9911796707
TMI Blog2013 (8) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... , but Customs authority arbitrarily and baselessly held the goods to be prohibited one without any prohibition thereof for export relying a test report not relevant to the present adjudication. 1.2 According to learned counsel for appellant arbitrary adjudication was made on the basis of biased investigation relating to two live consignments covered by shipping bill No.2231280 dated 12.5.2009 and 2232302 dated 20.5.2009 seized and confiscated. As against the value of goods declared @ Rs.19. 57, Customs authority valued at Rs.35/- per kg. But ultimately when Customs auctioned the live consignment at Rs.3/- per kg., the value has become arbitrary. Auction was also not made known to the appellant in respect of the live consignment. Accordingly, past consignment goods were not liable to be valued at Rs.35/-. 1.3. It was further submitted on behalf of the appellant that Customs authority based his adjudication on the basis of a report obtained in respect of above two live consignments and applied the same to the past exports which is under appeal in the present proceeding before Tribunal. It was further urged that when the appellant is also facing consequence of adjudication in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llegality from the beginning of non-disclosure of source of procurement of the goods and customs was defrauded. Therefore, Tribunal should not grant waiver of pre-deposit since revenue has been seriously prejudiced by deliberate act of the appellant. 3. Heard both sides and perused the records. 4. No doubt present adjudication under challenge in this appeal relates to the past exports made during the period October 2007 to May 2009 in terms of 151 shipping bills. But there was hardly any evidence led by the appellant to prove that the goods covered by those shipping bills were different from the goods covered by the aforesaid two live consignment shipping bills seized. Adjudication proceeded when appellant failed to disclose source of procurement and mis-declaration of goods was patent and there was violation of export norm prescribed by EXIM policy as well as the Customs law. 4.1 Customs found that the goods covered by live consignment to be Muriate of Potash upon testing with the help of officials of Agricultural Department of Government of Karnataka who were authorized officers to draw sample and test the fertilizers. The sample proved to be Muriate of Potash containing more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious companies for the supplies. 5. In the statements dated 26.11.2009 and 4.2.2010, Shri Jayaram deposed that he was a trader exporter and as soon as he received the purchase order for export, he informed the supplier for supplying required quantity and his CHA took care of transshipment of the export consignment from the supplier to the port of shipment. He stated that he was not aware from where his suppliers got the chemicals as those were trade secrets and he was also not maintaining any records. He agreed to the manipulation of his purchase records as there was only one supplier of the goods and invoice was raised by another person for different commodity then the one supplied. He also stated that the DEPB scrips to the tune of Rs.128.29 lakhs was availed by him. He claimed to be innocent of the export restriction and denied to accept chemical analysis report obtained from Customs on the ground that the same did not contain details of Potassium Chloride which is major ingredient of the Muriate of Potash. But he neatly described that he exported identical goods which was similar to the goods seized attempted to be exported by the live consignments aforesaid under two shippi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equence of adjudication with a penalty of Rs.75 lakhs being actively and concisely involved in the illegal export. 5.5 When the appellant secreted the source of procurement of the goods exported, in para 34 of adjudication order, the learned adjudicating authority recorded as under: 34. There are no known sources of Muriate of Potash in India. MOP being fertilizer, is controlled and supplied to farmers after subsidy. Such subsidized MOP appears to have been diverted for export in large scale by unscrupulous traders and the current case pertains to part of such racket of diversion of subsidized MOP. Customs department has unearthed the scam in Bangalore and at other places of India in a very large scale. The export of MOP, a restricted item for export & requires an export license as per Foreign Trade Policy 2009 read with Notification No.30(RE-2003)/2002-2007 dated 28.1.2004 issued by the DGFT and the exporter failed to produce the requisite license for export of the product. Thus, the exporter has illegally exported prohibited goods by declaring the same as 'Industrial Salt' in respect of 151 shipping bills which were also MOP only. (Emphasis supplied) 5.6 The authority also n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t stage is to cross the hurdle of pre-deposit. Only after that stage, subject to compliance to the interim order, if any, assessee gets right to be heard on appeal in full length and fair opportunity is granted to place his case to decide the contentious issues involved. 6.2 While interest of Revenue weighs consideration, undue hardship that an assessee may suffer by an interim order also equally invites attention of the Courts while hearing interim applications. So also, the law laid down by Apex Court in Dunlop India Ltd - 1985 (19) E.L.T. 22 (S.C.), Vijay D. Mehta - 1988 (4) SCC 402: 1989 (39) ELT 178 (SC), Benera Valves 2006 (204) ELT 513 (SC) and Ravi Gupta 2009 (237) ELT 3 (SC) govern the field. Main purpose of passing an interim order is to evolve a workable formula or a workable arrangement to the extent called for by the demands of the situation keeping in mind the frame work of the legislation and to ensure that no irreparable injury is occasioned. Courts are therefore required to strike a delicate balance after considering the pros and cons of the matter lest larger public interest is not jeopardized and both litigants before the Court are equally dealt under law. Every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vene and give appropriate interim relief. In cases where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizens faith in the impartiality of public administration, a Court may well be justified in granting interim relief against public authority. But since the law presumes that public authorities function properly and bona fide with due regard to the public interest, a Court must be circumspect in granting interim orders of far reaching dimensions or orders causing administrative, burdensome inconvenience or orders preventing collection of public revenue for no better reason than that the parties have come to the Court alleging prejudice, inconvenience or harm and that prima facie case has been shown. There can be and there are no hard and fast rules. But prudence, discretion and circumspection are called for. There are several other vital considerations apart from the existence of a prima facie case. There is the question of balance of convenience. There is the question of irreparable injury. There is the question of the public interest. There are many such factors worthy of consideration. We often wonder why in the case indirec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. (See: S.P. Changalvaraya Naidu v. Jagannath [1994 (1) SCC 1]. 7.5 In leading English case i.e. Derry and Ors. v. Peek (1886-90) All ER-1 what constitutes 'fraud' was described thus : (All ER p. 22 B-C) 'fraud' is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless 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 Naidus 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 solemnit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty that a prudent man ought to act on the supposition that there was ill-designed deal to defraud Revenue, which invites penal consequences under law. 7.9 It is cardinal principle of law which is enshrined in Section 17 of Limitation Act that fraud nullifies everything. Adjudications do not suffer from time bar as is held by Apex Court in the case of CC. v. Candid Enterprises - 2001 (130) E.L.T. 404 (S.C.) where fraud surfaces. Lapse of time does not convert an illegitimate transaction to be otherwise and plea of time bar is not tenable but deniable. 7.10 When fraud is established that unravels all as has been held by Apex Court in the case of UOI v. Jain Shudh Vanaspati Ltd. - 1996 (86) E.L.T. 460 (S.C.) and in Delhi Development Authority v. Skipper Construction Company (P) Ltd. - AIR 1996 SC 2005 any undue gain made at the cost of Revenue defrauding it is to be paid back to Revenue followed by penal consequence of law. Fraud committed against Revenue void all judicial acts, ecclesiastical or temporal. 8. Prima facie, it appears that Revenue was defrauded by the conduct of the appellant who failed to come out with clean hands to show that there was no mis-declaration, no illega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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