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TMI Blog2019 (4) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner Customs (Export) Nhava Sheva. By the said order Commissioner has held as follows: i. I confiscate 17620 kgs of Brass Rods valued at ₹ 87,48,710/- and attempted to be exported illicitly under S/B Nos 9355475 and 9355476 both dated 1.0.2011, and seized under Panchnama dated 25.02.2011, subsequently released on execution of Bond BG under Section 113 (i) of the Customs Act, 1962. However, I give an option to M/s Divine Impex to redeem the same on payment of Redemption Fine of ₹ 25,00,000/- (Rupees Twenty Five Lakhs only) under Section 125 of the Customs Act, 1962. ii. I impose a Penalty of ₹ 87,48,710/- (rupees Eighty Seven Lakhs Forty Eight Thousand Seven Hundred and Ten only) on M/s Divine Impex under Section 114 (iii) of the Customs Act, 1962. iii. I impose a Penalty of ₹ 87,48,710/- (rupees Eighty Seven Lakhs Forty Eight Thousand Seven Hundred and Ten only) on Shri Yagnesh Trada under Section 114 (iii) of the Customs Act, 1962. iv. I impose a penalty of ₹ 1,00,00,000/- (Rupees One Crore Only) on Shri Yagnesh Trada under Section 114AA of the Customs Act, 1962. 2.1 Appellant 1 is an 100% Export Oriented Unit and A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained. They rely on the following decisions a. Roll Tubes Ltd [2011 (265) ELT 414 (T-Del)] b. Rishi Packers Ltd [2003 (159) ELT 110 (T-Mum)] c. Metal Fitting (P) Ltd. [1997 (93) ELT 747 (T)] d. Prabhulal Ram Ratan Das (P) Ltd. [2011 (271) ELT 420 (T)] e. Fairfield Atlas LED [2009 (241) ELT 49 (T) f. Shriram Tubes (P) Ltd [2008 (232) ELT 809 (T)] g. Shree Ganesh Rolling Mills [2009 (241) ELT 47 (T-Del)] h. Dilip Kumar [2008 (222) ELT 526 (T-Del)] (ii) They are manufacturers of Brass Electrical Items. They received an order from foreign buyer M/s Al Saaha International Elect Hardware LL (UAE), Order No ASEIH/112/10 dated 13.12.2010 an Order No ASIEH/104/10 dated 04.12.2010. (iii) They have exported Electrical Earthing Accessories under the shipping Bill No 9355475 9355476 both dated 11.02.2011, ARE-1 No 012/2011-12 and 13/2011-12 both dated 31.01.2011 and Invoice No DI/Exp/12/2010-11 and DI/Exp/13/20101-11. Irrespective of the evidences produced by the revenue the said consignments had reached the port and were presented for export. (iv) The challan No 164/01.02.2011 recovered from Shri Nilesh Chudasama driver of the truck along with the invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al evidences. Hence not allowing cross examination is enough reason for quashing the impugned order in view of following decisions: a. Andaman Timber Industries [2015 (324) ELT 641 (SC)] b. Mulchand M Zaveri [2016 (339) ELT 364 (Guj)] c. Saniul Abideen Neelam [2014 (300) ELT 342 (Mad)] (iii) The test report only talks about testing of metallic constituent and the shape of sample. It does not show as to how the item tested was not an electrical accessory but only brass rod. (iv) The goods cannot be held liable for confiscation under Section 113(i) as there is no mis-declaration in respect of the description of the goods. Further by incorrectly describing the goods the appellants do not get any pecuniary benefit and the export Is against a free shipping bill without claiming any export incentive. (v) Since goods are not liable for confiscation, no penalty can be imposed. 4.3 Arguing for the revenue learned Authorized Representative supported the order of the Commissioner and stated- (i) The goods have been held liable for confiscation, as they misdeclared to the extent, that they were not the same goods as described on the export documents. Also they were misd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mech Engineering were running from the same premises. M/s Patel Mech Engineering was manufacturing finished good i.e. earthing accessories from M/s Mech Divine Impex out of the imported raw materials. The finished goods manufactured by the M/s Patel Mech Engineering namely Brass Rods were sold in the local market against cash payments. The activities undertaken by the M/s Patel Mech Engineering were only to cover up the fact that M/s Divine Impex (Appellant 1) was undertaking manufacturing operations in the said premises, whereas no manufacturing was done by them . 5.3 Statements were recorded of Shri Yagnesh Trada (Appellant 2) twice. His first statement recorded on 3.02.2011 exhibited the fact of them getting EOU and warehousing permissions. He admitted to the shortages noticed in the stock and the sale of raw material and finished goods in local market These statements were corroborated by the various documentary evidences. To specific question in respect of the consignments under consideration the response was as follows: Question 3. Why were unable to explain the location of export goods shown removed by you from your unit under Export Invoice Nos DI/EXP/012/2010- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessories as declared. This fact is also established by the test report obtained. When the Shri Yagnesh Trada was again confronted with the above facts of examination, on 14.03.2011, he responded to the same in his statement stating as follows: Question 1. Please explain about the list of finished goods manufactured from the duty free imported Brass Scrap in your unit viz M/s Divine Impex. Answer 1. The items manufactures in my unit M/s Divine Impex are Brass Scrap, Aluminium Scrap, M S Turning, Metal Slag, Rubber Scrap, M S Scrap, Dust, Brass Ingots, Brass Electrical Parts and Aluminium Cast. Details about the production of all the items in my unit are duly entered in the Finished Goods Register. Question 2. You are being asked about the stock of Brass Rods, which are not shown in any of your finished goods stock register, then how you showed exporting the same under S/B No 9355475/11.02.2011 and 9355476/11.02.2011 from JNPT Nhava Sheva? Where have you purchased the stock of Brass Rods which were sent to JNPT in Truck No GJ-10W 5540? Answer 2. I agree that we do not manufacture Brass Rods, however the goods for export of which S/B No 9355475 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this respect do not advance their case. The case of Wescon relied by them was in case where the issue was in respect of valuation for the purpose of Drawback. Similarly in case of Deccan, the issue was, where no adverse finding has been recorded in the order vis a vis the value and specifications. Both the cases are clearly distinguishable. 5.8 Appellants have relied upon a large number of case laws to argue that case of revenue is not supported by any corroborative evidences and hence cannot be sustained. We are not in agreement with the said argument. It is clear case of substitution of goods shown to manufactured be manufactured and cleared by the Appellant 1 for export, but were actually the goods procured clandestinely from market. There is enough corroboration of the facts, in form of the statements and documents recovered during investigation. Even Apex Court has in case of D Bhoormal [1983 (13) ELT 1576 (SC)] held- 31. 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubious conduct of Baboothmull and Bhoormull, could reasonably lead to conclusion drawn by the Collector, that they were smuggled goods. These circumstances have been set out by us earlier in this judgment. We may recapitulate only the most salient among them. 36. The importation of such goods into India had been banned several years earlier, i.e. some of them in 1957 and of others in 1960. These goods, without exception, were all of foreign origin. They were of large value of over ₹ 12,000/-. They were all lying packed as if they had been freshly delivered, or were ready for despatch to a further destination. They were not lying exhibited for sale in the show cause of the shop. Baboothmull from whose apparent custody or physical possession, they were seized disclaimed not only their ownership but also all knowledge about the contents of the packages. He could not give a satisfactory account as to how those packages came into his shop. At first, he said that some next-door unknown broker had left them outside his shop. Some days later, he came out with another version viz. that one Bhoormull had left them there. Eight days after, one mysterious person who gave out hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gold to a refinery in Bombay was sent for the purpose of melting. The Customs authorities seized this gold when it was being melted. The gold was found to be of foreign origin and had been imported into India in contravention of the Foreign Exchange Regulation Act, 1947. The Collector of Customs confiscated it under Section 167(8) of the Act. The legality of confiscation was challenged by a petition under Article 226 of the Constitution before the High Court, on the ground that there was no evidence before the Collector to show that the gold had been imported into India after restrictions had been imposed in March 1947 on its importation. The High Court rejected this contention and dismissed the petition. The same argument was advanced before his Court in appeal by special leave. This Court also negatived this contention. While conceding that there was no direct evidence that the gold had been smuggled after March 1947, it was held that a finding to that effect could be reached by referring to the conduct of the appellant in connection with (a) the credibility of the story about the purchase of this gold from three parties, (b) the price at which the gold was stated to have been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tating as follows: 50. Their contention was that in case of relying upon the statements secured from various persons in this matter for confirming the confiscation and penalty, they should be allowed to cross-examine such persons before deciding the matter. I find that it is not necessary to allow cross-examination in each and every case. It all depend upon the merit of the case and in the subject case I do not find any merit for allowing cross-examination of others. In case of Fortune Impex Vs Commissioner of Customs, Calcutta reported in 2001 (138) ELT 556 (Tri.-Kolkata), it was observed by the tribunal that It is not required that in each and every case cross-examination should necessarily be allowed. There is no absolute right of cross-examination provided in the Customs Act. It was also held in that order that there is no violation of principles of natural justice when no specific reasons were given for cross-examination. 5.11 It is settled law that statements recorded under section 108 of Customs Act, 1962 are admissible piece of evidence and need not be further corroborated. In case of K I Pavunny [1997 (90) ELT 241 (SC)], Hon ble Apex Court laid down as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /or the members of his family had sight of such visitor or movement by others, they would immediately catch hold of such person or would charge them. Obviously, therefore, it would be the appellant who had concealed 200 gold biscuits of foreign marking in his compound at a place always visible from his bed-room window. Therefore, the High Court was right in its conclusion, though for different reasons, that Ex. P-4 is a voluntary statement and was not influenced by threat, duress or inducement etc. Therefore, it is a voluntary statement given by the appellant and is a true one. 26. In Naresh J. Sukhawani v. Union of India - 1996 (83) E.L.T. 258 (S.C.) = 1995 Supp. 4 SCC 663 a two-Judge Bench [to which one of us, K. Ramaswamy, J., was a member] had held in para 4 that the statement recorded under Section 108 of the Act forms a substantive evidence inculpating the petitioner therein with the contravention of the provisions of the Customs Act as he had attempted to export foreign exchange out of India. The statement made by another person inculpating the petitioner therein could be used against him as substantive evidence. Of course, the proceedings therein were for confisca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct seeks to achieve. 5.12 In view of discussions as above we are inclined to agree with the order of the Commissioner, that goods were liable for confiscation under Section 113(i) and the exporter liable to penalty under Section 114 (iii) of the Customs Act, 1962. However in our view the ends of justice will be met if the penalty imposed on the exporter i.e. Appellant 1 is reduced to ₹ 40,00,000/- (Rupees Forty Lakhs only). 5.12 Now coming the case of Appellant 2, who is partner in the Appellant 1. He is the person responsible for managing the affairs of Appellant 1, in fact he master minded the entire scheme of substitution and was present throughout. Commissioner has in para 43 of his order discussed the role of Appellant 2 as follows: 43. Shri Yagnesh Rameshchandra Trada, the Partner of M/s. Divine Impex, was found responsible for all the acts and the omissions, as narrated in the foregoing paras. He was the mastermind behind this fraud and actively involved in the said fraud. In the Panchanama dated 03.02.2011 and in his statement dated 03.02.2011, he admitted to have illicitly sold the duty free imported brass scrap as well as finished goods viz. Brass Ingo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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