TMI Blog2013 (10) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus construed, the term fraud within the meaning of these penal provisions is wide enough to take in its fold any one or series of unlawful acts committed or omissions made. 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. When material evidence gathered by Revenue remains uncontroverted, adjudication findings sustain. Accordingly appellants fail to succeeded on merit and on the fact and circumstances of the cases. It can unambiguously be held that there was deliberate misdeclaration of the description of goods exported and DEPB scrips were fraudulently obtained. Use of such non est scrips to discharge import duty against subsequent imports covered by the five appeals of the appellant company is recoverable with penal consequences of law - Following decision of COMMISSIONER OF CUSTOMS, KANDLA Versus ESSAR OIL LTD. [2004 (10) TMI 90 - SUPREME COUR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scated finding mis-declaration of description of the said goods as CGA in the shipping bills and a fine of Rs. 2 Crores (two crores only) was imposed on the appellant company in lieu of confiscation since such goods had left India. (ii) Undue DEPB benefit of Rs.2,90,76,818/- gained by the appellant company against export of mis-declared monitors violating Section 113 (d) and 113(i) of the Customs Act, 1962 was disallowed. (iii) Customs duty of Rs.2,35,22,016/- discharged utilizing unduly gained DEPB scrips was ordered to be recovered under section 28 of the Customs Act, 1962 and interest was directed to be payable on the said amount of customs duty demand under section 28AB of the Customs Act, 1962. (iv) An amount or Rs.1,60,00,000/- deposited by M/s Samsung was appropriated and remaining amount of duty of Rs.75,22,016/- was ordered to be recovered encashing Bank Guarantee vide No. of Rs.1,40,00,000/- issued by Deutsche Bank, AG- Tolstoy House, New Delhi 796 BGG 0400729 dated 22.12.2004. (v) Goods imported utilizing DEPB scrips unlawfully obtained were confiscated. But such goods not being physically available for confiscation, a fine of Rs. 1 Crore (One Crore only) in lieu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal No. C/742/2008 and appeal No. C/772/2008 were filed by Samsung Electronics Ltd. (hereinafter referred to as The Appellant Company ) and Sri Sunil Goel, Vice President (Finance and Accounts) of the appellant company respectively arising out of Order-in-Original No. 52/2008 Dated 29/08/2008 adjudicating SCN No S.MISC.20/2006 GR7-ACC/SCN/58/37/37/2006-GR7-ACC dated 22/05/2006 and such adjudication gave rise to the following consequences: (i) VGA monitors declaring FOB value of Rs. 1,42,85,219/- exported by M/s Samsung India Electronics Ltd. Nodia were confiscated finding mis-declaration of description of the said goods as CGA in the shipping bills and a fine of Rs.25 lakhs (twenty Five lakhs only) was imposed on the appellant company in lieu of confiscation since such goods had left India. (ii) Undue DEPB benefit of Rs.22,85,635/- gained by the appellant company against export of mis-declared monitors violating Section 113 (d) and 113(i) of the Customs Act, 1962 was disallowed. (iii) Customs duty of Rs.22,85,266/- discharged utilizing unduly gained DEPB scrips was ordered to be recovered under section 28 of the Customs Act, 1962 and interest was directed to be payable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty five lakhs only) was imposed on Shri Sunil Goel, Vice President (Finalce Accounts) of M/s Samsung India Electronics Ltd. under section 112 and 114 of the Customs Act, 1962. Appeal No. C/744/2008 AND Appeal No. C/774/2008 7. Appeal No. C/744/2008 and appeal No. C/774/2008 were filed by Samsung Electronics Ltd. (hereinafter referred to as The Appellant Company ) and Sri Sunil Goel, Vice President (Finance and Accounts) of the appellant company respectively arising out of Order-in-Original No.54/2008 Dated 29/08/2008 adjudicating SCN No. C.NO.VIII/12/ACE/DEPB/Misc/297/2004 dated 15/12/2005 and such adjudication gave rise to the following consequences: (i) VGA monitors declaring FOB value of Rs.5,25,64,338/- exported by M/s Samsung India Electronics Ltd. Nodia were confiscated finding mis-declaration of description of the said goods as CGA in the shipping bills and a fine of Rs.50 lakhs (fifty lakhs only) was imposed on the appellant company in lieu of confiscation since such goods had left India. (ii) Undue DEPB benefit of Rs. 84,10,294/- gained by the appellant company against export of mis-declared monitors violating Section 113 (d) and 113(i) of the Customs Act, 1962 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l their colour monitors of range 15, 17,19 and 21; and Colour Monitor with base resolution 1024 X 768 (Minimum) and above (which comes under the category XGA); they had not sold any CGA color monitor during last two years. 8.4 Shri Ajay Kumar, Proprietor of M/s Park Electronics, a distributor of Samsung in his statement interalia, stated that he used to buy computer components/peripherals from national distributors of Samsung; that all models of color monitors being bought by them from Samsung were VGA technology based; that they had not procured any CGA monitor since the commencement of their business i.e. 1993 and CGA monitors were not being sold since long. 8.5 Shri Vivek Prakash, Vice President (marketing) and incharge of I.T. Products (Sales) as well as integrated marketing group of Samsung, in his statement dated 22.5.2004, inter alia, stated that he was responsible for sales of I.T. Products both in India and abroad; they have exported CDT based monitors of various sizes viz 15 and 17 both normal and flat tube type from their factory in India; that the exact technical specification are available on the company s website; that the decision regarding classification of moni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing misdeclaration of description of goods has been recorded in para 20 of the above adjudication order. 9.1 From the scrutiny of the documents recovered, statements recorded from the persons connected with dealing in production/export of Samsung monitors and technical data gathered from web site it was inferred by investigation that the appellant company had been mis-declaring its monitors for export as CRT Data Display Monitors (Colour CGA) to claim DEPB benefit whereas they were actually manufacturing and exporting VGA and other higher versions of colour monitors viz. XGA, SXGA etc on which there was no DEPB benefit available to them. 9.2 Examining statement of Shri Mihir Tiwari, Manager OEM Exports on 25/06/2004, learned Adjudicating Authority below got a fair idea about the nature and type of goods exported by the appellant as has been recorded in para 20 of the adjudication order no. 50/2008 dated 29/08/2008. Shri Tiwari also admitted that the monitors exported by them were of the above model and size. In para 22 of the said order technical features of goods of the appellant was compared with other three manufacturers and tabulated for appreciation of the nature and chara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al specification of the monitor manufactured and exported by tem is given on their website. 9.8 Ld. Adjudicating Authority found that the aforesaid statement were credential when unrebutted by appellant company and without leading any cogent evidence to the contrary. He also found from various websites that monitor of resolution 1024 x 768 and 1280 x 1024 were of XGA and SXGA respectively and not of colour CGA which proved that colour monitors exported by Samsung were not CRT Data Display Monitors (Colour CGA) but were colour monitors VGA or XGA or SXGA of higher resolutions. 9.9 It was stated by Sri Ajay Anand that Monitors exported by appellant had 13 and 15 pins respectively for different sizes of the monitors. But its web site showed that CGA Colour monitor had only 9 pins. This proved that the pins used in the colour monitors manufactured and exported by the appellant company were not of CRT Data Display Moniotrs (Colour CGA) but were of VGA colour monitors and of higher resolutions. 9.10 Ld. Adjudicating Authority found statement of Shri Sanjay Pees, Area Sales Manager of appellant company was credible since he categorically stated that Samsung had not sold any CGA Colo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ync Master 551S model; 17 monitor, Sync Master 773S and Sync Master 773 DGX and Sync Master 763MB not entitled to DEPB benefit. ARGUMENTS ON BEHALF OF APPELLANTS 11.1 Ld. Counsel for the appellant submitted that monitors exported during the impugned period had screen sizes of 15, 17 and 19 and CRT Data Display Monitors (Colour CGA) was entitled to be 16% DEPB benefit. The appellant claimed such benefit under bonafide belief that CRT Data Display Monitors was not Colour Graphic Adopter, but Computer Graphic Array or Compatible Graphic Array. In view of the words used colour in bracket under serial no. 17 of the DEPB schedule the abbreviation CGA shall not be Colour Graphic Adapter that shall be only Computer Graphic Array or Compatible Graphic Array since the word color was not intended to be used twice in the DEPB Schedule under serial number 17. It was further submitted that the customs authority has no jurisdiction to sit over judgment of DGFT which is licensing authority as DEPB granting authority. Therefore the authority implementing Export-Import Policy can only have a say as to whether DEPB benefit shall be admissible to the appellant. Accordingly appellant s argument w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no demand arises in adjudication. 11.7 It was alternatively argued that duty drawback is admissible to the appellant under section 75 of Customs Act, 1962. ARGUMENTS ON BEHALF OF REVENUE 12.1 On the other hand revenue argued that when the deliberate misdeclaration was detected, the appellant made deposit of part of the DEPB benefit gained unduly. Investigation and extensive enquiry made resulted in gathering of vital evidence of no manufacture of CAG colour monitor by the appellant at the relevant time proving neither sale nor export thereof made as has been established in adjudication by evidence recorded in adjudication order. Evidence gathered from the distributor of the appellant proved such fact and the inventory taken from the distributor s premises also proved the same. No manufacture of CAG monitor by the appellant. Even the persons in charge of manufacture and sales of the product of the company revealed that no CAG monitors were manufactured by the appellant. 12.2 The appellant defined the abbreviation CAG according to its own convenience to serve its ill will with the ulterior motive to make undue gain at the cost of revenue and draws misplaced sympathy of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FINDING AND ORDER OF TRIBUNAL 13.1 Heard both sides and also perused the record. 13.2 What that was argued before learned Adjudicating Authority was only reiterated before Tribunal contending that the abbreviation of CGA stands for Computer Graphic Array or Compatible Graphic Array but not colour graphic adopter. Such technical plea was not at all substantiated by any evidence or any authenticated technical literature produced in the course of hearing for appreciation. The only stand of the appellant was that sl. No. 17 of DEPB Schedule enables it to get DEPB scrips for utilization thereof to discharge import duty. 13.3 Adjudicating Authority examined entire evidence gathered by investigation from different sources, persons and website as has been enumerated in Para 8.1 to Para 10 of this order establishing that the exported consignments were not CGA monitors. None of the evidence relied by ld. Adjudicating Authority were discarded by the appellant leading any cogent evidence. The evidence gathered from the web site showing number of pins used in the monitor exported went against the appellant demonstrating neither CGA monitors were manufactured nor exported by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the amount of Rs.1,60,00,000/- which was appropriated by the ld. Adjudicating Authority towards part of the duty demand made in the Adjudication which is under appeal No. C/740/2008. 13.7 Appellant relied on the decision of the Hon ble High Court of Bombay in the case of Pradip Polyfils Pvt. Ltd. V/s Union of India, 2004 (173) E.L.T. 3 (Bom.) to submit that Customs Authority has no power to sit over the decision of the DGFT. Reliance of the appellant is misplaced when the fact of the said case is looked into from Para 5 of the Judgment. Hon ble High Court in Para 5 of the Judgment framed the issue as to whether in respect of export of articles of Poly propylene effected prior to the amendment of the public notice on 15-12-1999, the Customs authorities were justified in holding that the same being not covered under Chapter 39 of the ITC classification and the petitioners are not eligible for benefit under DEPB Scheme. The issue so framed by the Hon ble High Court, makes clear that if there is no misdeclaration, the Customs Authority cannot interpret an entry in the DEPB Schedule to their advantage. For that reason Hon ble High Court in Para 7 of the Judgment categorically hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt fails to gain any benefit of that decision. 13.10 It was further relied on the decision in Vrundavan Exports vs. Commissioner of Customs (Ex.), Mumbai - 2005 (191) E.L.T. 1036 (Tri.-Mumbai) to submit that decision of the DGFT is final. No more description is called for in view of following of the decision of 2003 (157) E.L.T. 662 (Tri.-Mumbai) by Tribunal in the above case i.e., Kabian ECS India Pvt. Ltd. Vs. Commissioner of Customs, Mumbai which has been dealt in the preceding para. 13.11 Reliance was also placed by the appellant on the decision in Ashok Enterprises Vs Commissioner of Customs, Chennai 2005 (179) E.L.T 124 (Tri.-Chennai), which was an interim order of Tribunal. Such order having no precedential value that has no relevance in final decision. Further the Appellant failed to show how the decision of the Apex Court in I.T.C. Ltd. Vs Commissioner of Central Excise, New Delhi-2004 (171) E.L.T. 433 (S.C.), applies to its case. 14. If a party makes representations which he knows to be false and injury ensues therefrom although the motive from which the representations proceeded may not have been bad is considered to be fraud in the eyes of law. It is also well set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f fraud to be enjoyed by anybody as is held by Apex Court in the case of Chengalvaraya Naidu reported in 1994 (1) SCCI:AIR1994 SC 853. Ram Preeti Yadav v/s U.P. Board High School and Inter Mediate Education (2003) 8 SCC 311. 17. 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, acts upon the supposition that it exists. This definition of proof does not draw any distinction between circumstantial and other evidence. Preponderance of probability comes to rescue of Revenue and Revenue is not required to prove its case by mathematical precision. Thus, if circumstances establish that there is high degree of probability that a prudent man ought to act on the supposition that there was design to secure fake, false, forged or illegitimate DEPB scrip to clear imports duty free in contravention of the law or abetting to achieve such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity to take a definite determinative stand as a response to the conduct of the former either by words or letter. 22. Applying the aforesaid principles of law, in these appeals, when material evidence gathered by Revenue remains uncontroverted, adjudication findings sustain. Accordingly appellants fail to succeeded on merit and on the fact and circumstances of the cases. It can unambiguously be held that there was deliberate misdeclaration of the description of goods exported and DEPB scrips were fraudulently obtained. Use of such non est scrips to discharge import duty against subsequent imports covered by the five appeals of the appellant company is recoverable with penal consequences of law. 23. It is also needless to say that no evasion occurs without human intervention. Sri Sunil Goel is found to be instrumental to the wrongful claim of DEPB scrips by the company appellant causing prejudice to the interest of Revenue. Therefore on the facts and circumstances of the case as well as evidence recorded, adjudication finding against him remain untouched. 24. So far as the past consignments are concerned, record does not reveal whether any of such exports were under bond or pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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