TMI Blog2013 (2) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... vestigations revealed that the said firm was floated by Shri Surender Aggarwal along with Shri Bhagwan Tulsian alias S. K. Gupta and Shri Suresh Khandelwal. The said firm had applied to the Joint Director, DGFT, Mumbai for obtaining advance licence under the DEEC scheme on the basis of fake, fabricated, mis-declared documents. The details given in the application regarding manufacturing facilities, past export performances and Central excise registration details for the manufacturing premises were found to be false/bogus. The shipping bills submitted by them to the DGFT to show fulfilment of export obligations were actually found to be shipping bills filed by some other exporters. The chartered accountant's certificate submitted by them was also found to be forged. On the basis of such declaration, the said firm had obtained DEEC licences and utilised the same for the import of copper scrap/brass scrap duty free under Notification No. 43/2002 dated April 19, 2002 and had filed 24 bills of entry during the period from October, 2002 to March, 2003. The duty foregone on account of such imports amounted to ₹ 2,84,46,693 in respect of imports through Nhava Sheva port. There we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, 1962. It was proposed to impose penalties on the appellant firm, Shri Surender Aggarwal, proprietor of the firm and Shri Bhagwan Tulsian and Shri Suresh Khandelwal, who are the co-conspirators. It was also proposed to impose penalties on Shri Bhimsen Bhagwat Singh, partner of CHA firm and Shri Naresh Dhanji Bhanushali, proprietor of M/s. N.D. Bhanushali and Shri Gulbir Singh Anand, proprietor of M/s. Apollo Roadways for transportation of the goods from Nhava Sheva to New Delhi, thus helping in diversion of the duty-free imported goods. (5) Since Shri Bhagwan Tulsian, Surender Kumar Aggarwal and Shri Suresh Khandelwal were absconding when the case was detected and hence their statements could not be recorded. However, they were finally traced and their statements recorded. (6) From the statements of Shri Bhagwan Tulsian, it came to light that the person who financed the scrap imports were Shri Sajjan Kumar Goel, Shri Rajesh Dua and Shri Narang who are residents of Delhi. The duty saved on the imports were to be shared after deducting expenses amongst the importers and the financiers. (7) Shri Sajjan Kumar Goel was traced and his statements were recorded on April 5, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002-03, during a period of 18 months Shri Goel had lent him money 10 to 12 times which was returned in cash by him and also the profits were shared in cash. (9) Statements of Shri Bhimsen Bhagwat Singh, partner of Nikhil Shipping Agency, was recorded on April 26, 2008 which revealed that he knew Shri Sajjan Kumar Goel and identified him when his photograph was shown. He further confirmed that the import documents were given to him by Suresh Khandelwal and he used to hand over the bills of entry to Suresh Khandelwal and collected his payments from him. He had also met Shri Sajjan Kumar Goel along with Shri Suresh Khandelwal at a restaurant in Vashi. In that meeting Shri Sajjan Kumar Goel had handed over the import documents such as bill of lading and it was decided that Shri Sajjan Kumar Goel would, henceforth, hand over all clearance related documents and Shri Suresh Khandelwal would be no more the person interacting with him. Shri Bhimsen Bhagwat Singh also confirmed that after clearances of the goods, all the documents such as bill of entry, bill of lading, token and shipping company receipts were handed over to Shri Sajjan Kumar Goel in Mumbai, who used to pay him the CHA ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009 wherein he, inter alia, admitted that the imports of M/s. Lord Empire International was done by Shri Sajjan Kumar Goel and Shri Bhagwan Tulsian and Shri Tulsian had promised him a commission of ₹ 20,000 per container and introduced him to Shri Sajjan Kumar Goel and Shri Bhimsen Singh. He further informed that from his interaction with others, he learnt that the import and sale of imported goods in Delhi market was handled by Shri Sajjan Kumar Goel and Shri Goel had promised him ₹ 20,000 per container for arranging the transport of the imported goods for M/s. Lord Empire International to Delhi and the goods were transported to Delhi by Apollo Roadways and the instructions regarding delivery of the goods was given by Shri Sajjan Kumar Goel. He also confirmed that Shri Sajjan Kumar Goel used to take the proceeds of the sale of the imported goods and he had paid for the imports and Shri Goel had accompanied Shri Bhimsen Singh for clearance of the imported goods at Nhava Sheva port. In his further statement dated April 4, 2009 Shri Khandelwal confirmed the above transactions and submitted that Shri Sajjan Kumar Goel was the main brain behind the imports undertaken by M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, it was decided that Shri Goel would handover the import documents directly to the CHA. (17) On completion of the investigation, it appeared that Shri Sajjan Kumar Goel was not merely a financier but took active part in the imports of M/s. Lord Empire International and diversion of the imported goods and he co-ordinated the entire operations from arranging and financing the imports to the diversion and disposal of the goods at Delhi. Accordingly, vide addendum to the show-cause notice dated May 27, 2009, the name of Shri Sajjan Kumar Goel was also included for imposition of penalty under section 112 of the Customs Act. The notice was adjudicated vide the impugned order and duty demands were confirmed against M/s. Lord Empire International for an amount of ₹ 2,84,46,693 in respect of the imports in Mumbai along with interest thereon; for an amount of ₹ 32,44,866 along with interest for the imports undertaken through Kolkata port and an amount of ₹ 5,81,774 along with interest for the imports undertaken through Tuticorin. Equivalent amounts of penalty were imposed under section 114A of the Customs Act. A penalty of ₹ 2,64,42,908 each was imposed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement was recorded at Mumbai wherein he had also admitted that he had financed Shri Bhagwan Tulsian. (5) The appellant Shri Goel was arrested on Sunday April 6, 2008 and he was granted bail on April 15, 2008. Immediately thereafter, he retracted his statement on April 17, 2008. The retraction was rebutted by the DRI on May 5, 2008. (6) In his statement dated April 26, 2008 CHA Bhimsen Bhagwat Singh, for the first time was named the appellant. On April 3 and 4, 2009 Suresh Khandelwal's statements were recorded wherein he made serious allegations against the appellant. The transporters Anand and Bhanushali's statements were recorded in April, 2009 wherein they named the appellant for the first time. (7) Addendum to the show-cause notice was issued on May 27, 2009 and the show-cause notice of October, 2007 with the appellant's name interpolated as a noticee, was forwarded. (8) The appellant's request for cross-examination of officers was rejected and the order was passed by the respondent-Commissioner, inter alia, imposing penalty of about ₹ 3 crore under section 112(a) on the appellant. (9) The following submissions were made for waiver of pre-de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de to the income of Sajjan Kumar on the basis of mere statements. No transaction took place between Sajjan Kumar and Bhagwan. No income was earned on any such transaction. (a) S/Shri Bhimsen, G. S. Anand and N.D. Bhanushali were not asked the reason why they did not name the appellant in their statements recorded in 2006. Suddenly and for the first time after the statements of the appellant were recorded in dubious circumstances in April 2008, these three persons gave statements naming the appellant. Anand and Bhanushali admitted that they had never met the appellant in the past. They did not recall his telephone numbers. Yet Anand stated that he could identify the voice. After a gap of six years, identification of voice is highly unlikely. Shri Bhagwan and Shri Khandelwal were not asked about their whereabouts from 2003 to 2008/2009. Therefore, the said statements do not inspire confidence. The firm Lord Empire was created by them. The licence applications were made by them and the duty-free imports were arranged by them. Yet the DRI had not explained their absence for crucial period of five to six years. The statement of Suresh Khandelwal was recorded at the end of the investi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant was not a party to the notice dated 2007. In the circumstances, it is humbly prayed that pre-deposit of penalty be waived and the appeals be listed for final hearing at the earliest convenience of the hon'ble Tribunal. 4. None appeared for Shri Bhagwan Tulsian or Shri Suresh Khandelwal. However, in their appeal memoranda, it has submitted that the principles of natural justice has been violated much as cross-examination of the officers and the co-accused had not been given. In the case of Bhagwan Tulsian it is also contended that the appellant had no personal, business or financial relationships with any of the co-noticees. 5. The learned counsel for Shri Bhimsen Bhagwat Singh, partner of the CHA firm, submits that there is no allegation in the show-cause notice that the appellant was aware or had any knowledge about the genuineness of the existence of the firm. None of the co-noticees have implicated the appellant nor have they alleged that the CHA was aware of the evil desire or intentions of the importing firm. It is further submitted that inasmuch as the CHA licence has been revoked, he is penniless and is not in a sound financial position to make any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell the goods and receive the payment in cash. Since these goods were imported by Shri Sajjan Goel, he is the owner of the same. He further stated that subsequently there was a dispute between him and Shri Sajjan Goel over payment and thereafter Shri Suresh Khandelwal stopped working and his work was done by Shri Sajjan Goel only. It is to be noted that while Shri Suresh Khandelwal had retracted earlier statements on April 4, 2009, but this statement dated April 28, 2009 was never retracted by him. (c) Shri Bhagwan Tulsian in his statement dated May 7, 2008 stated that Shri Sajjan Goel had given him about ₹ 1 to 1.25 crore and it was decided that the money given by Shri Sajjan Goel would be returned to him out of the sale proceeds of the imported goods and that the customs duty saved would be shared between them after deducting the expenses. (d) Shri Sandeep Kumar Singh, an employee of M/s. Nikhil Shipping Agency, CHA in his statement dated May 6, 2008 stated that he had met Shri Sajjan Goel while accompanying his cousin, Shri Bhimsen Singh/ on a few occasions and discussions were held in connection with the clearances of import consignments of M/s. Lord Empire Internat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... working as an accountant with him having a monthly salary of ₹ 600 to ₹ 700. He obtained IEC for the company. Then he took Central excise registration declaring an address where there was no factory. Then he took four advance licenses from DGFT. The imported goods were sold in local market in Delhi. He also admitted that export obligation was not fulfilled in respect of these advance licenses. He also stated that earlier he had been arrested by CBI, Chennai in a DEPB fraud case, that DRI, Kolkata had also booked a case against him in connection with imports of M/s. Lord Empire International; that DGCEI, Surat had also booked a case against his EOU company M/s. Ganesh Overseas. (b) The statements dated May 7, 2008 of Shri Bhagwan Tulsian in which he had stated that Shri Sajjan Goel had given ₹ 1 to 1.25 crores and it was decided that the money given by Shri Sajjan Goel would be returned to him out of the sale proceeds of the imported goods and the customs duty saved would be shared between them after deducting the expenses. (c) Shri Gulbir Singh Anand, proprietor of M/s. Apollo Roadways stated in the statement dated April 23, 2009 that Shri Bhagwan Tulsian wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding transportation of imported goods. Further, he met him twice or thrice at Adarsh Bagh Hotel for collecting commission and advance payment. From the above it is clear that Shri Suresh Khandelwal was having full knowledge and was involved in evasion of customs duty. With respect to Appeal No. C/554/2011--appellant Mr. Bhimsen Bhagwat Singh: (a) The statement dated May 13, 2007 of Shri Bhimsen Singh in which he stated that he only checked the covering letter and IEC copy of M/s. Lord Empire International and due to heavy work load and time constraints, he could not verify their declared business address or the backgrounds of Bhagwan Tulsian, Surender Agarwal and Suresh Khandelwal. Also, Shri Sajjan Kumar Goel, Shri Bhagwan Tulsian, Shri Bhimsen Singh and Shri Suresh Khandelwal met several times at Adarsh Hotel, Kalbadevi where the formalities of-import of goods by M/s. Lord Empire International and the clearance, transportation of goods to Delhi, storage and the DEEC scheme rules were, inter alia, discussed. Shri Bhimsen Singh did not care to confirm whether the firm for which he was clearing the imported good duty free under the DEEC scheme ever manufactured and expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement dated May 26, 2006 did not co-operate with the investigating agency in identifying the exact godown or its postal address at Shahdara where the goods of M/s. Lord Empire International were unloaded so that the buyers of the duty tree fraudulently imported could have been traced out and guilty punished. This reflects the mala fide intention on his part. With respect to Appeal No. C/475/2011--appellant Mr. Naresh Dhanji Bhanushali: (a) In this case the transporter was given goods to transport them from Mumbai to Delhi. However the address of Delhi where delivery was to be done was not disclosed to him and he was supposed to telephonically contact to know the person/place where the delivery was to be made. It is a fundamental rule of transportation that the name and address of both consignor and consignee is to be taken before transporting the goods and accordingly bilty is made. The very fact that the consignor's name and address was not disclosed was enough to understand the dubious nature of goods and that they are liable for confiscation under the Customs Act as they were picked up from Nhava Sheva port. (b) The transported goods were delivered by the transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g officers and the co-accused were not allowed by the adjudicating authority. As regards the cross-examination of officers, in the case of Krishnaram Dyeing and Finishing Works v. CCE and Customs [2007] 209 ELT 410 (Trib.-Mum) this Tribunal held as follows: As regards the request for cross-examination of officers it has been rightly denied by the adjudicating authority. It is not the case that any statements of the officers have been relied upon against them. It is basically the private records of the company, the material evidence of the excess stock and the admission statements of the concerned persons of the company and the merchant manufacturers numbering 42 which have been relied upon to come to the conclusion of a well planned and fraudulent evasion by the appellant-company. It is not the case that the officers have been examined by the Department before the adjudicating authority as witnesses of the Department. The question of cross-examination without examination-in-chief is not legally sustainable. The ratio of this decision applies to the facts of the present case. Hence denial of cross-examination of the investigating officers has not contributed to violation of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 241 (SC) and the Supreme Court held as follows: It would thus be seen that there is no prohibition under the Evidence Act to rely upon the retracted confession to prove the prosecution case or to make the same basis for conviction of the accused. The practice and prudence require that the court could examine the evidence adduced by the prosecution to find out whether there are any other facts and circumstances to corroborate the retracted confession. It is not necessary that there should be corroboration from independent evidence adduced by the prosecution to corroborate each detail contained in the confessional statement. The court is required to examine whether the confessional statement is voluntary; in other words, whether it was not obtained by threat, duress or promise. If the court is satisfied from the evidence that it was voluntary, then it is required to examine whether the statement is true. If the court on examination of the evidence finds that the retracted confession is true, that part of the inculpatory portion could be relied upon to base conviction. However, the prudence and practice require that court would seek assurance getting corroboration from other evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Code stands excluded unless during the course of the same transaction, the offences punishable under the IPC, like section 120B, etc., are involved. Generally, the evidence in support of the violation of the provisions of the Act consists in the statement given or recorded under section 108, the recovery panchnama (mediator's report) and the oral evidence of the witnesses in proof of recovery and in connection therewith. This court, therefore, in evaluating the evidence for proof of the offences committed under the Act has consistently been adopting the consideration in the light of the object which the Act seeks to achieve. 13. The ratio of the above decision of the hon'ble apex court applies to the facts of the present case. In the present case, the appellants who had retracted their statements were arrested and produced before the magistrate who remanded them to judicial custody. At the time of production before the magistrate, none of the appellants complained of any ill-treatment by the customs/DRI officers. Further some of the statements were recorded when they were in judicial custody wherein they had admitted to their involvement in the matter and the state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rupees one crore in his statements, including the one recorded before the jail authorities on April 9, 2008. This position has been confirmed in the statements of Bhagwan Tulsian who had admitted that in consideration for the money lent, the profits from the duty saved was shared between Shri Goel and himself. Shri Suresh Khandelwal, in his statement had admitted that Shri Goel was the main brain behind the entire fraud and after some time Shri Goel used to deliver the import documents directly to the CHA and the goods were transported to Delhi where it was sold in the open market. This position is corroborated by the statements of Sandeep Kumar Singh, employee of the CHA, and Shri Bhimsen Bhagawat, the partner of the CHA firm. Even the transporters had admitted that the goods after transportation to Delhi was unloaded at the places as directed by Shri Goel. Thus each and every statement of the persons concerned had clearly confirmed and corroborated the role of Shri Sajjan Kumar Goel in the DEEC fraud. If Shri Goel was only a money lender and he had no role to play in the fraudulent imports of M/s. Lord Empire International, there was no necessity for him to get involved in the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Goel. Thus Mr. Bhimsen knew that the entire transactions were a fake and had been done purely with a view to defraud the exchequer. However, he chose not to inform the customs authorities about the fraudulent nature of the transactions. Thus there was glaring omissions in his conduct as a CHA. Consequently, he is also liable to penal action under the customs law. 19. As regards the transporters, they did not issue any bilty/delivery challans for the transport of the goods from Nhava Sheva to Delhi. They rather refused to identify the place/godowns where the goods were unloaded after its transportation to Delhi. Thus, though their roles may be minor, they definitely had a hand in these nefarious transactions. 20. In view of the foregoing and also considering the fact that the customs duty sought to be evaded is quite huge of the order of ₹ 3.23 crore and the fraud on the exchequer has been perpetrated in a systematic and well planned manner and all the appellants have played a part in the same, we are of the considered view that there is a strong prima facie case against all the appellants attracting penal consequences under the provisions of section 112(a)/(b) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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