TMI Blog2020 (9) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... prietor/Director also stated that they were working on a monthly salary of ₹ 3000/- to 12,000/-, doing and working for Shri Deepak Goel as per his instructions. They also stated that Shri Deepak Goel was doing transaction in these firms and companies. Further this appellant had also stated that they were engaged in raising inflated bills for the supply of fabric to M/s J.S. Designer Ltd. and were returning the differential amount in cash to Shri Vikas Mohan Singhal. Further, although Shri Deepak Goel have subsequently denied raising inflated bills for supply of fabric, but the facts are proved on the corroborative evidence being seizure of documents including cheque books etc of various firms and companies, wherein benamidar of this appellant were proprietor/partners/Directors and such benamidar persons have also admitted that they were only the name lenders engaged on salary basis, and such firm/companies were managed by Shri Deepak Goel. Admittedly, as per facts on record such firms and companies were raising inflated bills for the supply of fabric to M/s J.S. Designer Ltd. Thus, it is found that this appellant have facilitated the main accused M/s J.S. Designer Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments and his statement was also recorded on the spot on 1st June, 2011. One Apple I Mac computer was also resumed for further investigation. 4. In his statement Shri Vikas Mohan Singhal, Managing Director, inter alia stated that he was a textile engineer and they procured different fabric like polyester fabric/cotton fabric/knitted fabric/viscose fabric etc through different mills/agencies traders by placing purchase order through email or telephonically. The payment to all the suppliers were made through cheques/RTGS/NEFT. As regards the mode of negotiation, enquiry from different suppliers as regards quality etc. purchase orders was placed to the supplier quoting lower price. They did the value addition in the shape of embroidery, sequence, hand work with lot of embellishments as per the needs of buyer. The fabric was exported to Afghanistan, Iran, Tanzania. They used their own transportation up to the ICD/IGI Airport. He also submitted sample invoices of some of their supplier of fabrics like V S International Pvt. Ltd., M/s Vimal Fashion International, M/s Maya Fashion, etc. 5. Follow up search was made with some of the supplier of the fabrics. In the search carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as costlier than polyester. The price of cotton fabric was in the range of ₹ 50/- to 80 per meter, whereas the polyester price was in the range of ₹ 25 to 40 per meter. 9. Search was also conducted at M/s Niharika Fabrics (India) Pvt. Ltd., Delhi-6. Statement of Sales Manager of M/s Niharika Fabrics (India) Pvt. Ltd. was recorded on the spot on 7 July, 2011, who inter alia stated that the main business of the company was trading in fabrics and did not have any processing plant. They also have their branch office at Surat and they have sold polyester to M/s J.S. Designer Ltd. during the year 2010-2011 and 2011-2012. They have supplied fabric both from the stock at Delhi and directly from Surat. In his statement Shri Anurag Kanodia, proprietor of M/s Niharika Fabrics (India) Pvt. Ltd. inter alia stated that he usually procured grey fabric and got it dyed or printed and thereafter supplied the same. For the supply made from their Surat office, documentation was routed through their Delhi office, the average price for supply was ₹ 16/- per meter. In his further statement recorded on 16 September, 2011, Shri Anurag Kanodia stated that the ready stock of fabrics @ &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m; that one Shri Deepak of M/s G.K. International was one of their provider of purchase invoice and they had tied up with M/s J.S. Designer Ltd. to accept their sale invoices; that the payments were routed through Shri Deepak. He further agreed to modification of his earlier statement in view of the subsequent statement. In his further statement dated 23 August, 2011, Shri Chander Gauba, undertook to provide the details of payments received from M/s J.S. Designer Ltd. and its corresponding disposal. As per the details provided by him vide letter dated 29 August, 2011 it appeared that huge payments were made to M/s G.K. International. 14. Statement of Shri Deepak Goel (appellant herein) was recorded on 30 August, 2011 wherein he inter alia stated that he had started the work of brokerage in fabrics and automobile parts in his own name. He used to operate from rental premises at Chandni Chowk, which he left in the year, 2011. As M/s J.S. Designer Ltd. had good name in the market, therefore he had gone to their factory in Noida and met Shri Vikas Mohan Singhal; that he had approached Shri R.P. Sharma to provide the sale invoices/bills for the purpose of turn over only. Shri R.P. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Point Anil Saini 13. M/s Jagdish Fab Hemant Kumar, Ramesh Kumar Sharma 14. M/s Pyramid Tech Heights Pvt. Ltd. Parween Aggarwal, Sunder Prakash Sharma, Mahender Kumar Uday Bhagat 15. M/s Surat Clothing Empire Rajinder Kumar 16. M/s Aroma Textiles Pvt. Ltd. Parveen Aggarwal, Sunder Prakash Sharma 17. M/s Nikhil Trading Co. Atul Kumar 18. M/s Indraprastha Trade Impex Pvt. Ltd. Mahender Kumar 19. M/s Kishore Exports Ramesh Kumar, Hemant Kumar 16. In his further statement Shri Deepak Goel- appellant recorded on 12 September, 2011, stated that he was given orders for supply of cotton fabrics i.e. cotton voil, cambric and grey polyester etc. to Shri Singhal of M/s J.S. Designer Ltd. Thereafter he passed on the orders for the supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor of firms namely M/s Florance Textiles and Fabrics Pvt. Ltd., M/s Pyramid Tech Heights Pvt. Ltd., M/s Aroma Textiles Pvt. Ltd., M/s Giriraj Texturisers Ltd., M/s Raghvendra Apparels Pvt. Ltd. and partner in M/s Shri Radha Cloth Gallery Pvt. Ltd. He inter alia stated that Shri Deepak Goel- appellant started firms/companies namely M/s Florance Textiles and Fabrics Pvt. Ltd., M/s Pyramid Tech Heights Pvt Ltd., M/s Shri Radha Cloth Gallery Pvt. Ltd., M/s Aroma Textiles Pvt. Ltd., M/s Giriraj Texturisers Pvt. Ltd. and M/s Raghavendra Apparel Pvt. Ltd. He knew that these companies were started actually by Shri Deepak Goel for doing business in fabrics and Shri Deepak Goel assured him that he would be getting 10,000/- P.M. in return. He did whatever Shri Deepak Goel told him, that the full control of these companies was with Shri Deepak Goel. The order of fabrics were being brought by Shri Deepak Goel, the bills etc. was prepared by Shri Deepak Goel and he had been asked to sign the documents. The cotton fabric were supplied to M/s J.S. Designer Ltd. by these companies. He did not know regarding source of purchase of fabrics, that he has never seen purchase invoices, and the bank accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as and M/s Surat Clothing Empire. He further stated that he did not reveal this fact earlier as he was nervous and scared. These aforementioned firms/companies were created to divide the turnover and to save income tax. He came to know all these people associated with him in the course of trading. On being shown the invoices which were submitted by Shri Vikas Mohan Singhal and M/s J.S. Designer Ltd. along with cost sheet in respect of Shipping Bill No. 4119009, he admitted that he had issued the invoice(s) to M/s J.S. Designer Ltd. 23. In the course of further enquiry at supplier - M/s Manoj Kumar and Sons at Fatehpuri, Delhi-6, on 8 September, 2011, the premises were found locked from inside and the person(s) present escaped from the terrace door. Subsequently in his statement dated 12 September, 2011 Shri Deepak Goel appellant admitted that he was managing M/s Manoj Kumar and Sons and thereafter under Panchnama dated 7 October, 2011, premises of M/s Manoj Kumar and Sons was searched and documents were resumed under Panchnama. Shri Deepak Goel in his further statement dated 12 September, 2011 also stated that he had also been supplying fabrics to M/s Kamran Exports Pvt. Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve instructions to him about the rates to be charged from M/s J.S. Designer Ltd.; that the adjustment invoices were alike other invoices; he used to make payments to Shri Deepak Goel as per all the invoices raised by him from the companies owned by him (Shri Deepak Goel) or any other company from which he had arranged to supply fabrics. He was not aware if there were any such adjustment invoices, as they treated all the invoices in a similar manner. 28. The officers also sent representative samples collected from export consignments for technical evaluation and price assessment, to Textile Committee, Mumbai, which is a statutory body created by Government of India, wherein after examining they submitted its report on 24 August, 2011, giving the composition of the fabrics, type and the price per meter. From the report, it appeared to Revenue, M/s J.S. Designer Ltd. have highly inflated FOB value of the export consignments. 29. Accordingly, show cause notice dated 11.7.2012 was issued on the main noticee/exporter M/s J.S. Designer Ltd. and also its Directors and other persons including the present appellant, proposing to reject the FOB value in respect of several shipping bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depends upon on finishing, design and art work. Shri Chander Gauba, Director of M/s V S International Pvt. Ltd. was cross examined on 22.8.2017 wherein he stated that they have supplied polyester fabric and have received the sale proceeds. Shri Vimal Rathi, authorized signatory of M/s Vimal Fashions, in cross examination inter alia stated that the firm is engaged in trading in all types of fabrics since last twenty years. They have been supplying polyester fabrics for more than five years to M/s J.S. Designers Ltd. on verbal orders raising invoices and payments were received by cheque or letter of credit, and polyester fabric is generally costlier than cotton fabric. Shri Govind Das Chanok, Proprietor of M/s Maya Fashions was cross examined on 11.10.2017 wherein he inter alia stated that they have supplied cotton and other type of fabric to M/s J.S. Designer Ltd. and received the full payment through cheques. Further stated that Shri Honey Baruah was doing clerical work for them, have left in the year 2012-2013. Shri Pawan Kanodia, Director of M/s Niharika Fabrics India Pvt. Ltd. was cross-examined on 11.10.2017 inter alia stated that they have been supplying polyester fabrics to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of yarn, weight, quantity used per square meter, that these details were used by them and they had done market survey themselves and meeting people and collected the best available information for the report. They are independent professionals and did not have direct or indirect relation with M/s J.S. Designer Ltd. Shri B.S. Patil, Deputy Director, Textile Committee, Chennai was cross examined on 15.2.2018, inter alia stated that if laboratory can conduct various types of technical test such as composition of fabric, other parameter like warp, weft, GSM etc.; that there are no norms for the size of the sample and it all depends on parameters to be determined. As regards size of sample sent to the laboratory for testing, he stated that if any particular sample was insufficient in size, this fact would have been mentioned in their report; that at the request of the Customs Department they had given the average/approximate prices of the fabrics on the basis of survey in textile cluster, Surat. Some samples shown by the Advocate for M/s J.S. Designer Ltd. during cross examination and asked to recognize, Shri Patil stated that the samples were pasted on paper sheet bearing the name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abrics to M/s J.S. Designer Ltd. Thereafter the buyer is at liberty to do whatever he likes to do with the goods. Thus, the appellant is nowhere related to further use of the fabrics and alleged overvaluation for the purpose of export. The appellant have all along stated that the goods were actually delivered to the buyer and payments were received through banking channel. The department have failed to appreciate that the exporter M/s J.S. Designer Ltd. have done further work on the fabric (value addition), and as such it cannot be alleged that this appellant has facilitated the enhancement in value of the export goods as the appellant is not directly concerned in the export business of M/s J.S. Designer Ltd., and the details/intricacies of the same are not in the knowledge of this appellant, nor fabricated any documents for being presented before the Customs, hence the provisions of Section 114AA of the Customs Act are not attracted. This appellant is not aware of the export values of M/s J.S. Designer Ltd. nor have participated in preparation of overvaluation export invoices. This in absence of condition precedent as required under Section 114AA, the penalty imposed is fit to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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