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TMI Blog2024 (6) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... lared and utilized an already lapsed authorization while importing the goods under the impugned shipping bills. Concealment and suppression of facts - The copies of advance authorization as well as IEC Codes were obtained by the department from the office of DGFT, Ludhiana. The documents have sufficiently revealed that both the companies were controlled by Shri R. K. Goyal who had attempted to export the goods under export obligation of such authorization, the Export obligation period whereof had already expired. Not only this, the authorization itself had already lapsed and the penalty on the Director had already been imposed, who is none but Shri R. K. Goyal himself. In the light of this apparent conduct of the appellant, we do not find any infirmity in the findings in order under challenge where misrepresentation, concealment and suppression of facts have been alleged against the appellant. Mis-declaration in terms of quantity as well as quality - The variation in the GSM not only supports the allegation of mis-declaration about the quality of the fabric. This also proves that the goods which were attempted to be exported as expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which may indicate the proposed export to be a third party export. Rather the shipping bills were filed jointly being signed by the advance license holder as well as the export order holder. This fact is sufficient to confirm the noticed fraud played upon by Shri R. K. Goyal while using the IEC of two of its companies to defraud the Government exchequer. In addition the goods since were found to be of poor quality as contrary to the declaration of those being newly manufactured goods. This declaration has rightly been held basis for order of confiscation of these goods. The entire above observed facts are sufficient for us to hold that the exempted raw-material as was imported by M/s Kwality Overseas Private limited under the advance authorization license dated 19.03.2012 was not at all used for manufacture of the goods as were attempted to be exported by the appellants. The test reports corroborate the same. No evidence is produced by the appellants to falsify those reports. Nothing is produced to falsify the findings of order-in-original dated 02.06.2017. Hence, we do not find infirmity in the order under challenge passed based on those reports and the other facts as investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 113 of the Customs Act, 1962. After drawing the representative samples of the goods for further investigation that the goods were re-stuffed and re-packed and were handed over to the Custodian M/s Concor ICD, TKD, Export Shed, New Delhi for safe custody. 4. On the physical examination and examining the contents of the advance authorization, department observed that the goods should have been made of the material/fabric as was imported by M/s Kwality Overseas Private Limited against the said authorization. However, GSM measured for the goods under these shipping bills in presence of Shri Ranjan Mittal was found much less than the GSM of the fabric as was imported under the said authorization. The GSM of the goods under impugned shipping bills was found to be in the range of 35 GSM to 120 GSM as contrary to the GSM of the imported fabric which was in the range of 105 GSM to 355 GSM. Thus, there was found no corelation between the exempted-imported goods/fabric and the goods which were being exported vide impugned shipping bills. The declaration that the impugned goods have been manufactured out of the said exempted-imported fabric was thus apparently wrong. 5. The department summone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant s representative at the time of re-examination, the appellant failed to appear. Instead, appellant replied vide their letter dated 09.03.2018 submitting that segregation of cargo is not possible as the goods are made after clubbing of various types of fabrics. The samples which were drawn vide Panchnama dated 22/23.02.2018 were still forwarded to Textile Committee to provide the GSM of each sample for further investigation. Vide Test reports dated 23.02.2018 with respect to the goods of three impugned shipping bills, it was reported that GSMs of sample fabrics are much less than the GSMs of raw material said to have been used in those goods. 7. Meanwhile, the appellant requested that they were willing to withhold the benefit of exempted material against the advance authorization dated 19.03.2012 with respect to the goods covered under three impugned shipping bills dated 06.02.2018 and agreed to submit the requisite bonds and bank guarantees for an amount of Rs. 7,29,858/-, for amount of Rs. 8,36,533/- and for an amount of Rs. 8,93,013/- against three of the shipping bills dated 21.03.2018. The NOC from customs preventive for provisional release of the said goods was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as the common Director of two companies, namely, M/s Kwality Overseas Private Limited and M/s Candex Filament Private Limited. It has been the appellant s contention since the stage of filing reply to the show casue notice is that M/s Candex Filament Private Limited has purchased stock lot goods from M/s Kwality Overseas Private Limited. Thus, concealment has wrongly been alleged against the appellant Shri Rakesh Kumar Goyal. It is impressed upon that the Department was well aware about the fact that the advance authorization has already been cancelled. Not mentioning of such cancellation which otherwise was in the knowledge of the Department, cannot be alleged as suppression or concealment on part of appellant. The goods were initially seized on the ground that they are torn, old and are inferior quality goods. The seizure memo dated 06.02.2018 had several discrepancies. Since the seizure itself was not in accordance with the provisions of law, the confiscation of the goods seized is not at all sustainable. The goods were seized on the pretext of those been undervalued still no investigation has been made for the purpose of determination of valuation. The order of confiscating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended detention has resulted into huge losses due to incurring demurrage charges for the entire detention period to the appellants due to which the export order also got cancelled. The allegations for the difference in weight are not sustainable as the goods were declared on the basis of unit price instead of on the basis of weight of each unit. The findings in the impugned order are therefore any cogent basis. With these submissions, the order under challenge is prayed to be set-aside and the appeal is prayed to be allowed. 14. While rebutting the submissions and contesting the same, learned Authorized Representative mentioned that the shipping bills clearly indicated that the goods meant for export were supplied by M/s Kwality Overseas Private Limited and the appellant was exporting the same as merchant exporter, however, the proper declaration regarding the description (composition and GSM) quality and quantity of the exported goods, though a pre-requisite but was absolutely missing in the shipping bills. This failure had led to the seizure of the goods requiring their confiscation and imposition of penalty on the company and its Director as well. No doubt, the company is sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons as well as test reports well establish that the goods attempted to be exported were not made of the same material/fabric/raw-material which was imported as exempted (without payment of duty) under the said advance authorization. In support of his submissions, Learned Authorized Representative has relied upon the decision of Hon ble Punjab and Haryana in the case of Friends Trading Company vs. Union of India reported as 2011 (2) TMI 382 (P H) wherein it has been held that the extended period of limitation is invokable not only against the original holder of fraudulent or forced DEPB but also against the successor or purchaser thereof. With these submissions and reiterating the findings of the order under challenge, Learned Authorized Representative has prayed for the present appeals to be dismissed. 17. Having heard the rival contention and perusing the entire records, we observe and hold as follows:- Since the day of detention of the goods till the issuance of the show cause notice (SCN), the appellant Shri R. K. Goyal had never appeared before the investigating authorities despite being served with the repeated summons. Para 7 of the show cause notice, reflects the amount of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an already lapsed authorization while importing the goods under the impugned shipping bills. 20. We further observe that the Department got the opportunity to have the exporter/importer code (IEC) of both the companies i.e. of M/s Kwality Overseas Private Limited and of M/s Candex Filament Private Limited. The documents show that Shri R. K. Goyal, (one of the appellant) as the common Director of both the said companies. No clarification was brought on record about this observation as appellant failed to appear before the investigating officer as well as before the adjudicating authority. No documents ever were provided by him either during the investigation or at the stage of adjudication. The copies of advance authorization as well as IEC Codes were obtained by the department from the office of DGFT, Ludhiana. The documents have sufficiently revealed that both the companies were controlled by Shri R. K. Goyal who had attempted to export the goods under export obligation of such authorization, the Export obligation period whereof had already expired. Not only this, the authorization itself had already lapsed and the penalty on the Director had already been imposed, who is none b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y re-examination of goods to be exported nor the fresh drawl of the samples thereof. The customs broker of the exporter-appellant M/s Karan Logistics also despite its request for re-examination and despite acknowledgement for their G-Card holder to remain present for the purpose has also failed to make itself available at the time of re-examination. The department still drew fresh samples and got them re-examined, this time, from a technical authority i.e. Textile Committee. The said Committee vide test reports dated 01.03.2018 to 08.03.2018 in respect of goods of 3 shipping bills have clarified while corroborating the earlier examination/outcome of earlier testing that the GSM of the sample fabric (goods to be exported) is much less than the GSM of the raw-material said to have been used in manufacture of the said goods. This raw material was imported under Advance Authorization dated 19.03.2012. The Reports specifically clarified that the composition of fabric declared in the said three shipping bills is different from the composition found in the lab test of the imported sample fabrics. Similar were the subsequent reports with respect to the goods of remaining two shipping bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that it has already come on record that M/s Kwality Overseas Private Limited and M/s Candex Filament Private Limited, both were connected companies, Shri R. K. Goyal-appellant being common Director of both these companies who only had got filed the impugned shipping bills wrongly representing the export by M/s Candex Filament Private Limited to be in discharge of export obligation against the advance authorization of M/s Kwality Overseas Private Limited that too an year later the said authorization had already cancelled and years later since the period for compliance of export obligation under said authorization had already lapsed. Otherwise also as rightly observed by the original adjudicating authority that the appellant has failed to furnish any documentary evidence as that of contract between the advance license holder (M/s Kwality Overseas Private Limited) and third party exporter (M/s Candex Filament Private Limited) with respect to the impugned goods be exported by the appellant as merchant-exporter. No such shipping bill has been produced by the appellant which may indicate the proposed export to be a third party export. Rather the shipping bills were filed jointly being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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