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S.N. Ojha Versus Commissioner of Customs

Fraudulent drawback claim - Misdeclaration of goods and serial numbers - Held that:- As observed by the Commissioner of Customs, there is sufficient corroboration by the fact that as many as 100 consignments were allowed to be cleared without proper verification. The Appellant has been unable to show that any relevant piece of evidence has been overlooked or that the appreciation of the evidence by the Commissioner or the CESTAT is perverse. - As regards the procedure followed, it is not the cas .....

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failed to establish its case. - Joseph Kuok was exonerated in the adjudication proceedings does not in any affect the case against the Appellant. The case of the Department against the Appellant stands substantiated by the evidence on record. Considering the number of consignments and the value thereof, the submission that there was heavy pressure of work and therefore, the Appellant cannot be held responsible is unacceptable. - There is no legal infirmity in the impugned orders of the Commissio .....

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ant, S.N. Ojha, former Assistant Commissioner (Export), posted at the Inland Container Depot ( ICD ), Tughlakabad under Section 130 of the Customs Act, 1962 ( Act ) against an order dated 21st November 2005 passed by the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) in Customs Appeal No. C/422/03-B. 2. By the said impugned order, the CESTAT dismissed the Appellant s appeal and affirmed the order dated 19th August 2003 passed by the Commissioner of Customs imposing a penalty of &# .....

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(Adjudication). He was in-charge of processing of the shipping bills filed for export of goods through the ICD. He also performed other functions allied and incidental thereto. 4. It is stated that the procedure for processing the shipping bills on the Customs EDI computer system was prescribed in Public Notice No. 8/97 dated 13th August 1997. It is further stated that in terms of the said public notice the data from the shipping bills as provided by the exporter, would be entered into the EDI .....

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being exported from ICD, Tughlakabad by certain exporters in order to fraudulently claim drawback. The said exporters included M/s. R.S. & Co., M/s. Stitch & Style, M/s. Himgiri Overseas, M/s. Deepshikha Overseas and M/s. Saharanpur Handicrafts, New Delhi. Acting on the said information the DRI detained 12 containers at Mumbai port and another 10 containers at the Nhava Sheva port prior to their being loaded on to vessels. Four containers which had already sailed from Mumbai were called .....

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aring Clerk who had attended to the exports were summoned by the DRI Officers under Section 108 of the Act. On examination of 26 containers it was found that there was no marking of serial numbers on the cartons in some of the containers. Further although some cartons were numbered, those did not tally with the serial numbers given in the shipping bills, invoices and packing lists. Also the goods were not found as per the declarations given in the shipping bills and invoices by the exporter. Som .....

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oods in the said 10 containers was ₹ 11,45,84,196.50 on which fraudulent drawback availed was ₹ 1,97,84,550 . From the total drawback due on 26 containers and the 10 containers already delivered, the sum of ₹ 3,87,12,610 was found to be disbursed. The Commissioner of Customs, ICD, Tughlakabad was asked not to disburse the balance amount of ₹ 3,54,63,360. From the disbursal of the aforementioned drawback amount to the different firms, it was noticed that the amount of draw .....

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, 12th December 1999 and 15th March 1999. Mr. Joseph Kuok gave 4 statements on 3 different dates, i.e., 12th January 1999, 18th January 1999 and 13th February 1999 during recording of proceedings in the panchnama. He made further statements on 16th, 17th February 1999, 26th March 1999 and 26th August 1999. 9. On the basis of the above statements, a show cause notice ( SCN ) was issued to the several parties including the Appellant on 3rd December 1999 proposing an imposition of penalty under Sec .....

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ated 19th August 2003 passed by the Commissioner of Customs were as under: (a) The statements of Mr. Zaki Anwar and Mr. Lovkesh Sharma, Inspectors showed that they had cleared the goods covered by 85 shipping bills on the instruction of the Appellant despite the fact that the said bill was over-valued. The statements of the Inspectors showed that the Appellant s complicity and awareness. (b) The frequency of calls received by and made by the Appellant to Mr. Rajesh Kumar, the proprietor of the f .....

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tructions issued by the Department that goods for which the drawback claim made was over ₹ 1 lakh would require scrutiny/approval of the Assistant Commissioner before clearance, the Appellant could not divest himself of his responsibility by pleading ignorance. (d) 85 of the 100 shipping bills were assigned for examination to Mr. Lovkesh Sharma and this was confirmed by Mr. Joseph Kuok, Superintendent. (e) Although the evidence tendered by a co-noticee required corroboration, the fact was .....

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rma and Joseph Kuok had been acting under the instructions of the Appellant and had permitted the consignments to be exported without examination. Consequently, the findings of the Commissioner of Customs in the order-in-original were upheld. 12. Ms. Meenakshi Arora, learned Senior counsel appearing for the Appellant, made the following submissions: (i) During the initial interrogation neither Lovkesh Sharma nor Joseph Kuok named the Appellant. However, in their statements tendered after two mon .....

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esheet dated 29th April 1999. (iv) The finding of the Commissioner of Customs that the Appellant had been responsible for the clearance of the consignments covered by 100 shipping bills was perverse since the said bills were filed in a span of 20 days and during that time the Appellant had processed about 3000 bills for export of garments. Therefore, 100 bills out of 3000, particularly of five different exporters, could not have raised any suspicion as there was no alert qua the said five export .....

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the samples to the Appellant in their room. There were numerous inconsistencies in the statements of Joseph Kuok, Lovkesh Sharma and Zaki Anwar which made their statements unreliable and inadmissible in law. Reliance was placed on the decisions in Mohtesham Mohd. Ismail v. Special Director, Enforcement Directorate 2007 (8) SCC 254, Vinod Solanki v. Union of India 2009 (233) ELT 157 (SC), Union of India v. Bal Mukund 2009 (12) SCC 151, Noor Aga v. State of Punjab (2008) 16 SCC 417. (vi) Joseph Ku .....

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l was processed, the Assistant Commissioner had no access or control over the movement of the shipping bill or the cargo and would come to know of it if and only if the bills were returned to the Assistant Commissioner s screen with objection/query. The Court was shown the chart and the flow sheet showing the movement of the goods from one stage to the other to buttress the above submission. (viii) The fact that there were several calls from Rajesh Kumar only showed that the Appellant as a nodal .....

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bills by the Appellant to Joseph on the relevant date was done as Mr. Tandon was not available as he was busy in other work. The marking was in bona fide discharge of his duty. The mere fact that the appeal of Satish Kumar and Anwar were also dismissed would not automatically mean that the Appellant s case should also fail since both Anwar and Gupta were accused in other cases and had been suspended even at the initial stage of the enquiry. On the other hand, the Commissioner of Customs having e .....

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ied on the custom officers involved in a large scale case of fraud in respect of drawback claims. He referred to the order passed by the Supreme Court dated 27th February 2015 in Special Leave Petition (Civil) No. 22381 of 2015 [Ajay Yadav v. Commissioner of Customs (Import and General)] where the SLP of Mr. Ajay Yadav against the above order of this Court was dismissed as withdrawn. 14. Mr. Kaushik pointed out that the Court ought not to interfere with the concurrent findings of the Commissione .....

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(1997) 1 SCC 508 and Telstar Travels Private Limited v. Enforcement Directorate (2013) 9 SCC 549. 15. Mr. Kaushik also drew the attention of the Court to the fact that as far as the co-noticees were concerned, the appeals filed by Mr. Satish Gupta and Mr. Anwar against the order of the CESTAT had failed. The further appeals filed by them in Supreme Court were also dismissed. 16. Before proceeding to discuss the above submissions, the Court proposes to discuss the legal position as regards the s .....

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FERA ), the Supreme Court in K.T.M.S. Mohd. v. Union of India 1992 (3) SCC 178 emphasized in the context of a retracted statement by the noticee, it had to be shown that the initial statement was voluntary. Any statement obtained under inducement, threat, coercion or other improper means had to be rejected. At the same time, merely because a statement is retracted, it would not automatically lead to the inference that it was obtained involuntarily. The burden would shift to the maker of the stat .....

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t expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as an outcome of threat etc. if the same is to be relied upon solely for the purpose of securing a conviction. With a view to arrive at a finding as regards the voluntary nature of statement or otherwise of a confession which has since been retracted, the Court .....

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which held that a confession of a co-accused person cannot be treated as substantive evidence and can be pressed into service only when the Court is inclined to accept other evidence and feels the necessity of seeking for an assurance in support of the conclusion deducible therefrom. 20. In K.I. Pavunny v. Assistant Collector (supra), the Supreme Court held in the context of a retracted confession, that rule of prudence and practice does require that the Court seeks corroboration of the retracte .....

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the confession came to be made and whether or not it was voluntary and true. These require to be tested in the light of given set of facts. 21. The upshot of the above discussion is that while the strict requirements of the Evidence Act, 1872 would not apply to enquiries and investigations undertaken by the DRI or the Customs Department, the broad principle that statements made have to be voluntary and not under threat, coercion, would nevertheless apply. Where the maker of such statement retrac .....

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he case explaining the legal position in this regard require to be briefly discussed. Vishnu Kumar v. Commissioner of Customs (supra), concerned the conduct of a sorting assistant at the post office. In the context of a charge against him of abetting the smuggling of dutiable goods under Section 112 of the Act, the Court observed that knowledge and intention being state of mind, it may not be possible to prove them by way of direct evidence and they have to be primarily inferred from the act and .....

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e decision in Collector of Customs, Madras v. D. Bhoormul (supra), the Court noted: the law does not insist upon an impossible threshold of proof to establish allegations in Customs proceedings and that if on probabilities the statutory authorities can establish evasion, the legal standards are adequately met with. 24. In light of the above legal position, the Court proceeds to examine the present case, in light of the evidence brought on record by the Department. At the outset, the Court would .....

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prudent person could have arrived at. 25. The Court notices that the criticism by the Appellant of the statements of Lovkesh Sharma and Anwar is not that they were obtained under duress or coercion but they were made belatedly with a view to escaping liability and passing the blame on to the Appellant. Lovkesh Sharma and Anwar were co-noticees with the Appellant. Their statements are no per se exculpatory. Even the statement of Joseph Kuok does not appear to indicate that he was denying his role .....

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e following questions and answers are relevant in this regard: Q.8 Did you show sample of the goods to Assistant Commissioner (Exports) and who was the officer occupying the post of Assistant Commissioner (Export) at that time? Ans. 8. Yes, I shown the samples of the goods to Assistant Commissioner (Exports). Shri S.N. Ojha was the Assistant Commissioner (Export). Q.9. Was the samples shown to other Superintendent who had marked the documents to you? Ans.9 No, samples were directly shown Shri S. .....

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? Ans. 12 I myself fed the comments. Q.13 Were these comments also attested or checked by the Superintendent? Ans.13 Yes, these were checked while giving the order of Let Export by Superintendent. Q.14. What was the method of showing sample to Assistant Commissioner? Ans.14. The Assistant Commissioner had come to the export shed and the samples were shown in the Superintendent s cabin where Sh. S.N. Ojha was sitting. 27. Three months later, i.e., on 4th May 1999 when his statement was again reco .....

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no evidence to prove that the samples were shown to him. Moreover AC had denied having seen the samples, what do you say about this? Ans.4 I have gone through the statement dated 25th August 1999 of Sh. S.N. Ojha, AC and I have put my dated signature on the same. As stated in my answer to question no. 2 above, that this fact can be verified from the computer print out at ICD, Tughlakabad that I fed the remarks Samples shown to AC and I once again state that after showing the samples to AC, I fed .....

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k marked all the documents to Mr. Rajesh Bhasin to him, Lovkesh Sharma stated that I can presume safely that he was also instructed by Shri S.N. Ojha accordingly. Lovkesh Sharma was then asked: Q.6 When did Shri S.N. Ojha instruct you? Ans. 6 So far as I remember it was in the first week of November 98. Q.7 Why Shri S.N. Ojha, Assistant Commissioner chose to instruct you not anybody else? Ans. 7 I had worked with him in adjudicate cell for about 2 or 3 months. If appears he due to the instructed .....

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this regard: Q.1 You have seen the remark put by Sh. S.N. Ojha, Assistant Commissioner, Export on the Annexure C to the shipping bill No. 1038428 dated 21st November 1998 what you have to say about the said remark please explain. A.1 On 24th November 1998 the Assistant Commissioner Shri S.N. Ojha spoke to me on phone in the export shed that since Shri R.S. Tandon, Superintendent Export shed was busy I was to attend to the shipping bills and give Let Export Order . He further said that he was giv .....

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to him as he told me that he is under instructions from AC Sh. S.N. Ojha to facilitate clearance of the goods. I confirmed the position from Sh. S.N. Ojha and accordingly marked the documents to Sh. Lovkesh Sharma. 32. On 26th August 1999 Joseph Kuok again stated: Q. 2 On a single day there were 34 SBs of two parties which were examined by one Inspector Sh. Lovkesh Sharma? How so much work or no. of SBs given to one Inspector whereas there were 7 inspectors? Similarly how can one Superintendent .....

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