9911796707
TMI Blog2018 (6) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... . As per his advice, the entire fraud was committed - also, the appellant Shri Sudesh Nanaware, being a consultant, has admitted the pre-decided plan for committing the fraud - penalty upheld. Equal amount of penalty u/s 114A against M/s. Spectrum Fabrics - adjudicating authority had not gone into this aspect - Held that:- In the show cause notice, penalty under Section 114A was proposed. However, the adjudicating authority has neither discussed the issue of penalty under Section 114A nor any order was passed in the operative portion of the order - this issue first needs to be considered by the adjudicating authority - matter on remand. Appeal dismissed - decided against appellant. - C/364,376,397/2010 - A/86298-86300/2018 - Dated:- 8-5-2018 - Mr. Ramesh Nair, Member (Judicial) and Mr. Raju, Member (Technical) Shri Mithil Dave, Advocate, for appellant in C/364/10 None for appellant in C/376/19 Shri Chatru Singh, AC (AR) / Ms. Trupti Chavan, AC (AR), for Revenue ORDER Per: Ramesh Nair These appeals are directed against order-in-original passed by the Commissioner. One appeal is filed by the Revenue on the ground that the adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded under Section 108 of the Customs Act. Therefore, the penalty under Section 112(a) was rightly imposed. 4. We have carefully considered the submissions made by both the sides. We find that as regards the appeal of Shri Mahesh P. Patel, in the impugned order, the adjudicating authority has recorded the finding as under:- 33. (i) Shri Mahesh Purushottambhai Patel, Chartered Accountant of M/s. Spectrum Fabrics, in his statement recorded by the DRI under Section 108 of the Customs Act, 1962 on 12.06.2003 accepted that he issued Certificates in the name of M/s. Spectrum Fabrics, Surat, under his seal showing details of Export Performance for obtaining advance Licenses in the name of M/s. Spectrum Fabrics; that he had verified the Books of Accounts and seen Balance Sheet signed in original of both the Solvency Certificates, but they were not signed by any Chartered Accountant; that he had not verified their authenticity and he failed to verify the authenticity of the same. It was also stated by him that he never visited the factory premises of M/s. Spectrum Fabrics. (ii) On behalf of Shri Mahesh Patel, the consultant Mr. Mithil Dave had made submissions as detailed at par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal importer. The quantum of penalty was however reduced because it was held that CHA had played an active but only secondary role in perpetuation of fraud. This case would not further the submissions of Shri Patel. In fact it only goes on to support the contention that the Chartered Accountant having prepared documents leading to issue of fraudulent advance licenses has played a secondary role and therefore is liable for penalty. (c) In the case of M/s. Premier Packaging Limited Versus Collector of Central Excise, New Delhi cited in 1986 (26) E.L.T. 333 (Tribunal) dated 22.7.1986, it was held that Demand I Show cause notice only alleging short accountal of raw material is not tenable due to _lack of evidence of clandestine manufacture or surreptitious removal of manufactured goods. This case doesn't apply to the subject matter before me because as far as the role of Shri Mahesh Patel in the whole fraud of M/s. Spectrum Fabrics is considered, it is limited to issue of certificates without proper verification of the documents (fabricated by other notice) leading to issue of advance licenses resulting in fraud. The proposed penal action is not based on suspicion but the statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , hold Shri Mahesh Patel liable for penalty under Section 112(a) of the Customs Act, 1962. 4.1 From the above detailed finding of the learned Commissioner, it is seen that the appellant Shri Mahesh P. Patel has issued the solvency certificate on the basis of balance sheet which was not signed by the Chartered Accountant. Therefore, he was not supposed to issue any certificate which is not based on the audit of books account. Accordingly, on the basis of the certificate issued by the Chartered Accountant, Shri Mahesh P. Patel, M/s. Spectrum Fabrics obtained the advance licence fraudulently which resulted in huge revenue loss of ₹ 1.46 crores customs duty to the Government exchequer. As per the role described by the adjudicating authority, it is clear that the appellant Shri Mahesh P. Patel was knowingly involved in facilitating M/s. Spectrum Fabrics for entire fraud. Therefore, we do not see any reason to take any lenient view. Hence the penalty of ₹ 5 lakhs imposed on Shri Mahesh P. Patel is justified and no interference is required. Accordingly, we uphold the penalty imposed under Section 112(a) on Shri Mahesh P. Patel. 4.2 Similarly, as regards the penalty impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltant I liaisoning work for the issue of advance licences in the name of M/s. Spectrum Fabrics, Surat. This act, therefore, appears to be an after thought. All the case laws submitted by the consultant have been quoted out of context. In these cases, it was held that penalty was levied on brokers wherein their role was not established or arrived at by the adjudicator. In the subject case, it is clear that various documents were submitted to get advance licence issued in the name of M/s. Spectrum Fabrics were fabricated because it is now an established fact that there was no factory of M/s. Spectrum fabrics nor any manufacturing activity was ever contemplated. Having executed his role in the whole plan (for fraud) of duty evasion, one cannot take shelter saying the he was not involved in taking it to the logical conclusion. The fact of the matter is that, had there been no role of Shri Nanaware in obtaining the advance licenses by fraudulent means, there would never, have been any duty free import by M/s. Spectrum Fabrics nor any diversion of the goods. The fraud started by obtaining the advance licenses by way of fabricating false documents and Shri Nanaware performed his role to p ..... 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