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2016 (2) TMI 540 - CESTAT NEW DELHI

2016 (2) TMI 540 - CESTAT NEW DELHI - TMI - Levy of personal penalty against CA and appraiser for abetment in mis-declaration of export goods to avail wrong DEPB credit - Held that:- Revenue failed to prove the active involvement of CA and therefore no penalty could be levied. - However, the allegation against Shri A.K. Kaul (Appraiser) that he was actively involved in the fraudulent activity proved, therefore, leniency cannot be taken against him. - Appeal Nos. C/193, 194, 212, 465, 517, 518, 5 .....

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Further investigations into the matter indicated that Sh. Gurkirpal Singh, Director of M/s Supreme-Casting Pvt. Ltd., Jalandhar, Sh. Ashok Kumar, partner of M/s ATM International, D-163, Focal Point, Jalandhar, Sh, Pavitar Singh, Chartered Accountant, 1, First Floor, Sehdev Market, Jalandhar and Sh. Vijay Madaan, H.No.1310, New, Durga Puri, Habowal Kalan, Ludhiana, Proprietor of M/s Speed Cargo Logistics Pvt. Ltd., Ludhiana and Sh. Satbir Singh s/o Sh. Lashkar Singh, 13, Aman Nagar, Jalandhar ha .....

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tions submitted to the office of Joint Director General of Foreign Trade, Ludhiana were recovered as also rubber stamps of M/s Megna Impex, Jalandhar in addition to several other incriminating records and other rubber stamps. 4. During the investigation export documents like Shipping Bills / Invoices/Packing Lists filed by the exporter and appended as Annexure-A were resumed from CFS(OWPL), Ludhiana and from the office of the Joint Director General of Foreign Trade, Green Field, Ludhiana. The de .....

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lls which were alleged to be forged bears the signature of Shri A.K. Kaul. 4. Shri Sada Ram Dy. commissioner (Appraising Branch) who received the shipping bills of timing shaft which were presented before him and he examined classification, value for the same and found to be correct and signed the shipping bills but he has not signed the shipping bills showing description of goods as crank shaft. In these set of facts, after investigation the Adjudicating authority imposed penalty on all the app .....

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Shri Pavitar Singh are set aside. 6. Shri S.K. Malhotra, Ld. Counsel appearing on behalf of Shri A.K. Kaul (Appraiser) fairly conceded that appellant have no case as both shipping bills of crank shaft and timing shaft bears his signature as per the investigation conducted by CBI. Therefore, he is not pressing for discharging the appellant. But he submits that there is no malafides of the appellant and nothing has come on record. Therefore, he may be exonerated. 7. Shri L K Asthana, Advocate, Ld .....

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he goods and substituting the same. All these activities of fraudulent availment of excess DEPB benefit he came to know only at the time of investigation. Therefore, as the fraudulent document has not been signed by the appellant, therefore, he cannot be penalized in the proceedings. At the most disciplinary action would have been taken against the appellant by the Department in the departmental proceedings which has not been done by the Department as the appellant has already been by the retire .....

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e persons recorded during the course of investigation and action taken by CBI this Tribunal have arrived at the following conclusion: "13. After appreciating the submissions made by both the sides, we find that the issue required to be decided in the present appeal is as to whether there is enough evidence against the appellant so as to implicate him in the fraudulent export made by M/s. Megna Impex and to hold that he was aiding the abeting the same. Revenue's case is that M/s. Megna I .....

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sed that appellant was also a share holder in the illicit gains to the extent of 20%. We note that apart from Shri Ashok Kumar, no other person concerned with the case i.e. either Shri Gurkirpal Singh or Shri Satbir Singh has deposed to the effect that the appellant was to get 20% of the profit made by the firm. The appellants himself, in his statement recorded during the course of investigation has denied the fact of getting 20%. The question which arise is as to whether the said statement of S .....

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gh. As recorded in the impugned order, Shri Satbir Singh In his statement dated 13.12.2000 clearly deposed that all the consignments of M/s. Megna Impex were finalized and exported by Shri Ashok Kumar and Shri Gurkirpal Singh. It has also came on record that it was Shri Ashok Kumar who was managing all the affairs of the aforesaid firm M/s. Megna Impex. In his subsequent statement dated 16.4.2001, Shri Satbir Singh has deposed that Shri Ashok Kumar and Shri Gurkirpal Singh floated a firm in his .....

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given 3 to 4 blank cheque books duly signed by him to Shri Ashok Kumar and one blank cheque book and some loose cheques to Shri. Gurkirpal Singh. There is no mention of the name of Shri Pavitar Singh in the said statement of Shri Satbir Singh except to the fact that he was an employee of Shri Pavitar Singh and Shri Pavitar Singh was engaged In the activity of getting I.E Code and export related documents. 16. The question which arises is that whether the fact that the proprietor of M/s. Megna Im .....

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ngh has deposed that Shri Pavitar Singh was also involved in floating of said firm or the misuse of his employees' name by Shri Ashok Kumar and Shri Gurkirpal Singh was with the knowledge of Shri Pavitar Singh with a motive that he being an employee of Chartered Accountant, can be of help in any future unforeseen difficulties. Infact, the said fact stands accepted by Shri Ashok Kumar in his initial statement that he and Shri Gurkirpal Singh floated the dummy unit of Shri Satbir Singh as prop .....

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he paper work for such floatation and for the export purpose, for filing of applications and documents before the government authorities. The fact of recovery of said document along with stamp of M/s. Megna Impex was on account of his handling the professional work of the said export unit. He has deposed that he was not hand/ing any shipping bills or filing of any documents before the Customs and sale of DEPB sales credit in the market etc. All such export work along with the bank dealing was be .....

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orded by them in their charge sheet that on 2.1.2004 as under:- " Investigation has established that Shri Pavitar Singh prepared requisite applications for issuance of DEPBs as Chartered Accountant on instructions of Shri Ashok Kumar @ Lucky and Shri Gurkirpai Singh but no criminal mensrea was substantiated against him during investigation." The above finding of CBI duly support the appellant's stand that he was working only in his professional capacity as Chartered Accountant and .....

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...it is clearly established that the real beneficiaries of the business were Shri Ashok Kumar and Gurkirpai Sinigh and Shri Satbir Singh, the asesseee was only used as weapon for deposits of money in the bank accounts, which was withdrawn by these two persons for their own selfish motive and Shri Satbir Singh was a man of no means, Further, this fact is also corroborated by the enquiries, when Shri Ashok Kumar admitted before the Customs authorities that it was he, who managed the entire affair .....

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in the export of the goods. It is not the revenue's case that the exported goods were purchased by the appellant or some contribution to the value of the same stand made by him. There is no evidence on record to show the financial involvement of the appellant in procuring the exported goods or any assistance rendered for export of the same. The evidence placed on record do not indicate activities undertaken by appellant to- help Shri Ashok Kumar in his fraudulent exports. As such, merely bec .....

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ies of M/s. Megna Impex, but cannot be adopted as a legal evidence for upholding the charge of aiding and abeting. Mere knowledge of illegal activities of other persons are not sufficient to invite penal action against a person." 10. Thereafter, this Tribunal held that there is no justification to impose penalty on the appellant. 11. As this Tribunal has already examined the case of Shri Pavitar Singh on the basis of statement recorded by the Adjudicating Authority in the impugned order in .....

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