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TMI Blog2024 (1) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... On the basis of the material on record, it appears in the present case that Input Tax Credit has been availed by M/s Radiant Traders on procurement of cigarettes which have been shown to be used as raw material to manufacture smoking mixture . It is hard to believe that tobacco from high value inputs i.e., cigarettes is used to manufacture a low value output i.e., smoking mixture . It appears that this was done only to fraudulently obtain Input Tax Credit - In the present case, the accused persons are involved in fraudulently obtaining Input Tax Credit worth Rs. 200 crores by projecting transactions only on paper and without the actual purchase or sale of goods. As a result, they have duped the government exchequer and the taxpayers of a huge amount of money. Considering the aforesaid facts and circumstances, including the fact that Chirag Goel and Chaman Goel are the beneficiaries in an economic fraud involving a large corpus and were evading summons until the grant of anticipatory bail, the accused Chirag Goel and Chaman Goel were not entitled to be admitted on anticipatory bail. The impugned order has been passed without appreciating the material on record and cannot be su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng operated by the father of Jitender Kumar from the registered place of business. 3.4 During the course of investigation, it was found that M/s Radiant Traders, the manufacturers of smoking mixtures, had supplied their smoking mixture to M/s Harsha International, who exported the same. Upon search, it was found that no business activity was being conducted from the registered premises of M/s Radiant Traders and no goods or plant or machinery was found at their premises. 3.5 Subsequently, statement of the proprietor of M/s Radiant Traders, Manish Goyal, was recorded under Section 70 of the Central Goods and Services Tax Act, 2017 (CGST Act), wherein he admitted that he was acting at the behest of Chirag Goel. 3.6 The accused Manish Goyal was arrested on 25th November, 2022 under the allegations of having committed offences under Section 132(1)(b) and (c) of the CGST Act. 3.7 The residential premises of the accused Chaman Goel, situated at Kamla Nagar, Delhi were searched on 7th December, 2022 and unaccounted cash to the tune of Rs. 99,95,000/- was found therein, in respect of which no explanation was given by the father of Chaman Goel, who was present there. Furthermore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hind the entire fraud. Both of them are habitual offenders who have been involved in other cases involving receipt of fraudulent Input Tax Credit on the basis of fake invoices without actual supply of goods. VI. Anticipatory bail granted to Chaman Goel has been rightly cancelled by the learned Sessions Court as he was trying to escape the country and flee from justice. 5. Per contra, Senior Counsels appearing on behalf of Chirag Goel and Chaman Goel have made the following submissions: I. The order passed in Choodamani Parmeshwaran Iyer (supra) is distinguishable from the present case as in Choodamani Parmeshwaran Iyer (supra), the accused persons were only summoned under Section 69 of the CGST Act and there was no apprehension of arrest. However, in the present case, one of the co-accused persons, Manish Goyal, had already been arrested and therefore there was a genuine apprehension of arrest. Further, the order in Choodamani Parmeshwaran Iyer (supra) was delivered after the grant of anticipatory bail to the accused herein and cannot have retrospective operation. II. The impugned judgment clearly records and correctly so, that the CRCL Report was inconclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2023, which is subsequent to the order dated 21st December, 2022 passed by the learned ASJ granting anticipatory bail to Chirag Goel and Chaman Goel. I find merit in the submission of the senior counsels appearing for Chirag Goel and Chaman Goel that Choodamani Parmeshwaran Iyer (supra) cannot have retrospective operation. 11. In any event, while considering the present petitions, this Court can exercise jurisdiction vested in it under Article 226 of the Constitution of India, which confers the power to grant pre arrest protection. Therefore, I do not find merit in the submission of the DGGI that Chirag Goel and Chaman Goel could not have been granted anticipatory bail in light of Choodamani Parmeshwaran Iyer (supra). 12. Hence, I proceed to consider the present case on merits. 13. In the present case, the accused persons have been charged of the offences under Section 132 of the CGST Act, which is set out below: 132. Punishment for certain offences. (1) Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offences, namely: (a) supplies any goods or services or both without issue of any invoice, in violation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies/firms, including M/s Shree Mahaveer International, M/s Blue Water Expotrade India Private Limited and M/s Pinnacle Exports Expotrade, which were controlled and managed by Chirag Goel and Chaman Goel. 16. As noted above, there was no plant or machinery at the premises of the supplier, M/s Radiant Traders which claims to be the manufacturer of the smoking mixture that was exported. On search of the exporter M/s Harsha International, its principal place of business was found only to be a small kirana/ Pan Shop, which was being run by the father of the proprietor of M/s Harsha International. No business activity was being carried there with regard to export of smoking mixtures. 17. The proprietor of M/s Radiant Traders, Manish Goyal, in his statement has admitted that no manufacturing activity ever took place at his premises. He also stated that he had supplied various documents to Chirag Goel, who had set up M/s Radiant Traders in his name. Further, the suppliers of cigarettes to M/s Radiant Traders also named Chirag Goel as the proprietor of M/s Radiant Traders. 18. The proprietor of M/s Pinnacle Expotrade Pvt. Ltd., Abhay Kumar Yadav, who was the driver of Chirag Goel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 26th May, 2023, passed by the learned ACMM, whereby permission to travel abroad was rejected. Clearly, the ground of the mother of Chaman Goel undergoing treatment in Dubai is in the nature of an afterthought. 24. It is the case of the DGGI that both Chirag Goel and Chaman Goel are habitual offenders in respect of similar offences involving GST Input Tax Fraud and Chirag Goel was arrested by CGST East, in October, 2021 for fraudulently passing input tax credit. 25. The impugned order relies upon an order of even date passed by the same judge, whereby regular bail was granted to the co-accused Manish Goel. In my opinion, the said order could not have been made the basis for granting anticipatory bail to Chirag Goel and Chaman Goel as the aforesaid order was in the context of regular bail. In Manish Goyal s case, he had spent incarceration of approximately one month. Further, as observed by me in the judgment of even date delivered in the case of Manish Goyal (CRL.M.C.881/2023), Manish Goyal was acting on the directions of Chirag Goel and was not responsible for or aware of the day to day functioning of M/s Radiant Traders. 26. An application for anticipatory bail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that it is not a fit case to grant anticipatory bail. 27. At this stage, I deem it appropriate to refer to the observations made in the impugned order granting anticipatory bail, which are set out below: Therefore, in sum and substance, the case of the Department seems to be that there is a chain of documents without any actual supply of products while simultaneously there is no claim that the initial tax payment was not made and the entire claim of ITC in the chain is without any input tax deposit. Rather the Department is suggesting that, even though, there is payment of tax at one stage, all ITCs claimed in the chain are without any supply of goods. In the alternative and in my view, to explain the inherent contradiction in the said argument, the counsel for the Department has coined the parallel theory that if there was actual purchase of cigarettes by M/s Radian Traders, the same were perhaps sold in the market without invoicing and spurious smoking mixture was used as a cover to explain its disappearance, as also, used for the purposes of claiming input tax credit for the export of the smoking mixture. This is proposed to be established by firstly, the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as spurious goods and not fit for human consumption. It appears that the goods (i.e. inward supplied of Cigarettes) have not been utilized for furtherance of business (i.e . Therefore, even in the absence of any opinion by the lab in the report dated 02.11.2022 pertaining to query no. 2 and 3 raised by the IO with the lab, as already quoted hereinabove, the Department has assumed the position that Tobacco from the Cigarettes was never used in the smoking mixture and then justified the conclusion arrived at by it, by begging the question of economic viability. There is no imperical data made available by the Department viz-a-viz the possible weight of Tobacco drawn from the cigarettes purchased with reference to the quantity and the possible ratio of Tobacco in the product-smoking mixture and its weight in ratio to the weight of the cigarettes claimed as input for preparing mixture. 28. The impugned order granting anticipatory bail proceeds on the basis that an inconclusive opinion was given by the testing laboratory in respect of the samples of the smoking mixture seized from the Kandla Port. However, the impugned order fails to take into account that in response ..... X X X X Extracts X X X X X X X X Extracts X X X X
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