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TMI Blog2009 (4) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... the values alleged shown in the documents presented at Dubai [of US $ 3 per dozen for shirts and US $ 0.5 per dozen for handkerchiefs] for effecting clearance of the said goods, as the ex port value for the purposes of DEPB benefit, (iii) confiscated the goods in question under Section 113(d) and 113(i) of the Customs Act, 1962 [hereinafter referred to as "the Act"], (iv) imposed, in lieu thereof, redemption fine of Rs. 37,50,000/- under Section 125 of the Act, and (v) imposed the following penalties under Section 114(i) of the Act: (a) Rs. 75 lakhs on Viswajyoti Impex, (b) Rs. 25 lakhs on Jyoti Agarwal, (c) Rs. 25 lakhs on Sanjay Agarwal and (d) Rs. 25 lakhs on Kamal Malkani. 2. All the parties affected by the above order, viz. Viswajyoti Impex, Jyoti Agarwal, Sanjay Agarwal and Kamal Malkani, are in appeal before us. Viswajyoti Impex, Jyoti Agarwal and Sanjay Agrawal were represented by Mr. C. Hari Shankar, Advocate, while Mr. Sujay Kantawala, Advocate, represented Shri Kamal Malkani. The Revenue was represented by Mr. B.K. Singh, learned Joint Chief Departmental Representative. All parties were heard at length. 3. Viswajyoti Impex is a proprietorship firm of Jyoti Agar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wajyoti Impex was, from the beginning, is maintaining all records, such as the RG 1 and Form IV register. Representative copies thereof were on record. (ii) At the time of allowing factory stuffing to Viswajyoti Impex, vide letter dated 27-1-90 addressed by the AC, Appraising Group VI to the AC, Range 05, Div. Chembur, Mumbai-II, a detailed mode of examination was prescribed, in the following terms: "VERIFY PARTICULARS AS PER INVOICE & PACKING LIST INSPECT CONTAINER NUMBER (AS DECLARED IN INVOICE). VERIFY CONTAINER IS EMPTY BEFORE STUFFING, INSPECT LOT, EXAMINE 10% AFTER SELECTION, CHECK DESCRIPTION, QUANTITY, WEIGHT, VALUE AND TECHNICAL CHARACTERISTICS OF EXPORT PRODUCT. VERIFY THE DESCRIPTION, QUANTITY, SPECIFICAL, TECHNICAL CHARACTERISTICS. VERIFY THE PARTICULARS AS PER INVOICE & PACKING LIST. INSPECT CONTAINER NUMBER (AS DECLARED IN INVOICE). VERIFY CONTAINER IS EMPTY BEFORE STUFFING. INSPECT LOT. EXAMINE AFFER SELECTION. CHECK DESCRIPTION, QUANTITY VALUE AND TECHNICAL CHARACTERISTICS OF EXPORT PRODUCT. VERIFY THE DESCRIPTION, QUANTITY, SPECIFICATION, TECHNICAL CHARACTERISTICS, ITEM NO. & FOR WARD TWO SETS OF SAMPLES DULY SEALED. CONTAINER SHOULD BE SEALED IN A MANNER SO THAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nking transactions revealed that the entire amount received by M/s. Vishwajyoti Impex has been credited thereafter to M/s. Ravraj Impex." Mr. Hari Shankar emphasizes that this allegation is entirely bald in nature, without any supportive evidence whatsoever. No document, supporting this allegation, is relied upon. The Commissioner, too, in the impugned order, merely confirms the allegation without any material to support the same. (x) On 6-7-99, the DGFT suspended the DEPB licences issued to Vishwajyoti Impex. The order of suspension reads thus: "The investigations conducted by our office and DRI revealed that M/s. Vishwajyoti Impex, Mumbai-71 has obtained DEPBs fraudulently on the basis of forged shipping bills and bank realization certificate. Hence, the following DEPBs issued to the above firm stand suspended with immediate effect till further orders." It is emphasized that though, as per this order, the DEPBs were suspended on the ground that the S/Bs and BRCs were forged, no such allegation has been levelled by the Department either in, the Show Cause Notice subsequently issued to the Vishwajyoti Impex or in the impugned Order of the Commissioner. This indicates that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions, Mr. Hari Shankar would request that the impugned Order of the Commissioner be quashed. 10. Mr. Sujay Kantawala, appearing for Kamal Malkani, submitted that his client was entirely innocent, and had merely submitted all import documents to his buyer in Dubai, who had presented the documents and secured release of the goods. He, however, emphasized, without prejudice, that, as his client was situated outside India, the Act was not applicable to him, and no proceedings/penalty could be imposed on him thereunder. Reliance was placed, for this proposition, on C.K. Kunhammed v. C.C.E., 1992 (62) E.L.T. 146. 11. Opposing the above submissions of Mr. Hari Shankar and Mr. Kantawala, Mr. B.K. Singh, learned SDR, would contend thus: (i) Viswajyoti Impex appears to be a fly-by-night entity. It applied for a Central Excise licence on 9-1-99, was issued a licence on 18-1-99, got permission for factory stuffing on 27-1-99, issued export invoices on 1-2-99 and, after the exports were effected, discontinued business and surrendered its Central Excise licence. (ii) There was no evidence to show that Kamal Malkani had sold the imported goods to his buyer. (iii) The allegation that Viswa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id the penalty therefor. There was, however, no evidence of such payment. (viii) Mohd Israel Khan, a truck driver, had also deposed that part of the goods in question had not been loaded at Chembur [where the factory was located] but in a "gulley" at Juhu, and taken to Chembur, where the balance quantity was loaded. At Chembur, it is stated that some representative of the party arrived with two other persons. These two other persons, Mr. Singh would submit, must have been the Central Excise officers Mr. Hari and Mr. Shaikh, so that they could not have examined the contents of the containers, which were already loaded at Juhu. (ix) The fact that payment was made on D/A basis, and not on L/C basis, was cited as indicative of the fact that there was misdeclaration of value. (x) The Central Excise officers, Mr. Hari and Mr. Shaikh, on being questioned under Section 108 of the Act, admitted not having examined the export goods properly, but having merely seen the documents and tallied the invoices therewith. Disciplinary action had been taken against them, so that the appellant's assertion that no action had been taken was not correct. (xi) No samples had been received by the Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs authorities. He further drew our attention to the ground plan showing the separate premises of Viswajyoti Impex, on the basis whereof Central Excise registration had been granted to them. Insofar as the decisions relied upon by Mr. Singh are concerned, he submitted that they were distinguishable, as there were, in each such decision, other corroborative material to support the findings against the party therein, whereas no such evidence exists in the present case. 13. We have anxiously considered the detailed submissions advanced by all parties. 14. We may notice, at the outset, that it is not disputed that (a) the goods in question had been exported to Dubai, and had been cleared at Dubai and that (b) full remittance has been received against such exports. The genuineness and veracity of the BRCs is not questioned at any point of time. 15. We also unhesitatingly reject the allegation of Hawala, which seems to have been raised almost in terrorem. Barring the bald allegation of the money received having been paid to Ravraj Impex for hawala, there is not an iota of material supportive thereof. There is no document supporting this allegation. Ravraj Impex is never referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch this Tribunal proceeded, in Annapurna Yarn Fabrics (supra), therefore, is not available to the Revenue in the present case. 18. India Watch Parts Mfg (supra) has no parallel whatsoever with the case at hand. That was a case of undervalued imports, and the Revenue was relying on export declarations filed at the port of export. This Tribunal had taken adverse notice, in the said case, of the fact that the same foreign supplier had submitted two documents showing different prices-an invoice showing a lower price and an export declaration showing a higher price. There was no explanation why one person was showing two values in two documents. The manufacturer's invoice, when called upon, could not be produced by the importer, as is required by the Customs (Valuation) Rules, 1988. There was no evidence of contemporaneous imports at similar prices. The importer, for his part, admitted having declared a lower value, but credited it to the goods being defective, for which, too, no evidence was produced by the importer. A cumulative appreciation of this material resulted in this Tribunal holding against the appellant in that case. It is plain that the above factors have no parallel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial, (g) neither did the appellant pray for cross-examination of the suppliers, (h) once it was found that the appellant had overinvoiced one item, it was legitimate to conclude that it had tasted blood and had, therefore, resorted to the said mod us operandi in its subsequent exports as well [for which reliance was placed on Annapurna Yarn Fabrics (supra)]. These factors, cumulatively seen, convinced this Tribunal to hold against the exporter in that case. Per corollary, their absence, in the present case, denudes the judgment in Sai Traders (supra) of all precedential value herein. 21. Olympia Overseas (supra) was, again, a case of overvaluation of DEPB exports. In that case, samples, drawn from the export goods, had been subjected to market enquiry, which clearly revealed that they were grossly overvalued. Chemical tests conducted on the said samples also supported this finding. This Tribunal, relying on Circular 77/2002-Cus dated 27-11-02 issued by the CBEC-which prescribes market enquiry of samples drawn from export consignments as a method to detect overvaluation of DEPB exports-held the case against the exporter to be conclusively proved. In the present case, in fact, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of recording that burning test was also conducted. The submission, of the Revenue, that the reports were made by Sanjay Agarwal, cannot, in our view, discredit them; firstly, for the reason that Mr. Agarwal has merely stated that they were typed on his computer and, secondly, because they bear the signatures of the Central Excise inspector and Superintendent. Mr. Singh would, nevertheless, exhort us not to accept the said reports, on the ground that the said officers had, in their statements recorded under Section 108 of the Act, admitted not having examined the said consignments properly. We are not prepared to countenance this submission, as, if it were true, the Show Cause Notice should, unhesitatingly, have included the said officers as noticees, and penalty should also have been imposed on them. On the other hand, we find that neither of the said officers is even made a noticee in the present case. If the Revenue's case were to be accepted at face value, it would imply that the Central Excise officers entered positively false details in the examination reports, by stating, therein, that samples had been drawn and sent to the Customs authorities. This would amount, not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een received by the Customs authorities. A holistic reading of the said statement, however, in our view, cannot support this submission. We may usefully reproduce the relevant extracts, from his statement, in this regard, thus: "... In reply I state that from the documents seen by me it is clear that samples were not seen by me. Procedurally, if samples were seen by me, there would have been endorsement of seeing the samples ... Since no such endorsement are appearing on the copies of S/Bills seen by me I say that representative samples stated to have been drawn by the Central Excise officers were not seen by me. In the case under reference I wish to clarify that in the export consignment where goods were stuffed in the factory premises of the exporters under the supervision of Central Excise officers, the simples were generally not seen by us before passing or assessing the S/B at that time ... I further wish to state that in respect of the above shipment of handkerchiefs and ready-made shirts of M/s. Viswajyoti Impex, my the then Assistant Commissioner Sri Kapadwanjwala also did not consider it necessary to inspect the sample before passing of the S/Bills... Since there is no en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether Gopiram was related to him or not. It may be that these depositions reflect an uncooperative attitude on the part of Sanjay Agarwal; on the other hand, it may also be that he actually did not remember the details sought. We cannot, obviously, enter any definite finding in this regard. We note, however, that there is no suggestion coupled with confrontation with any evidence whatsoever, by the Revenue, to Mr. Agarwal, in his statement, that what he has said is false. The professed inability, of Mr. Agarwal to remember the details of G.B. Traders, cannot go to buttress the case of the Revenue to any great extent. Neither can the fact that payment has not been made to G.B. Traders do so. It may quite possibly be that, as the proprietor of G.B. Traders has since expired, Viswajyoti Impex has decided not to make the payment. In any case, this would essentially be an issue between Viswajyoti Impex and G.B. Traders. 29. Mr. Singh has also laid considerable emphasis on the processes stated to have been carried out by Viswajyoti Impex, which are merely, in his submission, cosmetic changes of the nature of thread cutting, ironing, etc. Barring the statement of Sanjay Agarwal, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, even prima facie, any resemblance. There is nothing, barring the said signature to link the said invoices to Viswajyoti Impex. There is, significantly, nothing whatsoever to indicate that either Viswajyoti Impex or Sanjay Agarwal was aware of, or privy to, the alleged second set of invoices. Even the statements of Kamal Malkani do not show his awareness regarding this second set of invoices, and therefore the possibility of his buyer in Dubai fabricating the second set of invoice for saving Customs duty in Dubai cannot be ruled out. We are, in the circumstances, not willing to accept the said invoices as a conclusive proof of overvaluation of the goods in question, especially in the face of receipt of full remittance and absence of any proof of Hawala. 33. Insofar as the relationship between jyoti Agarwal and Kamal Malkani, of sister and brother, is concerned, in the absence of any influence, on the price of the goods, of such relationship, nothing can turn thereon, as stands settled by the judgment in Clariant (supra), on which Mr. Harishankar rightly relies. 34. In conclusion, we must remind ourselves, in this regard, that such cases have to be decide by applying the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; Sd/- (M.V. Ravindran) Member (Judicial) 38. [Order per : K.K. Agarwal, Member (T)].- I have perused the order proposed by my learned brother. Since I am not in agreement with the same, I am recording a separate order. 39. I must state that the facts have been clearly brought out by my ld. Brother as well as the rival contentions from both sides. As rightly stated by my ld. Brother, there is no dispute that the goods in question had been exported to Dubai and had been cleared at Dubai and that full remittance appears to have been received as per bank realization certificate produced by the appellants. The only dispute is regarding valuation which according to revenue was highly over-invoiced which fact is borne out from the invoice submitted by the importer at Dubai to the Customs. 40. I am first looking into the case presented by the appellants in their defence. Their defence is built up on only two set of facts. First that the goods were examined by customs and central excise officers after carrying out a detail test and verification a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Select Impex cited supra holding that the statement of the officers who were subject matter of vigilance enquiry were rightly rejected. In the present case, no evidence has been brought to show that these officers were under vigilance enquiry. On the other hand, the appellants have taken a stand that no action was initiated against the officers and therefore they cannot be considered as having aided and abetted them as otherwise, they would have been made a noticee in the show cause notice. I must state that even if it is presumed that vigilance enquiry has been initiated against officers for gross negligence, they would in their cross-examination make every attempt to deny the statement recorded by the departmental officers and would maintain that they properly examined the goods as contended by the appellants as that would absolve the officers from the charges levelled against them. Therefore, it can be safely concluded that they were not cross-examined as it would have exposed the fraud played by the appellant. 41. A great hue and cry has been made about not making the officers the noticee in the show cause notice for aiding and abetting the appellants. I do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x copy is not the correct method unless fresh signatures are obtained. Though the ld. Advocate for the appellant has submitted that the bare perusal of Shri S. Agarwal's signature on the export invoices and the invoices received from Dubai customs will itself show that the two signatures are totally different and will not require a handwriting expert's opinion as the court can draw its own conclusion by visual comparison. In this regard I may state that Shri S. Agarwal's signature as proprietor/authorized signatory on the proforma invoices submitted by them at pages 93 to 95 of the paper book and those on the invoices submitted to Dubai customs at pages 154, 156 and 158 resemble each other. In any case, I would not venture to comment on the handwriting which is the field of handwriting expert. All I say is that the admitted fact is that invoice was submitted for GB Traders to Dubai customs. The plea of GB Traders that they have given all the documents to their buyer to whom the goods have been sold, who might have submitted the second invoice is not acceptable as documents were filed in the name of GB Traders and were cleared under his name and therefore all the documents submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the power for which they were fined but no proof of such fine has been submitted. The fact that they were indulging in power theft shows the character/conduct of the appellants. (iv) The appellants purchased unfinished shirts and handkerchiefs from one GB Traders but they failed to give the address of the supplier GB Traders. GB Traders was stated to be a proprietary firm of one Gopiram, who is said to have expired in April 1999. As appellants own say, no payment could be made to GB Traders as he expired in April. Though the raw material register shows that unfinished sleeve shirts were purchased and handkerchiefs were purchased vide purchase order no. 48 dated 9-1-99 and purchase document no. 47 dated 9-1-99, the appellants could not produce the purchase documents which has been mentioned by them in their own Form IV register. (v) Though GB Traders have carried on the job work at the appellant's premises the appellant could not state the job charges agreed upon nor could provide the payment details of it. (vi) The appellants failed to indicate the number of workers employed by them and the names thereof. (vii) Though the shirts and handkerchiefs are said to be designer shirt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation in a live consignment does not ipso facto mean that the earlier consignment must have also been over-valued. But looking in the totality of the circumstances, the Tribunal held them to be over-valued. The facts of the present case may not be identical but looking in the totality of the circumstances and preponderance of evidence, the charge of over-valuation has to be upheld and I accordingly uphold the findings of the Commissioner including that on extent of over-valuation and limiting the DEEP benefits to the value declared to Dubai customs. 48. As regards imposition of redemption fine of Rs. 37,50,000/-, I hold that since the goods were never available for confiscation nor seized, the redemption fine cannot be imposed as has been held by the Punjab & Haryana High Court in the case of Raja Impex, 2008 (229) E.L.T. 185 (P&H). 49. As regards penalty imposed on Viswajyoti amounting to Rs. 75 lakh, I find the same as excessive and reduce it to Rs. 25 lakh. Since Viswajyoti Impex is a proprietary concern of Smt. Jyoti Agarwal, no separate penalty can be imposed on her, the same is set aside. 50. As regards penalty imposed on S. Agarwal, authorized signatory the same is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sd/- M.V. Ravindran (K.K. Agarwal) Member (Judicial)&nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egation and the order stands passed by said Member against the appellant, on the basis of assumptions and presumptions. He submits, that the proceedings under the Customs Act are quasi criminal proceedings, the standard of proofs required to be produced by the Revenue, needs to be on the higher side and the matter cannot be decided on the preponderance of probabilities. He submitted that learned Member (Judicial) has taken into consideration the entire evidence on record and has discussed the same in detail examining each and every evidence produced by the Revenue. 56. I find that learned Member (Technical) has disagreed with the learned Member (Judicial) by referring to two set of facts. As regards the appellant's submission that the goods were examined by the Customs and Central Excise officers, who prepared the examination report without indicating anything to the contrary, learned Member (Technical) has observed that, as per the statements given by the two officers, the examination was actually not conducted and only reports were signed by them. The fact of non-cross-examination of the said two officers by the appellants stands interpreted by the learned Member (Technical) as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a third party who had filed the import documents with the Customs authorities at Dubai and they are not in a position to explain the filing of such lower value invoices by the buyer. It may be a case where buyers at Dubai has sought to file the fabricated lesser value documents so as to evade duties arid avail the benefit from Dubai Customs. 58. I find that apart from the above evidence, all the other evidences on records, which are in the nature of examination report by the officers and receipt of full remittance by the appellant are tilting the weight of evidence in favour of the appellants. Learned JCDR fairly admitted that the evidence available on record does not prove Revenue's case beyond reasonable doubts but submits that the same can be decided on the basis of preponderance of probabilities. Though, it is true that there is no gulf fixed between balance of probability and proof beyond the reasonable doubt but, yet the measure of probability is still involved in the question to prove beyond reasonable doubt. It is well settled law in the case of quasi criminal cases that the burden rests upon the prosecution to prove that the accused is guilty beyond reasonable doubts. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he balance of probability is more readily tilted against the Revenue. 60. In view of the above discussion, I agree with the learned Member (Judicial) that all the appeals are required to be allowed. The file is sent back to the original Bench to record the final order. Sd/- &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Sd/- Ashok Jindal & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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