TaxTMI 
TaxTMI 
2026 (2) TMI 1034
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....n respect of installed machinery which were submitted to DGFT for obtaining Advance Authorisations by M/s. Minerva Tex Fab, Surat and M/s. N.S.Textiles, Surat. The goods imported by both of whom against the Advance Authorisations under actual user condition were found to be liable to confiscation under Section 111(d) and 111(o) of Customs Act, 1962 on account of diverting the goods imported to the local market of Bangalore and consequently, penalties of Rs. 3,00,000/- and Rs. 2,00,000/- were imposed on the Appellant under Section 112(a) of the Customs Act, 1962 vide Orders in Original No. 24494/2014 dated 26.03.2014 and 24497/2014 dated 27.03.2014 respectively. 3. The appellant Dipal J Shah has preferred the present appeals assailing the impugned orders. 4.1 The Ld. Advocate Mr. S. Suriyanarayanan Iyer appeared and argued for the Appellant Dipal J Shah and submitted that in the instant case, the Appellant had issued one certificate to M/s. Minerva Tex Fab situated at 79, Jay Narayan Industrial Estate, Anjana Farm, Surat on 14.05.2009 and one certificate to M/s. N.S. Textiles situated at 78, Jay Estate, Pipodra, Surat on 14.05.2009 for bank loan purpose. The certificates were ....
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....ccounts, Appellant had signed on certificates which were prepared and typed out in the office of Shri Hiral K. Patwa, Advocate. 4.4 The Ld. Advocate contended that the Appellant was not aware that the certificates issued by the Appellant were to be utilized for procuring duty free raw material, as generally such certificates are used by the parties for production to bank for getting loan and advances and in fact, the Appellant was informed by Shri Hiral K. Patwa, Advocate that the certificates were necessary and required for bank loan purpose. Moreover, Appellant was not having any knowledge that the rent deeds were also fraudulently prepared for the said plots and he could not smell the modus operandi adopted by the parties concerned to obtain such certificates through Shri Hiral K. Patwa, Advocate. 4.5 The Ld. Advocate submitted that the Appellant never knew that the certificates issued by him were misused for obtaining Advance Authorisation. His friend Mr. Hiral Patwa, Advocate had informed him that certificates were required for bank loan purpose and the above mentioned certificates containing all required details were prepared and typed in the office of Appellant's frien....
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....21.12.2008 respectively that they did not have any separate office and they proposed to operate export business from their residence on Small Scale basis as a manufacturer exporter. Later on, M/s. Minerva Tex Fab and M/s. N.S. Textiles submitted copies of SSI Certificates Part-II showing the factory addresses to DGFT and the said SSI Certificates were issued on 18.12.2008 which was before the dates of declaration to DGFT, which declarations were already available with DGFT when these units submitted copies of SSI Certificates. This modus operandi reveals the intention of the proprietor of M/s. Minerva Tex Fab and N.S. Textiles right from the initial steps to do the scam. Further, Vishal Agarwal has given statement before DRI on 22.02.2011 that addresses of factory premises were fabricated by him to obtain Advance Authorization licenses. Thus, it clearly appears that the Appellant was made the instrument by Vishal Agarwal for his illegal deeds and personal gain. All these facts came to the knowledge of Appellant only on referring to relied upon documents of the SCNs dated 30.08.2012 and 05.03.2013 whereas the Appellant had issued C.A. Certificates on 14.05.2009 which clearly indicat....
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....) for evasion of duty. Further, the Appellant had not dealt with the excisable goods and had not gained any direct or indirect benefit for issuing the C.A. Certificates. 4.13 The Ld. Advocate placed reliance on the following judgments in support of all the above contentions: - i. A.S.R.V. Prasad Vs. Commissioner of Central Excise and Customs, Guntur [2009 (245) ELT-0577 (Tri-Bang.)] - where DEPB benefits had been availed fraudulently and it was held that mere issue of certificate itself cannot be ground to hold that applicant abetted export of goods which are liable for confiscation under section 113. ii. Shyam Agarwal Vs. CC (Import) Mumbai Order No. A/839/WZB/2006/C-II/CSTB dated 18.07.2006. iii. Ravindra Maruti Mansukh Vs. CC [2013 (291) ELT 263] - where it was held that a person who merely handed over import documents of a car to CHA and did not know the importer and acted as intermediary between CHA and broker cannot be made liable to penalty under Section 112(a) of Customs Act, 1962. iv. Shri T.S. Makkar Vs. CCE [Order No. A/1471-1492/WZB/AHD/2012 (L.B.) dated 10.10.2012] where it was held that neither the Assessee dealt with the goods n....
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.... of Raw material and Production of Grey cloth/month, which details are too precise to be certified without any cursory physical check, but the Appellant failed to do any due diligence and has stated to have merely relied upon the "information and documents" produced before him, without attempting to verify the veracity of any such documents. Learned AR submitted further that besides the production and machinery details, the Appellant has also certified the existence of factory of M/s. Minerva Tex Fab, Surat at 73, Jaynarayan Indl. Estate, Anjana Farm, Surat when the fact is that no such manufacturing facility existed and even in his defence, the Appellant has stated that he had issued the Certificate without knowing the firm, M/s. Minerva Tex Fab, for whom it was issued and on a belief that the same was being issued for bank-loan purpose, which justification, even if true, does not appear to be acceptable. 6. Heard both sides and perused the appeal records. 7. The issue for consideration in these appeals is whether the Chartered Accountant Dipal J Shah is liable for penalty under Section 112(a) of Customs Act, 1962 for issuing certificates certifying consumption of raw materi....
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....hibition in respect of the imports and in respect of which the condition is not observed which non-observance is without sanction of the proper officer. 9. Even accepting the allegations contained in the show cause notice against the assessee and the final findings of the Commissioner in the penalty order, it cannot be stated that the assessee either had done or committed to do any act which would render the goods liable to confiscation under Section 111 of the Act. With equal force even the abatement clause contained in clause (a) of Section 112 of the Act would not apply since it is not the allegation of the department against the appellant that he had in any manner either directly or indirectly aided or facilitated the importer to commit the fraud. 10. The Tribunal in the impugned judgment erroneously expanded the findings of the Commissioner by observing that the role prescribed by the adjudicating authority to the assessee was of knowingly being involved in facilitating the importer to commit the fraud. This was neither the allegations contained in the show cause notice nor was the findings of the Commissioner. In fact the allegations and the findings clearly....