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TMI Blog2022 (12) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... ropping the penalty on the respondent under Section 114 of the Customs Act, 1962 without examining the controversy in proper perspective and recorded perverse finding? (iii) Whether, the Hon'ble CESTAT was correct in holding that in view of Section 1(2) no penalty is to be levied under Section 114 of the Customs Act, 1962? 2. Heard Shri. M.B. Nargund, learned Additional Solicitor General for the Revenue and Shri. Phanindra, learned Senior Advocate for the Respondent. 3. Brief facts of the case are, a firm by name M/s. SLN Overseas Traders ('SLN' or 'exporter' for short), owned by one Suresh Prabhu, situated in Kundapur, Udupi, had exported 21 consignments of ladies garments during August 2007 and May 2009, through New Mangaluru Port to Dubai. According to the Revenue, the Garments were made of inferior quality fabric but, declared to be made of Corduroy/Denim/Viscose fabric to fraudulently avail duty free import credit. The exporter had falsely claimed fulfillment of export obligation against the corresponding DFIA Scrips obtained by making fraudulent exports. Based on the Intelligence, DRI (Directorate of Revenue Intelligence) conducted investigation and a show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. Respondent did not appear before the Customs Authorities. The ED (Enforcement Directorate.) investigated the issue of money laundering and a Red Alert notice has been issued against the respondent and hence, his statement could not be recorded; * the respondent is one of the main accused involved and has played a major role in the export fraud. He has been colluding with his counterparts and associates operating from India, causing damage to Indian economy; * respondent is an Indian National and holds an Indian Passport. He has indulged in illegal activities, both in India and abroad, in designing, planning and execution of illegal activities in India. The authority in C.K. Kunhammad Vs. CCE (1992) 62 ELT 146 relied upon by the CESTAT, is not applicable to the case on hand; * respondent did not respond to the summons and has been absconding; his statements could not be recorded. He is the henchman of Suresh Prabhu and has arranged for sending money illegally from Dubai to India under the cover of subject exports of M/s SLN by way of inward remittances from certain Dubai based parties who are neither consignees nor buyers for the subject export goods. The Respondent con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 108 of the Customs Act, 1962 reads as follows: "108. Power to summon persons to give evidence and produce documents- (1) xxx (2) xxx (3) All persons so summoned shall be bound to attend either in person or by an authorized agent as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject, respecting which they are examined or make statements and produce such documents and other things as may be required: Provided that the exemption under section 132 of the Code of Civil Procedure, 1908 (5 of 1908), shall be applicable to any requisition for attendance under this section. (4) xxx" 13. In Romesh Chandra Mehta Vs. State of West Bengal 1970 AIR 940., it is held that a Customs Officer under the Act is not a police officer within the meaning of Section 25 of the Evidence Act and the statements made before him by a person who is arrested or against whom an inquiry is made are not covered by Section 25 of the Indian Evidence Act. It is further held that a statement under Section 108 of the Act is not a statement made by a person accused of an offence, and the person who gives the statement does not stand in the character of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of foreign currency and imposition of penalty. There is no ground warrantaing reduction of fine." (Emphasis Supplied) 19. We have perused Suresh Prabhu's statement. He has admitted that the respondent was making full payment through the bank and asked him to pay specified amounts to specified individuals. It is also stated that the Respondent was not only recovering the excess payment but was also ensuring the transfer of money to his associates in India through non-banking channel. 20. Therefore, the statements made by Suresh Prabhu should be considered not as a confessional statement of a co-accused, but as an independent piece of evidence. It is thus evident from his statements that the respondent was involved in the offence. Hence the contention of Shri Phanindra that other independent evidence is required, is untenable and liable to be rejected. Re: Question No. 2: 21. The question involved is whether the Tribunal was justified in dropping the penalty. 22. Section 114 of the Customs Act, 1962 reads thus: Penalty for attempt to export goods improperly, etc.-Any person who, in relation to any goods, does or omits to do any act which act or omission would render such g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s similar to facts in the instant case: "19. The facts and the circumstances of the present case show that the appellant was a party to the conspiracy, pursuant to which customs duty was being evaded by clearing dutiable goods, without sending the parcels, containing those goods, to the Foreign Post Office for the purpose of examination and he also intentionally aided in evasion of duty. The evidence available on record in the form of statement of the appellant recorded under Section 108 of Customs Act, coupled with the statement of Kishori Lal is sufficient to prove the complicity of the appellant in evasion of customs duty." (Emphasis Supplied) 26. Feroz Khan in his statement dated October 01, 2009, given before the officers of DRI, has admitted that the respondent is also involved in sending money through SLN Account. 27. In para 9 of its OIO (OIO - Order-in-Original) No. 29/2014 the DRI has recorded thus: "9.3. From these, it is now established that M/s SLN Overseas Traders exported overvalued garments to Dubai for which remittance was received through Shri. Feroz Khan/ M/s East West Tourist Corporation. As admitted by both, Shri. Suresh Prabhu and Shri Feroz Khan, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be entered into outside the territorial jurisdiction of the Commission but if it results in a restrictive trade practice in India then the Commission will have jurisdiction under Section 37 to pass appropriate orders in respect of such restrictive trade practice." (Emphasis Supplied) 35. In Ajay Aggarwal Vs. Union of India (1993) 3 SCC 609, it is held as follows: "25. A conspiracy thus, is a continuing offence and continues to subsist and committed wherever one of the conspirators does an act or series of acts. So long as its performance continues, it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity. A crime is complete as soon as the agreement is made, but it is not a thing of the moment. It does not end with the making of the agreement. It will continue so long as there are two or more parties to it intending to carry into effect the design. Its continuance is a threat to the society against which it was aimed at and would be dealt with as soon as that jurisdiction can properly claim the power to do so. The conspiracy designed or agreed abroad will have the same effect as in India, when part of the acts, pursuant to the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, the owner, importer or exporter of the goods shall also be liable as if the thing had been done by himself. (3) When any person is expressly or impliedly authorised by the owner, importer or exporter of any goods to be his agent in respect of such goods for all or any of the purposes of this Act, such person shall, without prejudice to the liability of the owner, importer or exporter, be deemed to be the owner, importer or exporter of such goods for such purposes including liability therefore under this Act." 40. Records of this case disclose that respondent was functioning in India through his agent who used to collect money by showing a currency note of a specified number to Suresh Prabhu. Therefore, the provisions of Section 147 would apply in this case in full force. 41. Further, Halsbury's law of England III Ed., Vol 10, pg. 327, para 602. states that: "A criminal enterprise may consist of a continuing act which is done in more places than one or of a series of acts which are done in several places. In such cases, though there is one criminal enterprise, there may be several crimes; and a crime is committed in each place where a complete criminal act is performed, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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