TMI Blog2011 (2) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... ved to the same accounts in Russia, cripple the appellants from the benefit of Apex Court Judgment in EHSANA DIST. CO-OP. MILK P.U. LTD. Versus UNION OF INDIA - (2003 -TMI - 46557 - SUPREME COURT OF INDIA) - Therefore without expression of any opinion at this stage, we direct that the appellant M/s. Hem Chand Gupta and Sons and M/s. Gee Dee International should make pre deposit of 25% of the duty drawback availed by them. - C/46-49/2009 - C/47-50/2011(PB) - Dated:- 1-2-2011 - Dr. Chittaranjan Satapathy, Shri D.N. Panda, JJ. REPRESENTED BY : S/Shri Piyush Kumar, Aman Gupta and Ms. Reena Rawat, Advocates, for the Appellant. Shri Sumit Kumar, SDR, for the Respondent. [Order per : D.N. Panda, Member (J)]. Pursuant to the Order of Hon ble High Court of Delhi in C.W.P No. 9581 of 2009 disposed on 2-7-2009 directing the Tribunal to consider judgment of Hon ble High Court of Calcutta in Terai Overseas Limited v. Union of India - 2001 (129) E.L.T. 574 (Cal.) and Apex Court judgment in Mehsana District Co-operative Milk P.U. Ltd. v. Union of India - 2003 (154) E.L.T. 347 (S.C.) and the issue of over-valuation of the goods pleaded by the Department, the matters were heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation of the goods exports done by the Appellants to claim higher duty draw back and DEPB Credits fraudulently and provisions of re-payment of State Credit System was abused, investigation was done against M/s. Hem Chand Gupta and Sons in Appeal case No. 46/09 and the Appellant Gee Dee International in appeal case No. 47/09. It was noticed that these two concerns had claimed duty draw-back of Rs. 6,58,22,845/- and Rs. 7,96,78,663/- respectively resorting to overvaluation and the goods exported under the above scheme did not reach the destination in Russia. It was further noticed that the importers in Russia were not in existence and the exports were diverted to a third country without being exported to Russia violating conditions of re-payment of State Credit scheme and the advances sent from Russia from particular Accounts went back to some account. 2.2 Investigating team searched Office premises of both the appellants and Godown premises of M/s. Hemchand Gupta and Sons. Similarly residential premises of Shri Jaydev Gupta of M/s. Hemchand Gupta and Sons were also searched. Statements under Section 108 of Customs Act, 1952 were corded in the course of search from various pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment for delivery of goods During April-June 2003 that money was returned to account of 000 Business Kant as the goods were not imported to Russia. (d) Total sum of 11,00,00,000 INR (contract No. BUS-INR 99/02 dated 1-10-2002) during December 2001- January 2003 was transmitted by Russian company 000 Business kant to Indian company M/s. Gee Dee International as preliminary payment for delivery of goods. During December 2002 - February 2003 the money was returned to the account of 000 Business Kant as the goods were not imported to Russia (e) Total sum of 21,30,00,000/- INR (contract No. BUS-INR 108/02 dated 1-11-2002) during December 2002- January 2003 was transmitted by a Russian company from an Account title as 000 Business Kant to Indian company M/s. Gee Dee International as preliminary payment for delivery of goods During February - April 2003 that money was returned to the account of 000 Business Kant as the goods were not imported Russia. (f) Total sum of 20,00,00,000 INR (contract No. BUS-INR 127/02 dated 2-11-2002) during January-February 2003 was transmitted by a Russian company from the Account titled as 000 Business Kant to Indian company M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of consignee, the cargo was sent by Road, When the appellants have merit, and entitled to the benefit of the ratio laid down by the Hon ble High Court of Calcutta in Terai Overseas Limited (supra); there shall not be requirement of pre-deposit since, the appellants have already deposited Rs. 25.00 lakhs each in the course of investigation; Circular No. 5 dated 31-5-1999 issued by Reserve Bank of India does not apply to the Appellant s case when the appellants received export value through Reserve Bank of India. 7. Per contra, the submissions of Revenue made by the SDR are as under : (1) The instant matter arises on account of the order dated 3-7-2009 passed by Hon ble Divisions Bench of Delhi High Court in the Writ Petition (C) No. 9582/2009 in the case of M/s. Gee Dee International v. Commissioner of Customs and the Writ Petition (C) No. 9581/2009 in the case of M/s. Hem Chand Gupta and Sons v. Commissioner of Customs, under which the order dated 27-4-2009 of the CESTAT were challenged. (2) The Hon ble Delhi High Court observed that following points/issues were not considered by the Tribunal in its orders dated 27-4-2009, and therefore remitted the case back to the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1962 as it existed during 1985-86 is enclosed as per index. It is seen from the then Sec. 75(1) that for granting the drawback following two conditions are to be satisfied : (a) Goods have been entered for export; and (b) An order permitting the clearance and loading thereof for exportation has been made under Section 51 by the appropriate officer. However, in the case at hand, the RMG goods under question were exported by the parties namely M/s. Hem Chand Gupta Sons and M/s. Gee Dee International during the period 1999 to 2005. The copy of the Section 75 of the Customs Act, 1962 as it existed in 1999 is enclosed as per index. It is important to note that the said Section 75 was amended by Section 120 of the Finance (No. 2) Act, 1991 (49 to 1991) and two provisos were inserted under the erstwhile Section 75(1). In terms of the second proviso so interested, it was stipulated that : Where any drawback has been allowed on any goods under this sub-section and the sale proceeds in respect of such goods are not received by or on behalf of the exporters in India within the time allowed, such drawback shall be deemed never to have been allowed and the Central Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the second point/issue, the Hon ble Delhi High Court had observed (under paragraph 10) as under :- We may also point out that the learned counsel for the respondent had further argued that before the petitioner could become entitled to the duty drawback, it was necessary that under the scheme in which duty was drawn, it was necessary to establish that the goods reached the final destination with the consignee in the particular country. 4.1 On the above point/issue, if is reiterated that in the instant case the parties have exported RMG to various Russian firms under Repayment of State Credit Scheme , which are governed by specific Circulars 4 dated 19-5-1999 and 5 dated 31-5-1999 issued by the RBI. As per paragraph 1(vii) of the RBI Circular No. 4 dated 19-5-1999 (copy enclosed as per index) if is mandatory that such exported goods must reach Russian Federation and that no third country exports are permitted to be financed out of funds from such repayment of state credit. The relevant clause 1(vii) of the said circular is reproduced below for ready reference. vii. Funds from repayments of State Credits are to be utilized for export of goods to Russian Federation onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as foreign trade participants but did not make any export-import operation during the period 2000-2005. 4.3.2 Letter No. 07-149/2760, dated 28-4-2006 (copy enclosed as per index] of Russian Customs indicate that a sum of Rs. 53.66 crores which were sent by M/s. OOO Business Kant Moscow to M/s. Hem Chand Gupta Sons in respect of contract no. dated 2-9-2002, BUS-INR-109/02 dated 1-11-2002 and BUS-INR-128/02, dated 2-12-2002 as preliminary payments towards delivery of goods and Rs. 52.30 Crores which were sent by M/s. OOO Business Kant Moscow to M/s. Gee Dee International in respect of contract no. BUS-INR-99/02, dated 1-10-2002. BUS-INR-108/02, dated 1-11-2002, and BUS-INR-127/02 dated 2-12-2002 (Rs. 52.30 crores) as preliminary payments towards delivery of goods were returned to the bank account of M/s. OOO Business Knat Moscow as the goods were not imported in Russia. As an illustration, attention is drawn to the S/B No. 1256407 dated 20-1-2003 filed by; M/s. Hem Chand Gupta Sons enclosing therewith the invoices no. 1999/02-03, dated 20-1-2003 issued to M/s. OOO Business Kant Moscow. This invoice bears the reference of the contract no. under the column Buyer s Order No. da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the goods exported vide Shipping, Bill No. 1272222, 1272223, 1272228 1272235 all dated 4-4-2003 was declared as Rs. 1,18,62,868 in India by the exporters while amount declared of the above consignment before Dubai customs was found to be USD 11,634 which is equivalent to Rs. 5,35,164. 6. In view of the submissions made above and in order to prevent the position of Revenue from being prejudiced it is most humbly prayed that the appeals filed by the appellants may be heard only on full deposit of the outstanding demand. 6.1 M/s. Hem Chand Gupta and Sons M/s. Gee Dee International in the Civil WP No. 9581/2009 and 9582/2009 filed by them in the Hon ble Delhi High Court respectively, had relied on the Order-in-Original passed by the Commissioner of Customs, Kolkata in the case of M/s. Amit impex. In this regard it is submitted that an appeal against the said order was filed by the Department in the Hon ble Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench-Kolkata and the Hon ble CESTAT vide their Order No. A-264/KOL/09, dated 19-5-2009 had set aside the said order and remanded the case to the Adjudicating Commissioner Kolkata for fresh decision. Cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y v. Skipper Construction Company (P) Ltd. - AIR 1996 (S.C.) 2005. The Apex Court in the case of S.P. Chengalavaraya Naidu v. Jagannath - AIR 1994 SC 853 and in the case of Ram Preeti Yadav v. UP Board of High School and Intermediate Education - AIR 2003 SC 4268 has held that no court in this land will allow a person to keep on advantage which he obtained by fraud. 11. When the material evidence prima facie throw light on fraud against Revenue, white collar crimes committed under absolute secrecy shall not be exonerated from penal consequence of law following Apex Court judgment in the case of K. I. Pavunny v. AC, Cochin - 1997 (90) E.L.T. 241 (S.C.). Plea of the Appellants that no action was taken by any other agency till adjudication is untenable. 12. An act of fraud on Revenue is always viewed seriously. Fraud and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. It has been held by Apex Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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