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Shri Tejinder Singh Makkar Versus Commissioner of Customs (EP) , Mumbai

2017 (10) TMI 1139 - CESTAT MUMBAI

Duty Exemption Pass Book (DEPB) Scheme - it came to light of Revenue that the documents filed before Jt. DGFT to obtain the DEPB scrips were fake including the BRC bearing No. 0305023 dated 16.07.1998 claimed to have been issued by Union Bank of India, Bandra, Mumbai - Held that: - Impugned DEPB scrips were obtained by appellant fraudulently from Jt. DGFT and that was sold by him. He was actively and consciously involved in defrauding revenue for which interest of Customs was prejudiced. Appella .....

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free import in contravention of the law or abetting to achieve such ill object, such act against public Revenue calls for penal consequence to curb such mischief. - Penal provisions are enacted to suppress the evils of defrauding Revenue which is an anti-social activity adversely affecting the public revenue, earning of foreign exchange, economic and financial stability of the economy. Therefore such provisions are construed in a manner to suppress the mischief and to promote the object of t .....

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gainst appellant. - C/1271/08 - A/90279/17/SMB - Dated:- 27-10-2017 - Dr. D.N. Panda, Judicial Member None for appellant Shri S. J. Sahoo, Asst. Commr (AR) for respondent ORDER Per: D.N. Panda Record reveals that the appellant Shri Tejindeer Singh Makkar @ Billa was noticed to be one of the brains behind sale of Duty Exemption Pass Book (DEPB) scrips obtained from Jt. DGFT under fraud and he was beneficiary of aggregate value of DEPB scrips of ₹ 1.5 crore as well as scrips value of ₹ .....

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from Jt. DGFT. When the matter was investigated, it came to light of Revenue that the documents filed before Jt. DGFT to obtain the DEPB scrips were fake including the BRC bearing No. 0305023 dated 16.07.1998 claimed to have been issued by Union Bank of India, Bandra, Mumbai. The DGFT, Mumbai cancelled the offending scrips. But using such fraudulently obtained DEPB scrips, import made by Unique Exim was claimed to be duty free. Such claim was denied by Customs. 2. On 15.01.1999, appellant state .....

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M/s. Pearl Exports, M/s. Universal Trading Co. and M/s. Unique Exim before Customs and those were taken back after passing thereof by the Custom Officers. Deepak also floated a firm called M/s. Pegasus Manufacturing Co., showing Shri Diamond Messey as proprietor thereof. Without any physical export being done, false shipping bills were passed by Customs and DEPB scrips were obtained on the basis of such documents by such nonexistent concerns. No foreign exchange came to India against such false .....

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ndra (W) and Razakwadi, Bandra (E) and was abetting commitment of the offence stated above. Different signatures were made on different forged and fake documents by him for presentation before Customs and Jt. DGFT. Fake application for IEC was made by that abettor. The photographs pasted on the IEC application forms were procured from different photo studios and were of unknown persons. 2.2 Appellant gaining experience from Shri Deepak Agarwal @ Dabbu and working with Shri Arun Gupta, Ashok Khem .....

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e Shri Yashpal from Delhi Custom House and with the illgained experience of processing false shipping bill, he obtain DEPB scrips producing false BRCs before DGFT. Fabricated rubber stamps were made in the name of Customs to affix false seals on the shipping bills. Those were made from stamp makers of Dadar (East). Kakaji, the conduit was engaged by appellant to sign various documents and to contact the licence broker Shri Vinay Saigal to get the DEPB scrips from DGFT paying him 10% of the DEPB .....

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h the appellant acted as above, he proved himself to be an offender under Customs Act, 1962 causing detriment to the interest of Customs. His defence plea that it was innocent was discarded by the adjudicating authority on the basis of probe result demonstrating his fraud and forgery committed, as discussed above. 4. None present for the appellant. 5. Revenue submits that fraud committed by appellant in the manner stated in the adjudication order proved his contumacious conduct and deliberate in .....

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pellant in his grounds of appeal. 7. Impugned DEPB scrips were obtained by appellant fraudulently from Jt. DGFT and that was sold by him. He was actively and consciously involved in defrauding revenue for which interest of Customs was prejudiced. Appellant was not at all a stranger to the commission of the offence alleged by investigation. Having pre-determined mind to deceive the exchequor, he perpetuated fraud against Revenue. Accordingly, he was liable to the penal consequence provided under .....

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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 obtain DEPB scrips without any export and such scrips sold for duty free import in contravention of the law or abetting to achi .....

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mage by wilfully or recklessly causing him to believe on falsehood. Of course, innocent misrepresentation may give reason to claim relief against fraud. In the case of Commissioner of Customs, Kandla v. Essar Oil Ltd. - 2004 (172) E.L.T. 433 (S.C.) it has been held that by fraud is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from the ill-will towards the other is immaterial. Fraud involves two elements, deceit and injury to the deceived. .....

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de (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly and carelessly whether it be true or false [Ref : Roshan Deen v. Preeti Lal [(2002) 1 SCC 100], Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education [(2003) 8 SCC 311], Ram Chandra Singh's case (supra) and Ashok Leyland Ltd. v. State of T.N. and Another [(2004) 3 SCC 1]. (C) Suppression of a material fact would also amount to a fraud on the Court [(see Gowrishankar v. Joshi Amha Shankar Family Trus .....

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ue gain made at the cost of Revenue is to be restored back to the treasury since fraud committed against Revenue voids all judicial acts, ecclesiastical or temporal and DEPB scrips obtained playing fraud against the public authorities are non est. So also no Court in this country can allow any benefit of fraud to be enjoyed by anybody as is held by Apex Court in the case of Chengalvaraya Naidu reported in (1994) 1 SCC I : AIR 1994 SC 853. Ram Preeti Yadav v. U.P. Board High School and Intermedia .....

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nce establishes fraud against Revenue, white collar crimes committed under absolute secrecy shall not be exonerated as has been held by Apex Court judgment in the case of K.I. Pavunny v. AC, Cochin - 1997 (90) E.L.T. 241 (S.C.). No adjudication is barred under Section 28 of the Customs Act, 1962 if Revenue is defrauded for the reason that enactments like Customs Act, 1962, and Customs Tariff Act, 1975 are not merely taxing statutes but are also potent instruments in the hands of the Government t .....

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nts. Unlawful gain is thus debarred. (G) Fraud and justice do not dwell together for which penal provisions are enacted to eradicate evils of defrauding Revenue which is anti-social activity adversely affecting public revenue. Such provisions are construed in the manner which curbs the mischief, promote their object, prevent their subtle evasion and foil their artful circumvention. Thus construed, the term fraud within the meaning of these penal provisions is wide enough to take in its fold any .....

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the evils of defrauding Revenue which is an anti-social activity adversely affecting the public revenue, earning of foreign exchange, economic and financial stability of the economy. Therefore such provisions are construed in a manner to suppress the mischief and to promote the object of the statute, preventing evasion, foiling artful circumvention thereof. Thus construed, the term fraud within the meaning of these penal provisions is wide enough to take into its fold any one or series of acts .....

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