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TMI Blog1999 (3) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... s at the relevant time a Director of the company, and appellant in Appeal No. C/682/98-Bom. Sharad Agarwal was at the relevant time Vice President. 3. The exporter tendered to the Custom House at Nhava Sheva a consignment intended for export to Russia stated to contain 25000 men s shirts valued at Rs. 400/-. The export was to be made under claim for drawback of the duties paid on both on inputs used in manufacturing shirts. The marine container in which the goods was packed was sealed by the central excise authorities having jurisdiction over the appellant factory in accordance with the procedure for export of goods permitted to be stuffed in the container after examination in the exporter s premises. However, examination by the customs o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of goods other than those declared in the containers or their liability to confiscation. He, however, contends that the person who is responsible for the wrong shipment was Sharad Agarwal, the Vice President. Ajay Gupta commenced taking active part in the affairs of the company only in a short while prior to the export, following the death of his father. He was only 25 years old. He was in any event looking after such matters as procuring orders and finance; activities such as operations, affairs of the factory were looked after by Sharad Agarwal who has been performing these functions from 1978 onwards. 5. Mr. J.M. Jain, the ld. Advocate of Sharad Agarwal contends that Sharad Agarwal was not even present when the goods were loaded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of draw back would also have accrued to the company. Penalty is therefore rightly imposed on the company and the premeditated efforts to defraud the Government of such large amount of revenue justify the penalty of Rs. 10 lakhs imposed. 8. We now turn to the penalties imposed on the Vice President and Director. It is not possible, on consideration of the evidence, to rule out the involvement of either of these two persons. The goods were not manufactured by the exporter, but procured from two local suppliers. The Commissioner s finding that none of the goods was manufactured by the exporter and all of them procured from two suppliers is not challenged. A random verification of the goods supplied by the supplier, which would possibly ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 13-1-1997. These contentions were reiterated by his advocate before us. 11. However, the Commissioner finds that Agarwal in his statement dated 18-12-1996, taken a different stand. He finds the statement to show that he was very much present and in control of the situation. The Commissioner also finds that Agarwal was working with the company from 1979 onwards and his ignorance of the fact that the goods were not manufactured in the company. He finds Agarwal had also said in his statement dated 18-12-1996 that only 9000 shirts were purchased from another manufacturer and implications being that the rest of the shirts were manufactured by the appellant before us, whereas later version says that all the shirts were purchased from outside. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een made clear that he was merely repeating what he was told by his Vice President to say. The other question that arises from this is why Agarwal choose to help out the company by making wrong statement merely on a direction of superior. The earlier statement contained details, which, if accepted would lead the department to believe that rags which were sought to be exported as shirts were supplied by somebody else, thus points suspicion away from the company. Such an extent of loyalty shown by Agarwal to his employer demands an explanation; this is not the conduct of a mere salaried employee. No such explanation is found. Agarwal was not giving a statement and not representing his company in the matters such as business ventures, circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought the guilt home to Agarwal as the person who was responsible for manipulating the shipment. Agarwal would then have no defence whatsoever. In this scenario, it is incredible that Agarwal would have embarked upon a venture on his own, responsibility for which, if successful, would inevitably have brought home to him. A connected and equally important aspect is that the payment for the goods would have been received, not by Agarwal, but by the company. If Agarwal was alone responsible for the transaction it would be reasonable to conclude, he did it in order to make some money. But he would not have been able to get the money without the cooperation, either of Gupta or of any other persons in the company who would have control over the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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