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TaxTMI 
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2024 (11) TMI 1599
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....ata Zonal Office, are that the Additional Director of DRI, Kolkata, vide a letter dated 14.02.2007, forwarded a copy of a Show Cause Notice (SCN) dated 29.11.2006 issued under section 124 of Customs Act, 1962, against Sh. Rijaul Biswas (the appellant herein) and others in connection with seizure of six pieces of gold bars, Bangladesh currency and documents at Petrapole, West Bengal. It was seen from the Show Cause Notice that based on information received from BSF, the officers of DRI, alongwith BSF personnel, searched one Md. Mohshin Ali, a Bangladeshi national, one Pradip Halder and one Samir Halder at the office of M/s. Madhumita International, Petrapole, Bongaon, 24 Parganas (N), West Bengal on 03.06.2006. As a result of the search, six gold bars wrapped in black carbon papers with black tapes and Bangladesh Taka 2 lakhs in four bundles were recovered from the possession of Md. Mohshin Ali and Bangladesh Taka 1 lakh in two bundles was recovered from the possession of Sri Pradip Halder who was an employee of M/s. Madhumita Stores, Petrapole which was the proprietary concern of the present appellant, Sh. Rijaul Biswas. Further, Bangladesh Taka 6,00,420.00 and Indian Rs. 15,710.00....
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....ing the appellant's version of the underlying facts of the case. It is admitted that he was the proprietor of M/s Madhumita International, Petrapole, 24 Parganas (North) at the relevant time. It is also stated that the appellant's firm was engaged in the export of various commodities such as rice, stone chips, onion, fruits etc. It is further stated that the appellant's office was located within the premises of M/s. Madhumita Stores which functioned as a money-changer. The appellant was a Merchant Exporter. He procured the goods from the market and exported the same on the basis of Letters of Credit (LC). All the transactions were conducted through legitimate channels through banks. It is submitted that on 03/06/2006, at about 11.00 hrs., personnel of the Border Security Force (BSF) intercepted a person named Md. Mohsin Ali, stated to be a citizen of Benapole, Jessore, Bangladesh, in the premises of M/s Aditi Service, Customs House Agent (CHA), where the appellant's employee Shri Pradip Halder was also present. The BSF personnel recovered gold and Bangladesh currency from the possession of the said Md. Mohsin Ali. The BSF personnel detained both Md. Mohsin Ali and Shri ....
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....Section 3(a), 7 & 8 of the Foreign Exchange Management Act, 1999. 9. The appellant submitted the reply to the said SCN vide letter dated 12th November 2012, whereby he denied and disputed the allegations contained in the SCN. It was, inter alia, contended that the proceedings are void ab initio since the same were not based on any investigation made by the FEMA authorities. Rather, the proceedings were based on the SCN issued by the DRI, the Search List, and statement of Md. Mohsin Ali, Shri Pradip Haider and the appellant himself. The place of seizure has been wrongly mentioned and the same has not been considered in the light of the statement of Panch witnesses and affidavit of eye-witnesses. The place of seizure and the recovery of the Bangladesh currency was not from the place of the appellant nor from the appellant. It is further contended that the inference the dealing in foreign exchange is wholly untenable. 10. It was submitted that Shri Md. Mohsin Ali and Shri Pradip Haider are not party to the proceedings before the learned adjudicating authority and their statements cannot be relied upon. Also, their statements are in the nature of 'improved' statements which canno....
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....ppeals (FEMA). The instant appeal before this Appellate Tribunal has arisen from the said order of the first appellate authority. The main contentions of the appellants before this Appellate Tribunal are along the same lines as before the Ld. Special Director of Appeals. It is contended that • The Ld. Special Director (Appeals) mentioned the submissions and the decisions cited by the appellant but did not deal with the same, which seriously affected the decision-making process, resulting in gross violation of the principles of natural justice and making the order a nullity in the eye of law; • Cross-examination was not granted in spite of specific request made for the same to find out the correct place of seizure and the goods or documents recovered therefrom. The statements of the eye-witnesses were submitted before the Adjudicating Authority and also before the Appellate Authority, but none of the authorities have adverted to their affidavits. In view of the same, neither recovery of any diary nor any foreign exchange from the premises of the appellant was proved and the question of dealing of the foreign exchange and violation of Section 3(a) of FEMA....
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.... raised makes the order non- speaking and cannot be maintainable in law (vi) Andaman Timber Industries 2015(324) ELT 641(S.C.) (paragraph 6) - Denial of cross-examination the Adjudicating Authority though the statement of the witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of the principles of natural justice. Affidavit of eye-witnesses viz. Sri. and Goutam Roy Chowdhury and Md. Nazrul Sardar 13. It is also contended that the respondents, in their submissions, attempted to state that the evidence of eye-witnesses were brought for the first time before the Authority which was not correct since the same was contended before the Adjudicating Authority and subsequently this point was again raised before the Appellate Authority who has duly mentioned the same in his order, but failed to address the issue. 14. In light of the above, the appellant has prayed that the impugned order of the Ld. Special Director of Appeals be set aside. Arguments on Behalf of the Respondent Directorate 15. The respondents have strongly opposed the arguments and contentions of the appellants. On facts....
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.... also includes a 'firm', which in the present case is M/s Madhumita International. Further, it must be also noted that the appellant herein is the sole proprietor of the said firm and, therefore, liable for the acts of the said firm. It is a well-settled law that a sole proprietorship firm has no separate legal identity and in fact is a business name of the sole proprietor. Reliance in this regard is placed on M.M. Lal v. State (NCT of Delhi), 2012 SCC OnLine Del 4851, wherein the Hon'ble Delhi High Court has observed as under: "5. It is well settled that a sole proprietorship firm has no separate legal identity and in fact is a business name of the sole proprietor. Thus any reference to sole proprietorship firm means and includes sole proprietor thereof and vice versa..." 18. Therefore, the ground raised by the appellant that the said documentary evidence i.e. diaries seized from the premises of the firm of the appellant will not be an admissible piece of evidence does not hold any good and therefore is liable to be dismissed. 19. That, the appellant has also raised a ground in the said appeal that the statements given by the appellant before the DRI aut....
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....ose proprietor was Sh. Rijaul Biswas who was also the proprietor of Madhumita International. He further stated that he was asked by Rijaul Biswas to visit the office of Madhumita International and receive the gold bars from Mohsin Ali towards payment of export made by him Rijaul Biswas. As per instruction of Rijaul Biswas, he received the gold bars on 4 or 5 occasions from Mohsin Ali and handed over Bangladesh Taka to him. The appellant Sh. Rijaul Biswas was not present on the date of search and his statement could not be recorded on that day. However, his statements were recorded subsequently by the DRI on 19.09.2006, 21.09.2006 27.09.2006 10.10.2006, 13.10.2006, 23.10.2006 and 30.10.2006 and 10.11.2006 wherein he admitted the seizures made in his office, admitted the transactions in Bangladesh Taka towards exports to Bangladesh and also admitted that Pradeep Halder was his trusted man. Statements of the appellant were also recorded by the Respondent Directorate (ED) under Section 37 of FEMA 1999. 24. I have perused the Search List as well as Panchnama drawn at the time of search and find that the place of search is clearly mentioned in both the documents to be the office premi....
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....firmity in the Panchnama and the Seizure List or find any reason to doubt the contents of the two documents read together are a true and correct narration of events that took place during the search. 25. It is next contended that case Sh. Md. Mohsin Ali and Sh. Pradip Halder are not parties in the proceedings their statements cannot be relied upon. I do not find any merit in this contention either. Admittedly, the two persons were present on the date of the search while the appellant was not present on the said day. There are no cogent reasons as to why their statements as witnesses cannot be relied upon. However, as regards failure to allow cross-examination of the witness, I find merit in the contention of the appellant. It is well-settled that the opportunity to cross-examine witnesses is the part and parcel of the principles of natural justice, especially where the respondents were seeking to rely on their statements, and even more so, because the appellant had specifically requested for such an opportunity. That having been said, I find that the statements of witness in the present case are amply substantiated by other evidence including seizure of cash, seizure of diaries ....
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.... writing and the accounts mentioned in that the statement narrating BD Taka and Indian currency mentioned in the seized diary was received by me and paid by me to the Bangladeshi nationals are correct. The amount was Rs. 17 Lakhs approx. received from BD buyers and paid Rs. 02 Lakhs approx. to BD buyers in equivalent BD Taka towards under/ over value of export bills. The aforesaid amount is the differential amount received by me and paid by me to BD buyers in respect of export made by M/s Madhumita International". [Statement recorded 21.12.2011 under Section 37 of FEMA, 1999.] 26. Thus, in the aforesaid statements before the DRI and the ED, the appellant not only admitted the seizure made from his office but also admitted the transactions in Bangladesh Taka for over/under invoicing of exports to Bangladesh and further stated that Sh. Pradip Halder was his trusted man. During the course of the arguments, the Ld. Counsel for the appellant also sought to argue that the statements of the appellant were not voluntary and were forced. Even prima facie, it is hard to believe that statements stretching over a period from 2005 to 2011, each affirming the previous statements, ....
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....erefore, the question of improved version or stating facts which were at variance with earlier statements does not arise. As regards the appellant himself no doubt his statements were recorded on several occasions, including twice by the ED. In nearly all the statements, he stood by his earlier statements. It has not been pointed out by the appellant how his subsequent statements were at variance with earlier statements or there was any lack of consistency. In the absence of any such averments, the subsequent statements can by no means be held to be 'improved statements'. 29. In Mohtesham Md. Ismail 2007 (8) SCC 254 it was held that it is by now well-settled principle of law that a confession of a co-accused person cannot be treated as substantive evidence and can be pressed into service only when the court is inclined to accept other evidence and feels the necessity of seeking for an assurance in support of the conclusion deducible therefrom. From this itself it can be seen that the Hon'ble Supreme Court did not completely rule out the use of statement of the co-accused. Moreover, in the present case penalty proceedings were initiated and finalized against the appellant alone a....