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TMI Blog2004 (12) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... Ordered the recovery of differential duty on the quantity of 17 mt from the real importer, without naming the real importer. (iii) Penalty of Rs. 8,50,000/- was imposed on M/s. Cashmir Enterprise, Shivpur, Shrinagar, Kashmir under Section 112(a)(ii) of the Customs Act, 1962 for lending their name to enable clearance of the goods under Notification No. 345/86-Cus. (iv) Penalty of Rs. 20 lakhs under Section 112(a)(ii) on Vijay N. Desai the brain behind the conspiracy for illegal import, illegal claims and illegal sale of the goods and for defrauding the Government revenue. (v) For acts of aiding and abetting cheating, defrauding the Government of revenue, penalty of Rs. 5 lakhs each was imposed on Shri Mukesh Shah, M/s. Shah & Mehta the clearing Agents, under Section 112(a) of the Customs Act, 1962. (vi) Found no evidence to justify imposition of penalty on Suresh K. Shah, Partner of M/s. Shah & Mehta the clearing agents. (vii) Penalties of Rs. 5 lakhs was imposed on proprietor of M/s. Vij ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wledge of the entire fraud they were also taking part in the conspiracy of cheating the Government of its revenue by getting the goods cleared in an illegal manner. From the very beginning it was in the knowledge of all concerned that the goods are being imported by Vijay N. Desai and not by M/s. Cashmir Enterprises. It was also clear to all concerned that only documents will be produced and in the of Cashmir Enterprises as actual users and the goods would be sold in Bombay as they have been imported for sale by Vijay N. Desai. In spite of this M/s. Shah & Mehta through their partner Shri S.K. Mehta executed a bond and provided the CHA surety on the said bond to show that the imports have been made by M/s. Cashmir Enterprises for their bona fide use. They, therefore, succeeded in getting the goods cleared from Customs not only under OGL but under concessional rate of duty under Notification 345/86-Cus., dated 16-6-86. The plea of the learned Advocate that they got the goods cleared in the normal course of their business is not supported by evidence on record because work of clearance was attended to by them with the help of Mukesh Shah who was not authorised to get the goods cleare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the Customs House Group Asst. Collector along with Import Export Code number, the surety bond for end-use signed by the CHA, is prior to clearance of the goods. The very fact of recovery of consumption certificates and affidavit dated 14-12-91 of the sole proprietor of M/s. Cashmir Enterprise from the office of the CHA, indicates that the said documents were never presented to the Customs Authorities by the CHA i.e. after the goods are landed and up to the clearance from Customs or thereafter. The non questioning of the partners by the investigators i.e. DRI and the exoneration of Shri Suresh K. Shah, the Partner of CHA firm, by the adjudicator from the liability to a penalty under Section 112(a) or (b) of the Customs Act, 1962 itself would indicate that the penalty on the partnership firm of M/s. Shah & Mehta, under Section 112(a), for abetting, cheating or defrauding cannot be upheld. (iii) For penalty on partnership firms as arrived at, would call for a culpable mental state and a Partnership firm, in the facts herein or in law cannot be held to be having the same. The individual personality of a partnership firm like that of a Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mehta. This statement was never retracted by Mukesh Shah. This statement was written by Mukesh Shah in his own handwriting. It, therefore, cannot be said that this statement was recorded under duress, coercion or threat, etc. also it is important to note that Mukesh Shah has given graphic details of the transactions and sequence of events which indicate that he had detailed knowledge of the import of the consignment, its clearance and its sale etc. from evidence on record it also appears that he had prior knowledge regarding the clearance of the consignment, its sale in the local market and the arrangement for producing fictitious and bogus documents to give the impression that the goods had been sent to Srinagar whereas the goods have been sold in the local market. The submission by the learned Advocate the Mukesh Shah had no knowledge that any illegal act had been committed in respect of the impugned goods and that the goods are to be sold in the market, and that lorry receipts are required to be produced only as fictitious evidence is contradicted by evidence on record. I find that Mukesh Shah in his statement dated 27-6-91 recorded under Section 10B of the Customs Act, '62 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any illegality had been committed in their import or clearance is contrary to the evidence on record. Therefore the citations by the learned Advocate of - (i) R.P. Hussain v. Collector of Customs - 1990 (49) E.L.T. 452 (Tribunal) (ii) Justice Pendse's judgment in the case of Shahikant & Co. and others v. Union of India. (iii) TOMCO & Anr. v. Union of India -1986 (26) E.L.T. 931 (Bom.) are not relevant in the circumstances of this case because Mukesh Shah was a co-conspirator with Vijay N. Desai and Nazir Shah for illegal import, illegal clearance and illegal sale of the goods in the market for profit. It is also on record that he received Rs. 70,000/- from Vijay N. Desai. This amount can be explained only as his part of the booty and cannot be explained what for an amount of Rs. 70,000/- was received by Mukesh Shah if he merely arranged for transportation of the goods from Bombay to Srinagar. 26. The learned Advocate had also argued that the lorry receipts were obtained by Mukesh Shah bona fide and in a legitimate way and the goods were actually loade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself indicates that Vijay N. Desai had stated that the clearing agent along with Mukesh Shah had arranged for the lorry receipts. Therefore Vijay N. Desai had indicated that Mukesh Shah was connected with the clearing agent. Mukesh Shah himself in his statement had admitted that he was the partner of the clearing agent firm M/s. Shah & Mehta. Even if he is not a partner it makes no difference to this case. The documents for clearance of the consignment were tendered by Mukesh Shah. Mukesh Shah had stated in his statement dated 18-6-91 "I am surrendering a bunch of documents which is maintained in our office - now serial numbered from pages 1 to 13. I have signed the first page (No. 1) and the last Page (Page no. 13) in token of having submitted the same today. This party was introduced to me by one Mr. Vijay N. Desai of Inter Trade Electronics (P) Ltd. Mr. Nazir Shah has given me the import declaration, photocopy of SSI certificate along with certificate of Directorate of Industries, stating that goods be cleared under concessional rate of duty. After giving these documents Mr. Nazir Shah told me that I should clear the goods under concessional rate of duty as they are manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive part as a co-conspirator for clearance of the goods and made hefty profit by receiving Rs. 70,000/- from Vijay N. Desai. By his actions he rendered the impugned goods liable for confiscation under Sections 111(d) and 111(c) of the Customs Act, '62 and himself liable to penalty under Section 112(a)(ii) of the Customs Act, '62." Perusal of the above leads us to find that the adjudicator has found the liability under Section 112(a) of the Customs Act, 1962. That provision reads as - "112. Any person - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abets the doing or omission of such an act," The goods are found to be liable to confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962. As regards liability under Sections 111(d) & 111(o) on admitted role of Mukesh K. Shah, which as it appears from the notice issued. "10. In his statement recorded under Section 108 of the Customs Act, 1962 on 18-6-91 Shri Mukesh Kuverji Shah has stated that : (i) they had cleared one consignme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 4136800 on the instructions of Shri Vijay N. Desai of M/s. Intertrade Electronics (P) Ltd., Sion, Bombay; (ii) the goods were escorted by Shri Harish Dharamshi an employee of Shri Vijay N. Desai. (iii) He knew Shri Harish Dharamshi for the last 15 years as his neighbour staying in Block No. 17, Azad Nagar, Wadala. (iv) He knew Shri Vijay N. Desai since the year 1984; (v) He had cleared some 6 to 7 consignments of parts of audio cassettes and tapes in the name of M/s. Intertrade Electronics (P) Ltd., Sion, Bombay in the year 1984-85; (vi) In September, 1990 Shri Vijay N. Desai came to his office requesting to clear one consignment of EVA BP-20 per vessel S. S. Ever Bridge (IGM No. 2090, dated 26-6-90) under concessional rate of duty under the benefit of Notification No. 345/86, dated 16-6-86 under OGL subject to Actual user condition; (vii) On being asked about the benefit of notification Shri Vijay N. Desai told him that he had already finalized with some Actual user in Kash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D. Bond and bank guarantee typed and he got these documents typed and handed over to Shri Nazir Shah and thereafter Shri Nazir Shah gave him the bank guarantee which he had submitted to the Customs Department. (xiv) Shri Vijay N. Desai told him that he would be paying the cash amount equivalent to the Customs duty to Shri Nazir Shah and that Shri Shah would bring the pay order; (xv) After depositing the pay order brought by Shri Nazir Shah to Customs, he informed Shri Vijay N. Desai; (xvi) The goods after having been released from the Customs as per the instructions of Shri Vijay N. Desai were transported under the escort of Shri Harish Dharamshi to Gala Warehousing Co. Sewree; (xvii) Shri Vijay N. Desai requested him to arrange for lorry receipts showing the consignment as if the goods have been despatched to Srinagar and to get the fake 'N' forms from Octroi Deptt. showing as if the consignment had crossed the BMC limits; (xviii) He had arranged the fake lorry receipts and fake 'N' forms through Shri Parmanand Sharma of M/s. Richa Roadlines, 403-A, Commercial Manor, 4th floor, 68/70, 4th Clive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (x) The goods covered by lorry receipts no. 936 dated 9-11-90 and no. 948 dated 21-11-90 had not been transported by him to Srinagar and had issued these bogus receipts for a commission of Rs. 300/- i.e. Rs. 150/- per lorry receipt. 13. Shri Parmanand Sharma in his statement recorded under Section 108 of the Customs Act, 1962 on 11-7-91 has inter alia stated that : (i) Mr. Mukesh Shah of M/s. Shah & Mehta contacted him and told that he should prepare two bogus lorry receipts showing the consignee as M/s. Cashmir Enterprises, Shivpora, Srinagar, Kashmir and consignee and M/s. Shah & Mehta, Bombay. (ii) He told lies on 24-6-91 that Shri Nazir Shah contacted him for transporting the goods on the instructions of Shri Mukesh Shah of M/s. Shah & Mehta; (iii) One day Shri Mukesh Shah contacted in his office and asked him to see him (Mukesh Shah) in his office immediately of M/s. Shah & Mehta where Mr. Mukesh Shah & Mr. Kamal Mehta were present and that Mr. Mukesh Shah told him not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashmir Enterprises, Srinagar; (vii) Shri Nazir Shah also told him that he (Shah) would sell the consignment to him (Shri Desai) for trading and thereby can make some good profit; (viii) Shri Nazir Shah also told him that he (Shah) would give the consignment at much lower prices than the prevailing market rate; (ix) On the basis of the request of Shri Nazir Shah he had paid an amount of Rs. 5,50,000/- in cash as duty amount towards the clearance of the said document; (x) He had already introduced Mr. Mukesh Shah of the CHA firm M/s. Shah and Mehta to Shri Nazir Shah and the consignment was cleared sometimes in November, 1990; (xi) After clearance, the consignments were delivered at M/s. H.M. Mehta's warehouse at Mazgaon, Bombay-10 by Shri Mukesh Shah as per his instructions; (xii) As per the detailed discussions, Shri Shah offered him the consignment of PVA BP-20 at the rate Rs. 100/- per kg. in open market at the rate of Rs. 120/- per kg making a profit of Rs. 1,70,000/- (xiii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes of which he had to check from his record; (xxvi) Out of the quantity of 17 MT (850 bags), a balance of 5 MT (250 bags) are still lying at Gala of his friend Shri Dinesh Shah at M/s. Tungarewharr Industrial Estate, Vasai, Distt. Thane. When asked to state who had arranged for lorry receipt of M/s. Rich Roadlines showing bogus dispatch of the goods to Srinagar, Shri Vijay Desai has stated that the Clearing Agents Shri Mukesh Shah had arranged the lorry receipts at the instructions of Mr. Nazir Shah. These charges, as brought out, in the notice, even if established lead only to arrive at a finding of assistance rendered by Mukesh Shah in obtaining the lorry receipts and 'N' forms. These documents were allegedly to be used to indicate the ostensible dispatch of 17st of PVA outside Mumbai to Srinagar. When in fact part of goods i.e. 5 MT were seized outside Mumbai octroi limits at a place, near Vasai, would itself indicate that the goods to have left Mumbai and crossed Octroi Post. There is therefore nothing incriminating in the documents of octroi clearance as alleged. Desai appears to be not questioned about of detailed whereabouts remaining 12 MT of PVA which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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