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2015 (11) TMI 548 - CESTAT MUMBAI

2015 (11) TMI 548 - CESTAT MUMBAI - TMI - Availment of fraudulent duty drawback claim - Fabrication and forging of documents - Imposition of penalties - Held that:- Initially Shri B S Chauhan admitted that the signatures on the shipping bills bearing examination reports were his. He also stated that he had given the examination report on the basis of goods shown to him by the CHA but denied having received any money. It is indeed strange that although the Customs investigating agency had specime .....

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Chauhan would give examination reports as desired by them . At the same time the fact is that Shri GS Kohli and Shri R S Singh themselves never discussed any issue with Shri Chauhan. Therefore as held by the adjudicating authority, the next logical step for investigation shoul have been to examine Shri R.S. Singh and Shri Balbir Singh. But this was not done.

More so when the Department did not examine Balbir Singh who is supposed to have met B S Chauhan. Therefore the statement of S .....

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ccused verified by the handwriting expert. This is especially so when Shri GS Kohli admittedly forged the signatures of all other agencies such as banks, steamer agents, RBI, DGFT etc. In such circumstances the preponderance of probability is that Shri GS Kohli had forged the signatures of Shri Chauhan too. Further department is taking a contradictory stand as far as the statement of Shri Chauhan is concerned.

When Shri G S Kohli and Shri R S Singh (employee of Shri Balbir Singh) them .....

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ve been given for such different treatment for different officers. - no good reason to differ with the Order and uphold the same in dropping penalty against Shri. Pamnani. - department has not proved the case with any degree of certaint. We hold that penalty cannot be imposed on Shri. Balbir Singh.

As regards Shipping Bills showing the CHA as Pal India Shipping Agency, he categorically stated that the signatures were not that of Manohar Badheka. Both Shri. Quereshi and Badheka have de .....

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ms, Banks and Steamer Agents they could have forged his(Quereshiís) signatures as a CHA on these fabricated S/bills. The absence of any evidence to prove that Shri. Quereshi and Shri. Badhekar had indeed filed the S/Bills, the penalty on them is clearly not sustainable. - Decided against Revenue. - APPEAL NO. C/660, 664, 665/11, CO/175/11 - Dated:- 5-8-2015 - Mr. P.S. Pruthi, Member (Technical) And Mr. Ramesh Nair, Member (Judicial) Shri. M.K. Sarangi, Joint Commissioner(A.R.) : For the Petition .....

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concerns. He fabricated and forged documents relating to export of goods without actual physical export thereof and in this manner fraudulently claimed drawback of huge amount. He filed Shipping Bills with bogus IEC Code, bogus RBI Code, made forged Bill of Lading and bank attested invoices, forged signatures of officers of preventive department on export promotion (EP) copies of shipping bills and also examination reports were obtained on the shipping bills without carting the goods and withou .....

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cle parts Kingpin nickel metal, spring bush copper. The Shipping Bills showed Custom House Agent as M/s. Crown Shipping or M/s. PAL India Shipping Agency. In some cases the shipping bills were registered with export department and proper order for examination was given by the appraising officer. In some cases drawback was sanctioned and in some the drawback amount claimed was not yet sanctioned. But the original and duplicate copies of shipping bills were not traceable. The scrutiny of triplicat .....

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d in export register under different name. In the case the of some S/B Nos., goods were shown to be carted back to town as per CWC records in respect of there S/Bs but still drawback was claimed. In some cases quantities shown in shipping bills as stuffed in containers were much beyond the capacity of the containers. The drawback copies of S/B s were tampered in respect of quantities shown, so were the Bills of Lading. Invoices submitted to Customs were sometimes different from those supposedly .....

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bills are forged. RBI code number on Shipping Bills was found to be bogus on verification from RBI. The IEC code was found to be not issued by DGFT. 3.1 In his statement Shri. Gurmit Singh Kohli stated that he was proprietor of M/s. ATA Industrial Enterprises, In January 1995 he started a proprietary firm by the name of M/s. All Exports. He admitted to have received drawback without making any export in respect of companies floated by him. He also stated that he was getting the drawback with the .....

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h to the Appraiser Shri. Chauhan. It was Shri. Chauhan who guided them to prepare documents, float new company(M/s. All Export), that is how the modus operandi was carried out, 25% of the drawback amount was taken by Shri. Chauhan, the drawback cheques were obtained after paying the officers and staff in the drawback department. He prepared all the documents and got the shipping bills prepared by Shri. Ramesh Singh. Some of the Bills of Lading were prepared by him and some by Shri. Ramesh Singh. .....

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to the companies whose business was brought to him. Shri. Ramesh Singh had a Custom pass in his company in 1994 which was surrendered in January 1995. The proprietor of Adarsh Clearing and Forwarding Shri. Ramesh Singh admitted that shipping bills were prepared in his office and were sent to the office of Pal Shipping Agency and Crown Shipping Agency for signature. Shri. Omprakash employee of Adarsh Clearing and Forwarding Agency in his statement admitted that Shri. Ramesh Singh was using licenc .....

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he shed. He only depended on the CHA presentation of the Cargo and mischief may have been played by the CHA s dock clerk. He denied receiving 25% of the drawback claim. The drawback agent of the firm M/s. ATA Enterprises, Shri. Paresh Kanthariya admitted in his statement that Shri. Gurmit Singh Kohli gave him 37%+3% commission for looking after drawback work right from collecting the shipping bills till collecting drawback cheques. He admitted that he would collect drawback cheques within a week .....

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gh, Shri. Qureshi of the Crown Shipping Agency, Shri. Manohar Bhadeka of PAL India Shipping Agency, Shri. Paresh Kanthariya, Ramesh Singh and also to Shri. BS Chauhan, Shri. Abhay Desai and Shri. Harsh Srivastava all Appraising Officers and Shri. Rajesh Pamnani, Tally Clerk. The Commissioner confirmed the demand of drawback already paid, rejected the claim of drawback in respect of shipping bills for which drawback was not sanctioned. The goods were held to be liable to confiscation. However in .....

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ers. Further that adjudicating authority ignored the statement of Shri. Manohar Bhadeka who had admitted to being paid by Shri. Ramesh Singh for the business brought to him by the latter. Thus Revenue in its appeal seeks to impose penalties against Shri. Balbir Singh, Shri. Qureshi, Shri. Manohar Bhadeka, Shri. Chauhan, Shri. Desai, Shri. Srivastava and Shri. Pamnani. 5. Heard both sides. 6. Learned A.R. appearing on behalf of the department reiterates the grounds of appeal. On the preliminary o .....

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on is not acceptable as it was made after many years. 7. Learned Counsel for the respondent Shri. Chauhan stated that appeal filed by the A.C. on authorisation given by the Commissioner is not tenable. He relied on Collector of Customs Vs. Arvind Exports[2001(128) ELT 133] and on Commissioner of Customs, ACC, Mumbai Vs. M.B. Electronic[2007(207)ELT 225]. On merits he argued that statement of Shri. Chauhan of having physically examined the goods has been discarded without reason. The case had bee .....

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n is that when the goods are not liable to confiscation, no penalty can be imposed under Section 114(iii). Another point raised by the Learned Counsel is that the statement of co-accused could not be treated as substitute evidence; he relied on Mohtesham Mohd. Ismail [2007 (220) ELT 3(SC)] and Santosh Pandurang Patil[2014(306) ELT A66]. On the charge against Shri. Rajesh Pamnani tally sheet cleark, it was stated that Shri. Pamnani was not known to Shri. Kohli. Allegation of payment made to Shri. .....

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gation on the part of appellant does not survive. He reiterated the findings of the adjudicating authority. He relied upon Commissioner of Customs, New Delhi Versus M.I. Khan[ 2000(120) ELT 542(T)] [2007(217)ELT 592(T)] G.H. Industries Versus Collector of Central Excise, Ahmedabad [1997(94) ELT 483(T)] 8. We have carefully considered the facts and submissions 9. Learned counsel for the respondent Shri Chauhan made a preliminary objection that the authorisation under Section 129(D) is filed by th .....

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0. A contention raised by the counsel for the respondents is that the whole case is based on the statement of Shri GS Kohli only and is not tenable, relying on the case of Santosh Pandurang Patil (supra). We find that in this judgement the honourable High Court of Madras, after considering the decision in the case of Naresh Sukhwani 1996(83)ELT 258 (SC) which is relied upon by Revenue, held that mere confession of a co-accused cannot be the basis for deciding the charges against the other accuse .....

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support of the conclusion deducible therefrom. We may however notice that recently in Francis Stanley, this court has emphasised that confession only if found to be voluntary and free from pressure, can be accepted. A confession purported to have been made before an authority would require a closure scrutiny. It is further more now well-settled that the court must seek corroboration of the purported confession from independent sources. In view of the judicial pronouncements of the apex court ab .....

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who recorded the statement at Agra but to the Collector at Kanpur. In these circumstances the retraction was not accepted by the Court. 10.1 We may now examine the facts of the case before us in the light of judgements discussed above. Initially Shri B S Chauhan admitted that the signatures on the shipping bills bearing examination reports were his. He also stated that he had given the examination report on the basis of goods shown to him by the CHA but denied having received any money. It is i .....

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told to Shri GS Kohli that according to Balbir Singh, Appraise Shri B S Chauhan would give examination reports as desired by them . At the same time the fact is that Shri GS Kohli and Shri R S Singh themselves never discussed any issue with Shri Chauhan. Therefore as held by the adjudicating authority, the next logical step for investigation shoul have been to examine Shri R.S. Singh and Shri Balbir Singh. But this was not done. This step for investigation was most necessary when in the present .....

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and cannot be relied upon in the face of judicial pronouncements discussed in paras above. In the facts and circumstances the allegation against Shri BS Chauhan is based merely on hearsay evidence in the form of a statement dated 08.08 1995 of Shri GS Kohli. 10.2 Another aspect of the investigation is that the CBI started investigating the case in January 2002 and completed investigations in December 2004. Initially the CBI had filed FIR on 8.1. 2002 against various persons that is Shri GS Kohl .....

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ecimen signatures and handwriting of Shri BS Chauhan were also taken by the CBI and sent to the handwriting expert. On the basis of the charge sheet filed by the CBI it is concluded that Shri BS Chauhan did not write the examination reports and signed the same as alleged in the show cause notice. The Commissioner appears to have rightly concluded that when Shri GS Kohli could forge the signatures of bank officers, steamer agents, CHA s etc nothing prevented him from forging the signatures of Shr .....

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ate copies of the shipping bills were not available even in the year 1995 when the case was investigated by the CIU Custom House. In the case of drawback, the examination report was written on the duplicate copy of the shipping bill with carbon copy of the report on the drawback (triplicate) copy and EP copy of the shipping bills. It is a fact that the reports, initials and signatures on the shipping bills found on drawback copy were verified by the GEQD Hyderabad as discussed in detail in the c .....

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the standard of proof in a civil case is preponderance of probability compared to a criminal proceeding where charges have to be proved beyond reasonable doubt. Revenues contention is that just because the adjudicating authority appears to have wrongly construed that the CBI is not pressing proceedings against the officers in the court, it does not mean that they were not guilty. In view of the details of the case discussed in paras above, we are of the view that the case established by Revenu .....

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s taking a contradictory stand as far as the statement of Shri Chauhan is concerned. 10.4 Further there are vital links missing in the investigations. It is beyond comprehension why Shri Balbir Singh was not examined when he is the person who is supposed to have conveyed to Shri GS Kohli about the settlement with Shri BS Chauhan. More so when Shri G S Kohli and Shri R S Singh (employee of Shri Balbir Singh) themselves had never discussed any issue with Shri BS Chauhan.. Therefore we hold that Re .....

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ustainable reasons given by the Commissioner in his Order, we reproduce this part of the Order as below 6.11 I find that penalty has been proposed on Sh. Rajesh Parnnani4,. Tally Sheet Clerk u/s. 114(iii) of the C.A. 1962, under para 48(ix) of the SCN, in as much as he failed to tally the triplicate (Drawback) Shipping bill copy with the duplicate shipping bill or the particulars thereof entered in the matching register. He relied upon E.P. Copy instead of duplicate copy of the Shipping Bill for .....

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Clerk to verify Drawblack claims with the duplicate copy of the Shipping Bills. The said stnaind The said Standing Order prescribed the detail procedure for processing of the Drawback claims and the role of Tally Sheet Clerk was confined to the Data Entry in a specified column of the relevant annexure of the said Standing Order. Further I find merit in submission of Shri. Rajesh Pamnani that alleged non-matching of drawback claim with the duplicate copy of Shipping Bill, though not mentioned in .....

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was paid ₹ 5000/- Per Shipping bill by drawback agent Sh. Paresh Kantharia, which is a hearsay evidence and same is not sustainable in law. Further, he submitted that the investigating agency has not found the statement of Sh. G.S. Kohli worth reliance for action against other officer (Sh. Praveen Arora, Examiner para-41-iv and John Pinto, Asstt. Commissioner para-44-iii of SCN.) named by him. Without specifying reasons, it is not reasonable to take action against some of the officers whil .....

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is for others to establish charges against them, more so when no reasoning have been given for such different treatment for different officers. We find no good reason to differ with the Order and uphold the same in dropping penalty against Shri. Pamnani. 10.7 The next person against whom penalty is dropped is Shri. Balbir Singh. We I find that only basis of allegation against Shri Singh is the statement of Shri Gurmeet Singh Kohli. No evidence from any other independent source is seen by us. We .....

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e in law. Therefore, the department has not proved the case with any degree of certaint. We hold that penalty cannot be imposed on Shri. Balbir Singh. 10.8 Both Shri M. I. Quereshi of M/s Crown Shipping Agency and Shri Manohar Badheka of Pal India Shipping Agency have been charged with filing the impugned Shipping Bills without verification of the authority and authenticity of the documents for monetary consideration. We find that Sh. Quershi in his statement dated 1.7.96 stated that the signatu .....

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r stated that at the relevant time Shri. R.S.Singh used to handle the work at Nhava-Sheva. We find that the department did not conduct further investigation to prove that this denial was after-thought. It has not been established by the handwriting expert that the signatures are of Shri. Querishi. Hhence, found with substance. Similarly, we find that in statements of Shri. Manohar Badheka, partner of Pal India Shipping Agency recorded on 18.06.96 & 21,06,96, he stated that the signatures on .....

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