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Deepak Kothari Versus Commissioner of Customs (CSI Airport) , Mumbai

2015 (11) TMI 550 - CESTAT MUMBAI

SEEPZ - allegation of Clandestine clearance of duty free goods, a large quantity of diamonds, gold etc. in the domestic market instead of exporting - Contravention of the provisions of Notification 177/94-Cus. - Penalty u/s 112(a) - Held that:- the clandestine clearance and purchase of the diamonds was happening even before August 1999 and Ms. Bengali in her statement has indicated how this was being done and the fact that the diamonds would be taken out from the safe, weighed and thereafter the .....

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gave vague answer to that and simply stated that these printouts indicate the detail of the export, consignee etc.

From the various evidences which have been discussed in detail by the adjudicating authority in para 3.11, I have absolutely no doubt whatsoever in my mind that the appellant was actively involved in almost throughout two years and a very substantial quantity of diamonds which have been clandestinely cleared by the unit located in SEEPZ were purchased by him. He was awa .....

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e then value of the diamonds covered by the 18 printouts itself is more than ₹ 7 crores. Similar purchase of clandestinely cleared diamonds was being done by the present appellant even for the earlier period for which the quantity and value details could not be found out in the investigation. Keeping in view the over all facts, the penalty of ₹ 10 lakhs cannot be considered on the higher side. - impugned order is upheld - Decided against assessee. - APPLICATION No. C/S/94725/14-Mum A .....

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can be heard at the same time. Accordingly, after waiving the requirement of pre-deposit, the case is being taken up for final disposal. 2. Brief facts of the case are that one M/s. Neelkamal Jewellery Exports Ltd. is a unit located in SEEPZ. The unit is importing diamonds and precious metals like gold etc. and exporting jewellery, diamonds etc. The unit is importing the said diamonds/precious metals etc. under Notification No.177/94-Cus. read with the relevant provisions of EXIM Policy. The sa .....

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al Jewellery Exports Ltd. and thereafter sold such diamonds in the domestic market, penalty has been imposed under Section 112(a) of the Customs Act. 3. The case of the Revenue started with an information and thereafter stock taking in the unit of Neelkamal Jewellery Exports Ltd. on 5th November 1999. There was acute shortage of the diamonds of various varieties physically available compared to the stock position indicated in the records of the said company. Statements of various persons startin .....

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, as far as the present appellant is concerned, his name appeared consistently in all the statements. Statements of large number of officials working in the said unit were recorded as also that of the present appellant and one Shri Prem Atmaram Mayekar who was working in the office of the present appellant, was also recorded. Statements of one Miss Pearl Bengali who was working as secretary to the director, Shri Bhupendra Kapadia, were also recorded on 11.11.1999 and 12.11.1999. In her statement .....

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re thereafter handed over to Shri Bhupendra Kapadia. Miss Bengali also stated in the statement that on one or two occasions, Shri Bhupendra Kapadia asked her to take the said diamonds out of the SEEPZ and hand over to the present appellant. However, she refused to do so and thereafter Shri Bhupendra Kapadia has not asked her to take the diamonds out of the SEEPZ. She also explained that no records of such transactions were kept initially. However, from August 1999 she started keeping the record .....

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r and peon in the said company, were transporting these documents from SEEPZ to the present appellants office in Opera House. These diamonds were being handed over to the present appellant and the present appellant either himself or through his Accountant Shri Prem Atmaram Mayekar, was handing over the cash to them which in turn was given to Shri Bhupendra Kapadia. In the investigation, it is seen that number of statements of the present appellant were recorded. The present appellant perhaps be .....

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ayekar who was working in the appellants office admitted certain things which obviously implied that the diamonds were being clandestinely removed from SEEPZ were being sold to the present appellant and the present appellant in turn was paying for the same to Shri Bhupendra Kapadia. The investigator thereafter carried a confrontational panchnama wherein the present appellant was called. In addition, Shri Prem Atmaram Mayekar, Shri Balasaheb Sutar and Shri Ramdas Yadav were also called. During t .....

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statements, there were statements of number of other persons, which are not so much relevant for the present appeal and are therefore not being discussed. Based upon investigation, show cause notices were issued to Neelkamal Jewellery Exports Pvt. Ltd., Shri Bhupendra Kapadia, the present appellant and other persons. The case was adjudicated. Aggrieved by the said order, the present appellant along with another appellant Shri Bhutnath Das filed appeal before this Tribunal. This Tribunal allowed .....

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that those 18 documents though referred in the statement of Ms. Bengali but are not relied upon in the show cause notice. Further, the said documents are not available with the department. Since the documents are neither available with the department nor are relied upon though mentioned in one of the statements, he decided the case on the basis of available records. Learned counsels main emphasis was that these 18 documents are mentioned in the statement of Ms. Bengali and the statement states t .....

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e appellant in none of his statements has accepted that he has purchased the clandestinely removed diamonds. His submission was there has been only one transaction of diamonds with Shri Bhupendra Kapadia and that transaction was also was not from his SEEPZ unit but from one of his another set up in Hiranandani Gardens. It was also submitted that in the said transactions, the diamonds were exported and the amounts were paid through cheque to Shri Bhupendra Kapadia. Learned counsels submission is .....

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ts and circumstances of the case, particularly the fact that the appellant has not admitted and Shri Bhupendra Kapadias statement cannot be relied upon and also the fact that those 18 documents could not be produced by the Revenue, there is no case whatsoever for imposition of penalty under Section 112(a) of the Customs Act. 5. Learned AR, on the other hand, submitted that the appellant was provided copies of all the statements relied upon as also copies of panchnama and all other documents. He .....

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cuments, there is no grievance whatsoever of the appellant and documents running into few hundreds of pages which included large number of statements, panchnama etc. were all provided to the appellant. The learned ARs next submission was that in any case, these 18 documents were shown to the appellant while recording his statement and the present appellant at the time of recording of the statement has gone through these documents and given his comments. The learned AR submitted that except stati .....

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sked any question about these documents from her but that was not done. Similarly, the appellant could have asked about Ms. Bengalis claim that details of these 18 documents as also on earlier occasions details of diamonds were faxed to the appellant could have been questioned and also how and on what basis she has claimed that these diamonds have gone to the present appellant, but nothing of this sort was done. This itself proves that whatever Ms. Bengali has stated in heir statement was true .....

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collecting the cash, the appellant admitted the transactions. This admission itself proves that the appellant has been purchasing regularly the clandestinely cleared diamonds from the SEEPZ. The said panchnama or the statements have not been retracted or questioned and, therefore, these have to be relied upon. The learned AR also submitted that the so called as variation in the statement of Shri Bhupendra Kapadia are of no consequence whatsoever as far as the present appellant is concerned. It i .....

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Commissioner, about the reliability relating to the statements, cross-examination etc. 6. I have carefully gone through the records, particularly the various statements as also other details including the submissions made by the leaned counsel for the appellant as also of the learned AR. The learned counsel has submitted that the statements of Shri Bhupendra Kapadia of Neelkamal Jewellery Exports Ltd. cannot be relied upon as there are lot of contradictions between different statements, while i .....

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available in all statements made by Shri Bhupendra Kapadia. To my mind, whatever variations are there in the statements of Shri Bhupendra Kapadia are of no consequence as far as the present appellant is concerned and the statements of Shri Bhupendra Kapadia can be relied upon. 7. The other main submission of the learned counsel was that the 18 computer printouts have not been given to them and it is in violation of the direction of this Tribunal in earlier remand proceedings. I have gone through .....

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the impugned order details the effort made by the department to locate these printouts. However, the Revenue has not been able to locate these 18 printouts from the records available with them. Since these 18 printouts are not available, one has to decide the case based upon what is available. I also note that these documents are not fatal to the case. First of all, these documents relate to clandestine clearance of diamonds from August 1999 onwards. It is not the Revenues case that the clande .....

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icated to the present appellant on fax and the diamonds will be handed over to Shri Bhupendra Kapadia who would take further action to ensure that these are clandestinely taken out of the SEEPZ area and thereafter transported to the present appellants office. In my view, it is very important to note that these 18 printouts for whatever worth these may be, were shown to the present appellant while recording his statement and even that time he gave vague answer to that and simply stated that thes .....

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very strange that Ms. Bengali was present for cross-examination but the appellant did not cross-examine her. She could have been cross-examined even in the absence of those 18 documents or they could have asked questions about those 18 documents. In the absence of any such cross-examination by the appellant despite the availability of Ms. Bengali for cross-examination, whatever has been stated in Ms. Bengalis statement has to be taken as true and correct. I also find that the Revenues case is n .....

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as confirmed that Shri Balasaheb Sutar and Shri Ramdas Yadav used to bring the diamonds and would go straight to the cabin of the present appellant and many a times the present appellant would direct him to hand over substantial amount of cash. I have also gone through the panchnama drawn during the confrontational panchnama/statement on 24.11.1999 and in this confrontational panchnama/statement, the present appellant has confirmed that he knew Shri Ramdas Yadav and he knew Shri Balasaheb Sutar .....

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