Custom, Excise & Service Tax Tribunal
Mulraj D. Gala vs Commissioner Of Customs (Export) on 12 November, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II APPEAL No.C/85177/13 (Arising out of Order-in-Appeal No.627 (Adjudiction Export)/2012/Misc/(JNCH)/Exp-71 dated 06/11/2012 passed by Commissioner of Customs (Appeal), Nhava Sheva) For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy :Seen of the Order? 4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================
Mulraj D. Gala Appellant Vs. Commissioner of Customs (Export), Respondent Nhava Sheva Appearance: Shri.A.K. Prabhakar, Advocate for appellant Shri.SenthilNathan, Dy. Comm. (AR) for respondent CORAM: Honble Mr. Ramesh Nair, Member (Judicial) Date of Hearing : 12/11/2014 Date of Decision : 12/11/2014 ORDER NO Per: Ramesh Nair
1. The appeal is directed against Order-in-Appeal No.627 (Adjudication Export)/2012/Misc/(JNCH)/Exp-71 dated 06/11/2012 passed by Commissioner of Customs (Appeal), Nhava Sheva wherein the order-in-original No.196/2011-12 dated 29/02/2012 passed by the Joint Commissioner of Customs (Export), JNCH, Nhava Sheva was upheld.
2. The facts of the case is that M/s.Elit had imported Polyester kbnitted fabrics under DEEC scheme from Nhava Sheva Port. For issuance of the DEEC certificate from DGFT, the appellant issued a Chartered Accountant certificate. Those certificates were taken as evidence of the financial turn over for the purpose of issue of licence. M/s.Elit has contravened the licensing provisions by which huge amount of Customs duty was evaded. On the issuance of the false Chartered Accountant certificate by the appellant, the adjudicating authority has imposed a penalty of Rs.2.00 lakhs under Section 112 (a) of Customs Act, 1962. On appeal by the appellant before the Commissioner (Appeals) such penalty was maintained by the learned Commissioner (Appeals). Therefore, the appellant is before me.
3. Shri A.K.Prabhakar, learned Counsel for the appellant submits that the appellant Chartered Accountant has issued the certificate in regard to the turn over of the company for the year 1998-1999, 1999-2000 and 2000-2001 on the basis of his professional capacity, on the basis of documents of M/s.Elit produced by Shri Giresh Matalia. Therefore, the certificate was issued in good faith and professional capacity. Therefore, he should not have been implicated in the case of contravention of provisions of Customs Act by which the Customs duty evasion has taken place. He also submits that though the appellant has issued the certificate but he is not the party to fraud committed by M/s.Elit.
4. Shri Senthil Nathan, Additional Commissioner (AR) appearing of behalf of the Revenue reiterates the findings of the impugned order.
5. On careful consideration of submissions made by both the sides, I find that the fact is not under dispute that the appellant had issued the certificate which was proved to be false. As regards the submission of the learned Counsel that certificates were issued on the basis of documents produced by M/s.Elit, it has been admitted that the documents submitted by M/s.Elit was unsigned and not audited. As a Chartered Accountant he is of duty bound to issue any certificate only on the basis of audited books of accounts. From the records, it is a fact that the certificate was issued by the Chartered Accountant without having any audited balance sheet or books of accounts. It is clear from the fact that the appellant has intentionally and very consciously certified the export turn over during the period 1998-99, 1999-200 and 2000-2001. The lower adjudicating authority has recorded his findings in para 4.6 of the order-in-original which is reproduced below:
As regards Noticee No.5 (Shri M.D.Gala) I find that he has contended that he has done the certification in respect of M/s.Elit as a professional based on records produced before him by the client and that he issued the certificates in good faith. In this regard, from the case records, I find that Shri MD Gala, Chartered Accountant, at the instance of Shri Girish Matalia, issued a false certificate stating that M/s.Elit had exported goods valued (i) Rs.13.29 lakhs in the financial year 1998-99 (ii) Rs.24.84 lakhs in 1999-2000 and (iii) Rs.105.66 lakhs in 2000-2001 whereas actual exports made by M/s.Elit was Rs.106.66 lakhs only in the year 2001-2002 and there were no export prior to that. I find that he had neither checked relevant purchase documents nor export documents but blindly issued the certificate at the instance of Shri Girish Matalia for an undisclosed consideration. I find that by issuing the said false certificate he facilitated imports by M/s.Elit without need of bank guarantee and thus became a party to the fraud to cheat the Government revenue. Though he has claimed that he issued the certificates in his professional capacity, I find that before certifying the said export, it was his duty to verify the correctness of the documents placed before him. I find that Mahesh Pathek has stated in his statement that the said certificates were issued by Shri Gala even though no such exports were physically made by him in the name of M/s.Elit or any other firm. I also find that Shri Gala has himself admitted that proprietor Shri Mahesh Pathaks signature was not there on the documents when he audited the documents of M/s.Elit. Thus, I find that Shri Gala has indiscriminately issued the certificate regarding export of M/s.Elit without verifying supporting documents nor making sure that the documents purported shown to him were of M/s.Elit without verifying supporting documents nor making sure tht the documents purportedly shown to him were of M/s.Elit, M/s.Elit was able to obtain advance authorisations without furnishing the bank guarantee, under which the impugned goods were imported and subsequently diverted in local market. Thus, I find that Shri Mulraj Gala, by his acts of omission and commission, directly or indirectly aided an abetted M/s.Elit in contravening the provisions of the above referred notification which rendered the impugned goods liable to confiscation under Section 111 (o) of the Customs Act, 1962.I find that Shri Mulraj Gala is therefore, liable to penalty under Section 112 (a) of the Customs Act, 1962. 5.1 From the above findings, the offence committed by the appellant is clearly established and I do not find any infirmity in such findings and the Commissioner (Appeals) also correctly upheld the penalty imposed on the appellant. The appeal is therefore, dismissed.
(Dictated in Court) (Ramesh Nair) Member (Judicial) pj 1 5