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TMI Blog1987 (7) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... s. H.K. Shah Co. and since that premises was found locked they visited the premises of M/s. Damani Enterprises. From the records of Damani Enterprises it was seen that they had issued a transport voucher No. 664 dated 29-11-1979 at 10.50 hours in the name of M/s. H. K. Shah Co. for 114.540 kgs. of silver in the form of chorses, i.e. pieces weighing less than 1 kg. each and having no individual serial numbers stamped on them. Thereafter at about 14.30 hours the said officers visited the premises of M/s. H. K. Shah Co. and on verification of the stock they did not find the silver bullion weighing 114.540 kgs. purported to have been purchased by them from M/s. Damani Enterprises. The appellant Hamirmal Valchand Jain when questioned stated that he had already sold the chorses and he also produced his records. Verification of the records showed that between 10.50 hours and 14.30 hours the firm had issued 115 transport vouchers showing retail sale of one or two chorses silver to each purchaser against cash. When questioned regarding the cash Shri Hamirmal stated that it had been sent to the Bank of India Zaveri bazar branch through his Accountant one Mithalal. One of the officers a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on three different dates, the appellant Hamirmal Jain stated that Mithalal did not deposit the amount but the two cash amounts given to Mithalal namely 2.65 lakhs and 2.5 lakhs were found lying in the cupboard of his office premises and he deposited the said two sums in the Union Bank Mirza Street on 21-11-1979. During the investigation summons were issued by registered post A.D. to the alleged purchasers of silver chorses and all the summons were received back undelivered with remark not known . Personal enquiries also showed that the names and addresses are fictitious. On verification of the records maintained in the firm M/s. H.K. Shah Co. it was noticed that during the period between 4-9-1979 and 20-11-1979 the firm had shown disposal of a total quantity of 4328 Kgs. of silver valued at Rs. 86 lakhs in retail at one or two chorses to each customers against cash. The vouchers are issued keeping a time gap of one or two minutes to one another. The alleged purchasers are also not traceable at the addresses shown in the vouchers. After the completion of the investigation a show cause notice was issued to the present appellants and the mother of the second appellant. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Act. (e) From the evidence on record it was clear that there were no purchase or sales by the partners or by the firm. The appellants only indulged in creating certain fictitious documents which did not warrant imposition of heavy penalty on the firm as well as on the partners. Shri Jain urged that in similar cases the adjudicating authority as well as the Board were taking a lenient view and imposing penalties not exceeding Rs. 10,000/-. It was also contended by Shri Jain that in the stay application filed by the appellants they were directed to deposit Rs. 10,000/-, Rs. 5,000/- and Rs. 5,000/- respectively and the amount of penalty may be reduced to amounts ordered in the stay application. Shri Jain also submitted that there was no justification to impose penalty on the firm as well as on the partners. 4. Shri Pattekar appearing for the Collector submitted that all the contentions of Shri Jain have been considered by the Additional Collector as well as the Board and they have given valid reasons for not accepting those contentions and in the said circumstances and in view of the categorical admission made by the 2nd appellant, the appeal deserves to be dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms officers reveal that no such deposit was made but then Hamirmal in his further statement stated that he found both the amounts in the business premises on the next day. 7. From the review of the evidence the purchase of 114.540 kgs. of silver bullion valued at Rs. 82.6 lakhs from M/s. Damania Enterprises by M/s. H.K. Shah Co. had been established satisfactorily. Regarding the sales there is discrepancy in the evidence of the father and son. According to the father he sold the entire 114.540 kgs. and obtained signatures on the vouchers from the purchasers. The son however stated that the father did not bring the silver purchased from M/s. Damani Enterprises to the business premises of H.K. Shah Co. but on the basis of the voucher No. 664, dated 20-11-1979 he prepared several fictitious vouchers showing sale of 170 pieces of chorses to different persons and forged their signatures. 8. Having regard to the admission of the son as to the creation of fictitious vouchers and also having regard to the evidence of the father that he did not know the names and addresses of the purchasers it could safely be concluded that the sales were all to fictitious persons. 9. Chapter IVA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchasers are not real persons but they are fictitious persons. Even if we are to accept the contention of Shri Jain that mere return of the summons with the postal endorsement not found or that there was no evidence as to the independent enquiry held by the department are accepted as correct even then his contention that no presumption can be drawn under Section 11M does not stand scrutiny having regard to the clear and unequivocal admission made by partner Shri Kantilal and other circumstances such as the duration between the vouchers, the impossibility of such vouchers coming into existence if the transactions were to be genuine, all establishes even beyond reasonable doubt that the purchasers are fictitious persons. Therefore the authorities below were justified in drawing on the presumption arising under Section 11M. 13. Shri Jain had contended that the appellant did not have an opportunity to rebutt the presumption. There is no force in this contention. It is true that presumption contemplated by Section 11M is a rebuttable presumption. In the show cause notice issued to the appellants, it was specifically alleged that the alleged retail sales of silver chorses are fictit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had relied on the presumption arising under Section 11M. That presumption had not been rebutted. Therefore, the illegal export stands established and as such the contention of Shri Jain that no penalty can be imposed under Section 114 requires to be rejected and it is rejected accordingly. 16. The next contention of Shri Jain that the steps specified in Rule 5 are impossible of performance and therefore the rules cannot be enforced in law also cannot be accepted. Having regard to the object of the Act and the introduction of Chapters IVA and IVB, it is necessary to place stringent restrictions on persons who possess, acquire and deal in specified goods. We are unable to accept Shri Jain s contention that the steps specified in Rule 5 are not capable of complying with and on that count the rule cannot be enforced. Even if we are to hold that the restrictions contained in the rule are unreasonable, we have no power or jurisdiction to hold the rule as ultra vires or inoperative. We, therefore, reject Shri Jain s contention. 17. The last of the submission made by Shri Jain was that the penalty imposed on the appellants are harsh and unreasonable. He had urged that from the evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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