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TMI Blog2013 (8) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... uty drawback - Whether the assessee deliberately facilitated fraudulent exports for claim of higher drawback rendering them to penal action – Held that:- Fraudulent past exports were proved to be making fictitious purchases recorded by the appellant without explaining the manufacture and cost data of the exports -Its records were fabricated - So also the cost data relating to attempted exports were not furnished - it was difficult to appreciate assessee’s pleadings to be merited at this stage since fraud nullifies everything – since draw back was availed in excess of admissibility - assessee was ordered to submit some amount as pre deposit – decided against assessee. - C/3596,3597,3598 of 2012 - STAY ORDER NO.57203-57205/2013 - Dated:- 8-4-2013 - D N Panda And Rakesh Kumar, JJ. For the Appellant : Dr Samir Chakraborty , Adv . For the Respondent : Shri Pramod Kumar, Jt. CDR. Per: D N Panda: Following consequences arising out of adjudication against the exporter M/s Kaka Carpets (in appeal No. 3596/2012), Shri Yadavendra Kumar Roy in appeal No. 3597/2012 and Ms. Rita Roy (in appeal No. 3598/2012), is under challenge in this batch of appeals and while filing appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of law. (vi) Penalty of Rs. 1,00,00,000/- (Rupees One Crore only) each was imposed on Mr. Y.K. Roy and Mrs. Rita Roy, Partners under Section 114 (iii) and 114AA of the Customs Act, 1962 for being personally liable for their role in improper exportation and furnishing false declaration in contravention of above provisions of law. (vii) Enforcement of Bank Guarantees of Rs. 20 lacs and Rs. 50 lacs furnished against provisional release of the export goods covered under Shipping Bills No. 702, 703 704 all dated 07/06/2008 was ordered for appropriation towards recovery of inadmissible drawback amount of Rs. 12 ,00,79,410 /- paid on the past exports, redemption fine and personal penalties imposed on M/s Kaka Carpets and its two partners. 2.1 The appellant, M/s Kaka Carpets was an exporter of carpet manufacturing the same as well as purchasing such goods from market. Noticing that the carpets exported by that appellant in terms of shipping bill Nos. 702, 703, 704/DBK/2008 all dated 07/6/08 in stuffed containers cleared by Customs ICD at Bhadohi on 07/6/08 moving towards J PT Nhava Sheva were misdeclared, as to quality, quantity as well as value thereof making over valuation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weaving technique 45.16 Wool-71.92% Cotton-13.74% Others-14.34% Both the consignment covered under signal export invoice in which the Roll No 9874 9507 are covered. Wool-80% Cotton-20% Others-Nil 03. Shipping Bill No.703/ bdk /2008 dated 07.06.08 Roll No.9507 HSN Indian Hand Knotted Woollen Carpets 570101 Gabbeh Plain, Quality: 4 1/2/21 hand Knotted Persian weaving technique 24.51 Wool-83.78% Cotton-09.96% Others-6.26% 04. Shipping Bill No.704/ bdk /2008 dated 07.06.08 Roll No.10076 HSN Indian Hand Knotted Woollen Carpets 570101 Indo-Nepali modern design, Quality 8/18, Tibetan pattern weaving technique 38 Wool-71.07% Cotton-23.35% Others-5.58% Wool-80% Cotton-20% Others-Nil 2.4 Above back ground of misdeclared attempted exports opened way for further investigation into the past exports made by M/s Kaka Carpets during 2004-05 to 2008-09. It was noticed by investigation that lower quality of goods were exported during that period over valuing the same and higher drawback claim was made defrauding Revenue. Accordingly, the out come of investigation warranted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y revealed that purchase of carpets were made from fictitious sellers who were non-existent at the given address. The addresses furnished by Appellants showed that metal/steel traders existed thereat. Huge banking transactions were made by non-existing concerns who were man of straw. When the appellant failed to provide cost details, past exports made from the year 2004-2008 were also found to be overvalued by exporter appellant to make undue claim of draw back causing loss to Revenue. 3.4 Adjudication also found that there were deliberate misdeclaration of material facts to make undue benefit of draw back at the cost of Revenue for which aforesaid consequences of adjudication were bound to flow. 4.1 Moving stay applications, learned counsel argued on two different counts of export. The first count of argument related to shipping bill No.702, 703 704 dated 7.6.2008. The second count of argument related to past export of carpets made during the financial year 2004-05 to 2008-09. 4.2 On the issue of consignment exported by above 3 shipping bills, it was submitted that when the consignments moved under physical examination of Department, there cannot be any allegation of discr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f undue draw back claim made by the appellant. Accordingly it was prayed on behalf of all the 3 appellants that there should not be recovery of demand during pendency of appeals. 5.1 While the appellant exporter pleaded as above, Revenue submitted that fraud having been committed by appellants against Revenue there cannot be misplaced sympathy looking to the bank guarantee plea of the appellant which is quit meagre compared to the amount defrauded. The appellant Sri Y.K. Roy and Mrs. Rita Roy were instrumental to the fraud committed. Revenue can only be protected if the bank guarantee is directed to be encashed with further redeposit since the appellant has already made undue gain at the cost of Revenue. Mis -declaration was established by physical examination of aforesaid 3 consignments physically examined in Nhava Sheva and as revealed by the outcome of report of the testing laboratory. Fraudulent past exports were proved to be making fictitious purchases recorded by the appellant without explaining the manufacture and cost data of the exports. Its records were fabricated. So also the cost data relating to attempted exports were not furnished. Therefore, there should not be any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant information and cost details as well as composition details its pleadings were unfounded. 7.5 Appellants were exporting carpets since 2004 and claiming drawback on the same. They claimed that they had purchased carpets for export and furnished list of suppliers thereof. But enquiry revealed that many such suppliers were based in Kolkata and did not exist at the given address. So also the named persons were traders in metal/steel. Proving their oblique motive appellants misguided the investigation for undue gain. Mr. Y.K. Rao and Mr. Rita Roy appear to be instrumental to the fraud committed against Revenue. 7.6 The bank accounts routing the transaction revealed huge transfers and transaction running into crores of rupees while suppliers at the given address were non-existent and in some cases, the addresses revealed that the same related slums/ jhuggies . Appellants had no cogent evidence to defend nor any plausible/reasonable explanation/reply furnished to rebut allegations of investigation. 7.7 The evidence of attempted exports on record prima facie shows that adjudication was not made arbitrarily nor even the adjudication relating to past exports unreasonable. Only tec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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