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Kirit Dhruv Versus Commissioner of Customs (ACC & Import) , Mumbai And Commissioner of Customs (ACC & Import) , Mumbai Versus Raj Associates

2017 (12) TMI 728 - CESTAT MUMBAI

Principles of natural justice - penalty - case of Revenue is that appellant like Kirit Dhruv who is a repeated offender threaten the basic fabric of the society and any leniency towards them will encourage further fraudsters. - Held that: - it is expected that the appellant shall not follow any dilatory tactics but shall cause appearance before adjudication authority to reduce the litigation as expeditiously as possible - appeal is remanded to learned Adjudicating Authority - appeal allowed by w .....

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on order passed has no legs to stand. To this submission, learned DR says that there was dilatory tactics followed by appellant without co-operating for adjudication as well as investigation and delayed the matter causing prejudice to Revenue. 2. We may state that violation of natural justice is incurable at the appellate stage and appellant deserves a hearing. In order to avail the course of natural justice, appellant shall make appropriate application for fixing hearing by the Authority on any .....

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ll do the needful considering the submissions of Revenue as extracted below:- 1. Based on intelligence that high value drug was being smuggled misdeclaring it as Epoxy Resin, a consignment of 27 kg of M/s Raj Associates was detained by Customs on 19.12.2004 and examined. Investigations revealed that M/s Raj Associates was a fake IEC in whose name the bill of entry existed and its proprietor was Anugandhi Nadar. However imports were found to have been made at the behest of Kirit Dhruv. Samples of .....

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of Epoxy Resin to evade payment of customs duty. 2. The modus operandi of the whole smuggling racket can be pictorially represented as follows :- 3. Two show cause notices dated 17.06.2005 and 27.04.2007 were issued to Kirit Dhruv and others for the present as well as the past consignments respectively. Both the show cause notices were adjudicated by the Adjudicating Authority on 7.3.2008 confiscating the goods absolutely and confirming the duty of ₹ 10,14,704/- on the seized consignment .....

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ium Phosphate with the suppliers in Hong Kong and Chine and import them in the name of M/s Raj Associates by misdeclaring them as Epoxy Resin. At his behest Anugandhi Nadar got an IEC in the name of M/s Raj Assocaites giving false address. He would then inform Anugandhi Nadar about the arrival of the consignments and give him the import documents to get the goods cleared from the customs. The goods after getting cleared were delivered to him and he would then sell them in the local market. 40,00 .....

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over to the CHA. He would also make draft to pay customs duty and hand it over to Gajendra Dolas. He was getting ₹ 1500 to 2000 per consignment from Nadar. 20,000/ 50,000/- 4 Gajendra Dolas The Delivery Boy - He was the link between the CHA and the Importer. He would deliver the import documents to the CHA along with the Demand draft for payment of duty. Further he would also carry the customs cleared consignment and hand it over to Joseph Fernandes. He used to get ₹ 1000/- to 1500 .....

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circumstantial evidences were also brought on record which substantiates the case of the Department. These are detailed below: A. In his statement dated 20.12.2004, Anugadhi Nadar has implicated Kirit Dhruv revealing that he was the mastermind of the smuggling racket and that at the behest of Kirit Dhruv, Nadar got a fake IEC in the name of M/s Raj Associates to import Dexamethasone in the guise of Epoxy Resin and that Kirit Dhruv using above IE code in the name of Raj Associates for importing .....

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of Kirit Dhruv has clearly stated that he remembered seeing few bills of sale of Dexamethasone and that he was advised by Kirit Dhruv not to attend to the Summons. C. Scrutiny of the call records of Kirit Dhruvs mobile phone 9821039958 revealed a large number of calls were made to the mobile and residence of Anugandhi Nadar. Most of these calls were around the period on which the bills of entry of M/s. Raj Associates were filed/ cleared. It was found that more than 60 calls were made by Kirit Dh .....

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calls. However Investigations revealed that the 57 earlier consignments, were shipped from Hong Kong which is evident from the calls made by Kirit Dhruv to Hong Kong. F. Scrutiny of his cash book and bank ledger revealed huge cash receipts which Kirit Dhruv claimed to be receipts from parties on account of sales, however he could not give the details of these parties. G. Transactions between Kirit Dhruv and Anugandhi Nadar which clearly proves that Anugandhi Nadar was working for Kirit Dhruv. H. .....

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t. J. Throughout the investigation, Kirit Dhruv refused to cooperate with the investigation. For months he avoided attending to summons and when he finally attended investigation he gave frivolous and evasive answers and refused to submit vital documents. His conduct in itself is a proof of his guilty mind. 6. Kirit Dhruv was the mastermind of the entire smuggling racket and the goods were actually imported on his behalf and he gained from selling them in the local market evading duty of ₹ .....

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T 1546 (SC) b) Sudhir Sharma vs. Commissioner of Customs reported in 2011(265) ELT 243 (Tri-Del) upheld by Hon ble Delhi High Court reported in 2015 (319) ELT 450 (Del). c) K.I. Pavunny vs. ASSTT. COLLR. (HQ.), C. EX. Collectorate reported in 1997 (90) E.L.T. 241 (S.C.) d) T. Manivannan vs. Commissioner of Customs (Tuticorin) reported in 2017 (348) ELT 513 8. The learned counsel has argued that Penalty on Kirit Dhruv has been imposed under Section 112 A and no such section exists. In this regard .....

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otherwise valid under law and within the power of the authority making it. Reliance is placed on the following judgements in this regard. a) Ram Sunder Ram Vs. Union of India and Others reported in 2007 (13) SCC 255 b) State of Karnataka vs. Maniyala reported in AIR 1985 SC 470 c) J. K. Steel Ltd. vs. Union of India reported in 1978 (2) ELT. (J.355) (SC) d) Collector of Central Excise, Calcutta vs. Pradyumna Steel Ltd. reported in 1996 (82) ELT. 441 (SC) e) R.K. Verma vs. Commissioner of Customs .....

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cause notices issued to him. Therefore, the appellant had enough opportunity to defend himself and there has been no breach of natural justice. Further, in a number of judgements it has been held that the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to be cross-examined by them on the statements made before the Customs Authorities. Reliance is place of followi .....

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