TMI Blog2007 (9) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... any person of any age including children. The goods were seized and statement of various persons concerned with the procurement of the fabrics and its export thereof were recorded. A show cause notice was issued on 18-7-2001 directing the appellants as to why the goods sought to be exported in the name of M/s. Ganesh Yarntex Exports (P) Ltd. and M/s. Aadee Exports (P) Limited with a declared FOB value of Rs. 2.72 crores should not be confiscated under Section 113(d), 113(h) 113(i) of the Customs Act, 1962 and why the declared value of US$ 6.40 per piece should not be rejected and export under DEPB Scheme be denied involving a DEPB credit of Rs. 41,06,700/- alongwith the goods which were seized in a godown for which shipping bills were not filed and a penalty under Section 114(i) of the Customs Act., 1962 should not be imposed. The show cause notice was adjudicated by the Commissioner, who denied the export under DEPB scheme along with DEPB credit of Rs. 41,06,700/- and confiscated the above goods under Section 113(d), 113(h) and 113(i) of the Customs Act, 1962 with an option to redeem the sane on payment of redemption fine of Rs. 5 lakhs. Penalties of various amounts were imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 113(i) of the Customs Act, 1962 and consequently no penalties can be imposed under Section 114(i) of the said Act. In respect of the goods seized on 24-2-2001 for which even shipping bills were not filed, the goods were held as not liable to confiscation. The charge of overvaluation was also rejected as it was not supported by any expert opinion and on the ground that the Commissioner did not permit cross-examination of the witness, whose statements were relied upon. 4. A civil appeal was filed by the Revenue against the above decision of the Tribunal and the Hon ble Supreme Court while dealing with the various decisions of the Supreme Court in the case of Om Prakash Bhatia, Prayag Export referred to the definition of prohibited goods as defined in Section 2(33) of the Customs Act, 1962, Section 50, Section 113 of the said Act, Section 18 of the Foreign Exchange Regulations Act, Rules framed thereunder and also notification issued by the Central Government and also the judgments in the case of Raj Bahadur Shreeram Durga Prasad (P) Ltd. and the Collector of Customs, Madras v. Nathella Sampathu Chetty and another and observed that the Tribunal in its opinion should have consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de any such goods in respect of which conditions, subject to which goods are permitted to be exported have not been complied with. This is also brought out in para 9 of the Apex Court decision in the case of Om Prakash Bhatia (cited supra), relevant para of which is reproduced as under :- 9. From the aforesaid definition, it can be stated that (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either absolutely or subject to such conditions to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in sub-section (2). Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erve Bank for the purpose of ensuring the realization of export proceedings by such exporter. 8. The above provisions therefore places an obligation on the exporter to furnish true and correct material particulars including the amount representing the full export value and once the full export value declared is found to be incorrect, it has to be considered as a violation of Section 7 of FEMA. As stated in the Om Prakash Bhatia case, the conditions to be complied may be post clearance or before clearance and therefore every type of condition is to be looked into and cannot be ignored. The Foreign Trade (Development and Regulation) Rules, 1993 provide that no import/export shall be made by any person except in accordance with the provision of the Act and the Rules made thereunder. Rule 11 of the Foreign Trade Regulation Rules, 1993 read as under :- Declaration as to value and quality of imported goods. - On the importation into, or exportation out of, any customs ports of any goods, whether liable to duty or not, the owner of such goods shall in the Bill of Entry or the Shipping Bill or any other documents prescribed under the Customs Act, 1962 (52 of 1962), state the value, qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violation of the conditions for import/export of the goods . Section 113 of the Customs Act allows for confiscation of goods attempted to be exported contrary to any prohibition imposed under this Act or any other law for the time being in force. We therefore hold that once it is found that the appellants have mis-declared the value of the goods in the declaration filed by them under the various Act, it will amount to violation of condition and have to be considered as prohibited goods. 11. Now we shall deal with the issue as to whether there has been over- valuation of the goods or not. We find that in the panchnama proceedings in respect of panchnama drawn on 6-1-2001 at Bharathi Docks, Chennai, it has been clearly brought out that the goods in question were loosely stitched, uneven shaped and are unfit to be worn by any person of any age. The goods declared as dyed printed night-wear (Maxis) in various style/size/design, colour made from P/L woven fab were found to be small, uneven and unshaped which cannot be worn by any person of any age including children. The panchnama was drawn in the presence of Shri Priyadarshini Patankar, a representative of the exporter who in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and shapes and unfit to be worn. He had personally gone to Shri Malik, one of the suppliers to take delivery of the consignment of maxis and had paid Rs. 1,10,000/- to Shri Malik. He got printed purchase bills in the names of bogus and fictitious names. He used to prepare and draw cheques in favour of the non-existing and bogus firms, which were marked as Co instead of A/C Payee and that all the exports were overvalued to avail DEPB benefits and that the cheques were handed over to Shri Pradeep Dhelia. 13. None of the above statements have been retracted by any of the person. Shri Suresh Jhunjhunwala in his statement dated 26-1-2001 and 27-1-2001, 16-3-2001, 20-3-2001 admitted that the goods in question were of sub-standard quality, were small, uneven, unshaped and not properly stitched. All the goods were in such shape and size that they cannot be worn/used by ladies of any age or children and unfit for human wear of any age and that the said goods when sold in the market do not have any commercial value and that the consignment is waste and cannot be categorized as nightwear or readymade garments/maxis. It may be noted that though the first two statements were recorded o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and value. Statement of various persons i.e. suppliers, exporter, employees of Shri Deepak Jhunjhunwala and Shri Suresh Jhunjhunwala stating that they prepared bogus bills and cheques in respect of bogus and non-existing firms and later on these cheques were discounted and money came back to Shri Deepak Jhunjhunwala and Shri Suresh Jhunjhunwala clearly establish that the goods were overvalued and mis-described. The appellants contention that no show cause notice was issued in respect of similar earlier consignment where also overvaluation was alleged by the department on similar grounds and therefore it has to be held that there is no overvaluation in the present case also is totally devoid of any merit as merely because some show cause notice has not been issued till now for some past consignment does not mean that there cannot be any over valuation in the present case when the evidence brought out by the Revenue clearly establishes the overvaluation of goods as held above. Appellants have also raised a plea that once, crossexamination of the person, whose statement have been relied upon has not been allowed, the statement will have no evidentiary value. This is also incorrec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Kedia through Shri Pradeep Dhelia and Shri Praveen Ghuge, Accountant has also admitted of getting purchase bills printed in the name of bogus and fictitious firms and none of these statements have been retracted. Each one of them has stated that the goods were over-valued. The appellants contention that the bogus nature of the bills was not verified is not tenable as when the person who prepared the bogus bill itself has admitted that the bills were bogus, there are no further investigations left to be carried out. 15. One of the appellant submission is that there has been denial of principle of natural justice as the impugned order is passed ex-parte without giving an adequate opportunity of personal hearing specially the last hearing when one of the appellant Shri Suresh Jhunjhunwala was admitted in Breach Candy Hospital. We find that as per the remand order of the Apex Court we are not required to go into the aspect of denial of principle of natural justice for not affording an adequate opportunity of personal hearing. Nonetheless, we note that hearings have been granted on 10-7-2003, 22-11-2003, 29-11-2003, 16-1-2004, 22-3-2004 and 29-3-2004 and on all these occasions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance of the goods and got the export documents signed by M/s. CSR International knowing fully that the goods were highly over-valued and mis-described and has accordingly abetted Shri Deepak Jhunjhunwala and Shri Suresh Jhunjhunwala in attempt to export the goods which he knew are liable to confiscation and accordingly he has also rendered himself liable penalty under Section 114(i). As regards Shri Satyapal Reddy, proprietor of M/s. CSR International, we find that there is no evidence to show that he has the knowledge that the goods were mis-declared and therefore imposition of penalty on him is not called for and is accordingly set aside. 20. As regards Shri Sachin Jhunjhunwala, we find that he was the Director of M/s. Ganesh Yarn Ltd. which was one of the exporter and has signed cheques in the name of suppliers from whom the raw material for export of readymade garment was purchased without verifying whether supplier were bogus or in existence and has thus abetted in the attempt of exporting the goods which are liable to confiscation and accordingly has rendered himself liable to penalty. 21. We however feel that the penalties imposed are excessive and reduce the same as un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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