AI Drafter 
TaxTMI 
TaxTMI 
2026 (1) TMI 286
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....a/Bulgaria under the Focus Market Scheme. Investigation were initiated against the appellant on the premise that the appellant had diverted the consignments intended for export to Armenia/Bulgaria after the Let Export Orders were issued to Jebel, UAE, which was not a country notified under the Focus Market Scheme. 3. Subsequently, a show cause notice dated 08.11.2017 was issued to the appellant. 4. This show cause notice was adjudicated by the Additional Commissioner of Customs by order dated 23.01.2019. The first issue that was framed for adjudication is: (i) Whether M/s BEN, Rewari (Haryana) (Noticee No. 1) had fraudulently diverted their export consignments covered under 62 Shipping Bills (as detailed in Annexure-A to the show cause notice) originally destined for export to Armenia and Bulgaria, the countries notified under Focus Market Scheme (FMS)/Merchandise Export from India Scheme (MEIS), to the changed "Country of Destination" i.e. Jebel Ali (United Arab Emirates), which was not a notified country under Focus Market Scheme/Merchandise Export from India Scheme, to avail undue benefit of FMS/SFMS/MLFPS/MEIS? 5. In this connection, the finding recorded by th....
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....g and that the Customs Stamp was appended by him and that he had made those amendments as per the instructions received from Praveen Rao. Praveen Rao in his statements stated that he had directed Imran Mirza to make necessary amendment in the TR-1/TR-2 copies of the Shipping Bills. The Additional Commissioner also noted that neither Imran Mirza nor Praveen Rao had retracted the said statements. 8. The second issue that was framed by the Additional Commissioner was: (ii) Whether the goods exported vide 62 Shipping Bills as per Annexure-A to the show cause notice having total FOB value of Rs. 34,01,97,382/- are liable to confiscation under Section 113(d), (g) and (1) of the Customs Act, 1962? 9. The finding recorded by the Additional Commissioner is: "22. I find that, as discussed in the foregoing paras, It has been established on record that M/s. BEN had filed 62 Shipping Bills for export of Ready Made Garments to Armenia or Bulgaria, as the case may be, for claiming benefit of Focus Market Scheme(FMS) and Merchandise Export from India Scheme (MEIS) at the rate of 4% and 2% respectively, whereas the goods were actually diverted to Jebel Ali, United Arab Emira....
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....oods have been held liable to confiscation, penalty under section 114(iii) of the Customs Act can be levied. Penalty has also been levied on Praveen Rao under section 114 of the Customs Act as he had directed Imran Mirza for making amendments in the Shipping Bills. Penalty under section 114(iii) has also been levied on Praveen Rao. 12. The appellant filed an appeal before the Commissioner (Appeals), who by order dated 11.02.2022, confirmed the order passed by the Additional Commissioner. The relevant findings are: "5.2 I find that it is established fact on record that the Appellant with the help of its Freight forwarder Shri Imran Mirza, Proprietor of M/s Concorde Shipping & Logistics India had diverted their consignments cleared for export from ICD, TKD, New Delhi to destinations other than the destinations declared in their Shipping Bills by way of fraudulent amendment in TR-1/TR-2 copies of the shipping bills. The amendments were never authorized by the proper officer. This was done clear with intention to avail undue benefit of Focus Market Scheme (FMS), under Chapter 3 of Foreign Trade Policy by showing a country as "Country of Destination", which was notified unde....
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....ods and liable to confiscation. 14. Shri M.K. Shukla, learned authorized representative appearing for the department, however, supported the impugned order and made the following submissions: (i) The appellant fraudulently diverted the goods intended for export to Armenia and Bulgaria to Jebel Ali, UAE to wrongfully claim benefits under the Focus Market Scheme; (ii) The goods exported are liable to confiscation as they were exported using fraudulent documentation and were not cleared for export to the actual destination port; and (iii) Penalties have been correctly imposed on the appellant and Praveen Rao. 15. The submissions advanced by the learned consultant for the appellant and the learned authorized representative appearing for the department have been considered. 16. It is seen that the first issue decided by the Additional Commissioner is whether the appellant had fraudulently diverted the export consignments covered under 62 Shipping Bills originally destined for export to Armenia and Bulgaria but diverted to Jebel Ali which is not a notified country under the Focus Market Scheme to avail undue benefits of focus market scheme. This findin....
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....ty 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 witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons making them would be of relevance for the purpose of proving the facts which they contain." (emphasis supplied) 19. After examining various judgments of the High Court and the Tribunal, the Tribunal observed as follows: "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 th....
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..... In any view of the matter, as the goods have been held not liable to confiscation under section 113, penalty could also not be imposed under section 114(iii) of the Customs Act. 24. Section 114AA of the Customs Act provides that if a person knowingly or intentionally makes, signs or uses or causes to be made, any material particular, in the transaction of any business for the purposes of the Customs Act, shall be liable to a penalty not exceeding five times the value of goods. The Additional Commissioner has relied upon the statement made under section 108 of the Customs Act that the changes were made on the instructions given by the Praveen Rao. This statement, for the reasons stated above, cannot be relied upon as evidence. Thus, penalty under section 114AA of the Customs Act could not have been imposed upon the appellant and Praveen Rao. 25. The Commissioner (Appeals) has merely held that all "preponderance of probability clearly indicates towards mala fide intention in such unauthorized amendments and unauthorized diversion of goods". It is for this reason that the Commissioner (Appeals) found no reason to interfere with the impugned order. The Commissioner (Appeals) fa....