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TMI Blog2017 (12) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... tification to evidence essentiality and approval. Neither does it condone the production of a forged certificate to accord it a sanctity that it fails to possess ab initio. The role of Shri Rakesh Yadav in the fabrication of the certificates has been sufficiently established. That M/s ICICI Bank and M/s Jindal Steel & Power Ltd have a major financial stake in the execution of the project is axiomatic. Any delay in obtaining the countersignature of the designated officer in the certificate issued by M/s ICICI Bank would have repercussions for both that would motivate them to collaborate in submission of a certificate that was not in accord with the prescriptions in the notification. Indeed, they stood to derive the benefits emanating from the fabrication of the documents - Their protestations of being the victims of cross-fire may not find many takers as the exemption notifications claimed by them cannot but have been within their knowledge and the crucial role of Line Ministry is unambiguously clear. The definition of Line Ministry i.e. offers no scope for any doubt that the Line Ministry may have been the Department of Economic Affairs in Ministry of Finance as that Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the World Bank as Industrial Pollution Prevention Project (Loan No. 3779-IN 3780-IN, Credit No. 2645-IN) was approved by the Government of India in Department of Economic Affairs, Ministry of Finance. The notification supra enables availment of concessional duty for imports intended for use in a project financed (whether by loan or grant} by the World Bank, Asian Development Bank or any other international organisation other than those listed in the Annexure and the said project had been approved by the Government of India, a certificate from the executive head of the Project Implementing Authority and countersigned by an officer not below the rank of Joint Secretary to the Government of India, in the concerned Line Ministry in the Government of India The certification of the eligible goods by the Project Implementation Authority and countersigning by the designated authority is intended to eliminate the risk of ineligible goods and ineligible projects from being accorded the exemption. The project was to be financed by the World Bank through M/s ICICI Bank in India as the designated Project Implementation Authority. 3. The five certificates admittedly issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reason to believe that the certificate signed by Dr. Adarsh Kishore was not genuine and that the appellant, as well as M/s ICICI Bank Ltd, assumed that Ministry of Finance was competent was the authority to issue the certificate; that in absence of any deposition that Shri Rakesh Yadav who had, admittedly, forged the certificates, had acted at the behest of the appellant, the consequent invalidity of the certificates was not a proper ground to deny the benefit of notification. 6. A further contention is that in the absence of evidence of collusion in forgery of the certificate, imposition of penalty under section 112(a) of the Customs Act, 1962 is not proper and, more particularly as the adjudicating authority has so recorded, confiscation of the goods was improper. It was also contended that the show-cause notice issued on 12th May 2005 was barred by limitation. 7. Learned Authorized Representative submits that there is a clear finding in the impugned order that certificates issued by the Project Implementation Authority were forged and fabricated by Shri Rakesh Yadav who admitted to having issued about 30 to 40 such certificates on various occasions till the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority held that there is no question of any bar on invoking the extended period as the goods had been cleared against forged documents furnished by appellant. Further, he submitted that limitation of time does not extend to confiscation proceedings under section 111 of the Customs Act, 1962 and that adjudicating authority could not be faulted for the finding that mala fides of the appellant in misleading the proper officer into accepting the credibility of the forged certificates to get undue benefits was apparent. 10. Having heard both sides and perused the records, it is seen that the impugned order has delved into the motive of appellant and has set forth the manner in which the signatures were forged in the certificate and the covering letter fabricated for presentation before the 'proper officer' of Customs to avail benefits of the notification extending concessional rate of duty. The adjudicating authority, relying on records seized during the investigation and the statements obtained under section 108 of Customs Act, 1962 has summarized the facts as under: M/s Jindal Steel Power Ltd had availed loan of ₹ 21.25 Crore (US$ 4.427 million ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02, ICICI/WB/IPPP/Customs/06 dated 24th April 2002 and PIAC No. ICICI/WB/IPPP/Customs/07 dated 21st May 2002 addressed to Commissioner of Customs, Kolkata Airport and PIAC No. ICICI/WB/IPPP/Customs/08 dated 4th June 2002 addressed to Commissioner of Customs, Mumbai Sea Port that were assumed to have been counter-signed by Additional Secretary (FB,ADB Ext.Fin.) for Ministry of Finance were forged and he had not seen those documents during his tenure as Additional Secretary (FB,ADB Ext.Fin.), Ministry of Finance, Govt. of India. Letter D.O. No. 5/4/93-FBIV dated 16th April 2002 addressed to Commissioner of Customs, JNPT, Nhava Sheva forwarding PIAC No. ICICI/WB/IPPP/Customs/04 dated 4th April 2002, letter D.O.No. 5/4/93-FBIV dated 29th April 2002 addressed to Commissioner of Customs, Kolkata Airport, Kolkata forwarding PIAC Nos. ICICI/WB/IPPP/Customs/05 dated 16th April 2002 and ICICI/WB/IPPP/Customs/06 dated 24th April 2002, letter D.O.No. 5/4/93-FBIV dated 4.6.2002 addressed to Commissioner of Customs, Kolkata Airport, Kolkata forwarding PIAC No. ICICI/WB/IPPP/Customs/07 dated 21st May 2002 and letter D.O.No. 5/4/93-FBIV dated 14th June 2002 addressed to Commissioner of Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e certificates to M/s Jindal Steel Power Ltd for onward transmission for countersigning instead of desptaching it directly, enabled the availment of exemption under notification no. 84/97-Cus dated 11th November 1997 using forged/fabricated certificates that rendering the impugned goods liable for confiscation under section 111(o) and themselves liable for penal action under section 112(a) of Customs Act, 1962 for their acts omission/commission. Shri Rakesh Yadav abetted the evasion of Customs duty as he was, by his own admission, responsible for the forgery and fabrication of Project Implementing Authority Certificates that were furnished for claiming exemption under notification no. 84/97-Cus dated 11th November 1997 and, the impugned goods having been held liable for confiscation under section 111(o) of Customs Act, 1962, he was himself liable for penal action under section 112(a) Customs Act, 1962. The importer made good the duty foregone during the investigation. 11. It may not be out of place to refer to the statements recorded under section 108 of Customs Act, 1962 that were relied upon to render the findings. Shri Rakesh Yadav, Junior Finance Officer, Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises, Udyog Bhavan, New Delhi in statement under section 108 of the Customs Act, 1962 recorded on 5th August 2004 deposed that had served as Additional Secretary to Government of India in the Ministry of Finance during the period from October 2002 to June 2003; that PIAC No. ICICI/WB/IPPP /Customs/04 dated 4.4.2002 addressed to Commissioner of Customs, JNPT, Nhava Sheva, PIAC Nos. ICICI/ WB/IPPP/Customs/05 dated 16.4.2002, ICICI/WB/IPPP/ Customs/06 dated 24/04/2002 PIAC No. ICICI/WB/IPPP/Customs/07 dated 21/5/2002 addressed to Commissioner of Customs, Kolkata Airport and PIAC No. ICICI/WB /IPPP/Customs/08 dated 4.6.2002 addressed to Commissioner of Customs, Mumbai Sea Port, for claiming Customs duty exemption that were purportedly countersigned by him as Additional Secretary (FB, ADB Ext. Fin.) for Ministry of Finance were not his and that he had not seen those documents during his tenure there; that such documents were not expected to be countersigned by anyone in the Department of Economic Affairs as it was not the 'Line Ministry' concerned with the imports for projects; that such papers were also not expected to be submitted for countersignatures to the officers of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that JSPL had utilized PIACs issued by M/s ICICI Bank Ltd, countersigned by officials of Department of Economic Affairs, Ministry of Finance, Government of India for clearance of imported goods with full exemption of customs duty; that JSPL had approached M/s ICICI Bank Ltd for financing their blast furnace and coal washery projects at a estimated cost of ₹ 135 crores with term loan of ₹ 100 crores and internal accruals of ₹ 35 crore; that M/s ICICI Bank Ltd explained that they could avail of concessional funding from World Bank for coal washery project ; that according to ICICI Bank Ltd., JSPL were entitled to concessional funding @ 1.5% p.a. subject to a ceiling of ₹ 1.50 crores as interest and nil duty on imports as per customs notification; that World Bank Group issued final clearance for coal washery project vide their sanction letter dated 20th March 2002 through M/s ICICI Bank Ltd for ₹ 21.25 crores (US $ 4.427 million); that M/s ICICI Bank Ltd issued Project Implementing Authority Certificates duly executed by Shri S. Mukherjee, Executive Director which was sent by courier to their office with a covering letter to Ministry of Finance, Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ADB terminology the borrowers who availed such loans from banks were called sub-borrowers; that as per practice, sub-borrowers submitted proposals to Business group of their bank which was appraised and evaluated before sanction and disbursal to the borrower; that the group sought approval of ADB for procurement of equipments covered, partly or wholly, by loans for projects covered by UEIP scheme; that under UEIF line of credit, M/s ICICI Bank Ltd had been designated as the Project Implementing Authority by the ADB; that the sub-borrower who availed loan under UEIP were entitled to exemption from payment of customs and central excise duties on the equipment acquired by them under that project; that for facilitating such exemption, a certificate signed by Executive Head specifying the details of the equipments issued as Project Implementing Authority was required to be issued; that the certificate so issued required counter-signature of an officer not below the rank of Joint Secretary to the Government of India in the concerned 'Line Ministry' in the Government of India. 16. Shri Zarasp Irani, Manager, M/s ICICI Bank Ltd whose statement was recorded on 4th August 2004 adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and was not the implementing agency or Line Ministry for the World Bank assisted projects. 18. During investigation JSPL vide letter dated 13.08.2004 deposited ₹ 32,57,994/-, ₹ 32,30,095/-, and ₹ 10,62,677/-. 19. Having examined the submissions made by both sides, the adjudication order and records, we observe as under: M/s Jindal Steel Power Ltd cleared goods valued at Rs against five bills of entry at different gateways claiming the benefit of concessional rate of duty of 5% BCD extended by notification no. Cus dated for projects funded by specified international organisations including World Bank. M/s ICICI Bank, the designated Project Implementation Authority, was required to certify the essentiality of the goods imported for the implementation of the approved project which, in the present dispute, was a coal washery categorized as Industrial Pollution Prevention Project. he proper officer would extend the benefit of concessional rate of duty in the assessment of such certified goods subject to the certificate being countersigned by the designated authority in the Line Ministry as evidence of satisfaction of essentiality of the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to evidence essentiality and approval. Neither does it condone the production of a forged certificate to accord it a sanctity that it fails to possess ab initio. 22. The role of Shri Rakesh Yadav in the fabrication of the certificates has been sufficiently established. That M/s ICICI Bank and M/s Jindal Steel Power Ltd have a major financial stake in the execution of the project is axiomatic. Any delay in obtaining the countersignature of the designated officer in the certificate issued by M/s ICICI Bank would have repercussions for both that would motivate them to collaborate in submission of a certificate that was not in accord with the prescriptions in the notification. Indeed, they stood to derive the benefits emanating from the fabrication of the documents. 23. Their protestations of being the victims of cross-fire may not find many takers as the exemption notifications claimed by them cannot but have been within their knowledge and the crucial role of Line Ministry is unambiguously clear. The definition of Line Ministry i.e. offers no scope for any doubt that the Line Ministry may have been the Department of Economic Affairs in Ministry of Finance as that Department w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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