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TMI Blog2013 (11) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... due to the appellant. The fraud so committed against Revenue proved oblique motive of the appellant. Enquiry conducted with M/s World Wide Cargo and M/s CMA UK Agents established that Bill of lading No. BCM/001758 was issued by CMA s agent in Barcelona on the basis of instructions received from the booking and freight forwarding company and the description of the cargo was declared as ‘Acrylic Staple Fibre’, Commercial Quality BRIGHT and the cargo was shipped from Barcelona and was routed through Dubai. Containers were stored in shipper s premises at Barcelona and freight was indicated as ‘Collect’. But the UK based Shipping Agent paid the freight to CMA s agent in Bradford. Investigation result revealed that M/s Linear Shipping Containers had amended the description on the Bill of Lading to read as ‘Synthetic Waste/ Soft Quality with predominance of staple fibre with wide variation in denier and length and containing drawn and undrawn fibre’. The real description of the goods ‘Acrylic Staple Fibre Commercial Quality Bright’ was deliberately changed on the basis of the UK Shipper’s instructions. Appellant followed dilatory tactics calling the experts for cross examination and u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by M/s Hall filed Machinery Brokers, Textile Fitters Agent and Worsted Machinery Consultant, West Yorkshire, England. 3. In terms of the licence and Import Export Pass Book, the appellant was authorized to import goods of description synthetic waste/soft quality with pre-dominance of acrylic staple fibre with wide variation in denier and length, containing both drawn and un-drawn fibres. 4. Directorate of Revenue Intelligence investigated into the above import based on a specific information that the consignment contained prime acrylic staple fibre but not the goods allowed for import. Initial examination of container no. SSXU-232477/0 made on 22.02.90 revealed that all the 24 bales packed in the container were found with labels of manufacturer which showed that the goods were Acrylic Staple Fibre of denier 2.5 and 3 (one bale having only one denier) and of fibre length of 110 mm. The label also indicated the serial number, gross and net weight of the bale giving description of the goods as: ACRYLIC STAPLE FIBRE, COMMERCIAL QUALITY, BGIGHT S.W.M. 3.0 DTEX, V 110 MM BRIGHT, BALE NO.42, GROSS WEIGHT 299.1 Kgs. 5. When the goods on physical examination were found to be misd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted the details received from their Principals C.M.A. as under:- (i) B/L issued by C.M.A s Agent in Barcelona, Spain on the basis of instructions received from booking freight forwarding company, decalred that freight was payable at destination and that cargo description was Acrylic staple fibre commercial quality bright. (ii) Cargo shipped on M.V. Ville Le Neptune 9514 Ex BCN, Vessel s ports of calls after Barcelona were Le Harve/ Rottoerdam/ Felistow/ Antwerp I Marceille/Naples/Jeddah/Mina Qaboos where cargo was discharged. It then connected with relay vessel Villa De Dubai 2110 from Mina Qaboos to Bombay. (iii) The Spanish freight forwarding company withdrew the containers themselves from empty stock of CMA in Barcelona, presented them to Shippers premises and returned them full to Quay Barcelona in readiness for shipment. No bond was issued, as is the local common practice. Exporters loaded the containers themselves. (iv) Freight up to Bombay was (as mentioned in point (i) above) initially declared by Spanish forwarder as collect . However, U.K. based shipper chose to pay freight to CMA, U.K. Agents Bradford U.K., M/s Liner Shipping Agencies. It was Liner Shippi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of the test report referred to above, from the letter dated 26.02.90 of M/s World Wide Cargo Pvt. Ltd., telex dated 01.03.90 of M/s CMA to M/s World Wide Cargo and telex dated 27.02.90 sent by M/s World Wide Cargo to M/s CMA as well as the mode of packing and specifications given on the manufacturer s label, found to be pasted on the bales of material imported vide B/E no. 110713 dt. 19.01.90, it appeared that the goods were acrylic fibre of specific denier, staple length, Bright and commercial quality, against the declared description of synthetic waste/soft quality with pre-dominance of Acrylic staple fibre with wide variation in denier and length, containing both drawn and un drawn fibre . It also appeared that the goods did not merit duty free clearance under notification no.117/88 against Import-Export Licence No.PF/0002325 DT.29.09.89. 11. In course of investigations, various CIF prices of Imported Acrylic fibre and quotation for Acrylic Fibre, showing price in Korea and Taiwan during August to November, 1989 were obtained. The lowest price noticed for acrylic fibre during the relevant period was Y 215 per kg. (Exchange rate Rs.I00 = Y 847.50). Calculated at this price, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lieu of confiscation. (iii) Customs duty of Rs.53,39,836.59 was confirmed on 96,085 kgs. of acrylic fibre, which was already released to the appellant provisionally at the time of import. (iv) Penalty of Rs. 15,00,000/- (Rupees Fifteen Lakhs) was imposed on M/s Sanjeev Woollen Mills and penalty of Rs. 1,00,000/- (Rupees One Lakh) was levied each on each the partners of M/s Sanjeev Woollen Mills namely S/Sh. S.P. Goyal, Sanjeev Goyal and R.K. Goyal under section 112(a) of the Customs Act, 1962. (v) Duty, fine and penalty demanded in terms of adjudication was ordered to be recovered enforcing the Bank Guarantee and the Bond executed by the importer appellant. 14. Ld. Counsel for the appellant submitted that staple fibre is defined by Chapter Note 55 of the HSN Classification; the goods imported were not the virgin acrylic staple fibre but were synthetic waste/ soft quality of the prescribed denier and entitled to be imported duty free under Notification No.117/88. Forty-eight samples were sent for testing and that created fiction as to virgin acrylic staple fibre. Nothing came out in favour of Revenue in cross-examination of CRCL experts and memory deficiency of the expert cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch manipulation. Therefore, appellants have no case to plead any benefit from the reported decisions cited above when fraud surfaced. In the cited decision the fact of questionable modus operandi of the appellant not being recorded, the present case does not fall within the four of that decision. Therefore, the appeals should be dismissed. 18. Heard both sides and perused the records. FINDING AND CONCLUSION OF TRIBUNAL 19. From the uncontroverted evidence of shipment of virgin acrylic staple fibre by exporter and subsequent manipulation made to the documents in transit at the behest of the importer, it is established that the appellant importer mis-declared the imported goods in the bill of entry as waste to get the duty free benefit by the notification aforesaid. That is corroborated from the test reports of CRCL New Delhi IPCL Baroda. Examination of the goods stuffed in container no. SXSU 232477/0 revealed that all the 24 bales packed in the container were with manufacturer s labels indicating that the goods were acrylic staple fibre commercial quality of denier of 2.5 and 3 and fibre length of 110 mm. 20. The contention that acrylic staple fibre were of commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers was established from the letter dt. 26.02.90 of M/s World Wide Cargo Pvt. Ltd and telex dt. 01.03.90 of M/s CMA to M/s World Wide Cargo and Telex dt. 27.02.90 sent by M/s World Wide Cargo to M/s CMA. Had there been no malafide, entire manipulation of transit documents would not have occurred. All that was done was at the behest of the appellant. Test report of M/s IPCL, Baroda communicated vide letter dt. 22.06.90 and report of CRCL, New Delhi dated 26.02.98 proved the characteristics of samples tested was more like virgin acrylic fibre than waste products and 44 samples under reference were not waste. 23. Suppression of a material fact 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)]. Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity. When fraud is established that unravels all. [Ref: 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 is to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y plea was that the goods were merely of different length and commercially called as waste. 28. Manipulation of the transit documents detected by the DRI with full proof could not be repelled by the appellant. Such self-speaking evidence brought out the ill design of the appellant. It acted to the detriment of the Revenue deliberately suppressing the material fact. Entire discussion and finding of the ld. Adjudicating authority brings out how he applied his mind proving that there was deliberate mis-declaration committing fraud against Revenue. Such reasoned and speaking order establishing deliberate mis-declaration should sustain. 29. Appellant failed to gain any benefit from the citation made in view of Crystal laboratory test findings and fraud committed against Revenue in the manner aforesaid. As no fraud can occur without human intervention, the persons connected to the illicit import were rightly brought to fold of law for penal consequence of law. 30. In view of above observation and finding all the appeals are dismissed. MA if any filed stands disposed and stay order passed earlier stand vacated. (Pronounced in the open court on 01/11/2013) - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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