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TMI Blog2023 (7) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... after the expiry of period limitation and deposits the duty suo motto. The appellants should be allowed an opportunity to defend their case in the manner they deem best. They should have been heard at least. That being so the appeals in respect of these three appellants need to be allowed and matter remanded to original authority for de novo consideration after allowing the opportunity of hearing to the appellant and also to cross examine the person whose statement revenue intend to rely upon against them. It is evident that actual amount paid by him against the purchase of the two cranes was not Rs 2,00,00,000/- but the actual amount paid by him was only Rs 1,25,00,000/-. That being so accepting the same as transaction value in the course of High Sea Sales, the transaction value by applying the principles laid down, as have been applied by the show cause notice and in the impugned order, the transaction value should have been determined at Rs 1,25,00,000/- which is less than the actual transaction value declared on the Bill of Entries at the time of clearance of goods - It is settled principle in law the entire fact stated in the statement about the transaction should have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Act, 1962. (d) However, I give the importer M/s Govindji Gopalji and Sons an option to redeem the 117 consignments of used canes and accessories under section 125 of the Customs Act, 1962 on payment of redemption fine of Rs. 6,50,00,000/-(Rupees Six Crores Fifty Lakhs Only) in lieu of confiscation, for the containers which were seized during the investigation under section 110 of the Customs Act. (e) I give the high seas buyer M/s Reetika Road Lines an option to redeem the one used canes and accessories under section 125 of the Customs Act, 1962 on payment of redemption fine of Rs. 3,50,000/- (Rupees Three Lakhs Fifty Thousand Only) in lieu of confiscation, for the containers which were seized during the investigation under section 110 of the Customs Act. (f) I give the high seas buyer Rangara Industries Pvt Ltd. an option to redeem the one used canes and accessories under section 125 of the Customs Act, 1962 on payment of redemption fine of Rs. 14,50,000/- (Rupees Fourteen Lakhs Fifty Thousand Only) in lieu of confiscation, for the C85160,85168,85914,85915/20154 containers which were seized during the investigation under section 110 of the Customs Act. (g) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice), on M/s Govindji Gopalji Sons. If the duty and interest as demanded above is paid within 30 days of communication of this order, the amount of penalty imposed would be 25% of the duty and interest as per first proviso to Section 114A ibid subject to the condition that the amount of penalty so determined is also paid within the said period of thirty days. (n) I impose penalty under section 114A, equivalent to the duty amount of Rs. 9,43,508/- (details as per Table 18 of the show cause notice), on M/s Rangara Industries. If the duty and interest as demanded above is paid within 30 days of communication of this order, the amount of penalty imposed would be 25% of the duty and interest as per first proviso to Section 114A ibid subject to the condition that the amount of penalty so determined is also paid within the said period of thirty days. (o) I impose penalty under section 114A, equivalent to the duty amount of Rs. 17,86,121/- (details as per Table 18 of the show cause notice), on Shri. A. K. Mani, Proprietor of M/s AKM Enterprises. If the duty and interest as demanded above is paid within 30 days of communication of this order, the amount of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 114AA of the Customs Act, 1962 on C85160,85168,85914,85915/20157 Shri. Nizar Rangara, Chairman-cum-Director of M/s Rangara Industries Pvt. Ltd. (aa) I impose a Penalty of Rs. 1,75,000/- ( Rupees One Lakh Seventy Five Thousand Only) under Section 114AA of the Customs Act, 1962 on Shri. A. K. Mani, Proprietor of M/s AKM Enterprises. (bb) I impose a Penalty of Rs. 1,75,000/- (Rupees One Lakh Seventy Five Thousand Only) under Section 114AA of the Customs Act, 1962 on M/s Huda Equipments. (cc) I impose a Penalty of Rs. 1,75,000/- (Rupees One Lakh Seventy Five Thousand Only) under Section 114AA of the Customs Act, 1962 on Shri. Hakim Shaikh, Director of M/s Huda Equipments. (dd) I impose a Penalty of Rs.3,50,000/- (Rupees Three Lakhs Fifty Thousand Only) under Section 114AA of the Customs Act, 1962 on Shri Madan Lalwani. (ee) I order for finalization of the assessment provisionally cleared one used crane viz. Lune AT-100/47 Hydraulic Mobile Crane under bill of entry no. 968060 dated (ff) I order for enforcement of Bank Guarantee of Rs. 7,65,000/- furnished at the time of seeking provisional release of the aforesaid crane from Customs, towards the duty/inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Huda Equipments Pvt Ltd and Shri Hakim Shaikh 1 48,27,819/- 87,22,750/- 11,26,632/- Total 122 39,64,79,950/- 73,90,29,923/- 8,73,57,448/- + Differential duty of this crane being beyond 5 years period, is beyond time period under Section 28 of the Customs Act, 1962. However, differential duty having been deposited voluntarily, the same has been adjusted against duty evaded jointly and severally were called upon to show cause, as to why: (a) the respective declared value of the goods as mentioned in column 'D' of the Table 18 ibid (further details at 'Annexure-A-1' to 'Annexure-B-2' to this notice) should not be rejected under Rule 10A/ Rule 12 of the Custom Valuation Rules 1988/ 2007 (as applicable) and the value should not be re- determined as the value mentioned in column 'E' of the Table-18 ibid, under Rule 3 / Rule 8 of the Custom Valuation Rules 1988 or Rule 3 Rule 9 of Customs Valuation Rules, 2007 read with section 14 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the consignments, imported and cleared from Mumbai port, mentioned against their respective names In Table 17 supra; (b) penalty should not be imposed upon them under Section 114AA of the Customs Act, 1962 in relation to the consignments, imported and cleared from Mumbai port, mentioned against their respective names In Table17 supra; 2.2 This show cause notice was adjudicated by the Commissioner by the impugned order. Aggrieved by the order appellants have filed these appeals 2.3 We are having only the appeals of Shri Dinesh Sharma (C/85160/2015) (Appellant 1), A K Mani (C/85168/2015) (Appellant 2), Dhramesh Vador (C/85194/2015) (Appellant 3) and Govindji Gopalji Sons (C/85915/2015) (Appellant 4). We are thus deciding the issues only in respect of these four appellants. 3.1 We have heard Shri Ankit Vishnoj Advocate for Appellant 1, Shri Stebin Mathew Advocate for Appellant 4 and Ms Pooja Reddy Advocate for Appellant 3 4 3.2 The counsels for the Appellant 1, Appellant 3 and Appellant 4 submitted that the order has been passed in violation of the principles of natural justice without allowing them the opportunity of hearing or the cross examination of the wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Shri Dinesh Sharma, Proprietor of the Noticee firm was recorded by DR1 officer wherein it was recorded that a cash amount of Rs. 9,11,000/- was transacted over and above the cheque payments of Rs. 26,62,000/- and actual purchase value was Rs. 35,73,000/-. 5 Vide letter 18/3/2013 through his letter the noticee made advance revenue deposits of Rs. Rs. 5,10,015/- towards the liabilities which may arise in the matter. He was assured that with this payment his matter is closed. 6. However the noticee was issued a Show Cause Notice No. DRI/MZU/B/INV- 12/ 2010-11 dated 4/4/2013 proposing rejection of declared value and proposing to hold the subject crane as liable for confiscation and proposing imposition of penalties under Section 112 (a) and 114A of the Customs Act, 1962 7. TIME BARRED MATTER: The noticee contend that SCN IS ISSUED BEYOND FIVE YEARS OF IMPORT. The SCN was issued on 4/04/2013 which is beyond the period of five years from the date of importation which was on 20/02/2007 and therefore there is no occasion to challenge the valuation or duty liabilities on the goods which were cleared finally on first check basis and unconditionally. It is further submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (B) (ii)lt was further prayed that: The amount deposited by the noticee as 1. by the noticee as advance revenue deposits be kindly held as available before the adjudicating authority and the appropriation ordered in Para 27.1 of the SCN be kindly held as null and void as made at SCN stage in violation of principal of natural justice. 2. The used Crawler Crane P I-1 670WLC SR No 50380 be held as not available for confiscation. 3. The penalties proposed in the show cause notice be dropped. 27 (E) M/s Govindji Gopalji Sons submitted their rely to the show cause notice. It was inter alia stated that: 1. They denied the allegations contained in the said show cause notice, they also denied that, there was any mis- declaration of value or any other material particulars with reference to any of the Cranes imported by us and which on the subject matter of the present show cause notice. 2. With reference to the said show cause notice they submitted that, the allegations contained in the show cause notice are based on the incorrect statements purported to have been recorded during the investigations. These statements are, as can be seen, recorded without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td Shri. K.B.Bhandari, Director, M/s Lakka Transglobal India Pvt. Ltd. and Advocate, Shri. S. K. Mathur attended the personal hearing on 10.06.2014 on behalf of M/s Friend Syndicate Clearing Pvt. Ltd, Noticee No. 13, Shri. V. R. Divakaran, Managing Director, Friend Syndicate Clearing Pvt. Ltd, Noticee No. 14, M/s Lakka Transglobal India Pvt. Ltd, Noticee No. 15 and Shri. K.B.Bhandari, Director, M/s Lakka Transglobal India Pvt. Ltd, Noticee No. 16. The advocate Shri. S. K. Mathur, submitted that: In the SCN there is no finding against M/s Friend Syndicate Clearing Pvt. Ltd. and M/s Lakka Transglobal India Pvt. Ltd. The prominent note of taking a benchmark value was suggested by Shri. Madan Lalwani. As such no case is made out against those noticees. In the absence of mens-rea and no role displayed by them. These firms should be absolved of penalty charges. Written submission dated 10.06.2014 were reiterated. (ii) Shri. Vikram Jhangiani, Partner of M/s M. Dharamdas Co Noticee no. 9 and his advocate Shri. C. Nanda Gopal attended the personal hearing held on 10.06.2014 Advocate Shri C. Nanda Gopal, quoted from SCN itself to Show not M/s M. Dharamdas Co. who bonafide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments recovered and taken on record the following facts emerge: (i) There was a meeting of mind between Shri. Dharmesh Vador (Managing Partner of M/s Govindji Gopalji Sons) overseas supplier, High Seas Buyers (i.e. Shri. Dinesh Sharma, Shri. Nizar Rangara, Shri. A. K. Mani and Shri. Hakim Shaikh) and Shri. Madan Lalwani and others towards defrauding the public revenue by resorting to mis-declaration of the transaction value of the secondhand cranes. (ii) Shri. Dharmesh Vador, Managing Partner of M/s Govindji Gopalji Sons imported 122 consignments of used cranes and accessories and cleared them from Customs on strength of manipulated invoices showing highly understated value of the cranes during the period January 2006 to September 2010. Out of these 122 consignments 05 used cranes were sold on high seas basis to other importers by Shri. Dharmesh Vador. (iii) Shri Madan Lalawani of CHA firm, M/s. M. Dharamdas Co. admitted that he had suggested M/s Govindji Gopalji and Sons to declare the value of the old and used cranes as Rs. 40/- per kg of net weight of the crane as benchmark for hassle- free clearances. (iv) M/s. Govindji Gopalji Sons, paid the actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he duty recoverable even for the period beyond five years. This has been upheld in the case of India Cements v/s CCE, Madras [1984(18)ELT 499 (TRB)] the special bench of CEGAT, New Delhi. M/s. Govindji Gopalji sons had voluntarily made a payment of Rs. 2,85,00,000/- during the course of investigation, as detailed at para 7 to the show cause notice. This is accordingly adjusted against the duty of Rs. 2,10,54,129/- payable on the 32 cranes (details as per Sr. No.1 to 27 of 'Annexure-A-1' and Sr No. 1 to 5 of 'Annexure-A-4' to the notice to the show cause notice which are beyond five years. Similarly, Shri. Dinesh Sharma, proprietor of M/s Reetika Roadlines (who had purchased one P H 670 crane from Shri. Dharmesh Vador on high seas sale basis) had made voluntary payment of Rs. 5,10.015/- was accordingly adjusted against the duty of Rs. 2,85,426/- which was imported vide Bill of Entry no. 824766 dated 20.07.2007 which is beyond five years. (ii) It was contended that the allegations contained in the show cause notice based on the statements were not corroborated by any tangible or cogent evidences but on the other hand the said statements were totally cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able in law. In regard to the assessment and examination carried out by the officers of the Customs for the impugned goods, I find that while allowing the goods for home consumption, assessments were made on the limited data available to the appraising officer and no detailed investigations were carried out, as of then. It was only during the course of detailed investigation carried out by the investigating agency that it was revealed and established that the value of the imported goods has been suppressed by the noticee with intent to evade duty. As regard to affording opportunity for cross examination. I find that there is no contradiction in the depositions made by Shri. Dharmesh Vador or his above named accomplices. In view of the various confessional statements and other documentary evidences brought to fore by the investigating agency, I do not find any compelling reason for offering the cross examination as sought by the noticee and also rely on the following judgements in this regard:- (a) 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Sudhir Sharma Vs CCE 2011 (265) ELT 243, the relevant paras of the said decision are reproduced below. 18.9 Though it cannot be denied that the right of cross- examination in any quasi- judicial proceeding is a valuable right given to the noticee as these proceedings may have adverse consequences, at the same time under certain circumstances, this right of cross-examination can be taken away. Hon'ble High Court of Bombay while dealing with the similar issue in the case of Gyan Chand SantLal Jain v. UOI, reported in 2001 (136) E.L.T. 9 (Bom.) and taking into consideration the applicability of concept of principles of natural justice in that regard quoted para 76 of Halsbury's Law of England, Vol. I (4th Edition) which reads thus:- Natural justice does not impose on administrative and domestic tribunals a duty to observe all the technical rules of evidence applicable to proceedings before courts of law. Members of tribunals may be entitled to draw on their specialized or local knowledge of the type of, issue before them in order to supplement as well as evaluate evidence to find facts by inquisitorial methods, and inspections and to obtain information fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount and interest amount deposited voluntarily by the importer is therefore adjustable against the duty recoverable even for the period beyond five years. 31 (C) M/s Rangara Industries Pvt. Ltd. Noticee No. 4, Shri. Nizar Rangara, Chairman- Cum Director of M/s Rangara Industries Pvt. Ltd. Noticee No. 5, Shri. A. K. Mani, Proprietor of M/s AKM Enterprises, Noticee No. 6, M/s Huda Equipment Pvt. Ltd. Noticee No. 7 and Shri. Hakim Shaikh, Noticee No. 8 were given numerous opportunities to file their reply to the instant show cause notice and also make submissions during the course of personal hearing. However, they neither filed any reply to the show cause notice nor did they appear for personal hearing. I therefore find that the principals of natural justice had been complied with as the above mentioned noticees had been given adequate opportunities to have their say recorded in the matter. I therefore decide the matter on the basis of the facts available on records. 4.3 From the excerpts produced in respect of the Appellant 1, Appellant 3 and 4 from the above order it is evident that the none of the three appellants were heard by the Commissioner while passing the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to call Panch witnesses for examination and cross-examination by the petitioner . As noted, the object of the Act is to prevent large-scale smuggling of precious metals and other dutiable goods and to facilitate detection and confiscation of smuggled goods into, or out of the country. The contraventions and offences under the Act are committed in an organised manner under absolute secrecy. They are white-collar crimes upsetting the economy of the country. Detection and confiscation of the smuggled goods are aimed to check the escapement and avoidance of customs duty and to prevent perpetration thereof. In an appropriate case when the authority thought it expedient to have the contraveners prosecuted under Section 135 etc., separate procedure of filing a complaint has been provided under the Act. By necessary implication, resort to the investigation under Chapter XII of the Code stands excluded unless during the course of the same transaction, the offences punishable under the IPC, like Section 120B etc., are involved. Generally, the evidence in support of the violation of the provisions of the Act consists in the statement given or recorded under Section 108, the recovery panchnama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a weak mind is not the road to reach the result. If a Judge on objective evaluation of evidence and after applying relevant tests reaches a finding that the prosecution has not proved its case beyond reasonable doubt, then the accused is entitled to the benefit of doubt for acquittal. The question then is : whether the learned Single Judge of the High Court has committed any error of law in reversing the acquittal by the Magistrate. Not every fanciful reason that erupted from flight of imagination but relevant and germane requires tested. Reasons are the soul of law. Best way to discover truth is through the interplay of view points. Discussion captures the essence of controversy by its appraisal of alternatives, presentation of pros and cons and review on the touchstone of human conduct and all attending relevant circumstances. Truth and falsity are sworn enemies. Man may be prone to speak falsehood but circumstantial evidence will not. Falsity is routed from man s proclivity to faltering but when it is tested on the anvil of circumstantial evidence truth trans. On scanning the evidence and going through the reasoning of the learned Single Judge we find that the learned Judge w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Proprietor of M/s. A.K.M. Enterprises [buyer of 4 cranes from M/s. Dharmesh Vador] was recorded on 12.01.2011 under the provisions of Section 108 of the Customs Act, 1962. In the said statement, Shri A.K.Mani inter alia stated that he had about 22 trucks / trailers and 9 cranes in his fleet lying at his yard in Chennai. On being asked to furnish details of the transactions relating to the aforesaid 4 cranes, Shri Mani stated that he had purchased the following two C85160,85168,85914,85915/201529 cranes viz. (i) Grove TM 800 crane (YOM 1981) and (ii) P H (YOM 1978), from Shri Dharmesh Vador locally. On being asked further, Shri Mani interalia stated that he had gathered from trade that one Dharmesh Vador of M/s. Govindji Gopalji Sons had many cranes available for sale; that he contacted Dharmesh and on a pre-decided date came to Mumbai with his mechanic; that Dharmesh called him to his (Dharmesh's) Taloja yard; that there he inspected the cranes and on approval of his mechanic was interested in two cranes viz. Grove TM 800 crane of 60 Tons (YOM 1981) and P H 660 crane of 40 tons (YOM 1978); that the deal for those two cranes was finalized for an amount of 85 lakhs; that Dharm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Date of recording of the statement Descripti on of the crane purchased on high seas from Bill of Entry No./ Date Declared CIF value Actual purchase price Payment Details Payment made through cheque (i.e. the sale invoice value declared) (Rs.) Payment made in cash under stated value) (Rs.) 1 2 3 4 5 6 7 8(a) 9(b) 3 A K Mani (Propriet or M/s AKM Enterprises) 12.01.11 USED GROVE HYDRAULIC CRANE CRANE Y.O.M. 1986 TM-1275 WSTD/ACCS. 857954/26.08.08 (Sr No 2 Annexure B-2) 48,27,819/- 70,00,000/- 70,00,000/- - 4 A K Mani (Propriet or M/s AKM Enterprises) 12.01.11 USED KRUPP HYDRAULIC CRANE 6275-YOM 1991 W?STD ACC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.6 Relevant excerpts from the statement of Shri A K Mani dated 12.01.2011 is reproduced below: (5) Krupp 6275 (YOM 1982) and (6) Grove TM 1275 W STD (YOM 1986) The above two cranes were also acquired from Dharmesh Vador. On my enquiry about crane of 100 tons and 200 tons capacity, Dharmesh sent me photographs of these two cranes. They appeared to be in good condition. I liked the cranes. Dharmesh offered to sell these two cranes to me on High Sea sale basis. He convinced me that I would be saving a handsome amount by way of sales tax if I buy these cranes on high sea sale basis. I had an Import Export Code in the name of my proprietary firm viz. A.K.M. Enterprises. The deal for these two cranes was finalized for Rs 2 crores. In addition, the Custom duty was to be paid by us. The custom clearing charges were to be borne by Dharmesh. While finalizing the deal with Dharmesh, he had informed me that they would be raising an invoice for USD 2,05,000/- plus 2% commission for Kruup 6275 crane and for USD 1,10,000/- plus 2% Commission for Grove TM1275. I arranged for a term loan of Rs 2 crores from my banker i.e. UCO bank. Within two to three weeks, the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot Rs 2,00,00,000/- but the actual amount paid by him was only Rs 1,25,00,000/-. That being so accepting the same as transaction value in the course of High Sea Sales, the transaction value by applying the above principles as have been applied by the show cause notice and in the impugned order, the transaction value should have been determined at Rs 1,25,00,000/- which is less than the actual transaction value declared on the Bill of Entries at the time of clearance of goods. It is settled principle in law the entire fact stated in the statement about the transaction should have been taken into account while determining the correctness of transaction. However we also take note of the submission made by the counsel and put on record that the transaction value as declared at the time of clearance will now be challenged by the appellant in any further proceedings. Having taken note of the above we are of the view that the appeal filed by the appellant 2 will have to be allowed in his favour setting aside the impugned order in his respect. 5.1 Appeals of Shri Dinesh Sharma (C/85160/2015) (Appellant 1), Dhramesh Vador (C/85194/2015) (Appellant 3) and Govindji Gopalji Sons (C/85915/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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