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TMI Blog2019 (9) TMI 1308X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 - Dated:- 12-9-2019 - Mrs. ARCHANA WADHWA, MEMBER (JUDICIAL) AND Mr. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) Shri Prakash Shah, Advocate, Shri Nishant Mishra, Advocate for Assessee (In Appeal Nos.7055,70056,70148,70351,70218 70352 of 2019) Shri Alok Yadav, Advocate (In Appeal Nos.70321, 70495 70354 of 2019) Shri Rajeev Ranjan Shri P.K. Singh Authorized Representative for Revenue ORDER All the appeals including the appeals filed by Revenue are being disposed of by a common order as they arise out of the same impugned order passed by Commissioner of Customs, Noida vide which apart from confiscating the gold jewellery and imposing penalty upon various noticees, the Original Authority has imposed penalties on the present appellants to the extent as shown in the following table:- SERIAL No. APPEAL No. APPELLANT PENALTY 1. C/70148/2019 M/s Shakti Jewellers Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent appellants but to appreciate the factual background, the facts are being adverted to in brief. The Directorate of Revenue Intelligence (hereinafter referred to as DRI) received an intelligence that certain companies based in Delhi, Mumbai, Dubai Singapore are conspiring together to misuse the facilities provided under Special Economic Zone (hereinafter referred to as SEZ ) scheme to import gold jewellery by mis-declaring the same as out dated and old jewellery for repair, remaking, polishing etc. to be used as raw material in their SEZ unit and by showing their fulfilment of export obligation by substituting the same with the Indian made jewellery. Accordingly, DRI Officers conducted searches at various places and primarily in the premises of two units by the Name M/s Vee Ess Jewellers Private Limited and M/s Ajit Exports, two units situated in the SEZ area of Noida. The office-cum-business premises of the said two units located at karol Bagh, New Delhi were also put to search along with searching residential premises of Shri Ajit Singh partner of M/s Ajit Exports and Shri Komal Jain Director of M/s Vee Ess Jewellers Private Limited and his brother Shir Kirti Jain partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suance of separate show cause notice which resulted in passing of an order by the Commissioner of Customs Air Cargo, Exports new customs house IGI Air Port, New Delhi by a separate Order-in-Original dated 31 January, 2011 confirming demand of duty, confiscating the seized goods and imposing penalty upon various persons. As the penalty was also imposed upon M/s Omkar Jewellers, New Delhi and M/s Orbit Gold, Mumbai, appeals were filed by the said two noticees before the Tribunal and the same was disposed of vide Tribunal s Final Order No.C/A/51307-51315/2016-CU[DB] dated 27 April, 2016 by setting aside the penalties imposed upon the said two appellants. 5. During the course of investigation, the Revenue recorded the statements of various persons. The statement of Shri Bharat Jamnadas Jagda, Director of M/s Shakti Jewellers Pvt. Ltd. and partner in M/s Omkar Jewellers was recorded on 07 February, 2009 wherein he deposed that he was trading in gold jewellery; that they started exporting jewellery to Dubai and America as also doing business in the local market; that son of his Partner Shri Mahesh Kumar Moolchand Kothari was proprietor of M/s Orbit Jewellers and they knew Shri A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were recorded including the Authorized Representatives of the Dubai Based and Singapore based jewellers who had exported the goods to the said two SEZ units. 6. During the course of further investigations, statements of various persons including the Authorized Representative of the present appellants were also recorded. Inasmuch as the said evidences procured by the Revenue by way of various statements are primarily in relation to two SEZ units, the details of the same are not being adverted to except where the same are relevant for the purpose of disposing the present appeals. 7. Based upon the investigations, proceedings were initiated against all the noticees including the two SEZ units. Vide impugned order passed by Commissioner of Customs, Noida, demand of duty stand confirmed against M/s Ajit Exports as also against M/s Vee Ess Jewellers Pvt. Ltd. along with imposition of penalties etc. upon them. In addition, he imposed penalty upon various other noticees including the present appellants. Inasmuch as M/s Vee Ess Jewellers and M/s Ajit exports have not filed appeas against the impugned order as also the said order does not stand appealed against by various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch it has been held that Shri Bharat Jamnadas Jadga of Shri Shakti Jewellers Pvt. Ltd. facilitated the fraudulent fulfillment of export to SEZ by way of supplying Indian made gold jewellery to the said two units. It is seen that the premises of M/s Shakti Jewellers Pvt. Ltd. were also put to search on 06 February, 2009 and nothing incriminating was found therein and as such no panchnama was drawn. Contesting the imposition of penalty upon them the learned counsel appearing for the appellant submits that the entire case of the Revenue is based upon the fax messages received by the said SEZ units from the fax number of the appellant read with various statements recorded. Apart from that there is no other evidence like any other bill/challans etc. found during the search of the SEZ units or the appellant. Though the appellant have strongly denied the sending of the said fax messages and has drawn our attention to the statement dated 05 July, 2010 of Shri Bharat Jamnadas Jagda to the effect that he has never dealt with the matter and may be some other person of Shri Kishore Dhakkan has sent this fax from their fax number but submits the learned advocate, that in any case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fax number. Apart from the fact that Shri Bharat Jamnadas Jagda, Director of M/s Shakti Jewellers Pvt. Ltd. has explained in his statement recorded during the investigation that he has not sent the said fax messages and the same might have been sent by any other person, we note that no person in his statements has clarified use of expression All Bharat goods , All BH goods All goods of Bharat used in the said messages. It is also uncontroverted fact on record that the jewellery supplied by the present appellant was exported by M/s Ajit Exports by way of a separate Airway bill, which was in no way relatable to fulfilment of export obligation by M/s Ajit exports. We find that there is factually no evidence on record to show that the jewellery exported by the two SEZ units in lieu of their export obligation, was obtained by them from M/s Shakti Jewellers Pvt. Ltd. In any case and in any view of the matter we note that the only case of Revenue against the present appellant is that he has supplied Indian made jewellery to the said two SEZ units. Even if the said allegation is accepted to be true reflection of facts, we really fail to understand as to how the sale of jewe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Jamnadas Jagda is that he used to receive gold jewellery from Shri Komal Jain and Shri Ajit Singh of the two SEZ units M/s Vee Ess Jewellers Pvt. Ltd. M/s Ajit Exports for further delivery of the same to the various persons. It stands contended before us that even if the said allegations are accepted to be true the only role attributable to the said appellants is receiving of packages and further delivering the same to various persons identified by Shri Kishore Ratilal Dhakan which again cannot be considered to be an offence in the absence of any knowledge about the fact that such jewellery delievery was in contravention of various SEZ facilities. Mere jewellery delivery, against consideration of ₹ 5/- per Kg., which is a normal delivery procedure in jewellery business cannot be held to be an offence so as to invite penal action. There is no evidence on record to show and establish that supply of locally manufactured jewellery either made by M/s Shakti Jewellers or by Shri Bharat Jamnadas Jagda to the SEZ units was for facilitating export obligations or to show that the locally manufactured jewellery was used for discharge of export obligation. It also stands brought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said appellant had supplied gold jewellery to two SEZ units viz. M/s Ajit Exports and M/s Vee Ess Jewellers Pvt. Ltd., under the cover of invoices as also the customs documents for the purpose of carrying out finishing, plating and remaking etc. of the same. As per the appellant full commercial value of the jewellery was declared in the invoice issued by them. The said jewellery sent by the present appellant was to be remade by M/s Vee Ess Jewellers and M/s Ajit Exports and after reprocessing, was to be exported back to the present appellant, for which they were duly authorized by law. As per the investigations conducted by the Revenue, the jewellery exported by M/s Mahesh Co. Pte. Ltd., Singapore to the said two SEZ units were cleared by them in the domestic market and instead of re-exporting the same, the said SEZ units exported the locally procured jewellery, gold bars as also sometime metal scrap. 14. The Revenue in the show cause notice issued to various persons, proposed imposition of penalty upon the said exporter of Singapore under various Sections of the Customs Act. The penalty to the extent of ₹ 6.50 lakhs stands imposed upon M/s Mahesh Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant filed writ petition before the Hon ble High Court of Delhi who vide their order dated 04 October, 2010 directed the Commissioner of Customs to hear the appellant and to dispose of their representation accordingly. The Commissioner of Customs vide his order dated 31 March, 2011 held that the goods are not liable to confiscation as no bill of entry stands filed and there is no violation of any provisions of the Customs Act but the consignment does not belong to the appellant and rejected their request for re-export of the same and further directed that this decision be communicated to DRT so as to make out a way for State Bank of India to take action. The said order of the Commissioner was appealed against by the Revenue before Tribunal who vide their Final Order No.C/A/53892/2015-CU[DB] dated 30 December, 2015 observed that Commissioner of Customs has no powers or jurisdiction to decide the claim of title to the seized goods, in favour of M/s Vee Ess Jewellers. Accordingly, the said order of the Commissioner was set aside and the appellant was directed to pursue the appropriate remedy under the law to establish its claim to the seized gold jewellery and return thereon to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation can be on account of numbers of factors involving threat of arrest, pressure, cohersive action or any other lurement etc. Prosecution cannot build its case upon sole testimony of co-noticees statement without their being any independent corroboration especially when the said deponents have neither been cross-examined nor examination-in-chief stands conducted by the Adjudicating Authority. As the case law on the said issue of cross-examination and examination in chief, relied upon by all the appellants is common, and relates to the same evidences available in all the cases, the same shall be adverted to in the conclusive part of our order. 19. The learned AR appearing for the Revenue has contended that as the appellant did not participate either in the investigation proceeding nor in the adjudication proceedings, their guilt stands accepted by them, inasmuch as they have nothing to offer on facts of the case. We find no merits in the above contentions of the learned AR. Admittedly the said appellant was located in Singapore as a company incorporated under the Singapore laws. The summon send by the Revenue Authorities did not stands responded to by the said company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y has nowhere explained as how he has jurisdiction over a company located in Singapore and incorporated under the laws of Singapore. Reference can be made to the following decisions :- (i) Relax Saftey Industries V/s Commissioner of Customs, Mumbai reported in 2002 (144) E.L.T. 652. (ii) Narendra Lodaya V/s Commissioner of Customs, Nhava Sheva reported in 2017 (348) E.L.T. 168. (iii) Guru Electronics Singapore Pte. Ltd. V/s Commr. of Cus., Bangalore, reported in 2009 (240) E.L.T. 56. 22. In view of the forgoing, we find no reasons to uphold penalties upon the said appellants. Accordingly, the same are set aside 23. The appellant have also claimed the return of 38,434.710 gms of gold jewellery exported by them under the cover of invoice No.48534 from Singapore to New Delhi vide Singapore Airlines Airway Bill No. 618 SIN 6672 0264 dated 05 February, 2009. The consignee of the goods was M/s Vee Ess Jewellers Pvt. Ltd. and admittedly the said consignee has not filed any bill of entries with the Customs. As such, the sender of the goods remains the owner of the same as per the customs law, inasmuch as no bill of entry was filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of penalty vide the present impugned order cannot be upheld. The same are accordingly set aside and their appeals are allowed. MOHD. IRFAN MUNSHI, SHRI JAISON SIMON PANAKKAL SHRI RAJESH RATANLAL PACHERIA 26. Penalties to the extent of ₹ 60 Lakhs stands imposed upon Mohd. Irfan Munshi Shri Jaison Simon Panakkal respectively and of ₹ 5.00 lakhs stands imposed upon Shri Rajesh Ratanlal Pacheria under Section 112 of the Customs Act. All the three appellants are employees of one M/s Damasy Retail Jewelers Pvt. Ltd., Malad (West), Mumbai. Whereas Shri Jaison Simon Panakkal is the country head of the said company w.e.f. January, 2009, Shri Rajesh Ratanlal Pacheria is accounts manager. As per the allegations of the Revenue, M/s Damasy Retail Jewellery P. Ltd. was instrumental in receiving the imported jewellery from one Shri Kishor Rati Lal Dhakan of Dubai through SEZ Routes without payment of duty and subsequently diverting the same in the domestic market. Whereas Shri Jaison Simon has contended that he did not receive the show cause notice and as such could not file a reply, but all the three appellants has pleaded that the entire ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies upon the said employees. The same are accordingly set aside and their appeals are allowed with consequential relief. 27. At this stage we may refer to certain precedent decisions on the issue of the findings of clandestine activities based upon the statements of various deponents, who have not been allowed cross-examination The Hon ble Supreme Court in the case of Andaman Timber Industries v. Commissioner of C.Ex., Kolkata-II reported as MANU/SC/1250/2015, while dealing with the cross-examination of the witnesses observed that not allowing the assessee the cross-examination of witnesses is a serious flaw which makes the order nullity inasmuch as the same amounts to violation of principles of natural justice because of which the assessee was adversely effected. The Hon ble Supreme Court further observed that when the assessee disputed the correctness of the statements and wanted to cross-examine and such opportunity was not given, the rejection of this plea is totally untenable. It is not for the adjudicating authority to have guess work as to for what purposes the appellant wanted to cross-examine. It was not for the adjudicating authority to pre-suppose as to what cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiary value of the statement, in so far as proving the truth contents thereof is concerned, is completely lost unless and until the case falls within the parameters of section 9D and otherwise it has to be held that adjudicating authority has relied on irrelevant material. If the procedure, which is statutorily prescribed by plenary parliamentary legislation, is not followed, it has to be regarded that the Revenue has given up the said witnesses so that the reliance by the Commissioner on said statement has to be regarded as mis-guided and the statements have to be eschewed from consideration as they would not be relevant for providing the truth of the content thereof. The provisions of Section 9D of the Excise Act are pari materia to the provisions of Section 138 B of the Customs Act and the ratio of the above decisions are fully applicable to the fact of the present case. As in the present case we have already observed that the Revenue s case is solely and entirely based upon the statements of various deponents who have not been offered for cross-examination, such statements have to be kept out of consideration. If that be so, nothing remains with the Revenue to adverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue, required to be discharged by sufficient and positive evidences. In the present case we find that there is not even an iota of evidence except the so called statements which had already been held to be not equal to the evidences, to prove that the appellant have knowledge about the said fact. As such, we are reaffirmed in our decisions of non-imposition of penalty upon the said appellants. 30. We further note that as per the findings of the Adjudicating Authority, the two SEZ units were importing the brand new jewellery in the guise of old jewellery for the purpose of remaking, re-polishing etc of the same and then exporting the gold bars or gold jewellery locally procured by them. In terms of the provisions of the Customs Act, the goods imported as well as at the time of export are required to be examined by the Customs Authority and it is only thereafter the goods are allowed clearance either for export or for import. It is reasonably expected that the Customs Authority must have done their job and must have examined the goods at the time of import as well as at the time of export. There is nothing on record to show that any discrepancy was found either in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he duty or interest so determined. 35. As is seen from above the liability to penalty arises on a person who is liable to pay duty or interest. In some case a person may be liable to pay only duty or only interest. The said provision provides for imposition of penalty equal to duty or interest. The use of the expression or as mentioned in the said section is unambiguous and does not lead to any interpretational issue that the said or has to be read as and . The Revenue s reference to various decisions of Hon ble Supreme Court laying down that in the context of those cases or has to be read as and , cannot be given effect to, inasmuch as it is only in peculiar facts and circumstances of a particular case that or has to be read as and. Revenue itself has given reference to clarifications given by Ministry of Law clarifying that it is occasionally found necessary to read the conjunction or and and as one for the other. The use of the expression occasionally in Ministry of Law s clarification leads us to the conclusion that it is not in each and every case or has to be read as and . In view of the unambiguous nature of the provisions of Section 114A, we fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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