Punjab-Haryana High Court
M/S Contessa Commercial Co. (P) Ltd vs Commissioner Of Customs on 8 September, 2014
Author: Ajay Kumar Mittal
Bench: Ajay Kumar Mittal, Fateh Deep Singh
CUSAP No.28 of 2013 (O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CUSAP No.28 of 2013 (O&M)
Date of decision: 08.9.2014
M/s Contessa Commercial Co. (P) Limited
......Appellant
Vs.
Commissioner of Customs (Preventive) Customs House, Central
Revenue Building, the Mall, Amritsar.
.....Respondent
CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
HON'BLE MR. JUSTICE FATEH DEEP SINGH
Present: Mr. Rajeev Anand, Advocate for the appellant.
Ajay Kumar Mittal,J.
1. This order shall dispose of CUSAP Nos.28 to 34 of 2013 as according to the learned counsel for the appellant, the facts and the issue involved in all these appeals are similar. However, the facts are being extracted from CUSAP No.28 of 2013.
2. CUSAP No.28 of 2013 has been preferred by the assessee appellant under Section 130 of the Customs Act, 1962 (in short, "the Act") against the order dated 25.6.2013, Annexure P.1 passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi (in short, "the Tribunal"), show cause notice dated 29.3.2004, Annexure P.2 and the order dated 6.1.2006, Annexure P.3 passed by the adjudicating authority.
3. A few facts relevant for the decision of the controversy involved as narrated in CUSAP No.28 of 2013 may be noticed. Acting on a specific information that the firms/companies namely M/s Contessa GURBAX SINGH 2014.10.30 10:02 I attest to the accuracy and integrity of this document High Court Chandigarh CUSAP No.28 of 2013 (O&M) 2 Commercial Co. (P) Limited, M/s ASK Exports, M/s SRM (P) Limited, 113, Park Street, Kolkata and M/s Varun Enterprises, D.N.Singh Road, Bhagalpur were indulging in fraudulent claims of duty drawbacks, Directorate of Revenue Intelligence, Amritsar (DRI) initiated investigation into the exports by above mentioned four companies which took place through CFS (OWPL) Ludhiana. During investigation, it was revealed that the above firms had exported the goods declaring them as gear cutting tools of cobalt bearing high speed steel, heat resistant rubber tension tape and gaskets, under drawback incentive scheme and had received/claimed drawback. On chemical testing of the goods declared as gear cutting tools of cobalt, the same was found to be made of low carbon steel as per IS226 i.e. mild steel and were without cobalt. It was found that all the four exporters had made export of inferior quality of goods and aggregate value thereof was depicted. Show cause notices were issued to the above firms relating to drawback already paid proposing recovery thereof and to deny drawback of the amount pending sanction. Preliminary investigation revealed that one Shri Vinod Garg and Shri N.D.Garg were master minded persons to defraud customs authorities making mis-declaration of description of goods in the shipping bills acting on behalf of four exporting firms procuring inferior goods from non existent firms to enable the exporters to claim higher draw back. Replies to the notices were filed. The appellant relied on the test reports. The investigating authority found that the following persons namely, S/Shri Vinod Kumar Garg, N.D.Garg, Sanjeev Kumar, Shambu Kumar, Vineet Kumar Saggar and Manjit Singh intimately connected with each other alongwith Shri Raj Kumar Kishorepuria, Anil Kumar Kishorepuria and Sunil Kumar Kishorepuria had defrauded Customs GURBAX SINGH 2014.10.30 10:02 I attest to the accuracy and integrity of this document High Court Chandigarh CUSAP No.28 of 2013 (O&M) 3 making fraudulent claim of drawback through misdeclaration of description of goods.Vide order dated 6.1.2006, Annexure P.3, the Commissioner ordered confiscating the exported goods and demanding the refund of the drawback alongwith interest, disallowing the pending drawback on GCT and HRTT and imposing penalties. The said order was challenged through appeals before the Tribunal. The custom authorities also filed three appeals. When the appeals came up for hearing on 17.8.2006, the interim relief was granted to the appellants in respect of the waiving of the pre deposits and staying the recovery till the disposal of the appeals. Vide order dated 14.1.2013, the appeals were finally heard and the impugned order dated 25.6.2013, Annexure P.1 was passed dismissing the appeals filed by the appellants. In respect of appeals of revenue on the issue of export of gaskets, the matter was remanded to the adjudicating authority for re- adjudication. Hence the instant appeals by the appellants.
4. We have heard learned counsel for the appellants and perused the record.
5. Learned counsel for the appellant submitted that the findings recorded are perverse and infact no inferior quality material had been exported.
6. The adjudicating authority on appreciation of evidence and analysing various reports and documents had concluded that the appellants had fraudulently claimed Duty Drawback/DEPB credit by way of exporting mis-declared goods through CFS (OWPL) Ludhiana. The appellants had exported the goods declaring them as Gear Cutting Tools of Cobalt bearing High Speed Steel, Heat Resistant Rubber Tension Tape and Gaskets under Drawback incentive schemes and had received/claimed drawback. It was GURBAX SINGH 2014.10.30 10:02 I attest to the accuracy and integrity of this document High Court Chandigarh CUSAP No.28 of 2013 (O&M) 4 concluded that the charges levelled in the show cause notice stood established against the appellants and order as referred in para 98 of the adjudication order dated 6.1.2006 was passed.
7. The Tribunal after examining the entire evidence and material on record upholding the claim of the revenue and also penalties imposed by the adjudicating authority affirmed the findings of the adjudicating authority relating to mis-declaration of the goods and wrongful claim of Duty Drawback/DEPB credit and concluded as under:-
"14.2 In the present case, the appellants in Table 1 and Table 5 resorted to fraud consciously by their ill design as was found by investigation and adjudicating authority. Their conscious knowledge of mis-declaration as to description of the goods as well as value of the export made from India was proved when they had intention to make ill gain from undue claim of DEPB. Motive of all these appellants was oblique to promote illegality. 14.3 Investigation discovering truth by extensive enquiry brought out neatly the intimate connection of the racket and their conscious involvement to benefit each other. The appellants in Table 5 were so keenly involved with Kishorepuria group that they became abettor causing serious prejudice to the customs which cannot be denied. Having echoing evidence on record by investigation, establishing live link and close proximity of the above appellants inference drawn by the adjudicating authority cannot be disturbed against them since presumption of innocence was countered by customs by the presumption of guilt which could not be assailed by the appellants.
Xx xx xx xx xx xx xx xx 14.7.Escapement of mis-declared goods resulting in fraud against Customs (Revenue), proved from governing facts, attendant circumstances and conduct of the parties using GURBAX SINGH 2014.10.30 10:02 I attest to the accuracy and integrity of this document High Court Chandigarh CUSAP No.28 of 2013 (O&M) 5 fraudulent documents for export, cannot be brushed aside accepting the plea that Customs failed to check the goods exported nor the same tested at the time of export. If such plea is entertained, the economy will be in jeopardy and fraud against the State shall perpetuate. Secrecy and stealth being covering guards of ill designed act, it is normally hardship for revenue to unravel every link of the process. Revenue successfully corroborated mala fide of appellants when material facts and evidence relating to their HI design remained in their special or peculiar knowledge.
Xx xx xx xx xx xx xx xx 14.11.In a leading English case i.e. Derry and others v. Peek (1886-90) All ER 1 what constitutes 'fraud' was described thus (All ER p.22 B-C) fraud is proved when it is shown that a false representation has been made (i) knowingly or (ii) without belief in its truth or (Hi) recklessly, careless whether it be true or false.This aspect of the matter has been considered by Apex Court in Roshan Deen vs. Preeti Lal (2002) 1 SCC 100, Ram Preeti Yadav vs. UP Board of High School and Intermediate Education 2003(8) SCC 311, Ram Chandra Singh's case (supra) and Ashok Leyland Limited vs. State of TN and another, 2004 (3) SCC 1. Suppression of a material document would also amount to a fraud on the court (see Gowrishankar vs. Joshi Amha Shankar Family Trust, (1996) 3 SCC 310 and S.P.Chengalvaraya Naidu's case AIR 1994 SC 853. No judgment of a court can be allowed to stand if it has been obtained by fraud. Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity.
15. Mis-declaration of descriptions and value was proved.
So also undue claim of DEPB proved from the aforesaid discussions for which appeals of appellants in Sr.no.1 to 7 in Table 1 and appellants in serial No.1 to 6 of Table 5 are dismissed."
GURBAX SINGH2014.10.30 10:02 I attest to the accuracy and integrity of this document High Court Chandigarh CUSAP No.28 of 2013 (O&M) 6
8. The view taken by the Tribunal is a plausible view which has not been shown to be illegal or perverse in any manner. Consequently, the appeals being devoid of any merit stand dismissed.
(Ajay Kumar Mittal)
Judge
September 08, 2014 (Fateh Deep Singh)
'gs' Judge
GURBAX SINGH
2014.10.30 10:02
I attest to the accuracy and
integrity of this document
High Court Chandigarh