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TMI Blog2017 (11) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... violation of the provisions of the Customs Act or the respondents herein were involved in the presumed smuggling. The whole case of the revenue is based on presumptions and assumptions and lacking any corroboration and moreover suspicious how so ever strong cannot take place of legal proof - appeal dismissed - decided against appellant. - C/Stay/70162-70170/2017, C/70305-70313/2017-CU [SM] - A/71353-71361/2017-SM[BR] - Dated:- 28-7-2017 - Mr. Anil Choudhary, Member (Judicial) Shri Rajeev Ranjan, Deputy Commissioner (AR) for Appellant Shri Amit Awasthi, Advocate, for Respondents ORDER Per : Anil Choudhary In all these appeals filed by the revenue, as the facts and the issue are common therefore, they are taken up together for disposal. The details of these appeals are as follows:- Stay/Appeal No. Party Order-In-Appeal No. Nature of Demand Amount C/Stay/70162/2017 C/70305/2017 Lucknow v. Bundelkhand Udyog 69-71/CUS/APPL/LKO/2017 Penalty NIL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , cattle feeds and edible oil. His main clients were in Bihar, Bengal and Uttar Pradesh. He was having five trucks and the same are engaged in transportation of grains etc. from Kanpur to Bihar. The consignments are also dispatched on the orders of Nepal based purchasers, namely, Shri Mukesh Aggarwal, Shri Umesh Aggarwal of Birgunj, Shri Raju Agarwal of Viratnagar and the carriers/traders based at Raxaul, Areraj, Barganian, etc. at Bihar-Nepal border, who get the consignments cleared from Kanpur based Dal Mills under the bills consigned to Silliguri based traders and the same were unloaded at the border. The payments are often received in cash/demand drafts etc. through him or through RTGS with intimation to him. It further appeared that the said commission agent was procuring pulses for Bihar/Nepal based dealers from many Dal mills including M/s Annapurna Udyog, Kanpur. The consignments were dispatched from Kanpur etc. under the cover of invoices, in the name of VAT registered dealer at Siliguri, West Bengal such as M/s Mayank Traders, M/s Shiv dutt Sushil Kumar. 3. Further, search was conducted on 18.06.2012 in the premises of M/s Shiv Dutt Sushil Kumar, Siliguri and the state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods to him. He was told that they were getting benefit for their Ex-UP sale and accordingly, he was receiving ₹ 3-5 per Quintal of pulses invoiced in the name of his firm. The said commission, he was receiving in cash form, from the Dal Mill owners. He further stated that he was not having the knowledge that the goods consigned in the name of his firm were illegally crossing into Nepal Border. He further submitted, sales tax returns for the Financial Years 2009 10, 2010 11 and 2011 12 submitted by M/s Mayank Traders and M/s Shiv Dutt Sushil Kumar, Siliguri wherein the details of the sales of pulses shown by Kanpur based Dal Mills was reflected. 4. M/s Bundelkhand Dal Mills, Kanpur submitted documents, such as- sales invoices, Party Ledger Accounts and the Bank Statements, showing the payments of the sale proceeds for the said sales related to the sale of pulses to the customers based at Bihar and West Bengal during the period 01/04/2009 to 31/01/2012, which revealed that they had shown sale of pulses to M/s Shiv Dutt Sushil Kumar, Siliguri. In view of the facts of the statement by Shri Sushil Kumar Agarwal, Proprietor of M/s Shivdutt Sushil Kumar, Dal Mills of Kanpur durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Co. have engaged many brokers for the sale and purchase of pulses. On being confronted with the documents resumed from the premises of Shri Ajay Gupta, he stated that his firm had never dealt with Shri Sushil Kumar of Shiv Dutt Sushil Kumar, as he is a consignment agent of his firm and its firm used to receive the C and F forms. He further stated that it is mandatory to issue bills/invoices of pulses for the insurance and 9R form issued by Mandi Samiti, U.P. Therefore, the consignments of pulses diverted to Bihar were covered by the invoices, way bills, 9R forms, insurance cover notes, consigned in the name of VAT registered firms of Siliguri. On being shown the statement of bills/invoices issued covering the consignment of pulses to M/s Shiv Dutt Rai Sushil Kumar, Siliguri along with their corresponding payment details as per his ledger duly supported by the bank account statements of M/s Annapurna Udyog, Kanpur, he stated that the supply of the said consignments were made under the brokerage agreements and it is the responsibility of the broker for the payments against the said deliveries. Therefore, he does not know the exact details of the bank account depositing the paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndi appeared to be as follows: (i) Procuring orders from Nepal based customers, having establishments in both countries, and based at Indo Nepal Border, by commission agent. (ii) Dal Mills to issue invoices, 9R forms, insurance notes covering the above mentioned negotiated consignment in the name of VAT Licensed dealers based at Siliguri namely M/s Mayank Traders/ M/s Shivdutt Rai Sushil Kumar. (iii) Arrangement of transport to have the GRs in the name of Siliguri based VAT Licensee dealers along with instructions to deliver the consignments of pulses dispatched to the carrier at the appointed place and person located nearby to the Indo Nepal border and get the freight from them in cash only. (iv) The said delivered consignments to be crossed over the border in the tractor trolleys, headloads etc. through the transport to Nepal from India. Accordingly, it appeared that M/s Bundelkhand Dal Mills, and others, smuggle pulses into Nepal, as export of pulses are not permitted by DGFT, the impugned consignment (s) appeared liable to confiscation under Section 113 (d) of Customs Act, 1962. Consequently, the Bundelkhand Dal Mill and other mill owners appeared liable to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, during proceedings of cross-examination on 19th April, 2016 has stated that as the broker, he received orders from customers, thereafter contacts the Dal Mill owners, procures the pulses and arranges the trucks and insured transportation of the pulses on the strength of the invoices in the name of the customers. He also undertakes responsibility to collect the payment from the customers and handover to Dal Mill owners. Dal mill owners have never asked them about the dispatched consignment of pulses to Nepal. Secondly, it has not been alleged, anywhere in the show cause notice that Dal Mill owners were making any monitory gains by such activities. Accordingly, the learned Commissioner (Appeals) held that Dal Mill owners were never engaged in the activity of smuggling and accordingly, no penalty is impossible upon them under Section 114 (i) of the Customs Act, 1962. So far as penalty is concerned on Ajay Gupta and Sushil Kumar Agarwal, it was observed that penalty should be determined on the basis of quantum of offence committed, the financial position of the person and most importantly, the monitory gain related with said activity, as smuggling is a financial offence. It was held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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