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TMI Blog2023 (1) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... Trading (India) and M/s New Life Organics. (ii) Penalty of Rs. 90,00,000/- (Rupees Ninety Lacs Only) is imposed under Rule 26 of Central Excise Rules, 2002 on Shri M K Patel (Noticee No 9). 9. (i) The amount of Rs. 6,00,000/- (Rupees Six Lakh Only) paid by Shri Riyaz Padela is ordered to be adjusted against the amount of demands confirmed against M/s Xian Organics, M/s Swift Trading (India) and M/s New Life Organics. (ii) Penalty of Rs. 50,00,000/- (Rupees Fifty Lacs Only) is imposed under Rule 26 of Central Excise Rules, 2002 on Shri Riyaz Padela (Noticee No 10)." 2.1 During the period from 19.07.2005 to 24.03.2006, eighty five claim of rebate were filed by five entities namely M/s. New Life Organics, Ankleshwar, Gujarat, M/s. Xian Organics, Valsad, Gujarat, M/s. Swift Trading (I), Masjid, Mumbai, M/s. Real Business House, Valsad, Gujarat, M/s. J.D. Trading House, Ankleshwar, Gujarat, claiming themselves to be the merchant exporter with valid IEC number. After causing verification of Central Excise duty paid status of the goods from the Central Excise Range where the goods were manufactured and from JNCH from where the goods were exported, 19 rebate claims f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestigations had raised question mark over manufacturing and export of the goods, Appellant deposited Rs. 1,01,35,000/- under protest. * The Appellant was not aware about the forged and fabricated nature of the documents. It came to the knowledge of the Appellant only after the investigation by the department. * The role of the Appellant was limited to introduction of Mr. Riyaz Padela with Mr. Deepak Jare. In so far as Mr. Bansode is concerned, the Appellant had only introduced Mr. Jare with Mr. Bansode in case of any difficulty in filing the rebate claim he could have sought Mr. Bansode's help. * Appellant has only introduced Mr. Padela with Mr. Jare and Mr. Bhansode without any knowledge of document been forged and fabricated documents. * It is submitted that the Appellant has not forged or fabricated any documents. The allegation regarding making some entry in the seal covers is totally incorrect and without any basis. The Appellant has not made any entry in any of the documents as alleged. * The statements of the Appellant are not voluntary statements and were taken under duress and coercion. * The Appellant after the show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to bring such offences under the ambit of penal provision. Since the provision of sub-rule 2 of Rule 26 was neither existing in Rule 26 (1) nor in Rule 209A of the Central Excise Rule, the provision of sub rule (2) cannot be made applicable prior to 01.03.2007 when sub-rule (2) was inserted. * In the present case also the allegations pertains to prior to 01.03.2007 and there is no allegation of physically dealing with the goods by the Appellant and as such Rule 26 (2) cannot be given a retrospective effect. Hence, the penalty of Rs. 90,00,000/- imposed upon the Appellant is not sustainable. * In view of the aforesaid submission the penalty imposed upon the Appellant may be quashed and set aside. 3.3 Arguing for the appellant 2, his counsels submitted as follows: * From para 94.1 and 109.2 of the impugned order, it is very clear that the whole case of the Department made out against the Appellant is that he used to deal with the fabricated documents which were further used to claim rebates. Accordingly, the entire allegation on the Appellant is solely about handling of the said fabricated papers. * Penalty has been imposed upon the appellant under Rule 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be imposed on such an offence which was committed before the said offence was penalized. Reliance in this regard is also placed on the decision of Hon'ble Supreme Court in the case of Commissioner of Central Excise v/s Elgi Equipments Ltd, wherein it is categorically held that illegality committed prior to insertion of section 11AC of the Central Excise Act, 1944 cannot be subject matter of penalty under the said provision. * The case laws relied upon by the Learned Departmental Representative during the course of hearing cannot be applied to the present case as none of the decisions deal with penalty for handling the documents during the relevant period in terms of Rule 26 of the Excise Rules. * Without prejudice to the above, the Appellant in the present case has paid Rs. 2,00,000/- during the stay and Rs. 6,00,000/- during the investigation, which is more that the amount that the Appellant has earned for handling of the said documents. Therefore, it is most humbly submitted before this Hon'ble Bench to kindly consider the same while deciding the present appeal. 3.4 Arguing for the revenue learned authorized representative submits that:- * Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " from the expression "acquire possession of" means goods liable to excise duty i.e. it has no relationship with physical existence of goods. According to Section 2 (d) of Central Excise Act 1944: "Excisable goods" means goods specified in the first schedule and the second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt". Thus, any goods mentioned in the first schedule of the said Central Excise Tariff Act will also be excisable goods. In M/s. Hiralal Ratanlal vs. STO, (AIR 1973 SC 1034), the apex Court observed as follows: "In construing a statutory provision the first and foremost rule of construction is the literal construction. All that the Court has to see at the very outset is what does the provision say. If the provision is unambiguous and if from the provision the legislative intent is clear, the Court need not call into aid the other rules of construction of statutes. The other rules of construction are called into aid only when the legislative intent is not clear." * Rule 26 of the Central Excise Rule, 2002 as existing at point of time in instant case, that the expression "in any other manner deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeding the amount of such benefit or five thousand rupees, whichever is greater". " * It is worthwhile to note that the said amendment to Rule 26 has been carried out without any corresponding amendment in the Section 37(5) and thus derives its power from the said section and is only clarificatory in nature. The amendments carried out through notification No. 8/2007- Central Excise (N.T.) 01.03.2007 therefore, are, equally applicable to cases prior to issuance of this notification read with provisions of Section 37(5) of the Central Excise Act, 1944. * In any case, each issue has to be dealt with separately, in the instant case detailed investigations have been carried out and it was comprehensively established that a conspiracy was hatched, fake documents viz. ARE-1, invoice etc were fabricated, proof of exports was also fabricated, and claims submitted to Maritime Commissioner and even ineligible rebate of Rs1,59,07,687/-was obtained by defrauding the Revenue. Thus, the entire scheme was nothing but a well thought out fraud. The main perpetrators of the fraud viz. Shri M.K.Patel and Shri Riyaz Padela have accepted the fraud and refunded the amount covering rebate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claims filed by the five merchant exporters revealed that they had neither paid any Central Excise duty or they have exported any goods. The investigations revealed following facts: * The manufacturers M/s. India Nippon Electrical Ltd. and M/s. Neuland Laboratories, Ankleshwar, Gujarat, whose goods were claimed to have been exported, were not in existence. * The jurisdictional Excise officers have confirmed that they have not supervised the stuffing of export consignments and no Central Excise duty was paid by the said units. * The Customs authorities of JNCH, Nhava Sheva, have confirmed that no such goods as claimed by the exporters, were actually exported from the said port. * The office addresses of the said merchant exporters were found fake and their proprietors, directors had also provided fake addresses and identity. * The export documents viz. ARE-1s, shipping bills, mate receipts etc. were found to be fake and fabricated. * Shri Sushil Ishwarbhai Patel), Proprietor of New Life Organics, Shri Anil Himmatbhai Patel, Proprietor of M/s. Xian Organics and Shri Harish Sushil Patel, Proprietor of M/s Trading (India) could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Noticee No. 9), Superintendent of Central Excise, Mumbai, had played crucial role in presentations o! fabricated/fake rebate claims to the Maritime Commissioner, Raigad and had earned considerable monetary benefit out of the amount of rebate received in the name of the merchant exporters. The evidence collected during investigations is summerised as under: 88.1 It was revealed that (i) M/s. Xian Organics, Valsad, (ii) M/s. Swift Trading (India) Mumbai and (iii) M/s. New Life Organics, Ankleshwar, had issued authority letters authorizing Shri Bhaskar Tate to submit the rebate claims on their behalf to the Maritime Commissioner and to receive the cheques pertaining to the sanctioned rebate amount, from the said authority. 88.2 Shri Bhaskar Gulabrao Tate had deposed that Shri Deepak Jare, had introduced him to Shri M. K. Patel and instructed him to work for him as Shri M. K. Patel was an Exporter. As he did not have any work he had associated himself with Shri M. K. Patel, who paid him small amounts to cover his travelling expenses. Shri M. K. Patel used to instruct him to do the followup of the subject rebate claims at the Rebate Section, Raigad and also at the Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate, Raigad, in the said connection on couple of occasions, on the instructions of Shri M K Patel to handle some technical clarifications required by the Rebate Section which Shri Bhaskar Tate was unable to handle. During his such visits he had seen the rebate claims of the said firms in question for the first time and he suspected about the genuineness of the same. He brought the same to the notice of Shri M K Patel, who assured that there would not be any problem and in any such event, Shri M. K. Patel would manage such problem. Since he was not satisfied with the reply, he started avoiding going to office of the Maritime Commissionerate, Raigad and he had even instructed Shri Bhaskar Tate to stop assisting Shri M K Patel in the processing of such rebate claims. On 7th June 2006, he was informed by Shri A. S. Bansode that, the manufacturers and merchants Involved in the said claims were bogus and as such, requested him to attend the office of the Maritime Commissionerate for satisfying their queries. However, Shri M. K. Patel had advised him not to respond to the summons issued to him to attend the office of the Central Excise department. In his further statement dated 27.07.06, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dela & Shri M.K. Patel, who had approached him for his help to open accounts in different names and to deposit certain cheques in such accounts and en-cash the amount. According to their instructions he had opened the dummy accounts. 88.6 The investigations thus revealed that Shri M. K. Patel, Superintendent of the Central Excise had actively involved himself in de-frauding the Government revenue by filing false claims of rebate with the office of the Maritime Commissioner, Raigad. He could not be located at his known addresses in the meantime anticipatory bail by Panvel court was granted to him with the directions to co-operate in the investigations. In his said statement dated 28.09.2006, Shri M.K. Patel has, inter-alia, stated that he was posted as Superintendent, Central Excise (Statistics), Thane-I in 2004 and on 07.10.2005, he was placed under suspension in connection with a case involving misuse of CENVAT facility. He knew Shri Riyaz Padela since the middle of 2003. Shri M.K. Patel, in his statement dated 05.10.2006 stated that he met Shri Deepak Jare who was a clearing agent during his tenure at Bhiwandi during 2003-04 and thereafter, they were in contact. Somewher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed towards the work done through him. Shri Dilkumar accepted the offer and introduced him to Shri Rakesh and informed that from then onwards he was required to contact Shri Rakesh for obtaining all the sets of rebate claims, (ii) In terms of the above understanding reached by him and Shri M. K. Patel with Shri Dilkumar, Shri M. K. Patel had provided him with a list of the documents which were required for claiming rebate. The documents prepared for rebate claims were checked and scrutinized by Shri M.K. Patel and changes suggested by him were carried out by Shri Rakesh. The liaison work relating to documents between Shri M.K. Patel and Shri Rakesh was done by him. The documents were forwarded to Shri M. K. Patel, either through the courier agency M/s. Shree Maruti Couriers or by handing over the same personally. The amount which was required to be handed over to Shri M. K. Patel out of the sanctioned rebate claims (which amounted to 60% of the total amount of rebate sanctioned), was given to Shri M. K. Patel through M/s. Patel Natwarlal Chinubhai & Co., (a private courier agency), situated at Surat. (iii) He has given Shri M. K. Patel, about Rs. 95 lakh towards hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Ralyaz Padela from Surat. The parcels contained documents related to claims of rebate which were handed over by him to Shri Bhasker Tate, the employee of Shri Deepak Jare, the CHA. During the recording of his statement dated 28.02.07, Shri M. K. Patel was shown copies of the documents pertaining to the claims of rebate made by the said 5 merchant exporters with the Maritime Commissioner. He was asked to state whether any of the documents have been prepared by him, particularly, the sealed covers received from the JNCH, Nhava Sheva, containing certificate of exports of goods and the report of the Central Excise Range office, certifying the Central Excise duty payment by the manufacturing units concerned. Shri M. K. Patel stated that the handwriting on the sealed envelopes merely appeared similar to his own handwriting. When he was further shown one more set of the rebate claim No. 35736/24.03.06 filed by M/s. J.D. Trading House, and the ARE-1 No. 504/02.09.05 and the Shipping Bill No. 3697581 dated 05.09.05 filed alongwith the same, he stated that even in respect of said set of papers, the handwriting of the words and figures found over the sealed cover, appeared to be similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the office of JNCH authorities containing typed letters certifying the exports of goods in question and similar such envelopes supposedly addressed to the Maritime Commissioner by the jurisdictional Range Superintendent of the alleged fictitious manufacturers containing letters certifying the duty paying nature of the said goods, were also prepared by Shri M.K. Patel, all in his own handwriting. 88.11 During investigations Shri Venkat Chari under his letter dated 13.03.2007 submitted two copies of TR-6 challans whereunder amount of Rs.70,00,000/- (Rs. 30,00,000/- plus Rs.40,00,000/-) was deposited in the Govt. treasury, under protest, by the said person. He also stated that the said payment was made towards erroneously refunded rebate amount to the said merchant exporters by the Maritime Commissioner. Shri Venkat Chari, in his statement dated 21.03.2007stated that he was a family friend of Shri M.K. Patel and he had no business or commercial relationship with Shri M.K. Patel. Shri M.K. Patel had told him that he was having some monetary problem to settle some dues of the Central Excise Department as his name had figured in the investigations relating to sanction of irregu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, for an amount of around Rs.10 lakh, which had been withdrawn by Shri Javed Shaikh. Shri Qadir Amin Dangra in his deposition recorded on 10.07.2006, stated that besides the account of Shri Pinakin Mulji Rajawala, he had also managed the accounts opened In the Memon Co-Op. -Bank, Surat in the names of (1) Rakesh Kumar Madhubhai More, (2) Shri Ketan Ghansubhai Gotawala, (3) Shri Sikandar Mithani, (4) Kalandar Textile, (5) M.N. Traders & (6) Faijal Dib. In all the accounts, various types of cheques were deposited and on their clearance, full amount was withdrawn in cash and for that purpose, he used to keep the pre-signed blank cheques of all the said account holders with him. All the aforesaid account holders were given Rs.15,000/- to Rs.20,000/- for the use of their accounts. In all the bank accounts as stated above, the cheques were deposited by Shri Riyaz Padela or Shri Javed Shaikh who used to work for Shri Riyaz Padela. Shri Riyaz Padela and Shri Javed Shaikh deposited the cheques issued by M/s. Xian Organics, M/s. Swift Trading and M/s. New Life Organics in the aforesaid accounts and the entire amount was withdrawn in cash. The operation of the aforesaid accounts was looked a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by Shri M K Patel for submission and processing at the office of the Maritime Commissionerate, Raigad. In his further statement dated 27.07.06, Shri Deepak Sharad Jare has inter-alia, stated that when investigations were initiated, Shri Riyaz Padela had told him not to respond to the communications and not to attend the office of Central Excise department for the purpose of the investigation, as the entire matter was being sorted out by him. He further stated that he has not received any monetary benefit and he had worked for Shri M K Patel & Shri Riyaz Padela merely because Shri M. K. Patel had assured to help in the process of help him in getting the business of export. Shri M.K. Patel, in his statement dated 05.10.2006 stated that somewhere in the later part of 2005, he had received a request from Shri Riyaz Padela for the services of a clearing agent to undertake the work related to export from Mumbai and then he had introduced Shri Riyaz Padela to Shri Deepak Jare. Shri Deepak Jare agreed and directed his employee, Shri Bhaskar Tate to take care of the said work. Somewhere at the end of 2005, Shri Deepak Jare informed him to receive the cheque of rebate sanctioned amount fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te courier agency), Surat, He had given Shri M. K. Patel about Rs. 95 lakh towards his share of payment calculated @ 60% of the rebate amount, for facilitating the processing and sanction of rebate claims. On receipt of the cheques of rebate sanctioned amounts through Shri M.K. Patel, he had given the first cheque to Shri Rakesh and he was not aware where the cheque was deposited by Shri Rakesh. Thereafter, 3 more such cheques of rebate sanctioned amount were deposited in Thane, two of the said cheques were deposited by him at the HDFC Bank and one through Shri M.K.Patel at IndusInd Bank, in the Current Account held by the merchant exporter concerned, in the said banks. He had received cross bearer cheques from Shri Rakesh which were given to Shri Afroze Bachau, on commission basis, for encashment through certain accounts in the Memom Co-op Bank, Surat. After these cheques were cleared, he received the money from Shri Afroz Bachau, out of which, he sent to Shri M.K. Patel, his share of 60% of the rebate amount. Shri Riyaz Padela further stated that he did not have any knowledge about the merchant exporters in respect of whom the rebate claims had been filed. Shri Riyaz Padela in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing firms viz., (i) M/s. Xian Organics, Valsad (ii) M/s. Real business House, Valsad (iii) M/s. New Life Organics, Ankleshwar (iv) M/s. J.D. Trading, Ankleshwar & (v) M/s. Swift Trading India, Mumbai. Shri Riyaz Padela. All the documents and cheques relating to the above firms were exchanged between him and Shri Rakesh. In further statement dated 28.12.06, Shri Riyaz Padela stated that he did not know the present whereabouts of Shri Dilkumar and Shri Rakesh. Shri Riyaz Padela further informed that he had voluntarily deposited an amount Rs.6,00,000/- (Rs.5 lakh on 21.12.2006 and Rs. 1 lakh on 28.12.2006) towards his share of the amount received and encashed, out of the total rebate sanctioned by the Maritime Commissioner, Raigad, to the said merchant exporters. ...... 103. As regards the charges of recovery of erroneous rebate paid, rejection of pending rebate claims and imposition of penalty under Section 11AC on Shri M.K. Patel (Noticee No. 9), Shri Riyaz Padela (Noticee No. 10), Shri Dilkumar (Noticee No. 11) and Shri Rakesh (Noticee No. 12), I find that the said charges have been upheld against respective merchants/noticees in whose names the claims have been file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and he should have knowledge or reason to believe that such goods are liable to confiscation. Rule 25 inter-alia provides the confiscation of the goods in respect of which contravention of any of the provisions of the Central Excise Rules or Notifications issued thereunder has been done. Here the terms 'dealing in any other manner' in Rule 26 and 'contravention of any of the provisions of the rules or notification issued thereunder' in Rule 25 are relevant to the subject issue. 106. Noticees No. 10, 14, 15, 17, 18, 20 & 21 have filed their defence relating to the charges of penalty under Rule 26 & Rule 27. The gist of their submissions is as under: 106.1 The notice does not specify any act on their part to render them liable to penalty. The notice proposed to impose penalty under Rule 26 and or Rule 27 of Central Excise Rules, 2002 without the mention of any specific provision/clause of Rule26 and or Rule 27 and without any evidence to show their involvement in the issue. They quoted the provisions of Rule 26 and Rule 27 of Central Excise Rules, 2002 and submitted that they have not violated any of the provisions of the said rules to attract penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposition of penalty under Rule 209A on an employee of the manufacturer (BHEL). (iii) In the case of Dayashankar Tiwari Vs. CCE Hyderabad 2008(85)RLT-15 the tribunal has held that if the department is not raising a proposal to confiscate the goods and no goods are confiscated the penalty under Rule 26 cannot be imposed. In the case of Steel Tubes of India Ltd. 2007(217)ELT-506-Trib.-LB the tribunal(LB) has held that to attract personal penalty under Rule 209 A of the Central Excise Rules, 1944, the person must have dealt with the excisable goods with the knowledge that they are liable for confiscation. When he is Involved in Issuing of invoices and there is no movement of the goods penalty is not imposable. The ratio of this case was followed by the tribunal in the case of Nasik Strips Pvt. Ltd. 2008(86) RLT(481). (iv) In the case of E Keshwan Vs. A.C. Customs-1987(27)ELT640 the tribunal has held that the confessional statement retracted by the accused cannot be said to be voluntary and cannot be relied upon. Mere confessional statement will not be sufficient to convict the person unless it is corroborated by other evidence. In the case of Bachha Prasad Vs. Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to some kind of transaction or attempts to enter into some kind of transaction with respect to prohibited goods and it is clear that the act is done with some kind of prior arrangement or agreement, it must be held that such a person is concerned in dealing with prohibited goods. In the case of Dr. Writer's Food Products Vs. Commissioner of Central Excise, Pune-II 2009(ELT)381-Trib. the issue involved was clandestine clearance of goods without payment of Central Excise duty. The tribunal on the Issue of penalty under Rule 26, has relied upon the Supreme Court's judgment in the case of Sachidananda Banerjee Vs. Sitaram Agarwal 1999 (110) ELT292-SC, for interpretations of the expression 'in any way concerned/in any manner dealing with goods' and held that the provisions of Section 167(81) of the Old Sea Customs Act, 1878 are pari material with Section 112(b) of the New Customs Act, 1962, which in turn are parl materia with Rule 209A of the Central Excise Rules 1944 and Rule 26 of the Central Excise Rules, 2002. In the case of V.K. Enterprises Vs. Commissioner of C.Ex.- 2010(ELT)462. The issue was passing on of cenvat credit by issuing Invoices only w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Shri Riyaz Padela through cheque discounting method with the help of Shr Afroz Bachau. As agreed Shri Riyaz Padela himself had delivered the amount forming the share of 60 % to Shri M.K. Patel. The investigations also revealed that crucial documents on the basis of which the rebate was claimed contained were in the handwriting of Shri M.K Patel. It has been confirmed by the Government Examiner of Questioned Documents) Hyderabad that Shri M.K. Patel had written the particular words and figures found on the fake documents filed for claiming rebate from the Maritime Commissioner. It is therefore established that Shri M.K. Patel has played pivotal role in fabrication of documents of rebate claims, facilitation of filing such rebate claims with the office of the Maritime Commissioner, Raigad, and was the major beneficiary of the amount so obtained as rebate of duty on the basis of forged/fake documents. The amount of rebate paid to merchants is liable to be recovered from him, and other beneficiaries. Shri M.K. Patel has also made himself liable to penalty under Rule 26/Rule 27 of Central Excise Rules, 2002. 109.2 Shri Riyaz Padela (Noticee No.10) was a crucial link in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1944. He is also liable for penalty, under Rule 26/Rule 27 of Central Excise Rules, 2002." 4.8 Appellant do not seriously dispute the findings recorded by the Commissioner in the impugned order against them except for the Appellant 1 stating that he was not supplied with the copy of the report of the hand writing expert, in respect of their alleged involvement in the alleged fraudulent claim of the rebate. However we do not find any merit in the submissions made on behalf appellant for the reason that impugned order do not base its finding entirely on the that report but have discussed the plethora of evidence to come to the conclusion of his involvement in fraud. Further Hon'ble Kerala High Court has in case of Kollatar Abbas Haji [1984 (15) ELT 129 (Ker)] held as follows: "6. Section 138B of the Customs Act, 1962 reads : "138B. Relevancy of statements under certain circumstances. (1) A statement made and signed by a person before any Gazetted officer of Customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have been so executed or attested; (b) admit the document in evidence, notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence; (c) in a case falling under clause (i) also presume, unless the contrary is proved, the truth of the contents of such document." This shows, that the Court shall presume, unless the contrary is proved, that the signature and every other part of the document referred to in the Section is genuine. There is much force in Counsel's submission. Section 138B makes it clear that in proceedings before an administrator, as in the case of a proceeding in a court of law, a statement made and signed by a person is material and it has to be admitted in evidence in the interest of justice. Section 139 places the burden upon the maker of the statement to deny the genuineness of his signature or any statement contained in the document. It is not disputed by the petitioner's counsel that the expression `document' would include the statements signed by the co-accused. Section 139 leaves no doubt that a court shall presume, unless the contrary is proved, that the signature of the maker is genuine and every other part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of this Court in Judgment dated 14 September 2010 (supra) whilst interpreting Rule 209A of the said Rules. The question of law framed, thus, stands answered in favour of the Respondents and against the Appellant." Appellants have also contended that the amendments made in the Rule 26 by Notification No 08/2007-CE (NT) dated 01.03.2007 are prospective and cannot be applied in the case were the offence was committed prior to that date. They have relied upon certain decisions in this respect. 4.9 From the facts as stated in the impugned order we are very clear in our mind that the appellants had conspired and perpetuated the alleged fraud by filing these rebate claims to defraud the exchequer of the amount claimed by them as rebate without payment of any central excise duty and without exporting any goods. It is settled principle in law and The legal maxim "fraud vitiates everything" is very relevant to the facts herein. In Bhaurao Dagdu Paralkar vs. State of Maharashtra, (2005) 7 SCC 605, Supreme Court dealt with the expression 'fraud' and its impact. It was held as under: - "By "fraud" is meant an intention to deceive; whether it is from any expectatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld also amount to a fraud on the court [(see Gowrishankar v. Joshi Amha Shankar Family Trust, (1996) 3 SCC 310 and S.P. Chengalvaraya Naidu s case (AIR 1994 S.C. 853)]. No judgment of a Court can be allowed to stand if it has been obtained by fraud. Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity. When fraud is established that unravels all. [Ref: UOI v. Jain Shudh Vanaspati Ltd. - 1996 (86) E.L.T. 460 (S.C.) and in Delhi Development Authority v. Skipper Construction Company (P) Ltd. - AIR 1996 SC 2005]. Any undue gain made at the cost of Revenue is to be restored back to the treasury since fraud committed against Revenue voids all judicial acts, ecclesiastical or temporal and DEPB scrip obtained playing fraud against the public authorities are non-est. So also no Court in this country can allow any benefit of fraud to be enjoyed by anybody as is held by Apex Court in the case of Chengalvaraya Naidu reported in (1994) I SCC 1: AIR 1994 SC 853. Ram Preeti Yadav v. U.P. Board High School and Inter Mediate Education (2003) 8 SCC 311." Fraud and justice do not dwell together for which penal provisions are en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rategy must be formed by social circumstances, individual factors and the character of the crime. India has been facing an economic crisis and gold smuggling has had a disastrous impact on the State's efforts to stabilize the country's economy. Smugglers, hoarders, adulterators and others of their ilk have been busy in their under-world because the legal hardware has not been able to halt the invisible economic aggressor inside. The ineffectiveness of prosecutions in arresting the wave of white-collar crime must disturb the judges' conscience. While we agree that penal treatment should be tailored to the individual, in the extreme category of professional economic offenders, incarceration is peculiarly potent. When all is said and done, the offences for which the appellant has been convicted are typical of respectable racketeers who, tempted by the heavy pay-off face the perils of the law and hope that they could smuggle on a large scale and even if struck by the court they could get away with a light blow. 20. Mr. Justice Abhyankar observed in a Bombay case (State v. Drupd AIR 1965 Bom. 6 Para 11 under Section 5, Imports and Exports Control Act : "A serious view must therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of the very acts complained of in this particular case. We are afraid we are unable to agree with Shri Jethmalani. The offence is one which jeopardises the economy of the country and it is impossible to take a casual or a light view of the offence. It is true that where the offence is of a trivial nature such as a simple assault or the theft of a trifling amount, we may hesitate to send an accused person back to jail as it would not be in the public interest or in the interest of anyone to do so. But the offences with which we are concerned and the stakes involved clearly show that sympathy in this case would be misplaced. We, therefore, set aside the judgment of the High Court and restore that of the learned Additional Chief Presidency Magistrate, 8th Court, Esplanade, Bombay. The respondent will surrender forthwith. The gold slabs will stand confiscated to the Central Government. The appeal is allowed." Rohit Tandon [2017 (356) ELT 3 (SC)] "18. The consistent view taken by this Court is that economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vations of Shah, J. and similar observations made elsewhere. The evil consequences of tax avoidance are manifold. First there is substantial loss of much needed public revenue, particularly in a welfare state like ours. Next there is the serious disturbance caused to the economy of the country by the piling up of mountains of blackmoney, directly causing inflation. Then there is "the large hidden loss" to the community (as pointed out by Master Sheatcraft in 18 Modern Law Review 209) by some of the best brains in the country being involved in the perpetual war waged between the tax-avoider and his expert team of advisers, lawyers and accountants on one side and the tax-gatherer and his perhaps not so skilful, advisers on the other side. Then again there is the 'sense of injustice and inequality which tax avoidance arouses in the breasts of those who are unwilling or unable to profit by it'. Last but not the least is the ethics (to be precise, the lack of it) of transferring the burden of tax liability to the shoulders of the guideless good citizens from those of the 'artful dodgers'. It may, indeed, be difficult for lesser mortals to attain the state of mind of Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separate and detailed opinion with which we agree." 4.13 Now we examine the provisions of the Rule 26 & 27 of the Central excise Rules, 2002 which were examined in the impugned order while imposing penalty in terms of Rule 26. For ease of reference we reproduce the said rule as it existed prior to its amendment in 2007: Rule 26 Penalty for certain offences - Any person who acquire possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these Rules, shall be liable to a penalty not exceeding a duty on such goods or Rs.10,000/-, whichever is greater. Rule 27 General Penalty - A breach of these rules shall, where no other penalty is provided herein or in the Act, be punishable with a penalty which may extent to Rs.5,000/- and with confiscation of the goods in respect of which the offence is committed. Section 112 (b) of the Custom Act, 1962 and Section 9 of the Opium Act, 1988 which are pari materia with the said rule are reproduced bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statement also further reveals about the telephonic conversation between the appellant and Hava. It is not as if the appellant is a total stranger to the said Hava who claims to know the appellant since 1979 and had been habitually delivering consignments of watches to the appellant. Since the statement of the said Hava revealed that the watches were being taken to the appellant, the officers accompanied Hava to Bangalore and asked him to contact the appellant over the telephone No. 40467. The evidence reveals that the appellant was contacted on phone by the said Hava and Hava was directed by the appellant to go over to Murdha Steel Centre, opposite Vanivilas Hospital near Kamat Hotel at Bangalore-where the appellant is stated to have promised to turn up at 4.30 P.M. to receive the watches. The appellant arrived at the appointed place at about 5.00 P.M. by a Bajaj Scooter No. CAH 6331 and while he was conversing with the said Hava, at or about that time the appellant was nabbed by the authorities. The appellant when he was being interrogated by the authorities suddenly tried to make good an escape when he was again caught. The statement of Hava is well corroborated by certain cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deed, entered into them." In Wharton's Law Lexicon, 14th Edn., at p. 777, the word "possession" is defined as being equivalent to 'the state of owning or having a thing in one's own hands or power." Thus, three different meanings are given; one is the state of owning, the second is having a thing in one's own bands, and the third is having a thing in one's own power. In case where property is in actual physical possession, obviously it would be in one's own hands. If it is in constructive possession, it would be in one's own power. Then, there is the third case where there may not be actual, physical or constructive possession and, yet, the person still possesses the right to recover actual physical possession or constructive possession; that would be a case covered by the expression "the state of owning". In fact, elaborating further the meaning of the word "possession', Wharton goes on to say that "it is either actual, where a person enters into lands or tenements descended or conveyed to him; apparent, which is a species of presumptive title where land descended to the heir of an abator, intruder, or disseisor, who died seised; in law, when lands, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons. In that regard, she has drawn inspiration from Rattan Lal v. State of Punjab[2], T. Barai v. Henry Ah Hoe[3], Basheer v. State of Kerala[4] and Pratap Singh v. State of Jharkhand[5]. Pyramiding the said facet, it is urged by Ms. Bhati that in the instant case, the sentence being higher for the offence of possession under the NDPS Act, such a provision cannot be made retrospectively applicable to him. To appreciate the said submission, it is appropriate to refer to Section 9 of the Opium Act. It reads as follows:- "9. Penalty for illegal cultivation poppy, etc. Any person who, in contravention of this Act, or of rules made and notified under section 5 or Section 8,- (a) possesses opium, or (b) transports opium, or (c) imports or exports opium, or (d) sells opium, or (e) omits to warehouse opium, or removes or does any act in respect of warehoused opium, And any person who otherwise contravenes any such rule, shall, on conviction before a Magistrate, be punished for each such offence with imprisonment for a term which may extend to one year, or with fine which may extend to one thousand rupees, or with both; And, where a fine is imposed, the convicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... session" consists of two elements. First, it refers to the corpus or the physical control and the second, it refers to the animus or intent which has reference to exercise of the said control. One of the definitions of possession given in Black's Law dictionary is as follows: "Having control over a thing with the intent to have and to exercise such control. Oswald v. Weigel[6]. The detention and control or the manual or ideal custody, of anything which may be the subject of property, for one's use and enjoyment, either as owner or as the proprietor of a qualified right in it, and either held personally or by another who exercises it in one's place and name. Act or state of possessing. That condition of facts under which one can exercise his power over a corporeal thing at his pleasure to the exclusion of all other persons. The law, in general, recognizes two kinds of possession: actual possession and constructive possession. A person who knowingly has direct physical control over a thing, at a given time, is then in actual possession of it. A person who, although not in actual possession, knowingly has both the power and the intention at given time to exercise dominion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying abstract rule to a concrete set of facts. The learned author has suggested certain factors which have been held to be relevant to conclude whether a person has acquired possession for the purposes of a particular rule of law. Some of the factors enlisted by him are; (a) degree of physical control exercised by person over a thing, (b) knowledge of the person claiming possessory rights over a thing, about the attributes and qualities of the thing, (c) the persons' intention in regard to the thing, that is, 'animus possessionis' and 'animus domini', (d) possession of land on which the thing is claimed is lying; also the relevant intention of the occupier of a premises on which the thing is lying thereon to exclude others from enjoying the land and anything which happens to be lying there; and Judges' concept of the social purpose of the particular rule relied upon by the plaintiff. The learned author has further proceeded to state that quite naturally the policies behind different possessory rules will vary and it would justify the courts giving varying weight to different factors relevant to possession according to the particular rule in question. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the appellant who is proved by evidence on record to have abetted the commission of an offence in respect of the gold in question and in such a situation, in my opinion, the order of the original authority is correct and is sustainable in law. ....". Corniche Holdings Inc [1999 (106) ELT 547 (T)] "8. In Salmond on Jurisprudence 12th edition by PJ Fitzgerald Sweet & Maxwell, London 1966, the following statements are made with regard to possession : "The test then for determining whether a man is in possession of anything is whether he is in general control of it. Unless he is actually holding or using it - in which event he clearly has possession - we have to ask whether the facts are such that we can expect him to be able to enjoy the use of it without interference on the part of others." 9. This view finds expression in judicial pronouncements. The Supreme Court in Mangal Singh and Others v. Smt. Ratno (dead) by her legal representative, A.I.R. 1967 S.C. 1786 said : "It is commonly known in English language that the property is said to be possessed by a person if he is its owner even though he may for the time being be out of actual possession or e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to penalty. There is no doubt that the so called merchant exporters or Rule 12B manufacturers have dealt with the goods inasmuch as they purchased the goods from market and in order to claim the rebate/or avail CENVAT credit they approached Muni Group of Companies and purchased certain invoices from them so as to fraudulently show as if the goods were purchased from Muni Group of Companies on the invoices of Muni Group and thereafter exported or used in processing. Thus, there are excisable goods which are purported to be cleared on the invoice of Muni Group. In all cases, the investigations have indicated that the goods were never transported from Muni Group of Companies to the appellants or to the port of export. Investigations revealed that the goods were lifted from some dealers in Surat, etc. Further, investigations indicate that some payments were made to Muni Group of Companies through account payee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er source. Here again, goods procured from some other sources would be non-duty paid goods otherwise, there was no need for them to get the invoices from Muni Group of Companies. The findings recorded above in respect of merchant exporters equally be applicable in the case of Rule 12B manufacturers and, therefore, penalty is imposable. Thus, these are the cases of fraud wherein the appellants as also Muni Group of Companies were equally involved and would be equally benefitted by getting the money from the government exchequer, in the name of rebate even though in reality, no duty was paid in the scheme of the above fraud, it was fraudulently shown that the duty was paid and the appellants or Muni of Group of Companies would be able to get refund of the duty in the form of rebate which thereafter will be distributed among themselves. 8.5. The reasoning adopted by the hon'ble Gujarat High Court in the case of Sanjay Vimalbhai Deora (supra) which in turn has been upheld by the hon'ble Supreme Court is equally applicable. Similarly, the judgment of the Punjab and Haryana High Court in the case of Veekay Enterprises and M S Metals (supra) are equally applicable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t penalty under Rule 26 cannot be imposed. In our view this is not the correct position in law as there are goods which are purported to covered by certain invoices. One has to deal with such invoices along with the goods and a holistic view of the two has to be taken. One cannot segregate invoices from the goods for the simple reason that both are submitted together for excise purpose. The interpretation taken by the Commissioner is therefore as per his understanding of the law and we do not agree with such an understanding. Such an interpretation of law will make minor violators of the procedure as liable to penalty under Rule 26 while the outright law violators or fraudsters will go scot free. We therefore take no cognizance of the order passed by the Commissioner and the fact that such order has been accepted by the department is of no consequence." This decision was followed by the tribunal in the case of Cannon Industries Pvt. Ltd. & Mangaldas K. Patel [Final Order No A/85656-85657/2019 dated 02.04.2019]. In case of Dr Writers Food Products [2009 (242) ELT 381 (T)] relied upon in the impugned order, following has been observed: "30. The learned counsel for the 2nd appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealing with any goods with respect to importation of which any prohibition or restriction is for the time being in force. The High Court has held on the facts in this case that Sitaram Agarwala cannot be said to have been concerned in any manner dealing with prohibited goods inasmuch as he was merely negotiating with the Chinese accused for their purchase but the deal had not been concluded. The view which found favour with the High Court thus was that if the deal had been completed, Sitaram Agarwala could be said to have been concerned in dealing with the prohibited goods but as the deal was not completed and he was merely attempting to purchase the goods it could not be said that he was in any way concerned in any manner dealing with them. We are of opinion that the view taken by the High Court is not correct. The words "in any way concerned in any manner dealing with prohibited goods" are of very wide import. It is neither desirable nor necessary to define all manner of connection with the prohibited goods which might come within the meaning of the words "in any way concerned in any manner dealing with such goods ". It will depend on the facts found in each case whether it can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. The fact that the act stopped at an attempt to purchase as in the present case when the police intervened does not in any way mean that Sitaram was not concerned in dealing with the smuggled gold. The evidence shows that there must have been a previous arrangement with the Chinese accused to purchase the smuggled gold. Sitaram went to the appointed place and met the Chinese accused surreptitiously and had a large sum of money with him to pay for the gold. He had sat down with the Chinese accused in the taxi and there is no doubt that if the taxi had not been stopped, the transaction for the purchase of the smuggled gold would have gone through. In these circumstances even though Sitaram had not come into actual possession of the smuggled gold before the police intervened, there is no doubt that he was concerned in dealing with prohibited goods. We are therefore of opinion that the High Court was in error in holding simply because the purchase was not complete that Sitaram was not concerned in dealing with the smuggled gold which was found with the Chinese accused. The acquittal of Sitaram on this ground must therefore be set aside. " 31. Thus, we are of the firm view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows: Hon'ble Punjab and Haryana High Court has in the case of M S Metals [2014 (309) E.L.T. 241 (P & H)] held as follows: "6. From the above, it emerges that the appellant was a registered dealer who was involved in issuing bogus invoice without selling any goods to M/s. Sonia Overseas on the basis of which the said firm took the Cenvat credit. It was in those circumstances that the penalty of Rs. 1 lac was imposed under Rule 25(1)(d) and 26(1) of the Rules." In case of Kay Iron Works (Jorion) Pvt Ltd. [2018 (359) E.L.T. 110 (P & H)], Hon'ble Punjab & Haryana High Court held as follows: "5. A perusal of the order passed by the Tribunal shows that it was conceded by the assessee before the authorities below that the invoices were issued without even supplying any goods. It was also recorded that the Settlement Commission did not admit the case of the appellant and also that Settlement Commission nowhere had held that their order would be extended in the case of the appellant as well. With regard to the contention that the penalty under Rule 25 of the Rules could not be imposed as there were no goods involved, the Tribunal relying upon the judgment of this Court in V.K. Ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the fact that appellants were not only responsible for creating the fabricated documents but also responsible for producing the fabricated documents in respect of verification of the payment of duty and export of the goods from the port, cannot claim that they had not handled the goods in law in the manner as stated in Rule 26 of the Central Excise Rules, 2002, taking note of the facts of the present case we find the said decision of the Hon'ble Bombay High Court relied by the appellant distinguishable on facts. 4.18 Appellants have argued that provisions of Rule 26 (2) cannot be invoked in their case as the offence committed by them was committed by them was prior to introduction of the said Rule. Though when we hold that penalty has been rightly imposed under Rule 26 (1) this argument will not survive but for completion of the issue we examine the said argument as well. It is evident that the offences under the Central Excise Act have been created under the Section 9 of the Act ibid which is reproduced below: Section 9. Offences and penalties. - (1) Whoever commits any of the following offences, namely: - (a) contravenes any of the provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duties shall be payable, and the recovery of duty not paid; (ibb) (ic)'....: (3) In making rules under this section, the Central Government may provide that any person committing a breach of any rule shall, where no other penalty is provided by this Act, be liable to a penalty not exceeding five thousand rupees. (4) Notwithstanding anything contained in sub-Section(3), and without prejudice to the provisions of Section 9, in making rules under this Section, the Central Government may provide that if any manufacturer, producer or licensee of a warehouse - a) .. b) .. c) ... d) contravenes the provisions of any such rule with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the manufacturer, producer or licensee shall be liable to a penalty not exceeding the duty leviable on such goods or two thousand rupees, whichever is greater; (5) Notwithstanding anything contained in sub-section (3), the Central Government may make rules to provide for the imposition upon any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y indulged into by anyone, including projecting or claiming the property as untainted property to constitute an offence of money-laundering on its own. The act of projecting or claiming proceeds of crime to be untainted property presupposes that the person is in possession of or is using the same (proceeds of crime), also an independent activity constituting offence of money-laundering. In other words, it is not open to read the different activities conjunctively because of the word "and". If that interpretation is accepted, the effectiveness of Section 3 of the 2002 Act can be easily frustrated by the simple device of one person possessing proceeds of crime and his accomplice would 468 See paragraph 36 of this judgment indulge in projecting or claiming it to be untainted property so that neither is covered under Section 3 of the 2002 Act. 42. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e context of Section 18 of the NDPS Act, it would have a reference to the concept of conscious possession. The legislature while enacting the said law was absolutely aware of the said element and that the word "possession" refers to a mental state as is noticeable from the language employed in Section 35 of the NDPS Act. The said provision reads as follows:- "35. Presumption of culpable mental state. - (1) In any prosecution for an offence under this Act which requires a culpable mental state of the accused, the Court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution. Explanation. - In this section "culpable mental state" includes intention, motive, knowledge, of a fact and belief in, or reason to believe, a fact. (2) For the purpose of this section, a fact is said to be proved only when the Court believes it to exist beyond a reasonable doubt and not merely when its existence is established by a preponderance of probability." On a perusal of the aforesaid provision, it is plain as day that it includes knowledge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent context. In the context of Section 18 of the Act once possession is established the accused, who claims that it was not a conscious possession has to establish it because it is within his special knowledge. xxx xxx xxx xxx 15. From a plain reading of the aforesaid it is evident that it creates a legal fiction and presumes the person in possession of illicit articles to have committed the offence in case he fails to account for the possession satisfactorily. Possession is a mental state and Section 35 of the Act gives statutory recognition to culpable mental state. It includes knowledge of fact. The possession, therefore, has to be understood in the context thereof and when tested on this anvil, we find that the appellants have not been able to satisfactorily account for the possession of opium. [pic] 16. Once possession is established the court can presume that the accused had culpable mental state and have committed the offence. In somewhat similar facts this Court had the occasion to consider this question in Madan Lal v. State of H.P.[22], wherein it has been held as follows: (SCC p. 472, paras 26-27) "26. Once possession is established, the person who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct came into force. Hence, he remained in possession of the prohibited substance and as such offence under Section 18 of the NDPS Act is made out. The possessory right would continue unless there is something to show that he had been divested of it. On the contrary, as we find, he led to discovery of the substance which was within his special knowledge, and, therefore, there can be no scintilla of doubt that he was in possession of the contraband article when the NDPS Act came into force. To clarify the situation, we may give an example. A person had stored 100 bags of opium prior to the NDPS Act coming into force and after coming into force, the recovery of the possessed article takes place. Certainly, on the date of recovery, he is in possession of the contraband article and possession itself is an offence. In such a situation, the accusedappellant cannot take the plea that he had committed an offence under Section 9 of the Opium Act and not under Section 18 of the NDPS Act. 17. After dealing with the concept of possession, we think it apt to address the issue raised by the learned counsel for the appellant that he could have convicted and sentenced under the Opium Act, as tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as replaced the part of the Notification dated 19.10.2001. Dealing with the said aspect, the Court held:- "13. Notification dated 18-11-2009 has replaced the part of the Notification dated 19-10-2001 and reads as under: "In the Table at the end after Note 3, the following Note shall be inserted, namely: (4) The quantities shown in Column 5 and Column 6 of the Table relating to the respective drugs shown in Column 2 shall apply to the entire mixture or any solution or any one or more narcotic drugs or psychotropic substances of that particular drug in dosage form or isomers, esters, ethers and salts of these drugs, including salts of esters, ethers and isomers, wherever existence of such substance is possible and not just its pure drug content." 14. Thus, it is evident that under the aforesaid notification, the whole quantity of material recovered in the form of mixture is to be considered for the purpose of imposition of punishment. However, the submission is not acceptable as it is a settled legal proposition that a penal provision providing for enhancing the sentence does not operate retrospectively. This amendment, in fact, provides for a procedure which may enhance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd eventually held thus: "Thus, in view of the above, the law on the issue can be summarised to the effect that, in the case of a continuing offence, the ingredients of the offence continue i.e. endure even after the period of consummation, whereas in an instantaneous offence, the offence takes place once and for all i.e. when the same actually takes place. In such cases, there is no continuing offence, even though the damage resulting from the injury may itself continue." 21. In this context, it would be fruitful to refer to a three-Judge Bench decision in Maya Rani Punj v. Commissioner of Income Tax, Delhi [28]. In the said case, the Court approved what has been said by the High Court of Bombay in State v. A.H. Bhiwandhiwalia [29]. For the sake of completeness, we reproduce the relevant paragraph:- "In State v. A.H. Bhiwandiwalla (a decision referred to in CWT v. Suresh Seth[30]), Gajendragadkar, J. (as he then was), after quoting the observations of Beaumount, C.J. in an earlier Full Bench decision of that Court observed: "Even so, this expression has acquired a well-recognised meaning in criminal law. If an act committed by an accused person constitutes an offence a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possible damage that their acts would have caused to the economy of country. In case of Vijay Madanlal Choudhary referred earlier by us Hon'ble Supreme Court echoing the observations made earlier in their decisions referred by us again reiterated that such acts be dealt in strictest manner. Observations made by the Hon'ble Apex Court are reproduced below: "129 ....... Further, we do not agree with the observations suggestive of that the offence of money laundering is less heinous offence than the offence of terrorism sought to be tackled under TADA Act or that there is no compelling State interest in tackling offence of money-laundering. The international bodies have been discussing the menace of moneylaundering on regular basis for quite some time; and strongly recommended enactment of stringent legislation for prevention of money-laundering and combating with the menace thereof including to prosecute the offenders and for attachment and confiscation of the proceeds of crime having direct impact on the financial systems and sovereignty and integrity of the countries. That concern has been duly noted even in the opening part of the introduction and Statement of Objects and Reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Laureate, Gunnar Myrdal. It is a broad-based assessment of the degree to which the State, and its machinery, is equipped to deal with its responsibilities of governance. The more soft the State is, greater the likelihood that there is an unholy nexus between the law maker, the law keeper, and the law breaker." (emphasis supplied) In Mohanlal Jitamalji Porwal [(1987) 2 SCC 364], while explaining the impact of economic offences on the community, the Court observed that usually the community view the economic offender with a permissive eye, although the impact of the offence is way greater than that of offence of murder. The Court held thus: "5.....The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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