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TMI Blog2004 (3) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... ore-2 had obtained several advance licences under DEEC Scheme for importation of Viscose Silk Yarn and Mulberry Raw Silk Yarn and sold the same to Shri Shanthilal and Shri Gopal Soni of M/s. Krishna Textiles, their business as well as residential premises of the partners of these firms were searched on 16-7-98 and certain incriminating documents, Cheques, DDs and Viscose Silk Yarn were found and seized. Subsequently, further investigation was conducted. From the investigation prima facie, it appeared that Shri Muralidhar K. Punjabi had started two firms, namely M/s. Mysore Silk International and M/s. Mysore Novelty International with the intention of obtaining advance licences under DEEC Scheme to import Mulberry Raw Silk Yarn free of duty and selling these goods in local market without fulfilment of export obligation thereby making huge profit within short time. Accordingly he obtained 4 advance licences, three in the name of M/s. Mysore Silk International for import of Art Silk Yarn and Mulberry Silk Yarn and one in the name of M/s. Mysore Novelties International for import of Art Silk Yarn. 2 Advance licences obtained in the name of M/s. Mysore Silk International and one in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act for abetment in committing the contraventions of the Customs Act. Penalty was also proposed on Shri Narendra Babu under Section 112(b) for having purchased the advance licence and causing loss of customs duty to the tune of Rs. 8,89,656/-. 5.The case was adjudicated by the Commissioner of Customs, Bangalore who denied the exemption under Notification No. 31/97 dated 1-4-97 to M/s. Mysore Silk International in respect of the imports under Bill of Entry Nos. 5130, dated 13-11-97 and 5005 dated 13-1-98 against the advance licence No. 07001024, dated 27-8-97. He also demanded duty of Rs. 8,89,656/- from M/s. Mysore Silk International, Bangalore and also interest as applicable on duty amount, under Section 28AB of Customs Act, 1962. He also imposed penalty of Rs. 8,89,656/- on M/s. Mysore Silk International, Bangalore under Section 114A of the Customs Act. He also imposed penalty of Rs. 2 lakhs on Shri Muralidhar K. Punjabi, Rs. 1 lakh on Shri B. K. Narendra Babu and Rs. 75,000/- on Shri Mangilal of M/s. Kozy Silks and M/s. Roopali Exports Pvt. Ltd., Bangalore 6.Shri Lakshminarayan, ld. Advocate appeared for the appellants, M/s. Mysore Silk International, Bangalore and Shri Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. Panjabi and Shri Narendra Babu have connived with each other and indulged in the illicit activity and it was with a view to escape from the clutches of law, they tried to implicate the appellant. Shri Muralidhar K. Punjabi and Shri Narendra Babu are co-accused and there is no other independent evidence to implicate him. 11.Finally, both the Counsels on behalf of the appellants stated the penalty may be reduced. 12.The ld. JDR appearing for Revenue re-iterated the findings of the Commissioner and further pleaded that in this case the goods were imported by the appellants under the DEEC Scheme by obtaining advance licence without payment of duty for manufacture and export of the goods out of Silk Yarn. However the appellants instead of manufacturing the goods out of the Silk Yarn, sold the licence and Silk Yarn in the market and did not fulfill the export obligation. They utilised the facility for their personal gains and defrauded the Government of its revenue. Therefore, they are liable for heavy penalty and duty is also required to be recovered from them. He relied on the following decisions in support of his contention - (i) Inter Trade v. Commissioner of Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proached them for clearance of Mulberry Raw Silk from ICD, Bangalore under DEEC scheme. He gave them DEEC Books and TRA's executed at Madras to ICD, Bangalore along with relevant papers and requested for clearance of goods from Customs ICD, Bangalore. They accordingly filed two Bills of Entry Nos. 05130 dated 13-11-97 and 5005 dated 13-1-98 in the name of M/s. Mysore Silk International, Bangalore. Two DEEC Books used in clearance of goods in the said Bills of Entry were in the name of M/s. Wood Stock Silk Exports and M/s. Harmoney Silks (P) Ltd., and the same were transferable one. The documents were given by Shri Narendra in the name of M/s. Mysore Silk International which were also signed and duly endorsed. After these goods were brought to their office, these were collected by Shri Narendra. Statement of Shri Narendra was recorded on 23-4-99 wherein he stated that he knew M/s. Pawar Agencies who is customs clearing agent of M/s. Kozy Silks. Shri Mangilal was the main person of in-charge of M/s. Kozy Silks and his son Shri Jaikumar was partner for day-to-day business. He has cleared several consignments of M/s. Kozy Silk. He stated that he was asked by Shri Mangilal whether he (N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 24-3-98 of Shri B. K. Narendra Babu and agreed to the contents of the same. He stated that services were utilised for clearance of the goods from Customs and M/s. Roopali Exports Ltd. sold 2,500 Kgs of Mulberry Raw Silk Yarn at ICD, Bangalore on High Sea Sales basis to M/s. Mysore Silk International and payment was also received through cheques issued by M/s. Mysore Silk International. He has no involvement of purchase of advance licence. Shri Narendra Babu has only informed that he has purchased the advance licence from M/s. Mysore Silk International. 14.From these statements, it is quite clear that Shri Murali K. Punjabi sold advance licence No. 07001024, dated 27-8-97 for import of 2,500 Kgs of Mulberry Raw Silk Yarn free of duty under DEEC scheme by selling the advance licence and giving relevant documents for clearance of the goods. We find that M/s. Mysore Silk International have contravened the provisions of Notification No. 31/97, dated 1-4-97. We find that the Notification No. 31/97, dated 1-4-97 was issued under the Customs Act, exempting the material imported against the advance licence issued on or after 1-4-97 subject to conditions mentioned in the Notification. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jabi was in his individual capacity for negotiating the sale of the licence and getting money into his account from Shri Mangilal and Shri Narendra Babu and transferring to the account of M/s. Mysore Silk International shows that he has acted beyond the capacity of the partner and therefore penalty has been correctly imposed on him. 16.In the case of smuggling or dealing with the smuggled goods where the things are kept closely secret, it is not possible in every case to get the corroborative evidence. In the present case, the licence which was issued to M/s. Mysore Silk International was sold by Shri Murali K. Punjabi and he also given the relevant papers to Shri Mangilal, who in turn used these papers for clearing the goods from the Customs through Shri Narendra Babu and the goods were taken by Shri Narendera Babu who finally disposed off all these goods. The customers have given their statements that the imported goods are Mulberry Raw Silk Yarn purchased from Shri Narendra Babu clearly established the total link. The licence which was issued in the name of M/s. Mysore Silk International and on which all goods were cleared through Shri Narendra Babu and M/s. Pawar Agencies fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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