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TMI Blog2023 (8) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the case are that an Intelligence gathered by DRI, Ahmedabad, indicated that M/s. Creative Enterprise, Chamber No. 209, Reshab Shree House, Ranjit Nagar Commercial Complex, West Patel Nagar, New Delhi - 110008, having an IEC No: 0506076814 (hereinafter referred to as the importer for the sake of Brevity), were indulging in evasion of Customs duty by resorting to gross undervaluation in the import of electronic goods viz, Car audio items viz. Car Speaker, CD Players, Amplifiers etc. imported by them through Kolkata Port. The intelligence indicated that the importer was manipulating the actual value of the imported consignments in collusion with the supplier firm and was declaring lower value before Indian Customs for assessment of duty thereby paying lesser amount of Customs duty. The intelligence also indicated that the imports were being made by Shri jhon Miranda and Shri Rakesh magoo in the name of their own firms as well as by using the IEC of other firms. 2.1 Searches were conducted on 26.07.2008 at the office premises of Shri John Miranda situated at 3rd Floor, Madhuban Building, S.B.Singh Road, GPO, Mumbai, the residential premises of Shri Rakesh Magoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... honically about the visits of the overseas supplier to India and the payments of differential amount were made to them. He agreed to deposit the amount of differential duty voluntarily on the goods imported and undervalued by them. 2.3 Statement of Shri John Miranda, Proprietor of M/s. Jojojem International was recorded under Section 108 of the Customs Act, 1962 on 26.07.2008 wherein he stated inter alia that, he had imported goods in the name of M/s. M.R. International, New Delhi, however, there was no firm known as Venus Enterprises in so far as his business was concerned and he did not know any M/s. Venus Enterprises; that, he was the sole proprietor of M/s. Venus International, having office at 305, 3rd floor, Madhuban Building, 23, Cochin Street, 323, S.B. Singh Road, Mumbai-400 001; that, he did not having any IEC number and therefore was not connected with import and export at all; that, he was the sole proprietor of M/s Jojojem International (IEC No: 0304015059) having office at 5B, Gr. Floor and 9B, 2nd floor, Vithal Niwas, Jacob Circle, Mumbai- 11 and they were importing various electronic goods like Speakers, Amplifiers, Twitters etc; that, he placed the order on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he extent of 50 to 60%; that, his rough estimate of their differential duty liability was approximately Rs. 50 lakhs on account of undervalued import in the name of various other fictitious firms used for facilitating import of electronic goods; that, further there was differential duty liability of approx Rs. 10 lakhs on account of his firm M/s Jojojem International (IEC No. 0304015059) as well as on account of other fictitious firms used for facilitating import of electronic goods. 2.5 Regarding the payment of differential amount to the overseas supplier, he stated that it was apparent from the names of the persons of the supplier companies, that they all were Indians and they had their persons operating in Mumbai and Delhi and they were sending their representatives to collect the differential amount. He stated that he did not have any contact number or contact persons' details as they were confirming the receipt of differential amount over phone. 2.6 On being asked, he stated that it was not correct that all 21 firms were used by them for imports; that, to the best of his memory they had used only 6 firms, besides his own proprietary firm, which were mentioned as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein he inter alia stated that, as Branch Manager of M/s R.S. Arunachalam, he was responsible for all the day to day work of the firm; that, his firm was a Custom House Agent and was functioning from all the major ports; that, as a Custom House agent it was his firm's responsibility to ensure complete adherence to all the Rules, regulations and guide the clients in this regard; that, he had been authorized to give statement on behalf of M/s R.S. Arunachalam and he produced the authorization letter; that, as a CHA, before accepting job from clients they verified the personal and professional details of their clients so that in case of any need by the department they may trace the clients; that, they also ensured that compliance with Rules and regulations is made; that, before starting the work with any client, he obtained authorization from him/them; that, he also got the signatures verified from the concerned bank; that, he did not normally verify the address of the business premises; that, after they get the documents from the clients they file the Customs documents like Shipping Bill or Bill of Entry as the case may be, and process the same through the concerned Custom House; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in the IEC by courier; that, all the faxes and couriers sent by the above firms were delivered from Shri Rakesh Magoo, Delhi / Shri John Miranda, Mumbai; that, he received the amount towards duty, interest, demurrage etc. from Shri Rakesh Magoo, in form of cash or draft; that, besides the above said firms of Shri Rakesh Magoo / John Miranda, he had also worked for import of car audio accessories for the firms - Venus Enterprises, Fine Enterprises, Shri Sainath Export, Avon Enterprises, Dipali International, Navyug Enterprises, Royal Enterprises, S&S International. 2.11 He stated further, that, as per his knowledge, all the above eight firms belonged to Shri Subhash Langi of Delhi who imports electronics goods like car audio and accessories in the name of the above firms; that, this was also evident from the fact that the fax of import documents like Bill of Lading and/or invoice of M/s. Dipali International, M/s. Navyug Enterprises, M/s. Fine Enterprises, were sent from the fax no.011-23521120 which belonged to Shri Subhash Langi; that, moreover, the directions regarding import, clearance, transportation etc. and payments for duty, other charges were received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Venus International, 305, Madhuban Building, 323, Cochin Street, S.B. Singh Road, Mumbai 400001; that, he agreed completely with the facts stated by Shri John Miranda, Proprietor of M/s. Venus International, Mumbai and M/s. Jojojem International, Mumbai in his statements dated 26.07.2008 and 28.07.2008; that, he was doing business of importing electronic goods like Car Speakers, Amplifiers etc. in the name of the firms viz. M/s A.S. Enterprises, M/s M.R. International, M/s S.S.R. Enterprises, M/s K.S Enterprises, M/s Balaji Enterprises, and M/s J.N.S. Enterprises.; that, the owners of all the firms / IEC holders stated above have never imported goods of their own; that, he paid commission to owners / IEC holders for allowing him to use said IEC to import various goods; that, in addition to above commission, he paid the IEC holders an amount equivalent to 5 to 10% of total profit earned by selling the said imported goods; that, the payment was made to the IEC holders in cash; that, the local buyers of goods imported by him were Ankush Ji - Delhi, Tejpal Ji - Delhi; that, Vineet ji - Delhi, Anil Dawar - Delhi, Rajneesh - Delhi, Abhishek - Delhi, Maninder - Delhi, Harvinder - Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not imported any of the Model & make of Speakers as shown in the said Quotation; that, page No. 000094 of said printouts pertained to M/s Venus International- owned by Shri John Miranda and he was not aware of the contents of the same; that, page No. 000102 of said printouts pertained to M/s Venus International - owned by Shri John Miranda and he was not aware about the contents of the said document; that, page No. 000112 of said printouts was an Invoice issued by M/s Cosmo Trading Co. Hong Kong and pertained to the consignment imported by him in the name of M/s Balaji Enterprises; that, page No. 000114 to 000119 of said printouts pertained to account of imported goods sold to Shri Harvinder ji which also contained Item No., Qty(Quantity), Rate & Amount; that, page No. 000121 to 000129 of said printouts pertained to account of imported goods sold to Shri Rajneesh Ji which also contained Item No., Qty(Quantity), Rate & Amount; that, page No. 000131 to 000151 of said printouts pertained to account of imported goods sold to Shri Abhishek Ji which also contained Item No., Qty(Quantity), Rate & Amount; that, page No. 000153 to 000176 of said: printouts showed the details of Payments an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erprises (0503074144), J.N.S. Enterprises (0505013085), K.S. Enterprises (0506071944), New Star Enterprises (0505051688), Surya Trading Co (0505003902), M.R. International (0508000793); that, the above mentioned IECs were all given to him by Shri Rakesh Magoo of M/s. A.S. Enterprises, New Delhi and he did not know any of the owners of these firms and he was also not aware as to who got the IEC for these persons from DGFT, that, he placed the order on the foreign supplier and at the time of arrival of the goods in India he contacted the Custom house agent M/s. Sai Dutta Clearing Agency Pvt. Ltd. for clearance of the goods at Mumbai and M/s. R.S. Arunachalam for imports at Kolkata; that, he paid the CHA their fee/charges by cheque issued by the firm in whose name the goods were imported; that, as stated by him in his statement dated 26/07/2008 he imported Car Speaker, Car Amplifiers, Car Tweeters in the names and IECs of the above stated 06 firms; that, the imports were mainly from M/s. Rasco International, Hong Kong, M/s. Cosmo Trading Co., Hong Kong, M/s. Wing Tat, Hong Kong, M/s. Chee Lin Exports, Hong Kong of Shri Vijay Kumar, M/s. Farle Exports, Singapore of Ms. Belinda, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge No. 000058 to 000078 of the documents forwarded by DFS, Gandhinagar; that, he knew Shri Harvinder and Shri Manu who were Delhi based purchasers of car speakers, amplifiers etc, however, he did not know Shi Maninder; that, page No. 000080 of the documents forwarded by DFS, Gandhinagar contains details pertaining to Integrated Circuits (ICs), however, he had never dealt in or imported ICs; that, he also did not know Sahib Electronics; that, it was true that he had imported car speakers, amplifiers etc in the name of M/s. Balaji Enterprises but he had not imported ICs in the name of M/s. Balaji Enterprises or any other firm; that, he was not aware of the contents of page No. 000082 to 000084 of the documents forwarded by DFS, Gandhinagar; that, he knew Shri Sunil and Shri Rajnish who were Delhi based purchasers of car speakers, amplifiers etc; that, page No. 000088 of the documents forwarded by DFS, Gandhinagar was a statement of account dtd. 28.08.2007 sent to his firm M/s. Venus International, Mumbai; that, however, he was not aware of the said document; that, there was no activity of any kind in M/s. Venus International and neither did it have any bank account; that, Shri Rakesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t this document was recovered from the hard disk of M/s. A.S. Enterprises of Shri Rakesh Magoo; that, therefore, though it is an account statement showing payments and expenses, he was not in a position to explain the same and as it must have been prepared by Shri Rakesh Magoo, and only he would be able to explain the same. Regarding the names mentioned in the expenses column i.e. Kumar, Belinda, Pawa, SKK, he stated that kumar apparently refers to Shri Vijay Kumar of M/s Rasco International, M/s Cosmo Trading, M/s. Wing Tat and M/s. Chee Lin Exports; that, Belinda apparently refers to Ms. Belinda of M/s Farle Exports; that, Pawa apparently refers to Shri Pawa of M/s. Pawa Brothers and SKK apparently refers to Shri Sunil of M/s. Zajel Al Khaleej General Trading Co. (LLC), P.O. Box. 25542, Dubai, U.A.E; that, he was not aware of the contents of page No. 000178 to 000185 of the documents forwarded by DFS, Gandhinagar; that, he knew Shri Sonu who is a Delhi based purchasers of car speakers, amplifiers etc; that, he was not aware of the contents of page No. 000187 to 000203 of the documents forwarded by DFS, Gandhinagar; that, he did not know Shri Maninder Ji; that, he knew the above m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f imports of the said Firm were given by Shri Rakesh Magoo and Shri John Miranda and as per the direction of Shri Rakesh Magoo, the clearance documents were sent by him directly to Shri Rakesh Magoo, Shri Ashwani Dham, Director of M/s Sai Dutta Clearing Agency Private Limited, Mumbai, who stated that they handled the imports for Shri John Miranda and Shri Rakesh Magoo in the name of various firms including M/s Surya Trading Company and all imported formalities were done by Shri John Miranda and Shri Rakesh Magoo. 2.20 On the basis of that, it was alleged that the payment of differential amount has been paid by them to represent the overseas suppliers in India. Therefore, on the basis of the statement, it was alleged that the imported goods were under heavily under-valued and the differential consideration was paid through illicit means. Therefore, differential duty was demanded and the various penalties were imposed on the appellants. 2.21 The matter was adjudicated. Demand of duty was confirmed jointly from M/s Surya Trading Company, Rakesh Magoo and John Miranda and penalties on all the appellants, namely, Shri Rakesh Magoo, Shri John Miranda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly became a partner of the firm M/s. Creative Enterprises, M/s Real Enterprises and M/s New Star Enterprises New Delhi; that Shri Rakesh Magoo was engaged in the import and trading of car electronics along with Shri John Miranda of Mumbai; that, he did not know the address of Shri John Miranda and never met Shri John Miranda, however, he met Shri Rakesh Magoo occasionally; that, he was not aware of how or who obtained the IEC in the name of their firm as all these matters were handled by the late Shri Rajinder Batra only on the instructions of either Shri John Miranda or Shri Rakesh Magoo; that, the office premises of their firms i.e. M/s Creative Enterprises and M/s Real Enterprises were on rental basis and the monthly rent was Rs. 5000/- each and M/s New Star Enterprises was also on rental basis and the monthly rest was Rs. 2000/-; that, he was not aware who paid the rent for the said premises as all these matters were being handled by the late Shri Batra; that, he had not invested any capital in the said firm; that, he did not recollect the IEC number of their firms; that, as and when instructed by the late Shri Rajinder Batra, he also used to sign cheques, import docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wen Road, Singapore:- 218919 US$ 27463 (Rs.17.17,005.62) Do 6. 332624/22.03.2007 Ess Kay Electronics Pte Ltd; 1, North Bridge Road, #03-03 High Street Centre, Singapore US$ 28403.50 (Rs.14,26,522.73) Do 7. 329185/06.03.2007 Pawa Brother Trading Pte Ltd; No: 77, High Street #02-07, High Street Plaza, Singapore179433 US$ 39254 (Rs.17,62,288.69/-) Do 8. 359501/16.08.2007 Farle Enterprises; 112, Owen Road, Singapore: 218919 US$ 40235.45 (Rs.22,97,999.39/-) Do 3.1 Shri Sahni also stated that he was in no way concerned with the goods imported under the above mentioned bills of entry and the goods were not his but belonged to Shri Rakesh Magoo and Shri John Miranda. 3.2 On the basis of the above investigation, it was alleged that M/s Creative Enterprise, Delhi with the connivance of Shri Rakesh Magoo & Shri John Miranda, have imported car electronic goods and under valuation of their assessable value and the differential amount has been paid through illicit means. Therefore, show-cause notice was issued to demand differential duty along with interest a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importation of the said goods by the said importer. There is no corroboration of the statement with other evidence on record. Therefore, the statement cannot be relied upon as held by the decision of the Hon'ble High Court of Madras in the case of CC Vs. Sainul Abiden Neelam : 2014 (300) ELT 342 (Mad.). 4.2 With regard to confiscation and imposition of redemption fine, he submitted that the goods were not available for confiscation by DRI, which has also been released upon final assessment by the jurisdictional Customs Authorities. Therefore, redemption fine is not imposable. To support, he relied upon the decision of the Hon'ble Bombay High Court in the case of CC (Exports) Vs. Sudarshan Cargo Pvt. Ltd. : 2010 (258) ELT 197 (Bom.). 4.3 With regard to valuation of the imported goods, he submitted that the similar charge is not sustainable being contrary to the manner of determination and the settled principles to be applied in this regard. He also submitted that the DFS print out relied upon does not comply with the provisions of Section 138C(4)(c) of the Act and therefore, cannot be admitted as evidence and no penalty can be imposed on the person, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23, Cochin Street, 323, S.B. Singh Road, Mumbai-400 001, having office Tel.No.022-66101714, Fax No.02222644322. Though this firm M/s. Venus International does not have any IEC code and therefore is no way connected with import and export whatsoever. Further, I would like to clarify that I am the sole proprietor of M/s. Jojojem International (IEC No.0304015059) having office at 5B Gr. floor and 9B, 2nd floor, Vithal Niwas, Jacob Circle, Mumbai-11 having Tel.No.23008920 and Telefax - 23016548 and we are importing various electronic goods like Speakers, Amplifiers, Twitters etc. 8.2 On being asked about my nature of job, I am to state that I used to place the order on the foreign supplier. Thereafter, I used to contact custom house agent M/s. Sai Dutt Clearing Agency Pvt. Ltd. for clearance of the goods. Thereafter I used to book the said goods through the transporter M/s. Godhara Road Lines or by Rajdhani Courier to Delhi. Shri Rakesh Magoo used to make payments towards clearing charges and transporting charges. 8.3 On being asked whether it is true that one Shri Rakesh Magoo is your business partner in the import and trading of car audio items and having your office at Mumb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was made to IEC holders for retiring the import documents from the Bank and which are the banks can be explained only by my partner Shri Rakesh Magoo. 8.9 On being asked about the amount paid to IEC holder and mode of payment, I am to state that all the details of the amount paid to the respective IEC holders can best be elaborately explained only by my partner Shri Rakesh Magoo. 8.10 On being asked about the details of the overseas suppliers - the overseas persons with whom you used to interact for placing the order, I am to state that I used to place the order with Shri Vijay Kumar owner of M/s. Rasco International and M/s. Cosmo Trading Co. having Tel. No. + 85290203944 and another office No. + 8523126097, 085227118102, 08523126116 and Fax No. + 8523696760, Hong Kong, Shri Mr. Pawa of M/s. A.K. Pawa Brothers, Singapore having Tel. No. 06563388437, 06581237233, 006596375057, 006563364462, 006563388437, 06563361440 and 6597337320, Shri Sunil of M/s. Zajel Al Khaleej General Trading Co., Dubai having Tel. No. 097142283717. 8.11 On being asked about the details of the CHA engaged by you for the clearences of car audio items at different ports. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls as they are confirming the receipt of differential amount over phone. 8.17 It is not true that all the importers given in the below mentioned table are managed and controlled by you and Shri Rakesh Magoo? Sr. No. Name of importer IEC No. 01. A.B.D. Exim 0508000971 02. A.S. Enterprises 0503074144 03. Balaji Enterprises 0504081730 04. Balaji Trading 0305044203 05. Colon International 0505059948 06. Good Luck Impex 0204027306 07. H.A. Enterprises 0504050002 08. Impact System Inc 0295009231 09. J.N.S. Enterprises 0505013085 10. K.S. Enterprises 0506071944 11. MEPL Trade International 0306020912 12. New Star Enterprises 0505051688 13. Real Enterprises 0505057279 14. Royal Enterprises 0508004934 15. S&S International 0503081647 16. S.M. Exim 0505006731 17. S.S.R. Enterprises 0504081900 18. Shri Sainath Exports 0505069749 19. Surya Trading Co 0505003902 20. Vicky Motors 0505063805 21. Zenith Enterprises 0305017397 8.18 I am to state that it is not correct to say that all the 21 firms mentioned above are used by us. In fact to the best of my memory we have used only 6 firms besides my own personal proprietary f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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