2014 (7) TMI 615 - AT - Central Excise

Duty demand - Clandestine removal of goods - Goods removed for export did not reach destination - forging of signature of customs officer - Held that - Material evidence on the records of Assistant Commissioner, Haldia, made clear that there was no shipment of the goods in question under 31 shipping bills. Confessional statements of Smt. Smriti Kana Basu, authorised representative of CHA, Sri Milan Gupta, Authorised representative of CHA corroborated the case of the Revenue as to no shipment of goods stated in the shipping bills. Transporter M/s.Dhanalaxmi Transport also brought out the case in favour of Revenue proving no movement of goods but mere L/Rs were issued. Endorsement on the back of the shipping bills proved forgery of signature of Customs Officials. All bills of lading were also forged. There was no material or cogent evidence on record to show that the ground of appeal have any merit. Except the only plea that the appellant exported the readymade garments under proper invoice recorded in ARE-1 showing termination of the goods at Haldia port there was nothing on record to show manufacture of goods, transportation thereof and actual export. Forging of signature of customs officer surfaced and that was not contradicted by appellant. Such evidence proves malafide of appellant - appeal dismissed - Decided against assessee.

Issues:
1. Fraudulent export of goods leading to loss of customs duty.
2. Involvement of individuals in the fraudulent activities.
3. Examination of material evidence and confessional statements.
4. Forgery of documents and signatures.
5. Decision on appeals filed by the company and directors.

Analysis:

Issue 1: Fraudulent export of goods leading to loss of customs duty
The judgment highlighted a case where readymade garments made of imported fabric were fraudulently claimed to have been exported, resulting in a loss of customs duty amounting to Rs. 3,83,75,454. The investigation revealed that the goods were diverted to the domestic market without payment of duty, and various rules and notifications were contravened. The adjudicating authority concluded that there was an intention to evade duty through fraud, wilful misstatement, and suppression of facts, leading to the imposition of mandatory penalties.

Issue 2: Involvement of individuals in the fraudulent activities
The judgment detailed the penalties imposed on individuals involved in the fraudulent scheme. Sri Suresh Sharma and Sri Vijay Vishwaroop faced penalties of Rs. 25 lakh each for their roles in the fraud. Confessional statements and material evidence corroborated the Revenue's case, proving the lack of actual export of goods despite documentation suggesting otherwise. The active involvement of these individuals in the fraudulent activities was established through oral and documentary evidence.

Issue 3: Examination of material evidence and confessional statements
The judgment extensively discussed the material evidence, including forged documents and signatures, to establish the fraudulent nature of the export scheme. The investigation revealed that shipping bills were not backed by actual shipments, and signatures of customs officials were forged to create a false impression of export. Confessional statements from authorized representatives further supported the Revenue's case, highlighting the lack of physical movement of goods as claimed in the documentation.

Issue 4: Forgery of documents and signatures
The judgment emphasized the forgery involved in the case, such as forged signatures of customs officials and fabricated bills of lading. The absence of actual shipments despite documentation suggesting otherwise pointed towards a systematic effort to deceive the authorities and evade duty payments. The adjudicating authority found no merit in the appellant's defense, as the evidence overwhelmingly supported the conclusion of fraudulent activities.

Issue 5: Decision on appeals filed by the company and directors
The judgment concluded by dismissing the appeals filed by the company and its directors. The company, Dewas Fabrics Ltd., failed to provide substantial evidence contradicting the findings of fraud and forgery. The directors were deemed actively involved in the fraudulent activities, contributing to the prejudice against Revenue. The oral and documentary evidence presented during the proceedings established their complicity in the scheme, leading to the dismissal of their appeals.

In summary, the judgment extensively analyzed the fraudulent export scheme, individual involvements, examination of evidence, forgery of documents, and the final decision on the appeals, emphasizing the serious consequences of attempting to evade customs duties through deceptive practices.

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