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2024 (3) TMI 193 - AT - CustomsFraudulent exports - Seeking to recover the drawback as well as seeking to impose penalties on all the noticees thereon - after about two years supplementary Show Cause Notices issued - Penalties imposed - HELD THAT - It is observed that the Appellants have been made co-noticees only on the basis of DRI s letter dated 15.03.2017 read with the Show Cause Notice dated 26.08.2016 and supplementary Show Cause Notice dated 18.05.2017. The Revenue is not able to point out any other specific allegations against the Appellants. On going through the Show Cause Notice dated 26.08.2016 and the relevant supplementary Notice dated 18.05.2017, it is seen that this Show Cause Notice is in respect of some other exporters, in respect of some other Shipping Bills, and in respect of some other Drawbacks which in no way are connected to the present Exporters, Shipping Bills or the Drawbacks. Therefore, the Department could not have used any materials found to be in their favour in that particular case, to implicate the present Appellants (Departmental Officers) in the present proceedings. We do not see as to how the Department can on its own assume that these two persons are also part of this letter dated 15.03.2017 so as to make them the co-noticees. The Ld.Counsel has also produced a copy of DRI s final Report dated 21.03.2017. Even in this final report, only the name of Shri Jyoti Biswas and Shri Vikash Kumar are being found. There is no mention of the names of the present two Appellants in this letter also. The Revenue cannot generalize the issue and based on the specifics of one case, the notice cannot be issued in other cases without any proper ground work. Thus, the observations towards the category 2 is equally applicable to category 1 also, wherein even in that case, the Show Cause Notice has been issued based on the DRI s letter as well as the Show Cause Notice and supplementary Notice issued to some other exporters on 26.08.2016 and 18.05.2017. Therefore, we hold that the impugned orders are not legal and proper. Accordingly, we allow the Category 2 Appeals also. As a result, all the eight Appeals are allowed with consequential relief, if any, as per law.
Issues Involved:
1. Validity of supplementary Show Cause Notices issued to the appellants. 2. Legal basis for issuing a second Show Cause Notice after adjudication. 3. Specific allegations against the appellants based on DRI investigations. Summary: Issue 1: Validity of supplementary Show Cause Notices issued to the appellants The present appeals were filed by the appellants, departmental officers, aggrieved by the penalties imposed on them through supplementary Show Cause Notices issued after initial Show Cause Notices to exporters. The appellants argued that the supplementary notices were erroneous as they were issued after the adjudication of the initial notices. Issue 2: Legal basis for issuing a second Show Cause Notice after adjudication For Category 1 appeals, the initial Show Cause Notices were issued under Rule 16A of the Drawback Rules, 1995, and adjudicated. The subsequent Show Cause Notices included the appellants as co-noticees. The Tribunal found no statutory provision allowing the issuance of a second Show Cause Notice on the same issue after an Order-in-Original had already confirmed the demand. Therefore, the Tribunal held that the entire premise for the second Show Cause Notice was legally unsustainable and allowed the Category 1 appeals. Issue 3: Specific allegations against the appellants based on DRI investigations For Category 2 appeals, the Show Cause Notices were issued under Section 124 of the Customs Act, making the appellants co-noticees based on DRI's letter and subsequent Show Cause Notices to other exporters. The Tribunal found that the appellants were implicated without specific allegations or evidence directly linking them to the fraudulent activities. The DRI's letters and final report did not mention the appellants by name. The Tribunal held that the Revenue could not generalize the issue and implicate the appellants without proper groundwork. Consequently, the Tribunal allowed the Category 2 appeals. Conclusion: The Tribunal set aside the impugned orders and allowed all eight appeals, providing consequential relief as per law.
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