....
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....lause (b) of Section 9D(1), viz. (i) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and (ii) the person who made the statement has to first be examined as a witness in the case before the adjudicating authority, and 17. There is no justification for jettisoning this procedure, statutorily prescribed by plenary Parliamentary legislation for admitting, into evidence, a statement recorded before the Gazetted Central Excise Officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word "shall" in Section 9D(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. 18. The rationale 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 knowl....