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TMI Blog2010 (3) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... (T) REPRESENTED BY: S/Shri L.P. Asthana, Prabhat Kumar, Advocates and J.M. Sharma, Consultant, for the Appellant. S/Shri Suniit Kumar and Vijay Kumar, SDRs, for the Respondent. [Order per: Rakesh Kumar, Member (T)]. - This is a common order in respect of 16 appeals, the details of which are as under:- S. No. Appeal No. Appellant Order against which appeal filed 1. C/354/05 Rahuljee Co. Ltd. An importer of non-ferrous scrap against forged advance licence Order-in-Original No. 12/05 dated 26-2-05 2. C/355/05 Anil Go Executive Director of M/s. Rahuljee Co. Ltd. - do- 3. C/555/05 Gautam Chatteijee -do- 4. C/357/05 Ashok Metal industries-An importer of non-ferrous scrap against forged advance licence Order-in-Original No.13/05 dated 17-3-05 5. C/563/05 Gautam Chatterjee -do - 6. C/353/05 Anil Go Executive Director of M/s. J Non-Ferrous Alloys Pvt. Order-in-Original No. 14/05 dated Ltd. 17-3-05 7. C/560/05 Gautam Chatterjee - do 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed that he is engaged in customs clearing job using the CHA licence of M/s. Star Carriers, and that he was aware of the forged nature of the licence, but he still acted as middleman between Shri Manoj Shah/Bipin Shah and Importers for sale of the forged advance licence and arranged customs clearance for the importers, for which he received commission from Shri Bipin Shah as well as Importers. 1.1.2 Further inquiry at the Nhava Sheva Custom house revealed that in all 12 bogus advance licence including licence No. 03030976 dated 27-7-99 had been got registered by Bipin Shah and Manoj Shah at the Custom house against which release advices had been issued in favour of a number of importers including M/s. R.S. Trade Links, M/s. Rahuljee Co., M/s. Ashok Metal Indus tries, M/s. Kaveri Enterprises, M/s. Holy Sales Corporation, M/s. Dinesh Metal, M/s. B.M. non-Ferrous Pvt. Ltd., M/s. Micro Metal, M/s. Bipin Enterprises, M/s. Dinesh International Pvt. Ltd. etc. Further inquiry also revealed Shri Vishvanath Jalari as the person who alongwith Shri Bipin Shah had fabricated and forged the DEEC books and advance licence. 1.1.3 Show cause notices were issued to the importer companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (218) E.L.T. 349. (2) The signatures of the signatories of the licence transfer letters M/s. Super Abrasive Tooling (in case of imports by M/s. Ashok Metal Industries), and M/s. Stay Sharp Diamond Tools and M/s. Supria Chemicos (in case of imports by M/s. Kaveri Enterprises) had been duly certified by the Bank of India and Bank of Baroda respectively and transfer letter of M/s. Oriental Containers Ltd. (in case of imports by M/s. R.S. Trade Links) had been duly certified by State Bank of Patiala. The importers had, therefore, no reason to suspect the genuineness of the licences in respect of which TRAs had been issued. (3) Premium paid for the licences is substantial, which indicates that the Appellant importers - M/s. Rahuljee Co., M/s. Ashok Metal Industries, M/s. R.S. Trade Links, M/s. Kaveri Enterprises etc. were unaware about forged nature of the licences. In any case, since premium of advance licence depends upon factors like supply and demand, when the licence is expiring etc., just from licence premium one cannot make judgment about the genuineness of the licence. (4) Shri Gautam Chatterjee while admitting the forged nature of the license has not implicated the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e penal provisions of Section 112(a) are atftacted in respect of these persons, (3) As regards the importers - M/s. Rahuljee . Co., M/s. Ashok Metal Industries, M/s. Kaveri Enterprises and M/s. R.S. Trade Links and their Directors/persons incharge, they had knowledge about the forged nature of the advance licences used by them for duty free imports in view of the following:- (i) In each case, the licence premium paid by DDs in around 50% to 75% of the duty foregone as against the market rate of premium of 98% of the duty foregone. The claim of payment of balance premium in cash over and above the DD amount is an after thought. (ii) The payment of premium by DDs was in the name of M/s. Uno Enterprises, not in the name of the transferee of the licences, which, prima fade, as suspicious and no bona fide buyer would have accepted this. This shows that in spite of circumstances indicating fraud, the importers purchasing the licences did not take any precaution. 3. Since the order could not be issued within a period of three months from the date of hearing, the appeals were re-listed and heard again on 8-1-10 when Shri L.P. Asthana, Advocate, representing M/s. R.S. Trade Link, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a). Are Shri Manoj Shah and Shri Gautam Chatteijee liable for penalty under Section 112(a) of the Customs Act, 1962 for abetment of import of copper scrap/brass without payment of duty against forged licences; (b) Are the importers - M/s. R.S. Trade link, M/s. Rahu Co., M/s. Ashok Metal Industries and M/s. Kaveri Enterprises liable to pay customs duty alongwith interest on the imports of copper/brass scrap against the licences which have been found to be forged and whether these importers are liable for penalty under Section 114A of the Customs Act, 1962 (c) Whether Shri Anil Coel of M/s. Rahuijee Co and M/s. B.M. Non-ferrous Pvt. Ltd. and Shri Sanjeev Khurana of M/s. R.S. Trade Links, are liable to penalty under Section 112 of the Customs Act, 1962, and (d) Whether the consignments of copper/brass scrap imported free of duty against forged advance licences are liable for confiscation under Section 111(d) of the Customs Act, 1962 and whether redemption fine in lieu of confiscation under Section 125 of the Customs Act, is imposable on the importers of the goods which are not available for confiscation. 4.1 Our findings on the above points are as under. 5. Liability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eting between Shri Gautam Chatterjee and Shri Bipin Shah is clear from the letter dated 7-2-2000 addressed by Shri Manoj Shah to investigating officers wherein he has also mentioned that he earned Rs. 75,000/- in cash for delivery advance licences received from Bipin Shah to Shri Gautam Chatteijee; (d) The forgery of advance licences has not only been admitted by Shri Bipin Shah in his statements, recovery of blank letter heads of various business concerns in India and Hong Kong, rubber stamps/seals of Punjab National Bank officials, stamps with letter "true copy" and "certified true copy" and other similar incriminating documents from his residence also clearly indicates his role in forgery; (e) Shri Manoj Shah was receiving a number of advance licences from Bipin Shah knowing very well that Bipin Shah is not a licence broker; (f) It is difficult to believrShri Manoj Shah's plea that he was not aware of the forged nature of the licences. Moreover one does not earn huge commission just for forwarding/passing on some documents received from one person to another. In view of this, we hold that Shri Manoj Shah had knowledge about forged nature of the licence and he has abetted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the forged nature of the licences, neither the proviso to Section 28(1) of the Customs Act is applicable no penalty on them can be imposed under Section 114A. 6.1.1 As regards the duty liability, since there is no dispute about the fact that the advance licence against which duty free imports of copper/brass scrap have been made by these importers, are forged and had never been issued by DGFT, in view of - (a) Hon'ble Madras High Court's judgment in case of East West Exporters v. AC, Customs reported in 1993 (68) E.L.T. 319 (Mad.), (b) Hon'ble Calcutta High Court's judgment in case of ICI India Limited v. CC, Calcutta reported in' 2005 (184) E.L.T. 339 (Cal.), the SLP to Hon'ble Supreme Court against Which has been dismissed vide order reported in 2005 (187) E.L.T. A31 (S.C.), and (c) of Hon'ble Punjab Haryana High Court in case of CC, Amritsar v. ATM International reported in 2008 (222) E.L.T. 194 (P H), the imports would have to be treated as if made without any advance licence and accordingly the customs duty exemption would not be available and since the goods had been cleared by availing full duty exemption, the imports would be liable to pay the duty. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no omission of commission on his part so as to render silver or gold liable for confiscation. 28. As noted above, SILs were not genuine documents and were forged. Since fraud was involved, in the eye of law such documents had no existence. Since the documents have been established to be forged or fake, obviously fraud was involved and that was sufficient to extend the period of limitation." 6.1.3 In this case, not only M/s. Ashok Metal Industries, M/s. Rahuljee Co., M/s. R.S. Trade Links and M/s. Kaveri Enterprises did not take the pre caution of ascertaining the genuineness of the advance licence from DGFT's licence bulletin or DGFT's website, the following facts indicate that they were aware of the forged nature of the licences - (a) The import licences have been purchased through Shri Gautam Chatterjee, an employee of a CHA. No prudent importer would purchase such high value advance licences through a petty employee of a CHA instead of a regular licence broker; (b) Licence premium was paid by demand draft in favour of M/s. Uno Enterprises, while the licence holder were different persons - like M/s. Super Abrasive Tooling, M/s. Supric Chemicals, M/s. Oriental Conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62 or any other law for the time being, in force. Hon'ble Supreme Court, in case of Om Prakash Bhatia v. Commissioner, reported in 2003 (155) E.L.T. 423 (S.C.) has held that the goods imported in violation of the provisions of Section 11 of the Foreign Trade (Development Regulation) 1992, readwith Foreign Trade (Regulation) Rules, 1993 would be liable for confiscation under Section 111(d) of Customs Act, 1962. Since, these imports against forged advance licences were not possible without the knowledge and connivance of Shri Anil Goel, 'Director, M/s. Rahuljee Co. and Shri Sanjiv Khurana, person incharge of M/s. R.S. Trade Links, they have actively abetted their illicit imports and therefore penalty under Section 112(a) has been rightly imposed on these persons. 8. Is redemption fine in lieu of confiscation under Section 125 of the Customs Act, 1962 imposable even in the cases where the goods are not available for confiscation. 8.1 Thus question is relevant in appeal No. C/3M/OS filed by M/s. Rahuljee Co., appeal No. C/350/05 filed by M/s. R.S. Trade Links, appeal No. C/357/05 filed by M/s. Ashok Metal Industries and appeal No. C/356/05 - filed by M/s. Kaveri Enterprises, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prises against order-in-original No. 16/05, dated 17-3-05, the goods held to be liable for confiscation and on which redemption fine under Section 125 has been imposed, are those which had been cleared without any condition/bond/undertaking and the same are not available for confiscation. Since in these cases the goods had been unconditionally released and as such are not available for confiscation, in view of the law laid down by Hon'ble Punjab Haryana High Court, as discussed in para 7.2 above, no redemption fine is imposable, and accordingly, the orders imposing redemption fine in lieu of confiscation under Section 125 of the Customs Act, 1962 is the goods not available for confiscation is set aside. 9. In view of our above discussion,- (a) Appeal No. C/355/05 and C/353/05 filed by Shri Anil God, appeal No. C/351/05 filed by Shri Sanjiv Khurana, appeal No. C/252, 253 254/06 filed by Shri Manoj Shah, appeal No. C/555, 560, 561, 562 563/05 and C/65/06 filed by Shri Gautam Chatterjee; and appeal No. C/357/05 filed by M/s. Ashok Industries Ltd. are dismissed, and (b) Appeal No. C/354/05 filed by M/s. Rahuljee Co., appeal No. C/350/05 filed by M/s. R.S. Trade Links an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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