TMI Blog1999 (8) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... mately. The goods were cleared free of duty in terms of the advance licence under DEEC book which stipulates and obligation on the importer to export fabrics to be made export specified quantity of suiting fabrics and shirts as a consequence of the import. The manufacture was to take place in the importer s factory at the industrial area, at Dohd. Some time after the importation, the importer wrote to the Custom House stating that export obligation had been completed against the import licence and giving details of fabrics totally valued at Rs. 20 lakhs or so stated to have been exported. The Custom House received information that the documents on the basis of which export stated to have been taken effect of the fabrics, were fabricated and that in fact no goods have been exported. It looked into the matter, and on the basis of various pieces of evidence gathered during the investigation came to the conclusion that the shipping bills showing export of the goods from Delhi had been fabricated; no export took place and the entries in the DEEC pass book relating to export were not attested by the Customs Officer whose signatures appeared but had been forged. 3. A common notice has i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of the policy and the notification. The contention that the Collector s view that the agreement with Sari Niketan was a cover up and did not really taken place is wrong. His own view, in that part of his own order in which he declines to accept the claim made by Sari Niketan before him, that the agreement between the parties was a forged one manipulated by misusing Sari Niketan s letter head, confirm this. He says that Sari Niketan entered into negotiations and knowingly agreed to help Banswara in contravention of law. He has imposed a substantial penalty of Rs. 5 lakhs on its proprietor Amarnath Tandon. 6. The sale of the imported goods was made by Banswara in February, 1987 only when it realised that export obligation could not be fulfilled and undertook to pay the duty. The sale was apparently made for the purpose of discharge the duty obligation. The contravention was only technical. There is no evidence to show that any of the appellants was concerned with, or knew of the forgery made by Sari Niketan that all shipping bills and other shipping documents to show that goods had been exported and fulfilled the export obligation. Notice does not show any such allegation nor do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contravention of law by Banswara. The Commissioner has found it fit to impose penalty of no small amount on Sari Niketan, on his finding, in his words that it knowingly agree to help M/s Banswara which itself was a violation of the law . He accepts the genuineness of the transaction between Banswara and Sari Niketan, when he says that in these circumstances M/s. Sari Niketan agreeing to manufacture and export goods on behalf of Banswara amounts to aiding and abetting by it of fraud committed by M/s. Banswara. He specifically finds that M/s. Sari Niketan s aiding and abetting M/s. Banswara rendered the material liable to confiscation under section 11 of the Customs Act, 1962, that it liable to penalty under section 112(a)(ii) of the said Act. In the light of his clear finding about the liability to penalty of Sari Niketan, repeated in these words quoted above a number of times (which is not challenged by the department), his finding that the transaction between the two had not taken place cannot be supported. We must emphasise here that we do not necessarily, in any event agree with the finding that Sari Niketan aided or abetted Banswara in any illegal activities. Sari Niketan is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmitted contravention of the notification. In that the yarn was sold by it in the market. This fact is not denied. The contention that yarn was sold in order to realise the duty was only be a mitigating factor. Contravention of the conditions of the notification that the imported material shall not be disposed of before export obligation is fulfilled, is established. The goods are therefore liable for confiscation under clause (m) [(sic) (o)] of section 111 and therefore Banswara liable to penalty. 11. While the notice and the order of the Collector rely heavily upon the fact that documents showing export which never really took and have been produced before the department. They were unable to show any evidence to show that any of the office bearer of the Banswara participated in it, abetted or were aware of such a fraud. We are unable to find a single piece of evidence that points to their involvement. Investigations by the department to as to who actually committed fraud have come to a dead end, as the Collector himself admits. In the absence of such evidence no penalty would be imposable on the company or its office bearers for acts connected with such manipulation of document ..... X X X X Extracts X X X X X X X X Extracts X X X X
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