TMI Blog2023 (3) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... e mala fide of the appellant is clearly established. This tribunal dealing with the similar fact maintained the penalty imposed on the Chartered Accountant for issue of Solvency/Export performance certificate in the case of MAHESH P. PATEL SUDESH D. NANAWARE VERSUS COMMISSIONER OF CUSTOMS (EP) , MUMBAI AND COMMISSIONER OF CUSTOMS (EP) , MUMBAI VERSUS SPECTRUM FABRICS [ 2018 (6) TMI 17 - CESTAT MUMBAI] where it was held that it can be seen that the appellant Shri Sudesh Nanaware, being a consultant, has admitted the pre-decided plan for committing the fraud. Therefore, he was rightly imposed the penalty under Section 112(a). The appellant has been rightly imposed with a penalty under Rule 26 of Central Excise Rules - there are no infirmity in the impugned order to the extent of penalty of Rs. 5 lacs was imposed upon appellant under Rule 26 - the penalty is upheld - appeal dismissed. - Excise Appeal No.11896 of 2013 - Final Order No. A/10711/2023 - Dated:- 24-3-2023 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. C.L. MAHAR, MEMBER (TECHNICAL) Shri R. Subramanya, Advocate for the Appellant Shri G. Kirupanandan, Assistant Commissioner (AR) for the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sides and perused the records. We find that the appellant have admittedly issued false performance certificate to fraudulent parties who, on the basis of the said certificates obtained the advance license and such advance licenses were used for evasion of huge excise duty on the clearance of goods clandestinely from the EOUs. Without the performance certificate, the fraudulent advance license could not have been issued and huge revenue loss could not have occurred to the government exchequer. Therefore, for the entire offence the appellant s role is key role. The appellant has also not verified any credentials of their so-called clients. It is also a fact on record that the appellant have categorically admitted in his statement that if he would have known that so huge revenue involvement is there, he could have charged heavy amount of fees as compared to Rs.1500 per certificate. With this statement, the mala fide of the appellant is clearly established. This tribunal dealing with the similar fact maintained the penalty imposed on the Chartered Accountant for issue of Solvency/Export performance certificate in the case of Mahesh P. Patel(supra) The relevant order is reproduced be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Spectrum Fabrics and not in the name of Shri Mahesh Patel and therefore, it is the company which is accountable. They have quoted various judgments to support the claim. I consider each one of them (a) In the case of M/s. Pactil Electronics Pvt. Ltd. v. Collector of Central Excise, Bombay-II cited in 1987 (28) E.L.T. 315 (Tribunal), it was held that for irregularities and illegalities committed by the Directors, the firm (which acts through its Directors) is liable for the omissions and commissions of the Directors, hence imposition of penalty on firm is justified. I find this matter has no relevance whatsoever to the subject case and more specifically in deciding the role of the Chartered Accountant Shri Mahesh Patel. (b) In the case of M/s. Kandla Clearing Agency Pvt. Ltd. v. Commissioner of Customs, Kandla cited in 2003 (158) E.L.T. 86 (Tri.-Del.), dated 17-9-2003, it was held that imposition of penalty on Customs House Agent is proper for filing documents knowingly on behalf of non-existent firm or using wrong name of client, while receiving payments from and making delivery to real importer. The quantum of penalty was however reduced because it was held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of 'no evidence' by the noticee doesn't survive. I also find that the rest of the cases are either not relevant to the subject case or deals with cases wherein there is penalty and confiscation ordered in cases of lack of evidence against the appellants. As discussed herein above, the ratio of these cases are not applicable since the subject case matter. (iv) After considering the charges in the Show Cause Notice and the evidences discussed hereinabove, I find that Shri Mahesh Patel, Chartered Accountant has issued false certificates which resulted in grant of advance licenses which would not have been otherwise issued and no duty free imports defrauding Government's revenue would have taken place but for such false certificates. The noticee, admittedly, having not verified any of the records could not take up a plea of not having played in role of fraud. I find that the subject matter is squarely covered by Hon'ble High Court of Bombay's order dated 1-2-2006 in the case of Shri Shyam Chaganlal Agarwal v. Commissioner of Customs (Import) cited in 2008 (226) E.L.T. 176 wherein it was held accordingly. I therefore, hold Shri Mahesh Patel liable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e detailed submissions made by the consultant on behalf of Shri Nanaware mentioned in the para 16 above of this order. The submissions have nowhere denied that Shri Nanaware was aware of the whole modus which was (as per his admission in the statement dated 20-9-2004) planned by Shri Nanaware and Shri Jatin Pancholi. To quote the portion of statement I (Nanaware) clarify that it was a pre-decided plan to make a duty theft, by way of making duty free import on the basis of advance licenses issued in the name of M/s. Tejal International and then to sell it in open market. It was also pre-decided that I will get issued Advance licenses in the name of M/s. Spectrum Fabrics, Surat and Shri Jatin Pancholi will import duty free yarns and/or fabrics on the basis of Advance licences issued in its name and then to make sale of it in the open market without payment of appropriate customs duties. (iii) Having admitted to a role in the whole fraud right from its inception stage and having never retracted these statements (facts), Shri Nanaware is trying to wash his hands off the whole act by stating now (after more than 3 years) that he was only looking after the consultant/liaisoning wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered by the Hon ble Bombay High Court in the case of SHYAM CHAGANLAL AGARWAL (supra) wherein, the Hon ble court has passed the following order :- Heard the learned Counsel for the parties. By this appeal, the Appellant is seeking to raise an issue with regard to Tribunal confirming the penalty imposed on the Appellant. The finding recorded by the CESTAT indicates that the Appellant who is a qualified Chartered Accountant, had issued false certificates. It is also clearly recorded by the Tribunal that based on the aforesaid false certificates issued by the Appellant (Chartered Accountant) advance licenses were granted for duty free imports of goods. The false certificates issued by the Appellant has resulted in grant of licenses which would not have been otherwise issued and no duty free imports defrauding the Government's revenue would have taken place, but for such false certificates. The Tribunal has also observed that the Appellant had deliberately issued false certificates, and that too different certificates for Income Tax and for DGFT/Customs, for the same period. Under those circumstances the Tribunal had refused to interfere with the order of the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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