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TMI Blog2013 (5) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... es of undue claim of fiscal incentives. Evidence Act not being applicable to quasi judicial proceeding, preponderance of probability came to rescue of Revenue and Revenue was not required to prove its case by mathematical precision. Exposing entire modus operandi through allegations made in the show cause notice on the basis of evidence gathered by Revenue against the appellants was sufficient opportunity granted for rebuttal. Revenue discharged its onus of proof and burden of proof remained un-discharged by appellants. They failed to lead their evidence to rule out their role in the offence committed and prove their case with clean hands. No evidence gathered by Revenue were demolished by appellants by any means. Crystal clear factual findings of the learned Adjudicating Authority and echoing evidence on record do not demonstrate that adjudications were made suspiciously or under surmise. All pleadings of the appellants were ill-founded. Show Cause Notice properly brought them to charge exhibiting civil and evil consequences for opportunity of rebuttal. Nothing was dealt behind their back. Investigation story was backed by evidence and not impeachable. In view of the above finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty 4. C/19/08 Neemichand Jain v. CC (Sea-Export) Chennai Licence Dealer/ Broker NIL 3,50,000/- 5. C/73/08 Sashi Prakash Lohia (Pankaj Impex) v. CC (Sea-Export) Chennai Broker/ Trader NIL 12,00,000/- 6. C/86/08 Sri Devi Extractions Pvt. Ltd. v. CC (Sea-Export) Chennai Importer 23,39,565/- 6,00,000/- 7. C/182/08 Satish Mohan Agarwal v. CC (Sea-Export) Chennai Broker NIL 12,00,000/- Arising out of Order-in-Original No. 5659/06 dt. 21-12-2006 passed by the Commissioner of Customs (Export), Chennai S. No. Appeal No. Appellant Status Duty Penalty 8. C/65/07 Sohan Lal, (Prop. Jaimaya Enterprises) v. CC (Sea-Export) Chennai Broker/ Trader in Licence NIL 1,00,000/- 9. C/66/07 P. Suresh Kumar (Raksha Exports) v. CC (Sea-Export) Chennai Broker/ Trader in Licence NIL 1,00,000/- 10. C/142/07 Suchitra Silk Pvt. Ltd. v. CC (Sea-Export) Chennai Importer 9,74,564/- 1,00,000/- 11. C/146/07 Satish Mohan Agarwal v. CC (Sea-Export) Chennai Broker NIL 5,00,000/- Arising out of Order-in-Original No. 7280/08 dt. 5-3-2008 passed by the Commissioner of Customs (Seaport-Export), Chennai S. No. Appeal No. Appellant Status Duty Penalty 12. C/11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Licence NIL 2,00,000/- 29. C/401/07 Suresh Kumar Jain (PS-Q Corpn. India) v. CC (Sea-Export) Chennai Broker NIL 2,00,000/- 30. C/402/07 Suresh (Raksha Exports) v. CC (Sea-Export) Chennai Broker/ Trader NIL 2,00,000/- 31. C/53/08 Saptagir Camphor Ltd. v. CC (Sea-Export) Chennai Importer 18,70,012/- 4,50,000/- 32. C/71/08 Sashi Prakash Lohia (Pankaj Impex) v. CC (Sea-Export) Chennai Broker/ Trader in Licence NIL 10,00,000/- 33. C/180/08 Satish Mohan Agarwal (Casino Electronics v. CC (Sea-Export) Chennai Broker NIL 10,00,000/- Arising out of Order-in-Original No. 6876/07 dt. 16-11-2007 passed by the CCE (Adjudication), Chennai S.No Appeal No. Appellant Status Duty Penalty 34. C/69/08 Sashi Prakash Lohia (Pankaj Impex) v. CC (Sea-Export) Chennai Trader in DEPB licence NIL 5,00,000/- 35. C/14/08 Neemichand Jain v. CC (Sea-Export) Chennai Broker/ Dealer in Licence NIL 25,000/- 36. C/387/07 P. Suresh Kumar (Raksha Export) v. CC (Sea-Export) Chennai Broker NIL 25,000/- 37. C/64/08 V. Venkatanarayana v. CC (Sea-Export) Chennai Broker in licence NIL 25,000/- 38. C/87/08 Andhra Pradesh Paper Mills Ltd. v. CC (Sea-Export) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chennai Trader in Licence NIL 1,50,000/- 54. C/398/07 P. Suresh Kumar (Raksha Exports) v. CC (Sea-Export) Chennai Trader in Licence NIL 1,50,000/- 55. C/408/07 Neemichand Desariia (Ganapathy Enterprises) v. CC (Sea-Export) Chennai Trader NIL 1,50,000/- 56. C/79/08 Sashi Prakash Lohia (Prop. Pankaj Impex) v. CC (Sea-Export) Chennai Trader in DEPB licence NIL 2,00,000/- 57. C/188/08 Satish Mohan Agarwal v. CC (Sea-Export) Chennai Broker NIL 2,00,000/- Arising out of Order-in-Original No. 6946/07, dt. 30-11-2007 passed by the CCE (Adjudication), Chennai S. No. Appeal No. Appellant Status Duty Penalty 58. C/77/08 Sashi Prakash Lohia v. CC (Sea-Export) Chennai Trader in DEPB licence NIL 75,000/- 59. C/15/08 Neemichand Jain (Rajendra Enterprises) v. CC (Sea-Export) Chennai Broker in Licence NIL 70,000/- 60. C/186/08 Satish Mohan Agarwal v. CC (Sea-Export) Chennai Broker/ Trader in DEPB licence NIL 75,000/- Arising out of Order-in-Original No. 7453/08, dt. 25-3-2008 passed by the CCE (Adjudication), Chennai S. No. Appeal No. Appellant Status Duty Penalty 61. C/153/08 Mukesh Balar v. CC (Sea-Export) Chennai Broker/ Dealer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g material etc. According to the Policy, the DEPB scrips issued against genuine exports are freely transferable and such scrips are permitted to be utilized to make import at the port specified therein, which is the port of export. 3.3 Against the DEPB scrips issued as above by DGFT, imports from a port other than the port of export are allowed under TRA (Telegraphic Release Advice) facility as per the terms and conditions of the Notification issued by the Department of Revenue. In this scheme, the importers are given the facility to discharge duty liability through debits against DEPB scrips under Notification No. 34/97-Cus., dated 7-4-1997 and 45/2002-Cus., dated 22-4-2002. In addition, importer can avail the benefit of "Nil" rate of Special Additional Duty (SAD) under Notification No. 23/02-Cus., dated 1-3-2002 against the utilization of DEPB licence under Notification No. 34/97-Cus., dated 7-4-1997. 4. Background of the cases 4.1 Investigation into the impugned TRAs used at the Chennai Port for clearance of different imports covered by different adjudications under appeal in this batch of appeals revealed that these imports were made against false, fake, forge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he name of M/s. Prabha International. He got IE code for both firms and was purchasing DEPB scrips from Satish Agarwal of New Delhi, which were given to him at lower values. Shri Satish Agarwal was also selling him DEPB scrips under TRAs of Mumbai port and he had not obtained any DEPB scrips on transfer from any original exporter. 5.2 Sri Lohia further stated that all the DEPB scrips with TRAs which were purchased by him from Sri Satish Agarwal were sold by him to various importers and brokers in Chennai. Shri Satish Agarwal was trading in DEPB licensees from New Delhi in the name of M/s. Casino Electronic Private Ltd. and was raising debit note in the name of different companies with their addresses for trading in the DEPB scrips viz. 1) M/s. K.K. Trading, Pradhan Building, 1st Floor, Room No. 19, Tank Bunder Road, Mazgaon, Mumbai, 2) M/s. Evergreen Enterprises, BMC Building, No. 5, 1st Floor, Room No. 26/27, S.S. Road, Mumbai, 3) M/s. Jayant H. Sanghvi, No. 127, C BIT Block, Lakshminayarayan Lane, Matunga Mumbai, 4) M/s. Universal Enterprises No. 80-C/22, Sector 10, Kopar Khairani, Navi Mumbai. 5.3 According to terms of deal, Shri Satish Agarwal was sending the DEPB s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequences. (3) When the DEPB scrips/TRAs were rightly issued by the port of registration, that cannot be questioned and benefit thereof cannot be denied nor questioned for no reason attributable to appellants since those were acquired by importers on payment of consideration. (4) There was no fraud committed by appellants to be dealt by Section 28 of the Customs Act, 1962. (5) The Show cause notices issued were barred by limitation when the appellants acted bona fide and utilised the same for discharge of duty. (6) When the DEPB scrips were not forged but were good scrips issued, the appellants are not liable to any consequence under the law. (7) The sub-brokers and brokers not having made huge profit except earning 0.5% profit on the deal, imposition of heavy penalties on them is unwarranted and uncalled for. (8) That Govt. should provide safeguard measures against forgery of DEPB scrips/TRAs. (9) Statements used against appellants were exculpatory and shall not implicate appellants. (10) The newly introduced Section 28AAA of Customs Act, 1962 not being retrospective, the buyer importers are not liable to pay duty and interest. 7. Arguments on behalf of revenue Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... areless whether it be true or false". This aspect of the matter has been considered by Apex Court in Roshan Deen v. Preeti Lal [(2002) 1 SCC 100], Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education [(2003) 8 SCC 311], Ram Chandra Singh's case (supra) and Ashok Leyland Ltd. v. State of T.N. and Another [(2004) 3 SCC 1]. Suppression of a material document would also amount to a fraud on the court, (see Gowrishankar v. Joshi Amha Shankar Family Trust, [(1996) 3 SCC 310] and S.P. Chengalvaraya Naidu's case (AIR 1994 SC 853). No judgment of a Court can be allowed to stand if it has been obtained by fraud. Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity. 9. Findings and conclusion by Tribunal Heard both sides and perused records. The principal issue involved in the batch of appeals is whether the importer appellants were entitled to the benefit of fake, forged and fabricated DEPB scrips/TRAs and whether the traders, brokers and sub-brokers supplying such instruments were liable to penal consequence of law under Customs Act, 1962. So also whether Settlement Commission's order passed in case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt has also observed that an act of deliberate deception with the design of securing something by taking unfair advantage of another is a "fraud". "Fraud" is a cheating intended to get an advantage. A person whose case is based on falsehood has no right to seek relief in equity. In Commissioner of Customs v. Essar Oil Ltd., (2004) 11 SCC 364 = 2004 (172) E.L.T. 433 (S.C.), their Lordships of the Supreme Court have observed that it is a fraud in law if a party makes representations, which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. Being the ultimate beneficiaries of the fake TRAs, the importer Appellants were not innocent. Claim at the threshold was based on fake TRAs. Therefore, Revenue has rightly invoked extended period under Section 28 of the Customs Act, 1962 to adjudicate the matter. 10.5 It has been held in ICI India Limited v. CC (Port), Calcutta - 2005 (184) E.L.T. 339 (Cal.) that the DEPB licence/scrip is admittedly a negotiable one and is available in the market. Anyone can purchase it from the market and avail of the credit out of it. But, ultimately if it is found that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nality of litigation" cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal gains indefinitely. We have no hesitation to say that a person, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation. Thus plea of these appellants are baseless and being misconceived are devoid of merit and they are liable to penalty under law for the unlawful act. The order of the Tribunal in the case of S.K. Colombowala v. CC (Import), Mumbai - 2007 (220) E.L.T. 492 (Tri.-Mum.) does not come to rescue of these appellants since that decision did not take into consideration the law laid down by Apex Court in the case of Chengalvaraya Naidu (supra). Accordingly, the orders passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be found. That is why under Section 3 of the Evidence Act, a fact is said to be 'proved' when, after considering the matters before it, the Court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. This definition of 'proof' does not draw any distinction between circumstantial and other evidence. Thus, if the circumstances listed aforesaid establish such a high degree of probability that a prudent man ought to act on the supposition that there was abetment to the offence of use of fake, false, forged and fabricated DEPB scrips and TRAs to clear imports duty free in contravention of the law. Thus, without detaching themselves from the deal of aforesaid ill-designed deal to defraud Revenue entire conduit is liable to consequences under law. 13. Adjudications were not time-barred 13.1 It is cardinal principle of law which is enshrined in Section 17 of Limitation Act that fraud nullifies everything. The adjudications were not time-barred following Apex Court judgment in the case of CC. v. Candid Enterprises - 2001 (130) E.L.T. 404 (S.C.). N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L and in the case of M/s. Synotex Industries v. CC - 2008-TIOL-777-CESTAT-KOL. When the material evidence established fraud against Revenue, white collar crimes committed under absolute secrecy shall not be exonerated from penal consequence of law following Apex Court judgment in the case of K.I. Pavunny v. AC, Cochin - 1997 (90) E.L.T. 241 (S.C.). Thus, the adjudications were not time-barred and Section 28 of the Customs Act, 1962 was rightly invoked by the Adjudicating Authority in view of fraud committed against Revenue. 13.4 We also find that while upholding the decision of the Tribunal in the case of R.S. Trade Link v. CC, New Delhi - 2010 (255) E.L.T. 572 (Tri.-Del.), the Hon'ble High Court of Delhi has held in the case of Rahuljee & Company Ltd. v. CC, New Delhi - 2011 (267) E.L.T. 313 (Del.) as follows :- "15. We do not find any illegality in the reasoning recorded by the Tribunal in this regard which is as under :- "6.1.1. As regards the duty liability, since there is no dispute about the fact that the advance licence against which duty fee imports of copper/brass scrap have been made by these importers, are forged and had never been issued by DGFT, in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there are circumstances beyond to mere fact of sale from which a warranty may be implied. 26. No one ought in ignorance to buy that which is the right of another. The buyer according to the maxim has to be cautious, as the risk is his and not that of the seller. 27. Whether the buyer had made any enquiry as to the genuineness of the licence within his special knowledge. He has to establish that he made enquiry and took requisite precautions to find out about the genuineness of the SIL which he was purchasing. If he has not done that, consequences have to follow. These aspects do not appear to have been considered by the CESTAT in coming to the abrupt conclusion that even if one or all the respondents had knowledge that the SIL was forged or fake that was not sufficient to hold that there 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting civil and evil consequences for opportunity of rebuttal. Nothing was dealt behind their back. Investigation story was backed by evidence and not impeachable. 14.4 Corroborative and cogent evidence gathered by investigation directly and surrounding circumstances proved nexus of the appellants and does not make investigation story unbelievable. Looking to the entire genesis of the case, it can irresistibly be concluded that investigation has very successfully proved its case. Oblique motive of all the appellants to be enriched at the cost of Revenue was proved. They had defrauded Revenue. Fruits of forbidden tree being always forbidden, the importer appellants had no right to make gain out of fake TRAs covering DEPB scrips obtained fraudulently. They are, therefore, liable to pay the duty lost in the imports make by them, along with interest thereon. 14.5 In view of the above findings, we hold that the importer appellants are liable to pay the duty and interest adjudged against the imports made by them covered by the adjudications under appeal and the traders, brokers and sub-brokers of fake TRAs and DEPB scrips are liable to be penalised being instrumental in provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emichand Jain v. CC (Sea-Export) Chennai Dealer/ Broker 5,00,000/- 10. C/68/08 Sashi Prakash Lohia (Prop. Pankaj Impex) v. CC (Sea-Export) Chennai Trader in DEPB licence 12,50,000/- Arising out of Order-in-Original No. 6932/07 dt. 26-11-2007 passed by the CCE (Adjudication), Chennai S. No Appeal No. Appellant Status Reduced Penalty (Rs.) 11. C/72/08 Sashi Prakash Lohia (Prop. Pankaj Impex) v. CC (Sea-Export) Chennai Trader in DEPB licence 6,25,000/- 12. C/18/08 Neemichand Jain v. CC (Sea-Export) Chennai Broker/ Dealer in licence 1,50,000/- Arising out of Order-in-Original No. 6930/07 dt. 26-11-2007 passed by the CCE (Adjudication), Chennai S. No. Appeal No. Appellant Status Reduced Penalty (Rs.) 13. C/70/08 Sashi Prakash Lohia v. CC (Sea-Export) Chennai Trader in licence 7,50,000/- 14. C/17/08 Neemichand Jain v. CC (Sea-Export) Chennai Broker/ Dealer in licence 1,50,000/- Arising out of Order-in-Original No. 6931/07 dt. 26-11-2007 passed by the CCE (Adjudication), Chennai S. No. Appeal No. Appellant Status Reduced Penalty (Rs.) 15. C/400/07 C. Mukesh Balar (Maruthi Enterprises) v. CC (Sea-Export) Chennai Broker/ Trader in Licence 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... j Impex) v. CC (Sea-Export) Chennai Trader/ Broker 37,500/- Arising out of Order-in-Original No. 6948/07 dt. 30-11-2007 passed by the CCE (Adjudication), Chennai S. No. Appeal No. Appellant Status Reduced Penalty (Rs.) 32. C/396/07 Sohan Lal (Prop. Jaimaya Enterprises) v. CC (Sea-Export) Chennai Trader in Licence 75,000/- 33. C/397/07 Ashok Kumar Jain (Anmol Exports/Ashok Impex) v. CC (Sea-Export) Chennai Trader in Licence 75,000/- 34. C/398/07 P. Suresh Kumar (Raksha Exports) v. CC (Sea-Export) Chennai Trader in Licence 75,000/- 35. C/408/07 Neemichand Desarlla (Ganapathy Enterprises) v. CC (Sea-Export) Chennai Trader 75,000/- 36. C/79/08 Sashi Prakash Lohia (Prop. Pankaj Impex) v. CC (Sea-Export) Chennai Trader in DEPB licence 1,00,000 Arising out of Order-in-Original No. 6946/07 dt. 30-11-2007 passed by the CCE (Adjudication), Chennai S. No. Appeal No. Appellant Status Reduced Penalty (Rs.) 37. C/77/08 Sashi Prakash Lohia v. CC (Sea-Export) Chennai Trader in DEPB licence 37,500/- 38. C/15/08 Neemichand Jain (Rajendra Enterprises) v. CC (Sea-Export) Chennai Broker in Licence 35,000/- Arising out of Order-in-Original No. 7453/08 dt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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