TaxTMI 
TaxTMI 
2025 (10) TMI 1209
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....he Impugned Penalty Order dated 11.5.2006 and the Impugned Rectification Order dated 9.4.2007. (b) Whether Tribunal exceeded its jurisdiction in not considering it self bound by the findings in the judgment dated 15.9.2004 passed by this Hon'ble Court.?" 4. The CESTAT disposed of total three Appeals arising out of the Order-in-Original No. 10/COMMR/1999 dated 30th March, 1999 passed by the Commissioner of Customs, Ahmedabad. Arising from the other Appeal disposed of by the CESTAT, Tax Appeal No. 870 of 2008 was admitted and tagged along with these Appeals, however, the same has been disposed of separately by order of even date as the appellant of the same was a Doctor by profession and was found involved in manufacturing of contraband drugs and was convicted by the Trial Court as well as the Appeal filed by the him was also dismissed by this Court and the conviction was also upheld by the Hon'ble Apex Court in Criminal Appeal No.1477 of 2005 by order dated 7th September 2006. 5. The brief facts of the present Appeals are as under: 5.1. On receipt of the specific information, Office of Director of Revenue Intelligence, Bombay (for short 'the DRI') intercepted a con....
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....are caught and his motive to open the firm was to export Mandrax tablets in the guise of medicines. It was also admitted by him in his statement that he was working on instruction of one Yogesh Chaudhari and that one Bupendra Bhatia had fabricated the export orders in name of M/s. Pharco Kenya Limited. 5.6. On the basis of the statement of Mr. Achint Patel that the Methaqualone tablets were supplied by the Dr. Bipin Shantilal Panchal, Dr. Bipin Panchal was summoned on 06.11.1993 to record his statement, where he admitted the supply of Mandrax tables to Mr. Achint Patel in May, 1993. It was also stated in his statement that the tablets were manufactured at Coral Pharma, Kheda and the same were manufactured by one Sri Kashyap Patel of Ruchi Pharma, Patan with the help of one Shri Deepak of Coral Pharma. 5.7. The Managing Director of Coral Pharma Private Limited-Mr. Hitesh Mehta in his statement stated that he rented his factory to Dr. Bipin Panchal during April, 1993 to June, 1993 for manufacture of Paracetamol tablets for export. He also stated that the appellants herein, i.e. Kashyap Patel and Piyush Pandya were working for Dr. Bipin Panchal and he had heard from the neighbor....
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....of the Customs Act, 1962. 5.13. In response to the show-cause notice, Achint Patel, Kashyap Patel and Piyush Pandya submitted reply dated 17th February, 1997 denying all the allegations and charges levelled against them. 5.14. However, Dr. Bipin Panchal, Bhupendra Bhatia and Yogesh Chaudhari did not file any reply to the show-cause notice in spite of the repeated reminders issued by the Adjudicating Authority. During the personal hearing, only Kashyap Patel and Piyush Pandya appeared and submitted similar written submissions and requested for cross-examination of all the witnesses and Officers without giving any specific names and grounds/disputed facts and on being asked, they did not mention anything on this aspect and therefore, the Adjudicating Authority rejected such request on the ground that it was only to delay the adjudication proceedings. 5.15. The Adjudicating Authority by the order dated 30th March, 1999 imposed penalty of Rs.10 Lakhs upon Dr. Bipin Panchal and Rs.5 Lakhs each on Kashyap Patel, Piyush Pandya and Yogesh Chaudhari and Rs.30 Lakhs each on Achint Patel and Bhupendra Bhatia. 5.16. Being aggrieved, Dr. Bipin Panchal, Kashyap Patel and Piyush Pandy....
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....r admitted that they were in knowledge of production of mandrax tablets at M/s. Coral Pharma and merely, on the basis of the statement of Mr. Hitesh Mehta, M.D. of M/s. Coral Pharma, the Adjudicating Authority has come to the conclusion that the appellants have abetted Dr. Bipin Panchal for production of the mandrax tablets at the factory. 6.3. It was submitted that vide common Judgment and Order dated 03.05.2004/15.09.2004 rendered in Criminal Appeal No. 711 of 2002 filed by the appellants, this Court allowed the Criminal Appeal by setting aside the conviction and sentence recorded by the Trial Court and the appellants were ordered to be released from the custody. Learned advocate Mr. Kuntal Parikh referred to and relied upon the findings of this Court recorded in paragraph No.127 of the said Judgment and Order to acquit the appellants, which read as under: "127. While considering the appeal of accused Kashyap Patel (accused No. 6) and Pivush Pandva (accused No. 7) and in light of the evidence as discussed and considering the submission of Mr. Raju, it transpires that both the accused were serving and getting salary of Rs. 3,000/- per month and the patrol charge from D....
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....ssions, reliance was placed on the decision in case of Capt. M. Paul Anthony Versus Bharat Gold Mines Limited and Another reported (1999) 3 SCC 679 wherein, the Hon'ble Supreme Court by considering the facts of the case held that departmental proceedings and proceedings in criminal case launched on the basis of same set of facts can be continued simultaneously, however, in the departmental proceedings the standard of proof is one of preponderance of the probabilities, in a criminal case, the charge has to be proved by the prosecution beyond the reasonable doubt and only little exception may be where the departmental proceedings and criminal case are based on the same set of facts and evidence in both the proceedings is common without there being a variance. 6.6. It was therefore submitted that in the facts of the present case also, on the same set of statements and facts before the Adjudicating Authority and before this Court in Criminal Appeal, where conviction was imposed by the Trail Court was set aside and there was no variance in the set of evidence considered by this Court for the acquittal of the appellants, the impugned order of levy of penalty need not be sustained. ....
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....ingh Versus State of Bihar reported in 2025 (0) AIJEL-SC 75144 wherein, the Hon'ble Apex Court after considering the Bihar and Orissa Subordinate Services (Discipline and Appeal) Rules, 1935 held that while acquittal in a criminal case does not automatically entitle the accused to have an order of setting aside the order of dismissal from public service following disciplinary proceedings, it is well-established that when the charges, evidence, witnesses, and circumstances in both the departmental inquiry and the criminal proceedings are identical or substantially similar, the situation assumes a different context. It was therefore submitted that in facts of the present case, when the charges evidence, witnesses and circumstances relied upon by the Adjudicating Authority and the Trial Court as well as this Court in criminal proceedings are identical, the entire situation assumes different context wherein, the order of acquittal passed by this Court would prevail to set aside the levy of penalty by the Adjudicating Authority confirmed by the CESTAT. 6.10. Relying upon the decision of the Hon'ble Madras High Court in case of M.K.S. Abubacker Versus Secretary to Government of India,....
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....itnesses including Shri Hitesh Mehta, M.D. of Coral Pharma to come to the conclusion that the appellants have abetted in manufacture of the contraband drugs without there being any involvement of the appellants in manufacturing process of such drugs. 6.13. Reliance was also placed on the decision of the Apex Court in case of Shri Ram Versus The State of U.P. reported in (1975) 3 SCC 495 which was referred by the Hon'ble Delhi High Court in case of Rajeev Khatri (Supra) to point out that Section 107 of the Indian Penal Code which defines abetment provides to the extent material that a person abets the doing of a thing who intentionally aides, by any act or illegal omission, the doing of that thing and therefore, to constitute abetment, the abettor must be shown to have intentionally aided the commission of the crime and mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of Section 107 of the Indian Penal Code. It was submitted that in the facts of the case, merely because the appellants have acted upon the instruction of Dr. Bipin Panchal, would not result into abetment of....
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....e Madras High Court after considering the decision of the Hon'ble Apex Court in case of Gopaldas Udhavdas Ahuja (Supra) and the decision of the Hon'ble Madras High Court in case of N. Jayathilakan Versus Additional Secretary reported in 1987 (31) E.L.T. 47 has held that the Customs Act contemplates two separate proceedings for the same act or omission and therefore, there is no question of double jeopardy and mere acquittal in the criminal proceedings in every case cannot result into setting aside, ipso facto, the orders of the confiscation passed by the competent authority under the Act and therefore, the contention of the appellants that the judgment of acquittal is not binding upon the departmental authorities, adjudicating the question under the confiscation and levy of penalty under the Customs Act, is not correct. 7.5. It was further submitted that the contention raised on behalf of the appellants that the appellants were not having the knowledge of the manufacture of the Narcotic Drugs by Dr. Bipin Panchal is also without any basis as the events narrated by the appellants in their statements depict the intention and knowledge of the appellants as they were working as per ....
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.... Panchal and they have also delivered the goods to Shri Achint Patel which is not considered by this Court while arriving at a conclusion of acquittal of the appellants in the criminal case. It was therefore submitted that the Appeals are liable to be dismissed. 8. Having heard the learned advocates for the respective parties and considering the submissions made by them and on perusal of the impugned Order-in-Original as well as the order passed by the CESTAT together with the Judgment and Order passed by this Court in Criminal Appeals whereby, the appellants have been acquitted, it appears that this Court while arriving at a conclusion that the appellants are not liable to be convicted, though it based upon the same set of evidence in form of the statements of the appellants and the co-noticee and other witnesses, has not taken into consideration that the participation of the appellants was admitted in their statements for delivery of the goods to Achint Patel as per the instructions of Dr. Bipin Panchal resulting into the abetment of the appellants in exporting the contraband Narcotic Drugs. 9. It is true that this Court while considering the case of the appellants has reco....
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....rugs. 12. In that view of the matter, when there is a concurrent findings of fact arrived at by the CESTAT, we are of the opinion that in the facts and circumstances of the case, the Tribunal has rightly upheld the levy of penalty and it cannot be said that the Tribunal has exceeded its jurisdiction in not considering the findings recorded in the Judgment dated 15.09.2004 passed by this Court resulting into the acquittal of the appellants in the criminal case. 13. It would also be germane to refer to the findings recorded by the Hon'ble Apex Court in case of Capt. M. Paul Anthony (Supra), which read as under : "13. As we shall presently see, there is a consensus of judicial opinion amongst the High Courts whose decisions we do not intend to refer in this case, and the various pronouncements of this Court, which shall be copiously referred to, on the basic principle that proceedings in a criminal case and the departmental proceedings can proceed simultaneously with a little exception. As we understand, the basis for this proposition is that proceedings in a criminal case and the departmental proceedings operate in distinct and different jurisdictional areas. Whereas i....
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....artmental proceedings and the criminal case were the same without there being any iota of difference, the distinction, which is usually drawn as between the departmental proceedings and the criminal case on the basis of approach and burden of proof, would not be applicable to the instant case." 15. However, in the facts of the present case, the Adjudicating Authority while passing the Order-in-Original has only considered the statements recorded by the DRI during the course of the investigation to conclude, on the basis of the defense which was taken by the appellants, which read as under: "They have disputed the contentions and verasity of the statement and panchanama of various persons and other documents relied upon in the SCN. They have claimed the SCN to be time barred under the provisions of Customs Act, 1962. They have not been provided with all the documents, account papers and other papers confiscated by the department. The burden is on the department to show that there was material suppression with an intent to evade duty. The SCN does not mention that the cartons were transferred by them out of India and that they were invo....
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....s since prosecution has not established their participation with the knowledge that contraband drugs were being manufactured or transported." 17. The above observations and findings of this Court while recording the acquittal of the appellants were not available before the Adjudicating Authority. However, it is a matter of fact that the appellants had relied upon this findings before the CESTAT and have also preferred an application for rectification, which was dismissed by the CESTAT on the ground that in criminal proceedings for prosecution of the appellants, higher degree of evidence was required whereas, the Tribunal which is a quasi-judicial authority has taken into consideration the findings of the Adjudicating Authority to hold that involvement of the appellants in illicit exports of Narcotic Drugs is fully established as per the discussion made by the Adjudicating Authority in the Order-in-Original. The Tribunal has recorded the facts of the case as well as the findings of the Adjudicating Authority as under : "2. As per facts on record, officers of DRI intercepted a consignment at EIV Air India Warehouse, Airport, on 4.11.1993. The said consignment consisting o....
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.... to sit in the office of M/s. Shanti exports run by Dr. Bipin Panchal and followed his instructions, as directed by Shri Prahlad Patel, partner of M/s. Ruchi Pharma. Though they denied any manufacturing activities of narcotics drug by them the search of the factory i.e. M/s. Coral Pharma on 16.2.94 resulted in recovery and seizure of 22 mandrax tablets and 2 pieces thereof from the factory. Hence the denial of Shri Kashyap Patel and Piyush Pandya are also baseless. Shri Kashyap Patel and Piyush Pandya in reply to SCN denied their connection with the said seizure of narcotic drugs. However, I find that all these defence arguments of both the noticees are vague and unclear. They did not produce any evidence to support their stand. Their involvement in the illicit export of narcotic drugs is corroborated in the statements of other co-accuse like Shri Achint Hitesh Mehta. The facts narrated by other co-accusse regarding the abatement of Shri Kashyap Patel and Piyush Pandya in their respective statements are corroborated with other evidences where it has been admitted that the mandrax tablets were manufactured at M/s. Coral Pharma by Dr. Bipin Panchal, Shri Kashyap Patel etc. and it was....
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....upon the appellants. All the appeals are accordingly rejected." 18. The decision of the Hon'ble Apex Court in case of Capt. M. Paul Anthony (Supra) which was further referred to and relied upon by the Madras High Court in case of D.V. Kishore (Supra) and decision of the Hon'ble Supreme Court in case of Maharana Pratap Singh (Supra) would not be applicable in the facts of the case because while arriving at a conclusion of acquittal by this Court, the standard of proof beyond all reasonable doubts was applied as against the preponderance of probability applied by the CESTAT being the quasi-judicial authority. 19. The Hon'ble Apex Court in case of Gopaldas Udhavdas Ahuja and Another (Supra) after referring to the decision of Captain M.Paul Anthony (Supra) has held as under : "20. In the case of Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. it has been held that where department and criminal proceedings are based on identical facts and where charges were sought to be proved by the policy officers and the panchas who raided the house and effected recovery and where same set of witnesses were examined in both the proceedings but the criminal court on examination of the e....
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....from prosecution under the Act. However, that difference did not entitle the Authorised Office to proceed arbitrarily in making an order for confiscation. 22. In the light of the above discussion, the first point for determination is whether from the circumstances one can say that the appellants were in conscious possession of primary gold. As indicated above, the adjudication proceedings under section 71(1) concluded before the criminal case. The judgment of the criminal court was not before the Authorised Officer. However, the basic controversy before the Authorised Officer was whether the entire primary gold (bars) was recovered from the ornamental top of the cupboard in the eastern bedroom as alleged by the appellants, or whether some of the gold bars were also recovered from the cupboards in the western bedroom and the room in which the telephone was placed as alleged by the department. According to the department, appellants were in conscious possession of the gold bars because some of the bars were found from the cupboards in the western room which were opened with the keys handed over by Ishwaribai, appellant No. 2 herein. According to the department, since primary....
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....phone room. No recovery memo was prepared by her. According to Kundalgaonkar, one of the witnesses to the recovery, one gold bar was recovered from the western bedroom. However, in his confidential record, he stated that two gold bars were recovered from that room. Similarly, in his report to Shri Vaidya, Kundalgaonkar has stated that Ishwaribai gave the keys to him whereas in the criminal trial he has deposed that she gave the keys to Mahadeshwar. All these contradictions have taken place because there was no contemporaneous record to prove the recovery and the panchnama prepared was faulty as it did not indicate the place from which the gold was recovered, in conclusion, none of the witnesses were able to give a coherent story as to where the primary gold was found. Therefore, recovery of three gold bars from the telephone room and western bedroom was not proved." 20. The Hon'ble Madras High Court in case of K.V. Rajagopal (Supra) after referring to the decision in case of Gopaldas Udhavdas Ahuja and Another (Supra) has come to the conclusion as under : "22. From the above said law laid down by the Hon'ble Supreme Court and finding of this Court, we are of the view th....
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....an offence. It necessarily involves the knowledge that the act being abetted is wrong. 32. The Black's Law Dictionary defines the expression 'abet' as under: "1. To aid, encourage, or assist (someone), esp. in the commission of a crime <abet a known felon>. 2. To support (a crime) by active assistance <abet a burglary>." 33. In Queen v Coney: the Court for Crowned Cases Reserved held as under: "To constitute an aider or abettor, some active steps must be taken, by word or action, with intent to instigate the principal or principals. Encouragement does not, or necessity, amount to aiding and abetting. It may be intentional or unintentional. A man may unwittingly encourage another in fact by his presence, by misinterpreted gestures, or by his silence or non-interference-or he may encourage intentionally by expressions, gestures, or actions, intended to signify approval. In the latter case, he aids and abets; in the former he does not. It is no criminal offence to stand by a mere passive spectator of a crime, even of a murder. Noninterference to prevent a crime is not itself a crime. But the fact that a person was voluntarily and purposely ....
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....dered the goods liable for confiscation under Section 111 of the Customs Act, is a necessary element for the offence of abetting the doing of such an act. 38. In Shree Ram v. State of U.P., the Supreme Court held as under: "6........Section 107 of the Penal Code which defines abetment provides to the extent material that a person abets the doing of a thing who "Intentionally aids, by any act or illegal omission, the doing of that thing". Explanation 2 to the section says that "whoever, either prior to or at the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to aid the doing of that act". Thus, in order to constitute abetment, the abettor must be shown to have "intentionally" aided the commission of the crime. Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of Section 107. A person may, for example, invite another casually or for a friendly purpose and that may facilitate the murder of the invitee. But unless the invitation was extended with intent ....
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....Customs (Import), Mumbai (supra) and held as under: "11. In respect of the show cause notice dated 8-7-2011, the imposition of the penalty has been made under Section 112(a) of the Act in respect of the goods which have been held to be liable to be confiscated under Section 111 of the Act. Here, the imposition of the penalty on the CHA is founded on the ground that he has abetted the offence. Though, for imposition of penalty in respect of the cases falling under Section 112(a) of the Act, mens rea may not be required to be provided as condition precedent, however, when it comes to imposition of the penalty on an abettor, it is necessary to show that the said essential element/ingredient is present."" 22. Applying the above decisions in the facts of the case, it is apparent that the appellants were the employees of the Ruchi Pharmaceuticals and at the instance of the partner of the said firm, Shri Prahlad Patel, the appellants were sitting in the Office of Shanti Exports of Dr. Bipin Panchal and were carrying out the work of Dr. Bipin Panchal as per his instructions. The appellants have taken on rent the factory of M/s. Coral Pharma from Shri Hitesh Mehta from April, 19....