2024 (3) TMI 875 - AT - Customs

Misuse of Advance Authorisation for export of garments - Benefit of Customs Notification No. 99/2009 dated 11.09.2009 denied - confiscation of fabrics imported - imposition of penalties - denial of cross examination of all the witnesses - Diversion of imported goods into open market without using the same in export goods - HELD THAT - The modus operandi adopted by the appellant, the active role of Shri Rakesh Goyal to defraud the Government have been brought out clearly by the statements of Shri Sunil Kumar, the broker and Shri Ajay Kumar Goyal, conoticee and other statements as discussed in the impugned order. Denial of cross examination of all the witnesses - HELD THAT - The Department had partly acceded to the request for cross examination, and four witnesses were cross examined. However, the appellant has sought cross examination of a greater number of people, which is not justified. It is noted that neither the appellant nor the Director cooperated with the Department during investigations. They did not voluntarily come forward to assist the investigations to negate the allegations of the Department. It is brought on record that Shri Manish Suneja had actively connived with the appellant to divert the imported raw materials to the open market. We take note that the Revenue has investigated each consignment and has indicated as to how and where the said consignments were disposed off. This is corroborated by the statements recorded under section 108 of the Customs Act, 1962. Consequently, the findings in the impugned order that the impugned goods have not been delivered at the factory premises of the actual user as mentioned in the condition sheet of the Advance Authorization is upheld. The benefit of Notification 99/2009-Cus dt 11.09.2009 cannot be extended to the appellant in view of the overwhelming evidence of diversion of imported raw material to the open market - The contention of the appellant that the export obligation against the Advance authorisation was completed stands negated by the letter dt 30.6.2015 issued by DGFT wherein it was stated that for the advance authorization no. 3010093690 dated 07.05.2013, the show cause notice was issued to the party on 29.06.2015. In addition, vide their letter dated 13.08.2015, it was confirmed that demand notice dated 18.11.2014 had been issued. There are no reason to interfere with the impugned order. Accordingly, all the four appeals filed by the appellant are dismissed.

Summary

Issues Involved:
1. Denial of benefit of Customs Notification No. 99/2009.
2. Confiscation of imported fabrics and imposition of penalties.
3. Violation of principles of natural justice.
4. Diversion of imported goods into the open market.
5. Undervaluation of imports.
6. Role of co-noticees in the diversion of goods.

Summary:

1. Denial of Benefit of Customs Notification No. 99/2009:
The appellant, M/s Himachal Fashion Pvt Ltd., was denied the benefit of Customs Notification No. 99/2009 dated 11.09.2009, as the imported raw material was found to be diverted to the open market instead of being used in the manufacture of export products as required under the Advance Authorisation.

2. Confiscation of Imported Fabrics and Imposition of Penalties:
The imported goods were seized based on the reasonable belief of violation of condition no. 14 of the Advance Authorisation. The adjudicating authority imposed penalties and ordered the confiscation of the fabrics imported by the appellant.

3. Violation of Principles of Natural Justice:
The appellant contended that the adjudicating authority did not consider their defense and denied them the opportunity to cross-examine the witnesses, which violated the principles of natural justice. However, the Tribunal noted that the Department had allowed cross-examination of four witnesses and found the appellant's request for further cross-examination unjustified, considering it a tactic to delay the proceedings.

4. Diversion of Imported Goods into the Open Market:
The Tribunal upheld the findings of the adjudicating authority that the imported goods were diverted to the open market. The evidence included statements from various individuals and corroborative documents, indicating that the goods were not delivered to the factory premises as required by the Advance Authorization.

5. Undervaluation of Imports:
The Tribunal upheld the enhanced values of the imported goods, as the declarations filed by the supplier in Hong Kong indicated higher values than those declared by the appellant before Indian Customs. The Tribunal found no hesitation in upholding the enhanced values.

6. Role of Co-noticees in the Diversion of Goods:
The Tribunal considered the roles of co-noticees, including Shri Ajay Kumar Goyal and Shri Pawan Kumar Seth, in the diversion of goods. The evidence, including statements recorded under \u/s 108 of the Customs Act, 1962, indicated their involvement in the sale of imported goods in the open market. The Tribunal found no reason to interfere with the imposition of penalties on the co-noticees.

Conclusion:
The Tribunal dismissed all four appeals filed by the appellant, upholding the findings of the adjudicating authority regarding the diversion of imported goods, denial of benefit under Customs Notification No. 99/2009, and the imposition of penalties. The judgment emphasized the overwhelming evidence against the appellant and the co-noticees, supporting the conclusions reached in the impugned order.