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TMI Blog2013 (11) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... detail and established truth by fruitful investigation result to make its story very believable - None of the appellants proved to be innocent and failed to lead cogent evidence to disturb adjudication finding. They did not repel any of the arguments of Revenue with cogent evidence - Appellants resorted to fraud consciously by their ill design as was found by investigation and adjudicating authority. Their conscious knowledge of mis-declaration as to description of the goods as well as value of the export made from India was proved when they had intention to make ill gain from undue claim of DEPB. Motive of all these appellants was oblique to promote illegality. Investigation discovering truth by extensive enquiry brought out neatly the intimate connection of the racket and their conscious involvement to benefit each other - Having echoing evidence on record by investigation, establishing live link and close proximity of the above appellants inference drawn by the Adjudicating Authority cannot be disturbed against them since presumption of innocence was countered by Customs by the presumption of guilt which could not be assailed by the appellants. The law does not require the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods declared as heat resistant rubber tension tape stated as follows: Each of seven samples is in the form of cut piece of grey coloured tape. Each is composed of natural rubber, carbon black, in organic filters and additives. It breaks when stretched. Each is not vulcanised. Therefore, the sample is considered as compound of pre-vulcanised compound rubber. 1.2 It was found that all the four exporter appellants had made export of inferior quality of goods and aggregate value thereof was as depicted in column (3) of the Table below. Duty Drawback to the extent indicated against each appellant as per Column (4) of the Table below was paid to them while certain claims of drawback of the value by each such appellant as depicted in column (5) of the Table remained pending sanction as mentioned against each: Sr. No. Name of the Firm/Company Total Export Value (FOB) in Rs.) DBK availed DBK claim Pending (1) (2) (3) (4) (5) 1. M/s. Contessa Commercial Co. (P) Ltd., Kolkata 3,0,91,466 85,26,423 18,08,700 2. M/s. ASK ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... description of goods, they were brought to adjudication along with appellants 5, 6, and 7 of Table-1 who were their directors/partners of appellants 1 to 4 of that Table for appropriate consequences under law. DIFFERENT APPEALS AGAINST ADJUDICATION CONSEQUENCES 2.1 Learned Adjudicating Authority examining various evidence on record completed adjudication against all the above concerns and persons by common adjudication order No. 37/Cus/05 dated 06.01.2006 dated 6.1.2006. 2.2 Appeals as depicted in the following Table-1 below were preferred by the exporter appellants as against order of adjudication: TABLE-1 S. No. Name of the Party (1) (2) 1. M/s Contessa Commercial Co. (P) Ltd. 2. M/s ASK Exports 3. M/s SRM (P) Ltd. 4. M/s Varun Enterprises 5. Shri Raj Kumar Kishorepuria 6. Shri Anil Kumar Kishorepuria 7. Shri Sunil Kumar Kishorepuria 2.3 Appellants in sl. No. 1 to 4 in Table-1 fraudulently claimed higher duty draw back on exports made by them. When such exports were questionable, dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods on which draw back claim is pending Amt. of drawback claim is pending. (1) (2) (3) (4) (5) Contessa Commercial 55,72,163 22,86,000 14,31,688 10,10,700 ASK Export 60,77,432 32,43,600 Nil Nil SRM (P) Ltd. 6,44,489 4,95,000 Nil Nil Varun Enterprises 25,75,499 14,55,300 11,07,625 5,35,500 TOTAL 1,48,69,583 74,79,900 25,39,313 15,46,200 (ii) Aggregate duty drawback claim amounting to Rs. 81,09,720/- (Rs. 65,63,520+Rs.15,46,200 appearing in Column 5 of Table 2 and 3 above) made by M/s. Contessa Commercial Co (Pvt.) Ltd, M/s S.R.M. (Pvt.) Ltd. and M/s Varun Enterprises as mentioned in para 96(i) of adjudication order was disallowed. Gaskets valued at Rs. 2,92,31,936/- detailed in para 95(iv) of adjudication order were not confiscated and recovery of duty drawback of Rs. 38,00,000/- claimed and availed was dropped. Drawback claim of Rs. 7,98,000/- pending on account of Gaskets was ordered to be sanctioned, if otherwise admissible. (iii) Aggregate d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C/150/2007 3. M/s. SRM (P) Ltd. C/151/2007 4. Shri Kumar Gupta C/152/2007 5. Shri P.N. Pandey C/153/2007 3.2 In respect of first three Appeals of Revenue, its grievance is that learned Adjudicating Authority should not have dropped proceedings on Gasketagainst the Respondents. These Respondents were represented by Sri Prabhat Kumar, Advocate In appeals at sl. No. 4 and 5 of the Table, grievance of Revenue is that proceedings against these two respondents should not have been dropped in adjudication by the Authority without bringing them to penal consequences of law. These were represented by none. 4. Following appellants appearing in Table-5 below being concerned and connected with questionable exports, facing penalties of the quantum mentioned against each u/s 114 (iii) of Customs Act, 1962 came in appeal before Tribunal and they were represented by Shri Kamal Jeet Singh, advocate: TABLE-5 Sl. No. Name of the party Penalties imposed u/s 114(iii) of Custom Act 1962 1. Sh. Vinod Kumar Garg 8,00,000 2. Sh. N.D. Garg, 8,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xported substandard goods of FOB value of Rs. 59,54,315/- mis-declaring the same as heat resistant rubber tension tape and gaskets from CFS (OWPL), Ludhiana of aggregate availing under claim of drawback of Rs. 13,55,000/- was recoverable. (E). The amount of drawback claimed by M/s Contessa Commercial Co. (P) Ltd. ASK Exports, M/s Varun Enterprises and M/s SRM (P) Ltd. was admitted by Sri N.D. Garg to be undue as that was much more than the market price of the goods. (F). Sh. Sunil Kishorepuria, Chief Executive/Partner of the aforesaid four concerns i.e., in sl. No.1 to 4 in Table-1 in his voluntary statements dated 21-08-2002 22-08-2002 admitted commitment of fraud in connivance with S/Sh. Vinod Garg and N.D. Garg of Ludhiana exporting above-referred mis-declared goods in consideration of commission of 3% of total import turnover and allowing Sh. N.D. Garg to use the names of above four appellant concerns in the export and defrauded Revenue. He not only admitted the fraud committed but also surrendered all the pending claims of drawback (which was worked out to be Rs. 89,07,720/-) in column 5 of the Table appearing under Para 4.1 aforesaid. He admitted to pay back the drawbac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons made through the false documents. (K). The goods exported mis-declaring as gear cutting tools of cobalt bearing high speed steel, heat resistant rubber tension tape and gaskets by four exporting concerns of Kishorepurias were similar/identical to the goods exported by six fake firms of S/Sh. Vinod Garg and N.D. Garg of Ludhiana and a part of which was seized by DRI on May-June 2000 and on chemical test those were found to be cut pieces of mild steel and prevulcanised rubber with a value much lower than declared by the exporter. S/Sh. Sunil Kishorepuria, Manjit Singh and N.D. Garg admitted such fact in their statements. (L). Manjit Singh, an authorised person of Sh. Vinod Garg dealing with central excise matters was found to be director in various concerns of S/Sh. Vinod Garg and N.D. Garg. In his voluntary statement dated 06-08-2002 and 07-08-2002 he admitted that he was also getting the goods cleared from Customs on behalf of four concerns of Kishorepurias of Kolkata. (M). There was evidence of reverse payments to Sh. N.D. Garg by M/s Jyoti Steels through bearer cheques number 623535 and 623536 both dated 18-01-2000 for Rs. 4,83,800/- and Rs. 5,16,200/- respectively from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d M/s S.R.M. (Pvt) Ltd failed to satisfy the Investigating Authority that their drawback claims were genuine. (R). On scrutiny of shipping bills, it was evident that the Customs staff posted at CFS (OWPL), Ludhiana form Inspector to Deputy Commissioner colluded with the above exporters and failed to draw samples from each consignment/shipping bill acted in violation of the instructions as sample was required to be drawn from goods covered by each shipping bill where the amount of drawback per shipping bill was Rs. 1 lakh and above and where admissibility of the drawback could not be decided on the basis of visual examination of the case. As the consignment exported was declared as gear cutting tools of cobalt bearing high speed steel, heat resistant rubber tension tape and gaskets which were entitled to one of highest rates of export incentives and which on visual examination could not be confirmed as per declaration, the instructions for drawl of samples from each shipping bills as given in circular number 34/95-Cus dated 6.4.95 issued under F. No. 609/34/95-DBK by the Govt. of India, Ministry of Finance, Department of Revenue, New Delhi, were not followed. False claim of drawba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Jindal Alloys, Jyoti Steel, Rama Krishna Steel Traders and Krishna Hardware Mills Store accounts were maintained with that bank. Shri Vinod Garg Shri N.D. Garg had floated Jindal Alloys, Jyoti Steel, Ramakrishna Steel Krishna Hardware Mills Store to issue fraudulent sales bills invoices and black money earned was routed through the bank accounts of above benami concerns who accounts were maintained with State Bank of Hyderbad by name lenders. This has been brought out clearly when account of different concerns as tabulated below were examined by investigation: Name of the firm Account No./Date of Opening Proprietor Introducer Date of closing of account Jindal Alloys, Kanganwal Road, VPO-Jugiana, Ludhiana 20125 29.7.2000 Shambhu Kumar S/o Jagdish Poddar N.D. Garg 21.08.02 Jindal Alloys, Plot No.11358, Gali No.3, Partap Nagar, Near Sangeet Cinema, Ludhiana 25037 15.02.2000 Vineet Kumar S/o Vasudev Saggar N.D. Garg 29.05.00 Jyoti Steels 684-Industrial Area-B, Ludhiana 20103 04.01.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s authorised excise clerk of SRG Forge Overseas. Said Ramakrishna Steel Traders had issued fabricated invoices of sale of goods misdeclared as gear cutting tools of cobalt bearing high speed steel and heat resistant rubber tension tape to Kishorpuria group of companies. 7.10 Jindal Alloys had issued fabricated invoices showing goods misdeclared as gear cutting tools of cobalt bearing high speed steel to Kishorepuria group of companies. Similar, Krishna Hardware Mills Store had issued fabricated invoices showing sale of goods misdeclared as gear cutting tools of cobalt bearing high speed steel and heat resistant rubber tension tapes to Kishorepuria group of companies. 7.11 Materials on record proved issuance of fictitious invoices by above non-existent trading concerns and goods were misdeclared as gear cutting tools of cobalt bearing high speed steel and heat resistant rubber tension tapes. Kishorpuria group of companies made false claim of high drawback while the goods meant for export were found to be inferior quality goods on testing technically. Which were subject matter of fictitious purchases from above concerns under fake invoices. Claiming the misdeclared goods purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the appellant and allegation of export of inferior quality goods cannot be made subsequent to export. There were genuine purchases of the goods from the market as the appellant company was merchant exporter and the goods purchased were of better standard and quality for which drawback at proper rate was claimed. All the goods having under gone check by the customs authority, the appellant exporter and the Directors/Partners thereof cannot be imputed to charge at a later stage alleging that they had hand in glove with each other to export inferior quality goods. Cross examination asked for was not allowed and the averments came out in cross examination in the cases examined were not considered by the Adjudicating Authority. 9.2 In was further submitted by Sri Prabhat kumar that CRCL Report cannot be relied upon evidence by Revenue as none of the customs officers examining the goods proved the exports to be misdeclared to claim undue drawback and failure to allow cross examination of the witnesses of Revenue, adjudication does not sustain. 9.3 It was also argued by learned Counsel that suppliers did not speak against the appellant exporter of Director/Partners thereof. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation detected all fraudulent activities, not only the exporter appellants came up to return back part of the drawback availed but also admitted to forego their drawback claim pending. It is full proof case of Revenue that papers were only fabricated to show that procurements were genuine. Seller of the exported goods who have issued invoices were proved to be non-existent and the invoices were proved to be fake and fabricated. Testimony of various witnesses lent credence to the case of Revenue. Benami Bank Accounts were operated by both the Gargs with their conscious knowledge to impress Revenue that there were real transaction made while all fake transactions were only made to defraud Revenue. All the assessee appellants had hand in glove to be enriched at the cost of Revenue. The appellant in sl. No.5 to 7 of Table 1 were gainer of undue claim of drawback and fostered misdeclared goods to be exported. So also they were consciously involved in the undue claim of drawback. Therefore, all the 7 appeals in Table-1 to this order may be dismissed. 11.2 It was also submission of Revenue that drawback should not have been allowed on gaskets by learned Adjudicating Authority for wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim. When reinvestigation gathered cogent evidence against Kishorpuria group, they came forward to surrender part of the DEPB claim made by them and deposited the same with investigation. Their contumacious conducts came to broad day light. 13.3 Revenue proved its case in minute detail and established truth by fruitful investigation result to make its story very believable. The conduits in sl. No.3 to 6 of Table 5 were found to be involved in the entire team of racketeers to defraud Revenue and they hand tools of appellants 1 and 2 of Table - 5. None of the appellants in Table 1 and 5 proved to be innocent and failed to lead cogent evidence to disturb adjudication finding. They did not repel any of the arguments of Revenue with cogent evidence. Forceful argument of Revenue established adjudication finding to be fair and justified and remained uncontroverted by the appellants in Table 1 and 5 aforesaid. 14.1 Apex explaining the term concerned appearing in section112 of the Customs Act, 1962 in the case of Sachidananda Banerji V. Sitaram Agarwala 1999 (110) ELT 292 (SC) laid down the law holding that the term concernedis to be given wide interpretation and even if a person has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal proof is not necessarily perfect proof often it is nothing more than a prudent mans estimate as to the probabilities of the case. 14.5 The other cardinal principle having an important bearing on the incidence of burden of proof is that sufficiency and weight of the evidence is to be considered to use the words of Lord Mansfield in Blatch v. Archar (1774) 1 Cowp. 63 at p. 65: According to the Proof, which it was in the power of one side to prove and in the power of the other to have contradicted. Since it is extremely difficult, if not absolutely impossible for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused, it is not obliged to prove them as part of its primary burden. 14.6 The standard of proof in a civil case is preponderance of probabilities. In a civil case there is no burden cast on any party similar to the one in a criminal proceeding. Following the ratio laid down in CIT v. Durga Prasad More - 82 ITR 540, 545-47 (SC) it may be said that science has not yet invented any instrument to test the reliability of the evidence placed before a Court or a Tribunal. Therefore, the courts and Tribunals have to judge the ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pper Construction Company (P) Ltd - AIR 1996 (SC) 2005. Escapement of offending goods from notice of Revenue was result of fraud against Revenue. The frauds committed by the perpetrators of the offence were in close connivance with the Customs Officers. The Apex Court in the case of S P Chengalavaraya Naidu v. Jagannath - AIR 1994 SC 853 and in the case of Ram Preeti Yadav v. UP Board of High School and Intermediate Education - AIR 2003 SC 4268 has held that no court in this land will allow a person to keep an advantage which he obtained by fraud. 14.9 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.). An act of fraud on Revenue is always viewed seriously. Fraud and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. 14.10 It has been held by Apex Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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