TMI Blog2013 (8) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... – 40 lakhs were ordered to be submitted – upon such submission rest was waiver till the disposal – Decided against assesse. - Appeal No.: C/823/2012 - Misc. Order No. 26093/2013 - Dated:- 11-6-2013 - MR. D. N. PANDA AND MR. B.S.V. MURTHY, JJ. For the Appellant: Mr. S. Raghu, Advocate For the Respondent: Mr. R.K. Singla, Commissioner (AR) ORDER Per: D. N. Panda; Moving the stay application arising out of appeal No. C/823/2012 filed against order of adjudication dated 11.1.2012, learned counsel submits that present adjudication related to past exports of 23601 MT of industrial salt valued by Customs authority at Rs.40,02,26,193/- holding that the goods exported was Muriate of Potash changing the classification from CTH 28273990 to 31042000 and imposed penalty of Rs.75 lakhs. Enhancement of the value of export was made in adjudication arbitrarily to arrive at the above figure while proper value was declared by appellant. While value of industrial salt per kg. was Rs.19. 57 declared in 151 shipping bills of past, Customs determined that @ Rs.35/- per kg. without any basis. The goods were not actually Muriate of Potash, but Customs authority arbitrarily and bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o clear Muriate of Potash in the guise of industrial salt causing huge loss to Customs. Muriate of Potash was exported by appellant without licence contravening Customs law as well as EXIM Policy. So also fertilizer control order was violated. Statements recorded from the appellant and also others demonstrated that the goods as covered in the shipping bill of past were same as that was seized while attempted to be exported by appellant malafide. When the appellant exported the offending goods without licence causing huge loss to customs by mis-declaration that called for issuance of appropriate show-cause notice invoking extended period to adjudicate the past exports in the present adjudication order and penalty was rightly imposed. When the appellant failed to prove that it made lawful export without mis-declaration and following the procedure prescribed under EXIM Policy, it was bound to face the adjudication. 2.1 It was also submitted by Revenue that valuation of goods of past export was quite reasonable and the mis-declaration crippled the appellant to challenge valuation when source of procurement was not proved by appellant. There was illegality from the beginning of non-di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Customs that the quantity intended to be exported has been imported. But such condition was not fulfilled by the appellant in respect of past exports including the live consignment attempted to be exported through ICD Bangalore in the guise of industrial salt causing subterfuge to Revenue. 4.3 The outcome of investigation into the live consignment opened the road for the investigation into the past exports made during the aforesaid period. Revenue when examined Shri N.A. Jayaram, the proprietor of the appellant, he in his statement recorded on 12.8.2009 failed to rule-out his engagement in the trading of the offending goods and stated export of Potassium Chloride made to different countries like China, Vietnam, Spain and Australia in 2008 against orders received. He also narrated the price of potassium chloride and stated that food grade Potassium Chloride which was industrial salt which were procured from M/s. Priya Products of Mysore. Industrial salt (Potassium Chloride industrial grade) was procured from local suppliers viz., Shri Kumar (Babu) and Shri Sadashiva who operated from Jigani and were giving bills to the appellant obtained from various companies for the supplies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid depositions and on testing the evidence before him made a categorical observation in the adjudication order in para 12 thereof that there were no known sources of MOP in India and it was imported as fertilizers for the benefit of farmers and sold at subsidized rate by the Government, but that was diverted illegally for export. The export of MOP being restricted goods required export licence as per EXIM Policy 2009-14 read with Notification No.30(RE 2003)/2002-2007 dated 28.1.2004 issued by the DGFT. But the appellant failed to produce the requisite licence for export of the offending goods. The appellant accordingly proved to be an illegal exporter and smuggled the goods in question and carried out his smuggling activity as is defined in Section 2(39) of Customs Act, 1962, defrauding Customs. 5.4 Appellant failed to disclose the source of procurement of Muriate of Potash on the plea of trade secret. When the authority was kept in dark, he came to the conclusion that the imported Muriate of Potash was exported by the appellant illegally in violation of the EXIM Policy norms as well as the Notification above said. The appellant thus faced consequence of adjudication with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was not involved in illegal export of Muriate of Potash in 151 shipping bills and failed to discharge the onus of proof when Revenue gathered cogent evidence to impute the appellant to the charges which remained un-rebutted. Coherent and cogent evidence gathered during investigation proved the appellant to be guilt and acted deliberately to be enriched at the cost of customs defrauding it. 5.8 The classification in the shipping bill claimed by the appellant proved to be deliberate mischief to defraud revenue. The restricted goods exported by appellant unlawfully without licence brought him to penal consequence of law. 6. Appellant s repeated prayer was to dispense with pre-deposit while direction for pre-deposit is rule of law and dispensation is an exception. 6.1 It may be stated that under Customs Act, 1962, appeals pass through two stages i.e., stage of stay hearing and the stage of appeal hearing held down by Apex Court in the case of Alex Enterprises v. Union of India - 2009 (236) E.L.T. 10 (S.C.). Right of appeal being conditional as held by Apex Court in the case of Vijay Prakash D. Mehta - 1989 (39) E.L.T. 178 (S.C.) = 1988 (4) SCC 402, the first stage is to cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they were either denied permits or their permits had been cancelled or suspended by Transport Authorities. We have come across cases where liquor shops are being run under interim orders of court. We have come across cases where the collection of monthly rentals payable by Excise Contractors has been stayed with the result that at the end of the year the contractor has paid nothing but made his profits from the shop and walked out. We have come across cases where dealers in food grains and essential commodities have been allowed to take back the stocks seized from them as if to permit them to continue to indulge in the very practices which were to be prevented by the seizure. We have come across cases where land reform and important welfare legislations have been stayed by courts. Incalculable harm has been done by such interim orders. All this is not to say that interim orders may never be made against public authorities. There are, of course, cases which demand that interim orders should be made in the interests of justice. Where gross violations of the law and injustices are perpetrated or are about to be perpetrated, it is the bounden duty of the Court to intervene and give app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sts in leading a man into damage by willfully or recklessly causing him to believe and act on falsehood. Of course, innocent misrepresentation may give reason to claim relief against fraud. 7.3 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. 7.4 In the case of Commissioner of Customs, Kandla v. Essar Oil Ltd. - 2004 (172) E.L.T. 433 (S.C.) it has been held that by fraud is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from the ill-will towards the other is immaterial. The expression fraud involves two elements, deceit and injury to the deceived. Undue advantage obtained by the deceiver, will almost always cause loss or detriment to the deceived. Similarly a fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a dece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onerated 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.). Enactments like Customs Act, 1962, and Customs Tariff Act, 1975, are not merely taxing statutes but are also potent instruments in the hands of the Government to safeguard interest of the economy. One of its measures is to prevent deceptive practices of undue claim of fiscal incentives. Preponderance of probability comes to rescue of Revenue and Revenue is not required to prove its case by mathematical precision. 7.8 Evidence Act does not insist on absolute proof for the simple reason that perfect proof in this imperfect world is seldom to be found. That is why under Section 3 of the Evidence Act, a fact is said to be proved when, after considering the matters before it, the Court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. This definition of proof does not draw any distinction between circumstantial and other evidence. Thus, if circumstances establish that there is high degree of probability that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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