Custom, Excise & Service Tax Tribunal
Ms.Preeti Daga vs Cc, New Delhi on 15 March, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066. BENCH-DB Appeals arsing out of Order-in-Original No.105/2005 dated 30.11.2005 passed by the Commissioner of Customs, ICD, New DELHI Customs Appeal No.121 of 2006 1. Ms.Preeti Daga Appellant Vs. CC, New Delhi Respondent
Present for the Appellant: Shri Hemant Bajaj, Advocate Present for the Respondent: Shri Vijai Kumar & Sh.Sunil kumar, SDRs Customs Appeal No.122 of 2006
2. Shri Dilip F.Mehta Appellant Vs. CC, New Delhi Respondent Present for the Appellant: Shri Hemant Bajaj, Advocate Present for the Respondent: Shri Vijai Kumar & Sh.Sunil kumar, SDRs Customs Appeal No.141 of 2006
3. Shri Ashok Pathak Appellant Vs. CC, New Delhi Respondent Present for the Appellant: Shri Anand Nadan, Advocate Present for the Respondent: Shri Vijai Kumar & Sh.Sunil kumar, SDRs Customs Appeal No.149 of 2006
4. Shri Anil Goel Appellant Vs. CC, New Delhi Respondent Present for the Appellant: Shri Pradeep Jain, Advocate Present for the Respondent: Shri Vijai Kumar & Sh.Sunil kumar, SDRs Customs Appeal No.150 of 2006
5. Shri Arun Gupta Appellant Vs. CC, New Delhi Respondent Present for the Appellant: Shri Pradeep Jain, Advocate Present for the Respondent: hri Vijai Kumar & Sh.Sunil kumar, SDRs Customs Appeal No.151 of 2006
6. Shri Basudev Garg Appellant Vs. CC, New Delhi Respondent Present for the Appellant: Shri Prabhat Kumar, Advocate Present for the Respondent:Shri Vijai Kumar & Sh.Sunil kumar, SDRs Customs Appeal No.164 of 2006
7. Shri Suresh Pal Gupta Appellant Vs. CC, New Delhi Respondent Present for the Appellant: Shri Pradeep Jain, Advocate Present for the Respondent: Shri Vijai Kumar & Sh.Sunil kumar, SDRs Appeals arising out of Order-in-Original No.100/2005 dated 28.11.2005 passed by the Commissioner of Customs, ICD, New Delhi Customs Appeal Nos.123 of 2006
1. Ms.Preeti Daga Appellant Vs. CC, New Delhi Respondent Present for the Appellant: Shri Hemant Bajaj, Advocate Present for the Respondent: Shri Vijai Kumar & Sh.Sunil kumar, SDRs Customs Appeal No.124 of 2006
2. Shri Dillip F.Mehta Appellant Vs. CC, New Delhi Respondent Present for the Appellant: Shri Hemant Bajaj, Advocate Present for the Respondent: Shri Vijai Kumar & Sh.Sunil kumar, SDRs Customs Appeal Nos.152 of 2006
3. Shri Anil Goel Appellant Vs. CC, New Delhi Respondent Present for the Appellant: Shri Pradeep Jain, Advocate Present for the Respondent: Shri Vijai Kumar & Sh.Sunil kumar, SDRs Customs Appeal Nos.163 of 2006
4. Shri Suersh Pal Gupta Appellant Vs. CC, New Dehli Respondent Present for the Appellant:Shri Pradeep Jain, Advocate Present for the Respondent: Shri Vijai Kumar & Sh.Sunil kumar, SDRs Date of Hearing: 17.09.2009 Date of Decision: 15.03.2010 Coram:
Honble Dr.Chittaranjan Satapathy, Technical Member Honble Mr. D. N. Panda, Judicial Member ORDER NO._______________ /2010 PER: D. N. PANDA
1. Two batches of appeals were made against two adjudications done in respect of different imports of ball bearings involving following appellants who came before Tribunal facing consequences of adjudication as depicted in the table below. Both sets of appeals are dealt by this common order in view of similar cause of action and common investigation resulting in similar consequences. Both sides could not inform whether other persons/concerns against whom adjudication was also done by the following order were whether in appeal accordingly this order is confined to the appellants as appearing in the table below:
Consequence arose under O-I-O No. 105/2005 dated: 30.11.2005 against allegations in SCN No. 338/XIV/96/2003 Dt. 30.04.2004 Consequence arose under O-I-O No. 100/2005 dated: 28.11.2005 against allegations in SCN No. 338/XIV/96/2003 Dt. 22.11.2004 Sl.No Appellants Batch of Customs Appeal No. Consequence of Adjudication Batch of Customs Appeal No. Consequence of Adjudication 1 Preeti Daga 121/2006 Penalty of Rs.1.00 lakhs u/s 112(a) 123/2006 Penalty of Rs. 50,000 u/s 112(a) 2 Shri Dillip F. Meheta 122/2006 Penalty of Rs.3.00 lakhs u/s 112(a) 124/2006 Penalty of Rs. 3.00 lakhs u/s 112(a) 3 Shri Ashok Pathak 141/2006 Penalty of Rs.2.00 lakhs u/s 112(a) -- --
4 Shri Anil Goel 149/2006 5,81,813 Pieces of bearings valued at Rs.10,43,765/-were confiscated u/s 111(d),(f),(l)and (m) and Customs Duty of Rs.5,30,233/- u/s 28 became recoverable. Fine of Rs. 4.00 lakshs in lieu of confiscation and Penalty of Rs. 30.00 lakhs u/s 112(a) 152/2006 Penalty of Rs. 20.00 lakhs u/s 112(a) 5 Shri Arun Gupta 150/2006 Penalty of Rs.4.00 lakhs u/s 112(a) -- -- 6 Shri Basudev Garg 151/2006 Penalty of Rs. 4.00 lakhs u/s 112(a) -- -- 7 Shri Suresh Pal Gupta 164/2006 Penalty of Rs. 10.00 lakhs u/s 112(a) 163/2006 Penalty of Rs. 10.00 lakhs u/s 112(a) -- OTHER CONSEQUENCES OF ADJUDICATION ORDER NO. 105/2005
2. Order of adjudication No. 105/2005 dated 30.11.2005 also gave to rise to other consequences as under in addition to the consequences aforesaid faced by the respective appellants:
(1). Customs duty amounting to Rs. 8,52,377/- (Rupees Eight Lakhs Fifty Two Thousands Three Hundred Seventy Seven only) in respect to B/E No.157960 dated 01.05.2003 was recoverable from M/s. Maya Trading Co. and Shri Ram Kishan Tiwari, the Proprietor of M/s.Maya Trading Co., under Section 28 of the Customs Act, 1962 read with proviso to the Section 28(1) of the Customs Act, 1962.
(2). Confiscation of 6,96,600 pcs. Of bearings imported in terms of Bill of Entry No.157960 dated 01.05.2003 under Section 111(d) & (m) of the Customs Act, 1962 was made. As the goods were not available for confiscation, fine of Rs.5 lakhs was imposed in lieu of confiscation on Shri Ram Kishan Tiwari, the Proprietor of M/s. Maya Trading Co.
(3). Anti dumping duty amounting to Rs.1,34,80,020/- (Rupees One Crore Thirty Four Lakhs Eighty Thousand and Twenty only) in respect of B/E No.361632 dated 19.6.2003 was recoverable from M/s.Maya Trading Co. and Shri Ram Kishan Tiwari, the Proprietor of M/s.Maya Trading Co., under Section 28 of the Customs Act, 1962 read with proviso to the Section 28(1) of the Customs Act, 1962 and further read with Clause 8 of Sub Section 9 of Section 9A of the Customs Tariff Act, 1975.
(4). Confiscation of 6,00,000 pcs. Of bearings imported vide Bill of Entry No.361632 dated 19.6.2003 under Section 111(d) & (m) of the Customs Act, 1962 was made. As the goods were not available for confiscation, fine of Rs. Four lakhs was imposed in lieu of confiscation on Shri Ram Kishan Tiwari, the Proprietor of M/s.Maya Trading Co.
(5). Customs duty amounting to Rs.11,58,724/- (Rupees Eleven Lakhs Fifty Eight Thousand Seven Hundred Twenty Four only) in respect of B/E No.158099 dated 23.5.2003 was recoverable from M/s.Devsons and Shri Raju, the Proprietor of M/s.Devsons under Section 28 of the Customs Act, 1962 read with proviso to the Section 28(1) of the Customs Act, 1962.
(6). Confiscation of 5,90,940 pcs. of bearings imported vide Bill of Entry under Section 111(d) & (m) of the Customs Act, 1962 was made. As the goods were not available for confiscation, a fine of Rs. Four lakhs was imposed in lieu of confiscation on Shri Shri Raju, the Proprietor of M/s. Devsons.
(7). Customs duty amounting to Rs. 11,13,723/- (Rupees Eleven Lakhs Thirteen Thousand Seven Hundred Twenty Three only) and anti dumping duty to Rs.84,60,948/- was levied in respect of B/E No.158324 dated 2.7.2003 and were recoverable from M/s.Devsons and Shri Raju, the Proprietor of M/s.Devsons under Section 28 of the Customs Act, 1962 read with proviso to the Section 28(1) of the Customs Act, 1962.
(8). Confiscation of 3,78,520 pieces. of bearings imported vide Bill of Entry No.158324 dated 2.7.2003 under Section 111(d) & (m) of the Customs Act, 1962 was made. As the goods were not available for confiscation, fine of Rs.2.5 lakhs was imposed in lieu of confiscation on Shri Shri Raju, the Proprietor of M/s. Devsons.
(9). Personal penalty of Rs. Ten Lakh was imposed on Shri Mukesh Kumar Gupta under section 112(a) of the Customs Act, 1962.
(10). Personal penalty of Rs. Four Lakh was imposed on Shri Gagan Thapar under section 112(a) of the Customs Act, 1962.
(11). Personal penalty of Rs. Two Lakh was imposed on Shri Gautam Chatterjee under section 112(a) of the Customs Act, 1962.
(12). Personal penalty of Rs. Twenty Lakh was imposed on Shri Ram Kishan Tiwari, the Proprietor of M/s.Maya Trading Co. under section 112(a) of the Customs Act, 1962.
(13). Personal penalty of Rs. Twenty Lakh was imposed on Shri Raju, the Proprietor under section 112(a) of the Customs Act, 1962.
3. Appeal of Sri Gagan Thappar registered as appeal case No. CA No. 177/2006 arising out of Order of Adjudication No. 105/2005 dated 30.11.2005 was dismissed on the date of hearing on 17.09.2009 for non persuasion. Similarly appeal of Gautam Chatterjee registered as Appeal Case No. 140/2006 arising out of that order of adjudication was also dismissed on 17.09.2009 as infructuous as he was deceased as stated by the learned counsel Sri Anand Nandan.
OTHER CONSEQUENCES OF ADJUDICATION ORDER NO. 100/2005 dated 28.11.2005
4. Order of adjudication No. 100/2005 dated 28.11.2005 also gave to rise to other consequences as under in addition to the consequences aforesaid faced by the respective appellants :
(1). Anti dumping duty of Rs. 91,91,943/- was recoverable from M/s.Aman Traders and Shri Surya Narayan Mishra, the proprietor of M/s.Aman Traders under Section 28 of the Customs Act, 1962.
(2). Confiscation of seized 4,189,20 pcs of ball bearings of KG brand imported vide B/E No.367208 dated 17.10.2003 and the wooden pallets, cardboard boxes, cartons & inner packages used to pack the aforesaid 418920 pieces of bearings under Section 111(d) and (m) of the Customs Act,1962 was ordered with an option to the importer i.e.M/s.Aman Traders to redeem the goods on payment of redemption fine of Rs.20,00,000/- (Rs.Twenty Lakhs only) i.e. after payment of Anti-Dumping duty.
(3). Penalty of Rs.91,91,943/- was imposed on Shri Surya Narayan Mishra, the proprietor of M/s.Aman Traders, under Section 114A of the Customs Act, 1962. As he is the sole proprietor of M/s.Aman Traders, I do not impose any separate penalty on M/s.Aman Traders.
(4). Personal penalty of Rs.3,00,000/- was imposed on Shri Gagan Thapar under Section 112(a) of the Customs Act, 1962.
BACK GROUND OF ORDER OF ADJUDICATION NO. 100/2005 Dt.28.11.2005
5. When one container bearing number BLJU 2201574 remained un-cleared at ICD, Patpargang for several days, enquiry was conducted by Investigating Authorities to ascertain reason thereof. They commenced investigation on 23.10.2003. On 24.10.2003 in the presence of two independent witnesses and one Shri Gautam Chatterji (who was the appellant in Appeal case No.140/06 and died by the time the appeal reached for hearing and was connected with clearance of the impugned goods through Bill of Entry No. 367208 dated 17.10.2003 presented by the CHA M/s Uniyal Cargo Movers Pvt Ltd, Delhi) the container was examined and found to have contained 600 cartons of bearing with the marking: AUREA INDUSTRIES (PVT.) LTD., 574, WERALATUDUWA ROAD, OFF NEGOMBO ROAD SRI LANKA, TELEPHONE 941-9344257. Those were noticed to be of Chinese origin, while country of origin was declared to be United Arab Emirates (UAE), imported by one M/s Aman Traders of 26/116, Gali No. 10, Siddhharth Gali, Viswas Nagar, Shahdara, Delhi -32 against IEC No. 0503045136. The container was therefore detained for further examination. Authorities noticed that forged/fabricated documents were used to evade Anti Dumping duty payable on these goods imported in that container. However none of the cartons had markings or any indication to show the nature of goods inside the carton or name of the manufacturer or country of origin of the goods inside therein. Examination by investigation resulted with inventory of 4,18,920 pcs. of ball bearings, of KG Brand with various part numbers as detailed in para 3 of order of Adjudication No. 100/2005 dated 28.11.2005. The import documents accompanying above goods revealed as under:
a. 4,21,170 pcs. of ball bearings were declared to be of United Arab Emirates (UAE) origin weighing 28.036 MT (net weight) and imported by one M/s.Aman Traders, 26/116, Gali No.10, Siddhharth Gali, Vishwas Nagar, Shahdara, Delhi-32 against Importer Exporter Code (IEC) No.503045136 with assessable value determined as Rs. 19,24,722.66 against Bill of Entry No.367208 dated 17.10.2003 filed through CHA M/s.Uniyal Cago Movers Pvt.Ltd., Delhi.
b. Examination of Bill of Entry showed that 10% of the goods were examined by Customs and country of origin appearing on the carton was Sri Lanka. An amount of Rs. 6,62,027/- was shown to have been paid as Customs duty vide TR 6 challan. Assessment to duty was found to have been done @ 25% Basic Customs duty + 16% CVD + Special Additional Duty.
c. Commercial Invoice No. AJPL-2003/1007 dated 13.7.2003 issued by Aurea Industries Pvt. Ltd., 547/2, Weralatundulwa Road, Negomba Mabole, Wattala, Sri Lanka showed that the said concern had sold 4,21,170 pcs of ball bearings to M/s.Metal Trading Co., Dubai for an amount of US$ 39,111.50 with delivery port shown as Nhava Sheva and final destination as ICD, Patparganj.
d. Commercial Invoice No.MTC/2003/075 dated 25.08.2003 issued by M/s.Metal Trading Co., LLC, Dubai showed that aforesaid 4,21,170 pcs. of ball bearings declared to be of Sri Lanka origin in the invoice were sold to M/s.Aman Traders, 26/116, Gali No.10, Siddhharth Gali, Vishwas Nagar, Shahdara, Delhi for US$ 41362.95.
e. Country of Origin Certificate No.202398 dated 25.10.2003 issued by Dubai Chamber of Commerce & Industries showed country of origin as Sri Lanka, Exporter as Metal Trading Co.(LLC) P.O.Box 20395, Dubai (UAE), Consignee as M/s.Aman Traders, 26/116, Gali No.10, Siddhharth Gali, Vishwas Nagar, Shahdara, Delhi and Invoice No.MTC/2003/75 dated 25.08.2003 for US$ 41362.95.
f. Bill of Lading No.CMB/NVS/20030708 dated 13.7.2003 issued by Balaji Shipping Agencies, U.K.Ltd., inter alia, indicated Port of Loading as Colombo.
g. Packing list dated 25.08.2003 issued by Metal Trading Co.LLC, Dubai inter alia, indicated Country of Origin as Sri Lanka; Gross weight as 28036 kg; Net weight as 26725 kg; Method of Loading as in boxes (600 boxes) and Total No. of pieces as 4,21,170 pcs.
h. IGM No.8348 relating to Bill of Entry No.367208 dated 17.10.2003 as aforesaid showed name of the importer as M/s. Maya Trading Co. and country of origin of Ball Bearings in Container No.BLJU-2201574, gross/net weight of 26.725 MT was of Sri Lankan. Consignee was M/s. Maya Trading Co. Shipper was Metal Trading Co.LLC, Dubai. B/Lading was CMD/NVS/20030708 dated 13.7.2003 and Port of Lading was Colombo.
i. Shipment was originally imported in the name of M/s. Maya Trading Co. and the importers name was later on amended to be M/s. Aman Traders.
6. When Investigation noticed above features, further investigation was conducted to know identity and existence of M/s Maya Trading Co., as well as M/s. Aman Traders located at 26/116, Gali No.10, Siddhharth Gali, Vishwas Nagar, Shahdara, Delhi. It was found by investigation that no such firm by the name of M/s. Aman Traders ever existed at that address. Accordingly enquiry was made with the CHA, M/s.Uniyal Cargo Movers Pvt.Ltd., Delhi. It came to light that one Shri Gautam Chatterji, processed the Bill of Entry No.367208 dated 17.10.2003 (which was subject matter of order of adjudication No. 100/2005 dated 28.11.2005) being given to him by one Shri Ashok Patahk on behalf of M/s.Uniyal Cargo Movers Pvt.Ltd. as per Oral evidence of Shri Chatterji recorded on 23.10.2003.
7. On 24.10.2003, office premises of Shir Gautam Chatterji at G & C Crgo Movers, C-31/A, II Floor, Madhu Vihar Market, Delhi-92 was searched. That resulted in recovery and seizure of two blank letterheads of M/s. Aman Traders. Shri Chatterji failed to explain about the import and could not disclose identity of persons importing the goods.
8. Enquiry was conducted with the Jt. DGFT, New Delhi to gather further details about M/s Aman Traders. The Edit report dated 27.10.2003 issued by that Authority revealed that proprietor of that concern was Sri Surya Narain Mishra, R/o 156/20, OmNagar, Gurgaon (Haryana). Enquiry was conducted to that address. Shri Surya Naryan Mishra resided there nor any firm in the name of M/s Aman Traders existed thereat.
9. In absence identity of importer; absence of declaration regarding KG Brand markings on the bearings in the import documents; non-existence of the importing firm Aman Traders at the declared address; absence of country of origin certificate issued by the specified Sri Lankan authorities and the KG brand bearings being of Chinese origin, attracting anti-dumping duty; 4,18,920 pcs. of ball bearings of KG Brand recovered from the aforesaid container during the search alongwith the packings were seized under Section 110 of the Customs Act, 1962. Country of origin was found to be mis-declared by the importer with intent to evade anti-dumping duty. When it was found that fraudulent import was made in the name of Aman Traders, a Show Cause Notice F.No.338/XIV/96/2003 dated 22.04.2004 for such imports. This show cause notice was adjudicated by OIO No.100/05 dated 28.11.2005.
BACK GROUND OF ORDER OF ADJUDICATION NO. 105/2005 Dt. 30.11.2005
10. Aforesaid back ground showed path for further Investigation to ascertain various links of imports causing loss of Revenue and the persons behind such act. As stated aforesaid when Sri Gautam Chatterjee was examined, he uttered name of Sri Ashok Pathak who gave B/E No.367208 dated 17.10.2003 to him on behalf of M/s.Uniyal Cargo Movers Pvt.Ltd.,Delhi, for processing . Sri Pathak was examined by Investigation. In his oral evidence, Sri Pathak stated that he was given the B/E No. 367208 dated 17.10.2003 by Shri Anil Goel of KMG Group located at 375, Main Road, Gazipur, Delhi on 15.10.2003 to process the same hiring services of some G card holder of Uniyal Cargo Movers. He also stated that he used to attend work of Sri Anil Goyel for customs clearance of consignments from 1999 till July 2003. But he could not say when and why name of M/s Maya Trading was changed to M/s Aman Traders.
11. When Sri Ashok Pathak named Shri Anil Goel and stated that he was also required by Sri Anil Goyel to clear one consignment of ball bearings in the name of M/s Maya Trading Co. of Rohini, Delhi, arrived in container No. AMPU 2749486, vide B/E No. 361632 dated: 19.06.2003 and the goods so cleared were transported to the godown of Sri Anil Goyel of KMG Group located at 375, Main Road, Gazipur, Delhi by truck No. DL 1 GB 0609 belonging to M. K. Transport having office at 126, village Ghazipur, Delhi and the goods arrived at that destination, investigation proceeded further. Manager Sri Dalbir Singh of the transporter in his statement recorded on 25.06.2003 confirmed transportation of goods imported by above container by his driver Sri Suresh Kumar under instruction of Ashok Pathak working for CHA M/s Uniyal Cargo Movers Pvt. Ltd. All these facts were also confirmed by the Driver of the truck Sri Suresh Kumar in his statement recorded on 28.10.2003.
12. When names of M/s Maya Trading Co, M/s Aman Trader and M/s K M G International came up from the statements recorded as above, Investigation made search into the premises of M/s K M G International located at 375, Main Road, Ghazipur on 28.10.2003. But no incriminating materials were recovered from that premises. Therefore Investigation proceeded further to enquire into the antecedents of M/s Maya Trading Co and another concern viz., M/s Devsons as well as the persons connected thereto causing the impugned imports.
13. Gathering information that M/s.Maya Trading Co. was operated from shop No.3, Plot No. 188, Pocket E 21, Rohini, Delhi, owned by one Sri Jaipal Singh, Investigation examined him on 03.11.2003. He confirmed that he had let out that shop to Sri Ramkrishna Tiwari of A-90/1, Jagatpuri, Delhi 51 and Sri Tiwari was doing business with one Sri Mukesh Gupta in the name of M/s Maya Trading Co and they use to open the shop occasionally. But they vacated the shop in May 2003. Accordingly Investigation proceeded to examine Sri Mukesh Gupta, who resided at Rohini.
14. Sri Mukesh Kumar Gupta was examined on 04.11.2003,who was resident of 55B, BA Block, Ashok Vihar, Phase-I, Delhi at the material time. In his oral evidence he stated that he was helping Shri Anil Goel of KMG Group. M/s.Maya Trading Company was formed by him at the instance of Sri Anil Goel. He confirmed that he took the premises identified as Shop No.3, Plot No.188, Pocket E-2, Sector 3, Rohini, Delhi from Shri Jaipal Singh in December,2002 and started a firm called M/s.Maya Trading Co. with Shri Ram Kishan Tiwari S/o Shri Jogeshwar Tiwari in that premises. The firm was started on the advice of Shri Anil Goel, Director of M/s.KMG International having office address at 375, Main Road, Ghazipur, Delhi. Shri Ram Kishan Tiwari was benamidar owner of the firm M/s.Maya Trading Company and obtaining of IEC No., Sales Tax registration and opening of Current Account in Syndicate Bank, Ashok Vihar in the name of M/s.Maya Trading Company were arranged by him. He further stated that as per advice of Shri Anil Goel, he used to obtain signatures of Shri Ram Kishan Tiwari on blank import documents and bank cheque books and giving the same to him. He also imported two containers of bearings besides the import of scrap in the name of M/s.Maya Trading Company for which Shri Anil Goel used to give him Rs.8,000/- per container. He was not aware of antecedents or whereabouts of Shri Ram Kishan Tiwari.
13. Shri Mukesh Kumar Gupta in his oral evidence further stated that he also started a company called M/s.Dev Sons in April, 2003 on the advice of Shri Anil Goel and one Shri Raju was made the owner of that company. That company was situated at B 4/114, Sector 8, Rohini, Delhi. He used to give Rs.7,000/- per month to Shri Raju for signing import documents and blank cheques. The IEC No., Sales Tax registration and Current Account of M/s.Dev Sons were arranged by him. In June-July, 2003, two containers of bearings were imported by him for Shri Anil Goel at ICD, Patparganj from Dubai/Colombo in the name of M/s.Dev Sons. Shri Mukesh Kumar Gupta also stated that he opened all these companies on the advice and for Shri Anil Goel persons named above were shown to be owners of these companies. He further stated that Sri Anil Goel asked him to arrange purchase bills in respect of the goods seized by Investigation from the godown located at 138-C, Main Road, Gazipur, Delhi.
14. When Investigation gathered information that Sri Anil Goyel of KMG Group was operating from a godown located at 138 C, Main Road, Gazipur, Delhi which was nearer to the office of KMG Group situated at 375, Main Road, Gazhipur, Delhi and some imported bearings were clandestinely cleared therefrom without payment of proper duty, Investigation proceeded to find out the modus operandi of that group. They found that the godown at the above address was owned by one Sri Arun Gupta. Enquiry made from Sri Arun Gupta confirmed that he owned the godown and that was used by his brother-in-law Sri Anil Goel who was one of the Directors in M/s KMG International. Accordingly the godown at 138 C, Main Road, Gazipur, Delhi was opened on 01.11.2003 in the presence of Panch as well as in the presence of Sri Pawan Goel, who was one of the Director of KMG Group and the godown owner Sri Arun Gupta. The search operation thereto resulted with finding of number of empty cardboard cartons with the marking: M/s AUREA INDUSTRIES PVT. LTD 574/2, WERALATUDUWA ROAD, OFF NEGOMBO ROAD MABOLE, WATTALA, SRI LANKA, TEL: 941 934257, FAX: 941 388712. This brought to the line with the imports which was subject matter of adjudication order No.100/2005 dated 28.11.2005.
15. Inventory of the goods in the godown at 138 C, Main Road, Gazipur, Delhi revealed that rolls of copper wires were lying alongwith card board cartons found to have contained electronic fluorescent lamps of KMG brand with the markings: KMG/SL, MADE IN SRI LANKA. Carton/plastic sacks were found to have contained bearings of KG brand and certain other brands. Used containers of black paint in open condition with a paint brush were also found. Preliminary examination revealed that 1309 card board cartons containing bearings of KG and Bauer Brand and 110 plastic sacks containing bearings in loose condition were found. Search operation further revealed that 8,48,686 bearings/bearing parts of foreign origin in assorted sizes and numbers having markings of KG & ABEC-1 BAUER existed in that godown. Those were seized in absence of any documentary evidence found to support existence of such goods in the godown and no explanation came forward from Sri Arun Gupta as well as Sri Pawan Gowel who were witness to inventory. 650 empty carton found in the godown were also seized. Statement was recorded from Sri Arun Gupta confirmed above fact and stated that he had no control over above goods nor he was custodian thereof.
CRUCIAL BILL OF ENTRIES
16. In the course of investigation, the Investigating team discovered four Bills of Entry bearing Nos. 157960 dated 01.05.2003, 361632 dated 19.06.2003, 158099 dated 23.05.2003 and No.158324 dated 02.07.2003. Those were crucial evidence for further investigation. First two Bills of Entry related to M/s Maya Trading Co. and later two Bills of Entry related to M/s Devsons. Results of investigation in respect of these Bills of Entries were as under:
(1). Bill of Entry No.157960 dated 01.05.2003 was found to have been filed in the name of M/s.Maya Trading Company, Plot No.188, Pocket E-21, Sector-3, Rohini, Delhi and covered import of 6,96,600 pieces of ball bearings imported from M/s.Aurea Industries Pvt.Ltd.,574, Weralatuduwa Road, Off Negombo Road, Mabole, Wattacla, Sri Lanka, vide container No.CLHU 2603659. The commercial invoice No.AIPL/2003/1003 dated 29.03.2003 issued by M/s.Aurea Industries Pvt.Ltd., Sri Lanka existed the goods covered there-under were ball bearings of 6,96,600 pieces @ US$ .7 per piece (C & F) with total invoice value at US$ 48,762. Relevant packing list mentioned quantity of ball bearings with the description : 6201ZZ 5,04,600 pieces and 6201ZZ 1,92,000 pieces aggregating 6,96,600 pieces. Such quantity of ball bearings were packed in 540 cartons. The Bill of Lading No. CMBO 33977 dated 28.03.2003 issued by MAERSK Seal and mentioned the port of loading as Colombo, Port of discharge as Nhava Sheva, Place of delivery as Patparganj (Delhi), container no.CLHU 2603659 and gross weight as 27941.670 kgs. The certificate of origin submitted along with import documents was shown to have been issued retrospectively by Department of Commerce, Sri Lanka bearing Reference No. CO/ISFTA/03/2138 dated 3.4.2003 showing country of origin as Sri Lanka. This Bill of Entry was filed through CHA M/s.Star Carrier. The examination report mentioned the goods, inter alia, as ball bearings, goods from manufacturer and COO (Country of Origin) Sri Lanka. The assessable value of the goods was determined at Rs.28,26,183/- and Bill of Entry was found to have been assessed @ Nil Basic Customs Duty (under exemption Notification No.26/2000 dated 01.03.2000 as amended which applicable to specified goods manufactured in Sri Lanka) + 16% CVD + 4% Special Additional Duty (SAD). The Total amount of duty assessed and paid on 3.5.2003 was Rs.5,83,324/-.
(2). Bill of Entry No.361632 dated 19.06.2003 was found to have been filed in the name of M/s.Maya Trading Company, Plot No.188, Pocket E-21, Sector-3, Rohini, Delhi and covered import of 6,00,000 pieces of ball bearings from M/s.Metal Trading Company, LLC, Dubai vide container No.APMU 2749486. The commercial Invoice Number 029 dated 27.05.2003 issued by M/s.Metal Trading Co., LLC, Dubai mentioned the goods covered there-under was ball bearings size 6201ZZ 3,00,000 pieces and ball bearings size -6202ZZ 3,00,000 pieces @ US$ .07 per piece (C&F) with total invoice value at US$ 42,000. The packing list mentioned number of pieces as 6,00,000 and gross weight 25850 kgs and net weight as 24600 kgs. The Bill of Lading number DXB 820957 dated 26.05.2003 issued by MAERSK Seal and mentioned the Port of Loading as Jebel Ali, Dubai, Port of discharge as Jawahar Lal Nehru, Port of delivery as ICD, Patparganj, Container No.APMU 2749486. The certificate of origin No.135991 dated 12.06.2003 submitted along with import documents was found to have been issued by Dubai Chamber of Commerce and Industry showed the country of origin as Sri Lanka. This Bill of Entry was filed through CHA M/s.Uniyal Cargo Movers Pvt.Ltd. The examination report mentioned the goods, inter alia, as ball bearings with COO (Country of Origin) Sri Lanka. The assessable value of the goods was determined at Rs.20,20,459/- and bill of entry was assessed to duty @ 25% Basic Customs Duty + 16% + 4% Special Additional Duty (SAD). The total amount of duty assessed was Rs.10,26,393/- which was paid partly through DEPB and partly through cash on 23.6.2003. It was noticed that no anti-dumping duty was levied/paid. However that despite the goods were claimed to be of Sri Lankan origin, no benefit of customs duty under Notfn.No.26/2000-Cus was claimed by the importer.
From the scrutiny of documents, it was revealed that the goods were shipped directly form Dubai, UAE, whereas the country of origin was claimed by the importer as Sri Lanka. It was noticed that the goods were shipped on 26.05.2003, whereas the country of origin certificate was issued on 12.06.2003 without the support of any documents evidencing export of the said goods form Sri Lanka to M/s.Metal Trading Co. or anybody else in UAE.
(3). Bill of Entry No.158099 dated 23.05.2003 was found to have been filed in the name of M/s. Devsons, Shop No.2, Pocket B-4/114, Sector-8, Rohini, Delhi and covered import of 5,90,940 pieces of bearings from M/s.Aurea Industries Pvt.Ltd. Sri Lanka in 2 containers bearing numbers as DNAU 2228466 and DNAU 220130. The commercial invoice No.AIPL/2003/1005 dated 09.05.2003 issued by M/s.Aurea Industries Pvt.Ltd., Sri Lanka mentioned the goods covered there-under were ball bearings 5,90,940 pieces of various sizes and prices as detailed in the commercial invoice, totally valued at US$ 65003.40. The packing list in respect of container No.DNAU 2220130 had details of total 275915 pieces of ball bearings of various sizes, packed in 504 boxes, gross weight as 26043.740 and net weight as 24983.240 and packing list in respect of container No.DNAU 2228466 had details of total of 315025 pieces of ball bearings of various sizes, packed in 511 boxes, gross weight as 24353.810 and net weight as 23293.310. The Bill of Lading number DNALCMB 030500028 dated 11.05.2003 issued by DONGNAMA Shipping Co.Ltd. mentioned the port of Lading as Colombo, Port of discharge as Nhava Sheva, Place of delivery as Patparganj (Delhi), container numbers DNAU 2220130 and DNAU 2228566 and gross weight as 50400.000 kg. The Certificate of origin submitted alongwith import documents was shown to have been issued retrospectively by Department of Commerce, Sri Lanka bearing Reference No.CO/ISFTA/03/2748 dated 12.05.2003 showing the country of origin as Sri Lanka. The Bill of Entry was filed through CHA M/s.Star Carrier. The examination report mentioned in the goods, inter alia, as ball bearings, goods form manufacturer, COO (Country of origin) Sri Lanka and COO certificate endorsed. The assessable value of the goods determined at Rs.38,41,923/- and bill of entry was assessed to duty @ Nil Basic Customs Duty (under exemption notification No.26/2000 dated 01.03.2000 as amended which is applicable to specified goods manufactured in Sri Lanka) + 16% CVD + 4% Special Additional Duty (SAD) as under: The total amount of duty assessed and paid on 30.5.2003 was Rs.7,92,973/-
(4). Bill of Entry No.158324 dated 02.07.2003 was found to have been filed in the name of M/s.Devsons, Shop No.2, Pocket B-4/114, Sector 8, Rohini, Delhi and covered import of 378520 pieces of ball bearings from M/s.Aurea Industries Pvt.Ltd. Sri Lanka in 2 containers bearing numbers HALU 3200750 and CRXU 2912016. The commercial Invoice No.AIPL/2003/1006 dated 16.06.2003 issued by M/s.Aurea Industries Pvt.Ltd. Sri Lanka mentioned the goods covered there-under were ball bearings 378520 pieces of various sizes and prices as detailed in the commercial invoice, totally valued at US$ 55833.34. The packing list in respect of container Nos. HALU 3200750 and CRXU 2912016 showed total no. of pieces as 378520, gross weight as 25.817 MT and 25.228 MT respectively, method of loading boxes and number of boxes as 552 in each of the two containers. The Bill of Lading number DNALCMB 030600117 dated 16.06.2003 issued by DONGNAMA Shipping Co. Ltd. mentioned the port of loading as Columbo, Port of discharge as Nhava Sheva, Place of delivery as ICD Patparganj, container numbers HALU 3200750 and CRXU 2912016 and gross weight as 51.045 MT. The certificate of origin submitted alongwith import documents was shown to have been issued by Department of Commerce, Sri Lanka bearing Reference No.CO/ISFTA/03/3618 dated 18.06.2003 showing the country of origin as Sri Lanka. This Bill of Entry was filed through CHA M/s.Uniyal Cargo Movers Pvt.Ltd. The examination report mentioned the goods, inter alia, as ball bearings, (GFM) goods from manufacturer and COO (Country of origin) Sri Lanka. The assessable value of the goods was determined at Rs.36,92,714/- and the Bill of Entry was assessed to duty @ Nil Basic customs duty (under exemption Notification No.26/2000 dated 01.03.2000 as amended which is applicable to specified goods manufactured in Sri Lanka) + 16% CVD + 4% Special Additional Duty (SAD). The total amount of duty assessed and paid through DEPB on 2.7.2003 was Rs.7,62,176/-.
17. Sequel to above, oral evidence was also recorded by investigation from different persons such as Sri Arun Gupta on 31.10.2003, Sri Jaaipal Singh on 03.11.2003, Sri Mukesh Kumar Gupta on 04.11.2003,Sri H. L. Arora on 02.12.2003, Sri Rajkumar Parcha on 06.11.2003, Sri Ravindra Uniyal on 09.12.2003, Sri Dinesh Kumar on 09.12.2003, Sri Dalbir Singh on 9.12.2003, Sri Gulab Singh on 09.12.2003, Sri Ajab Singh, Driver on 22.12.2003, Sri Basant Sharma on 10.12.2003, Sri Tutul Mandal on 10.12.2003, Sri Gautam Chatterjee on 16.01.2004, Sri Yusuf Khan on 16.01.2004, Sri Anil Goyel on 12.12.2003, Sri Mohan Lal Thappar on 24.12.2003, Sri Dillip F. Meheta on 06.02.2004, Sri Jitendra F. Meheta on 06.12.2004 and Sri Champalal Daga on 06.02.2004
18. Investigation could not know whereabouts of Sri Ramkrishna Tiwari, Proprietor of M/s Maya Trading Co and also whereabouts of Sri Raju, Proprietor of M/s Devsons could not be known.
19. On examination of seizure of the impugned goods made form the godown at 138 C, Main Road, Ghazipur, Delhi through panchnama and the goods covered by four Bs/E No.158099 dated 23.5.2003, 361632 dated 19.6.2003, 157960 dated 1.5.2003 and 158324 dated 2.7.2003, it was found that out of 8,48,686 pieces found in the inventory, only 2,66,873 bearings as detailed in Annexure-I to the Show Cause Notice were appearing in the 4 consignments imported in the name of M/s.Maya Trading Co. and M/s.Devsons at ICD, Patparganj and balance 5,81,813 pieces of bearings were not evidenced by any document. Out of total number of 8,48,686 pcs. of bearings seized, 4,86,000 pcs were of ABEC-1 BAUER brand and 3,62,686 pcs. Were of KG brand. The seized bearings were of two brands viz. KG and ABEC-1 BAUER. Out 3,62,686 pcs. of KG brand bearings, 2,66,873 pcs of bearings were found to figure in the four consignments imported in the name of M/s.Maya Trading Co. and M/s.Devsons (as mentioned in annexure I to the show cause notice). The brand of seized bearings, the forged country of origin certificates, oral evidence recorded corroborated with each other and these KG brand bearings were covered by four Bills of Entry Nos.157960 dated 01.05.2003, 158099 dated 23.05.2003, 361632 dated 19.06.2003 and 158324 dated 02.07.2003. KG was found to be well known brand of bearings manufactured in China and accepted as such in Indian trade and misdeclaration was made to evade antidumping duty and also customs duty and other consequences of law. 5,81,813 pieces of bearings, as detailed below, were without proof of import, as a result, those were found to be illicitly imported.
Brand Bearing No. Sl.No in the annexure to the Panchnama dated1.11.2003 Quantity in pieces ABEC-1 BAUER 608ZZ 26 & 27 486000 KG 6201 43 1170 KG 6201Z 15, 18 & 25 52575 KG LM48510 LM48548 9,10,28 & 29 9090 KG 11520 11590 1 & 2 8456 KG LM67010 LM67048 11,12,13 & 19 8107 KG 6204Z 39 & 40 8775 KG 6202Z 16,17 & 31 3790 KG 30203 22 1050 KG 30305 21 & 37 2510 Total: 5,81,813
20. Enquiry was made from the Deptt. of Commerce, Sri Lanka which revealed that Certificate of Origin number CO/ISFTA/03/2748 dated 09.05.2003 (relevant to B/E No.158099 dated 23.5.2003 filed in the name of M/s.Devsons), No.CO/ISFTA/03/3618 dated 16.06.2003 (relevant to B/E No.158324 dated 2.7.2003 filed in the name of M/s.Devsons) and CO/ISFTA/03/2138 dated 3.4.2003 (relevant to B/E No.157960 dated 1.5.2003 filed in the name of M/s.Maya Trading Co.) produced before customs authorities at ICD, Patparganj for clearance of the impugned goods at concessional rate of duty were forged documents and those were not issued by the Deptt. Of Commerce, Sri Lanka which was the designated authority under the Indo Sri Lanka Free Trade Agreement.
21. Enquiry was also conducted through Consulate General of India, Dubai about the profile of KG International which is otherwise well known to be the manufacturers/suppliers of KG ball bearings to India. Vide letter dated 29.03.2004, the Consulate sent two letters from M/s.KG International. Vide letter dated 08.03.2004 signed by Ms.Asma Noor, Executive Secretary, KG International, it was confirmed that KG brand was owned by them; that they get ball/roller bearings manufactured from China on job work basis. Vide Communication dated 28.03.2004, KG International confirmed that they do sell ball or roller bearings to local customers on cash payment basis.
22. Sri Lanka Customs, after conducting verifications with Deptt. Of Commerce, Sri Lanka, informed vide letter Nos.CIU/WROA/05/07 dated 20.07.2005 that the certificate of origin Nos.CO/ISFTA/03/2748 and CO/ISFTA/03/3618 though issued by Deptt. of Commerce, Sri Lanka, have not been issued to M/s.Aurea Industries Pvt.Ltd. but instead have been issued to M/s.Celetron Ltd.,Kandy, Sri Lanka for computer parts manufactured by them. The copies of original certificates issued by the Department of Commerce were also enclosed with the said letter of Sri Lankan Customs. It was also informed by Sri Lankan Customs that certificate No.CO/ISFTA/03/2138 was under investigation by them. Investigations made by the DRI through Sri Lankan Customs, established the fact that bearings were not manufactured in Sri Lanka and the certificate of origin were not genuine. Three certificates of country of origin as motioned hereinabove were found to be forged certificates. Country of origin certificates submitted at the time of clearance of goods were proved to be forged/un-genuine ones and on the basis of reply received from M/s. KG International when established that KG brand bearings were manufactured in China, result of investigation showed that goods covered by 4 Bills of Entry viz.157960 dated 1.5.2003, 361632 dated 19.06.2003, 158099 dated 23.5.2003 and 158324 dated 2.7.2003 were cleared by misdeclarations and suppression of facts regarding country of origin manipulating accompanying documents. 5,81,813 pieces of bearings as detailed in para 42 to the Show Cause Notice not being supported by any document proving import thereof, those were held to be illicitly imported. These goods remained unclaimed except with an attempt to explain that those part of the bearings imported at Tuticorin Port in the name of M/s.Fidelity Import. But no evidence came forward to support such plea.
23. It was not proved how those 5,81,813 bearings were imported in February 2003 were lying unsold even afer a period of nine months i.e. in October 2003. In para 10 of the reply dated 05.06.2004 Shri Anil Goel claimed that the bearings imported by M/s.Maya Trading Co. and M/s.Devsons were kept in the premises at 138-C, Main Road, Ghazipur, New Delhi after verifying that the bearings brought in for keeping in the godown pertain to the import documents shown at the time of unloading whereas in para 11 of the reply, he tried to co-relate the seized bearings with the bearings purported to be imported at Tuticorin Port. The part numbers of bearings as mentioned in import documents, records of CWC authorities at ICD Patparganj pertaining to movement of goods, the statements of Manager/owners of Transport Cos., truck drivers and Shri Kapur Chand, the person who used to supervise unloading of imported bearings at the godown of M/s.KMG International at 375, Main Road, Ghazipur, New Delhi and shifting thereof to the godown at 138-C, Main Road, Ghazipur, New Delhi established that the seized bearings were part of the bearings imported by M/s.Maya Trading Co. and M/s.Devsons vide B/E nos. 157960 dated 01.05.2003, 158099 dated 23.05.2003, 361632 dated 19.06.2003 and 158324 dated 02.07.2003. Learned adjudicating Authority observed that the manager/owners of transport companies, truck drivers of Shri kapur Chand have not retracted from their statements.
24. Based on the outcome of investigations made against aforesaid 4 B/E Show Cause Notice No. DRI F.No.338/XIV/98/2004 dated 30.04.2004 was issued to M/s.Maya Trading Co., Shri Ram Kishan Tiwari and Shri Anil Goel, M/s.Devsons, Shri Raju and Shri Anil Goel, Shri Anil Goel and Shri Arun Gupta, S/Shri Suresh Pal Gupta, Mukesh Kumar Gupta, Arun Gupta, Jitender Mehta @ Jeetu Mehta, Dlip F.Mehta, Gagan Thapar, Basudev Garg, Ashok Pathak, Gautam Chatterji and Ms.Preeti Daga and S/Shri Anil Goel, Ram Kishan Tiwari and Raju individually. This show cause notice was adjudicated by OIO No.105/2005 dated 30.11.2005.
ISSUES INVOLVED IN ADJUDICTION
25. Learned adjudicating authority examining entire materials and pleadings of the parties framed following issues for adjudication in the order of adjudication No.105/2005 dated 30.11.2005:
(1). Whether the goods imported by M/s.Maya Trading Co. vide B/E No.157960 dated 01.05.2003 and by M/s.Devsons vide B/E Nos.158099 dated 23.5.2003 and 158324 dated 2.7.2003 were chargeable to Basic Customs duty which was fraudulently evaded by the importers under Notification No. 26/2000-Cus dated 1.3.2000 at the time of assessment and, if yes, from whom such duty was recoverable.
(2). Whether the goods imported by Maya Trading Co. vide B/E No.361632 dated 19.06.2003 and by M/s.Devsons vide B/E No.158324 dated 2.7.2003 were chargeable to anti dumping duty under Notification 89/2003 dated 4.6.2003 and if yes, from whom such duty was recoverable.
(3). Whether 5,81,813 pcs of bearings out of 8,48,686 pcs of bearings seized from godown at 138-C, Main Road Ghazipur, New Delhi were chargeable to customs duty and if yes, from whom such duty was recoverable.
(4). Whether the value of these 5,81,813 pcs of bearings determined under para 43 of the show cause notice was correct or not.
(5). Whether the impugned goods as mentioned at S.No.(1), (2) and (3) above and 2,66,873 pcs of bearings out of a total of 8,48,686 pcs of bearings seized from the godown at 138-C Main Road, Ghazipur, New Delhi were liable to confiscation under provisions of the Customs Act, 1962 and penalties were imposable on the notices.
26. Upon examination of the fact and circumstances of the case, learned Adjudicating Authority recorded his findings relating to 4 Bills of Entry in the O-I-O No. 105/2005 dated 30.11.2005 as under:
(a) B/E No.157960 dated 01.05.2003 In respect of the goods involved in the B/E No. 157960 dated 01.05.2003, the country of origin was declared on the import documents as Sri Lanka. The basis for such declaration was the country of origin certificate no.CO/ISFTA/03/2138 dated 03.04.2003. This country of origin certificate was found to be forged one. The goods covered under this Bill of Entry were cleared at NIL rate of basic customs duty under the Notification 26/2000-Cus dated 01.03.2000. Thus duty was evaded by the importer by wilful misdeclaration and mis-representation of facts. Hence, the duty on the subject bearings was recoverable under Section 28 read with proviso 12 to the said Section 28 of the Customs Act, 1962 from the importer.
(b) B/E No.158099 dated 23.05.2003 In respect of the goods involved in the B/E No. 158099 dated 23.05.2003, the country of origin was declared on the import documents was Sri Lanka. It was done on the basis of the country of origin certificate No.CO/ISFTA/03/2748 dated 12.05.2003. The country of origin certificate was found to be forged one. The goods covered under this Bill of Entry were cleared @ nil basic customs duty under the Notification 26/2000-Cus dated 01.03.2000. Thus duty was evaded by the importer by wilful misdeclaration and mis-representation of facts. Hence, the duty on the subject bearings was recoverable under Section 28 read with proviso 12 to the said Section 28 of the Customs Act, 1962 from the importer.
(c) B/E No.158324 dated 02.07.2003 In respect of the goods involved in the B/E No. 158324 dated 02.07.2003, the country of origin declared on the import documents was Sri Lanka. It was done on the basis of the country of origin certificate No.CO/ISFTA/03/3618 dated 18.06.2003. This country of origin certificate was found to be forged one. The goods covered under this Bill of Entry were cleared at NIL rate of basic customs duty under the notification 26/2000-Cus dated 01.03.2000. Thus duty was evaded by the importer by wilful misdeclaration and mis-representation of facts. Hence, the duty on the subject bearings is recoverable under Section 28 read with proviso 1 to the said Section 28 of the Customs Act, 1962 from the importer. Further, Anti-dumping duty leviable under Notification 89/2003-Cus dated 4.6.2003 was also recoverable under Section 28 read with proviso to the said Section 28 of the Customs Act, 1962 and further read with clause 8 of sub-Section 9 of Section 9A of the Customs Tariff Act, 1975.
(d) Bill of Entry No.361632 dated 19.06.2003 The goods involved in B/E No 361632 dated 19.06.2003 were directly shipped to India from Jebel Ali Port, UAE. The Ant-dumping duty was evaded on the basis of country of origin certificate No.135991 dated 12.6.2003 purported to be issued by Dubai Chamber of Commerce on the basis of statement made by the shipper that these bearings were of Sri Lankan Origin. The country of origin certificate was manipulated one. The bearings were of Chinese origin and Anti-dumping duty under Notification no.89/2003-Cus dated 4.6.2003 was leviable. This duty was evaded by mis-representation of facts. Hence, Anti-dumping duty leviable under Notification no.89/2003-Cus dated 4.6.2003 is recoverable under Section 28 read with proviso 1 to the said Section 28 of the Customs Act, 1962 read with Anti-dumping duty Notification No.89/2003-Cus dated 4.6.2003.
27. In respect of 5,81,813 pcs. of bearings, learned Adjudicating Authority found that those were illegally imported. As regards valuation of these bearings, the transaction value in terms of the Customs Valuation Rules, 1988 was held to be determined in absence transaction value available in respect of these bearings. Under para 43 of the show cause notice, the valuation aspect of these 5,81,813 bearings was exposed for rebuttal. No reply to the show cause notice was received from Shri Ram Kishan Tiwari and Shri Raju of M/s.Maya Trading Co. and Devsons respectively. The Appellant Shri Anil Goel did not dispute valuation adopted in the show cause notice to determine the assessable value of the impugned goods. Value of these bearings was determined to be Rs.10,43,765/- Anti-dumping duty and basic customs duty was leviable on these bearings and such duty was evaded by wilful mis-statement and suppression of facts. Accordingly these duties became recoverable from the importer invoking extended period under the provisions of Section 28 of the Customs Act, 1962 and Anti-dumping duty was leviable under Notification No.89/2003-Cus dated 4.6.2003 was recoverable under Section 28 read with proviso to the said Section 28 of the Customs Act, 1962 and clause 8 of sub-Section 9 of Section 9A of the Customs Tariff Act.
28. Finding conscious involvement of Shri Suresh Pal Gupta, Shri Mukesh Kumar Gupta, Shri Arun Gupta, Shri Dilip F.Mehta, Shri Basudev Garg, Shri Ashok Pathak and Ms. Preeti Daga, Anil Goel, Shri Raju and Shri Ram Kishan Tiwari, learned Adjudicating Authority completed adjudication with the consequences as set out at the beginning of this order.
ARGUMENTS ON BEHALF OF APPELLANTS SRI ANIL GOEL, SRI ARUN GUPTA AND SRI SURESH PAL GUPTA
29. Ld. Counsel, Shri Pradeep Jain appearing on behalf of the appellants S/Shri Anil Goel, Arun Gupta and Suresh Pal Gupta in these bath of appeals argued that there was violation of principle of natural justice for denial of cross examination, non supply of report of Sri Lankan Authority and consideration of letters of Sri Lankan Government which was not before the learned adjudicating authority. He relied on the judgment of Apex Court in case of Swadeshi Polytex Ltd., 2000 (122) ELT 641 (SC) and in the case of Laxman Exports Ltd. V. CC -2002 (143) ELT 21 (SC). He also relied on the judgment of Honble High Court of Bombay in case of Nagraj Wal Chand Jain 2000 (123) ELT 50 (Bom) for his submission on denial of cross examination. So far as his contention of non supply of reports of Sri Lankan Authority is concerned he relied on the judgment of Apex Court in the case of Kothari Filaments V. CC (Ports), Kolkatta - 2009 (233) ELT 289 (SC). According to Sri Jain, learned Counsel, that though the Commissioner extensively relied upon the reports sent by Sri Lankan Customs Authorities regarding no manufacturing activity by M/s Aurea Industries and forged nature of Certificates of Origin, no such reports were provided to the Appellant, resulting in violation of principles of natural justice.
30. Shri Jain relied upon the letter issued by Board of Investment of Sri Lanka about project of M/s. Aurea Industries Pvt. Ltd. and letter from Department of Commerce, Sri Lanka about issuance of certificate of origin. Accordingly he submitted that Adjudication order was passed on the basis of some documents which were not relied upon in the show cause notice which is not proper. No such report/letter relied upon by the learned Adjudicating Authority was given to the Appellant. The appellants were not been given any opportunity to contradict the same. The report received after 9 months of holding the personal hearing on 14.10.2004 by ld. Commissioner was not liable to be used against the appellants. Honble Bombay High Court has held in Unique Coordinators vs. U.O.I., 2004 (165) ELT 396 (Bom.) that delay in rendering judgment amounts to violation of principle of natural justice. There was no mention that the letter dated 28.07.2004 sent by Department of Commerce was not genuine. If that was not genuine what action was initiated against the person who issued the same was not on record. Even the report after lapse of considerable period is silent about the third certificate of Origin No.2138. Even then the Commissioner has treated the said certificate as fake in para 71 (iv) of his Order. Thus any finding treating the said certificate to be false is not sustainable.
31. Sri Jain learned Counsel further submitted that bearings which were seized were not of Chinese origin in absence of technical data or test report. Only plea of Revenue was that goods were KG marked. His further argument was that if the certificate of origin is not genuine, a negative does not prove that the bearings were of Chinese origin. There were no materials to show that M/s. Aurea Industries Pvt. Ltd. had imported bearings from China or they had not purchased bearings of origin of Sri Lanka. In respect of B/E No.361632 dated 19.06.2003, when the goods were shipped in May, 2003 when there was no anti dumping duty on bearings and IGM was filed thereafter, the import of goods was complete before levy of anti dumping duty. The order of adjudication was therefore passed baselessly. His further argument was that imposition of penalty on all the three appellants was unwarranted without proof that Shri Ani Goel was the importer. There was no offence committed by the appellants. Duty demanded on bearings seized from godown were not liable to confiscation when the appellant showed that the bearings were part of bearings imported at Tuticorin Port by Fidelity Enterprises. There was no evidence of smuggling of bearings in question. Those goods were not notified goods under Section 123 of Customs Act, 1962. Therefore burden of proof was with the Department when KG brand was available in India. Mere allegation that goods were of foreign origin and the seller was fictitious is not sufficient to shift the burden by Department. Penalty in no case was imposable on the appellants.
ARGUMENT ON BEHALF OF APPELANT SRI BASUDEV GARG:
32. Ld. Counsel, Shri Prabhat Kumar appearing on behalf of Sri Basudev Garg in appeal case No.C/151/06 submitted that Sri Basudev Garg was co-noticee. He was neither connected with import nor he was not aware whether goods imported in the name of M/s.Devsons and M/s.Maya Trading Co. were brought to godown of M/s.KMG group. He was also not aware of exporter of Sri Lanka and he was not connected with day to day activities of M/s.KMG International. There was merely a charge that he failed to ensure that godown premises of M/s.KMG group were not used for unloading of the goods and proper payment of duty was not done. There is no evidence against him about his involvement. The Appellant had no knowledge about undervaluation of the goods imported or evasion of duty done. He had no knowledge of evasion of anti dumping duty nor did he have mens rea for imposition of penalty. Accordingly he is entitled to exoneration from charges following Apex Court decision in the case of Akbar Badrudddin Jiwani vs. CC-1990 (47) ELT 161 (SC) and in the case of Hindustan Steel Ltd. vs. State of Orissa -1978 (2) ELT J-159.
ARGUMENT ON BEHALF OF APPELANT SRI ASHOK PATHAK:
33. Ld. Counsel Sri Anand Nandan appearing on behalf of the Appellant Sri Ashok Pathak submitted that provision of law under which penalty has been imposed was not applicable to the case of the appellant when he was engaged in the work of freight and forwarding and he was providing occasional service. The entire set of documents relied upon by Revenue was not provided to the Appellant for which natural justice was violated. Reasons why penalty shall be imposable was not stated. Adjudication was done ex-parte and the appellant had not received notice. The Appellant was merely handing over shipping documents to the Customs Authorities. He had no business to verify the genuineness and authenticity of documents. The appellant has not connived and had no hand in glove. Therefore there should not be proceeding against the appellant. According to the learned counsel Sri Anand Nandan, the Appellant Sri Ashok Pathak was merely an employee of CHA and he was acting for the clearance of imports on the basis of documents given to him without attaching himself to the commitment of any offence under the law. He was not aware of any motive of Sri Anil Goel to make import of any offending goods to cause evasion. His role was neither active nor connected any ill intent of the imports for which he should not face penalty u/s 112 (a) of the Customs Act, 1962.
ARGUMENT ON BEHALF OF APPELLANTS MS. PREETI DAGA AND SRI DILLIP F. MEHETA
34. Learned counsel Sri Hemant Bajaj appearing for Ms. Preeti Daga and Sri Dillip F. Meheta argued that there was absolutely no evidence against Sri Meheta who was resident Manager of M/s Aurea Industries, Pvt. Ltd, Sri Lanka to suggest that he had directly dealt the offending gods to attract penalty u/s 112(a) of the Customs Act, 1962. Merely because he had signed certain documents he cannot be brought to charge under that section. He had neither imported nor exported the offending goods. He was under bonafide belief that after repacking the goods shall be of Sri Lankan origin. There was no misdeclaration made by him in respect of the invoices prepared by him and signed the same. Accordingly no penalty is imposable. He had not gained any extra benefit out of export from Sri Lanka. Relying on the decision of Tribunal in the case of M/s Z.U.Alvi V. Commr 2000(117) ELT 69 he submitted that an employee performing duty shall not be subject to penalty. Offence if any at all committed that was in Sri Lanka for which section 112 cannot apply. The Certificate of origin having been prepared in Sri Lanka by Sri jitendra F. Meheta, the appellant cannot be penalised in respect of such document and that too twice by two different show cause notices. At the relevant point of time the provisions relating to confiscation and penalties contained in the Customs Act, 1962 were not applicable to Anti Dumping Duty which is levied u/s 9 of the Customs Tariff Act, 1975. The penalty provision came to statute book in terms section 76 of Finance Act, 2004. The offence alleged being related to the period prior to enactment of Finance Act, 2004 i.e. 10.09.2004, penal consequences u/s 111 and 112 do not apply to the case of both the appellants. For such purpose he relied on the Apex Court Judgment in the case of Woollen Mills Ltd. Vs. Commr. Cus 2004 (167) ELT 439 (SC) and Tribunals decision in Silkon International V. Commr. Cus 2007 (208) ELT 271(Tri - Bang).
35. So far as appeal of Ms. Preeti Daga is concerned Sri Bajaj, learned Counsel has same arguments as he made in the case of Sri Dillip F. Meheta and further argued that merely because she was one of the Directors in M/s Aurea Industries Pvt. Ltd that was not sufficient to impose penalty on her unless it is proved by the Dept. that she had delat the goods which she knew or had reason to believe were liable to confiscation. There was no evidence showing any wrong done by her. There was also no evidence on record to show that the appellant had connived with any person to give false document.
SUBMISSIONS OF REVENUE
36. Both the learned SDRs appearing on behalf of Revenue argued that all the appellants faced consequence of adjudication for causing loss of Revenue. The basic issue involved in these batches of appeal relate to fraudulent import of KG brand ball bearings of Chinese Origin. But that was not actually so. The import documents mis-declared the goods were of Sri Lankan origin. The duty free exemption availed by the importers impressing that the goods were manufactured in Sri Lanka turnout to be false. Customs duty leviable on the Ball Bearings imported was evaded seeking Notificational benefit which granted exemption to goods manufactured in Sri Lanka. Investigation revealed full proof smuggling activity by a group of individuals/ concerns, to defraud Revenue.
37. Learned SDRs argued that the Appellant Sri Anil Goel was masterminded person and he was behind the scene operating the imports through three different dummy concerns viz., M/s Aman Traders, M/s Maya Trading Company and M/s Devsons. He along with other appellants in these batches of appeals was beneficiary of the fraudulent design made by him. They associated themselves in the whole process of evasion. 8,48,686 bearings seized from the Ghazipur godown controlled by Sri Anil Goel which proved that he was a de facto importer of the ball bearings through 5 (five) Bills of Entry discovered in the course of search. The Appellants committed fraud and caused loss of Revenue promoting fraudulent imports by their active involvement and rendered the goods liable to confiscation and invited penal consequences of law.
38. It was submitted on behalf of Revenue that the appellant Sri Arun Gupta had allowed use of his godown for fraudulent activities by his brother-in-law Sri Arun Goel and became a party to the storage of the illicitly imported goods. He was instrumental to cause evasion. Sri Basudev Garg being Chairman of KMG International was perpetrator of smuggling activity aiding, assisting and financing Shri Anil Goel to carryout fraudulent activities for benefit of all of them. Illicitly imported goods were seized from the godown situated at 138-C Main Road, Ghazipur, Delhi and Sri Basudev Garg had full knowledge about the same. They all had common interest in the illegal imports for the benefit of their group. Conscious knowledge of Sri Basudev Garg about the deal to cause evasion was well evident.
39. Sri Mukesh Kumar Gupta was actively associated with Sri Anil Goel to carryout unlawful activities for KMG International group at the instance of the later. He was engaged to form aforesaid dummy concerns with the help of benamidars to be proprietor thereof and give apparent shape to such fictitious concerns obtaining registrations applicable under different statutes. He was instrumental to coordinate with the benamidars and consciously occasion the transactions to occur so as to cause evasion. He was equally a conduit in the entire smuggling racket. Even oral evidence gathered from Shri Kapur chand, an employee of Shri Anil Goel proved that sometimes Sri Mukesh Kumar Gupta used to be present in the godown at Ghazipur at the time of unloading of bearings imported in the name of M/s Maya Trading Co., and M/s Devsons. He was quite aware of entire illegal imports, clearance and disposal of the illicitly imported goods.
40. Sri Anil Goel was actively helped by Sri Ashok Pathak, representative of CHA rendering his services for fraudulent clearances causing loss of Revenue and cause for evading duty payable on the goods imported. After clearing the goods on the advice of Sri Anil Goel, he was arranging transport of illegally imported goods to the destination for storage and trading was done from that place. He having been actively involved in clearing the goods for M/s Maya Trading Company and M/s Devsons causing evasion of duty at the instance of Sri Anil Goel, he has to face penal consequences of law. He did not reply to Show Cause Notice nor appeared for hearing but remained silent to save his principal without cooperating adjudication.
41. Revenue submitted that Sri Suresh Pal Gupta had played an active role to manipulate Country of Origin Certificate from Dubai Chamber of Commerce and connived with Shri Anil Goel as well as with Shri Dillip F. Meheta to send the goods to India and was instrumental in causing loss of Revenue. Against the appeal preferred by Sri Dillip F. Meheta, Revenues submission was that he admitted in his oral evidence that he was working in M/s Aurea Industries on the instructions received from Shri Suresh Pal Gupta from time to time and his main job in the employment was to supervise the work of repacking of ball bearings of KG brand exported by Shri Suresh Pal Gupta in the name of M/s Aurea Industries Pvt. Ltd of Sri Lanka and looking after their day to day work. His signatures appeared in various documents prepared by him in respect of offending imports. Investigation brought out his close connection with the above concern and his active involvement in the offending imports for the dummy firms was also proved in absence of his innocence came to record. Ms. Preeti Daga being Director of M/s Aurea Industries Pvt. Ltd, Sri Lanka did not take suitable precautionary measure to relieve her shelf from charges being associated with that company as Director thereof. She was aware of the offending imports.
42. Revenues further contention was that entire oral evidence recorded, material evidence gathered and seizure made in the course of search proved the offence committed by all the appellants without dissociating themselves from commitment of the same under Customs Act, 1962. The evidence gathered was creditworthy and no oral evidence being retracted, no opportunistic claim to avoid consequences of law is admissible. Following the ratio laid down by Honble High Court of Madras as held in V. Kader Ibrahim vs. Deputy Director, Enforcement decided on 10.07.1986 the appellants were found guilty. Criticism of the appellant Sri Anil Goel that cross examination of persons whose oral evidence was recorded was not allowed and enquiry conducted from abroad was not exposed during adjudication is devoid of merit for the reason that the said appellant was made aware of the crucial fact that it was on the strength of those statements and evidence he was called upon to show cause against the consequences proposed by the Show Cause Notice and the enquiry conducted was follow up of the original enquiry itself to ascertain country of origin of the imported goods. Therefore when the oral evidence and the follow up enquiry demonstrated that the said appellant had transgressed law, he was alerted about possible adverse effect of the statement and result of enquiry for leading his defence. When there was no perversity in the enquiry as well as recording of evidence and obtaining of result of followed up enquiry, Tribunal should not interfere to the order of Adjudication for the baseless plea of violation of natural justice made. There was no error of law committed or any element of perversity exists in the acceptance of the testimony of the oral evidence recorded and the inference drawn. Entire evidence on record proved complicity of the appellants and due process of law was followed in the adjudication process granting every opportunity of rebuttal.
43. With the aforesaid submissions, Revenue relied on the judgment of Honble High Court of Andhra Pradesh in the Case if Gyanoba Yaswant Yadav V. Collector of Central Excise decided on 20.01.1972. It was also submitted that when the materials gathered in the course of investigation and followed up enquiry were relevant and admissible in admissible in evidence, those were mound to be used against the appellants since evasion and smuggling are organised white collar crimes committed under absolute secrecy. Revenue also placed reliance on the Apex Court judgment in the case of K. I. Pavunny V. AC, Cochin 1997 (90) ELT 241 (SC) for their above argument.
44. It was further submitted by learned DRs that learned Adjudicating Authority is not in any sense a Court. He is not bound by any procedure laid down by the Code of Criminal Procedure or by the Rule of Evidence as enacted in the Evidence Act. But, in discharging his quasi judicial function it is incumbent on him, not only to comply with the requirements of the relevant statutory provisions but also to apply the principles of natural justice. When he has discharged his duties in such manner his findings in the order of Adjudication can not be demolished. All the appellants were issued show cause notice following principles of natural justice and they were afforded reasonable opportunity of defence through hearing. Plea of no cross examination allowed and result of investigation not exposed are mere dilatory tactics to avoid consequence of law. Nexus of the parties, their intimate connection with each other promoted illicit import proving all probabilities of commitment of the offence by the appellants causing evasion of duty and that was successfully proved by investigation. Nothing demonstrates that the Authority below merely acted on imagination. The moment offending goods were seized by investigation on the reasonable belief that those were smuggled goods; burden of proof that those were not smuggled was squarely on the person from whose possession the goods were seized. Such burden was not discharged by the appellants who were intimately connected with each other and suppressed entire fact of illegal deal till search operation detected the same. Following the ratio laid down by Apex Court in the case of C. Sampath Kumar V. The Enforcement Officer, 1997 (96) ELT 511 (SC), it was submitted by Revenue that there is no presumption that a statement made upon summon is always involuntary and such a statement can be used in evidence. Revenue further relied on the judgment of Honble High Court of Karnataka in the case of Panduranga Bommiah Vernekar and Anr. V. Collector of Central Excise decided on 02.04.1962 for such proposition.
45. Revenues further reliance on the judgment of Apex Court in the case of Surjeet Singh Chhabra V. Union of India 1997 (89) ELT 646 (SC) and on the judgment of Honble High Court of Madras in the case of Roshan Beevi & Others V. Joint Secy. to Govt. of Tamil Nadu 1984 (15) ELT 289 (Mad) was to submit that the Customs Authorities not being Police Officers, oral evidence recorded u/s 108 of the Customs Act, 1962 even if confessional are usable against the person and binding on him who gave the statement and cross examination in such circumstance is unwarranted even if such statement is retracted subsequently since Customs Authorities are not police officers. Revenue further placed reliance on the Apex Court decision in the case of K. T. M. S. Mohammed and Others V. UOI 1992 SCC (3) 178 to submit that mere retraction of an evidence recorded u/s 108 of Customs of Act, 1962 is not sufficient to take opportunity at a later date to plead that as value less when the maker of statement fails to establish that improper means was adopted to record such evidence.
46. It was submitted by Ld. SDR that the appellants utterly failed to prove their bonafide in these batches of appeals. So also Revenues pleading was that statement of a person in the status of co-accused obtained u/s 108 of Customs Act, 1962 is material following the Apex Court judgment in the case of Naresh Sukhwani V. UOI 1996 (83) ELT 258 (SC).
47. It also submitted on behalf of Revenue that the collusion of the parties in these batches of appeals was in the nature of secret arrangements among them for defrauding Revenue and Revenue could discover their modus operandi recovering the goods by search operation. It is not required that every link of chain of smuggling is to be brought to record for proving with mathematical accuracy. They relied on the judgment of Apex court in the case of State of Goa V. Colfax Laboratories 2003 (158) ELT 18 (SC) and C.C V. Bhoormull AIR 1974 SC 859.
48. Revenue argued that the learned Adjudicating Authority is concerned with preponderance of probability following the judgment of Honble High Court of Madras in the case of Santhanam V. CCE, Madurai, 1995 (79) ELT 564 (Mad). All the Appellants involved in the smuggling racket were most concerned with or without physical control over offending goods when they were interested by all visible and invisible means and consciously interested taking steps to promote smuggling. They were rightly brought to process of adjudication following ratio laid down by Apex Court in the case of Jethmal V. UIO - 110 ELT 379 (SC). So also Revenue relied on the apex Court judgment in the case of Radha Kishan Bhatia V. UOI 2004 (178) ELT 8 (SC) in support of their argument. It was also argued by revenue that agreement between the parties need not be directly proved when circumstantial evidence came to record demonstrating their act resulting in smuggle of goods discovered by search and seizure operation and there were reasonable ground to believe that they were instrumental to perpetuate smuggling by their association proved by evidence. Revenue also relied upon Apex judgment in the case of Bhagwan Swarup and Others V. State of Maharashtra AIR 1965 SC 682 to submit that all the appellants associated themselves to perpetrate smuggling by all possible means at their end as brought out by investigation. Therefore all the appeal are liable to be dismissed.
49. Heard both sides and perused the record and also gone through the various evidence gathered by Investigations relied upon by both sides and findings of learned Adjudicating Authority as well as reliance placed by both sides on various judgements.
FINDINGS BY TRIBUNAL
50. Factual matrix depicted and relevant as well as material facts and evidence noticed hereinbefore having given rise to investigation and search and seizure operation followed thereto having resulted in recovery of questionable goods from the container No. BLJU 2201574 at ICD, Patparganj as well as from the godown situated at 138-C, Main Road, Ghaziapur, Delhi, operated by one Sri Anil Goel and misdeclaration of description of goods as well as value thereof having been noticed by Investigation , country of origin of the goods recovered from both places became questionable, Antidumping Duty as well as customs duty was found to have been evaded, extensive enquiry was done to ascertain various aspects including identity of the importers and the persons involved in the imports as well as possessing the offending goods. When amendment to the name of the importer in IGM 8348 relating to the consignment came in BLJU-2201574 supported by Bill of Entry No. 367208 dated 7.10.2003 to show the importer as M/s Aman Traders instead of M/s Maya Trading Company as allowed on the basis of request dated 8.9.2003 filed by M/s Albatross Shipping Pvt. Ltd., New Delhi was noticed by Investigation, that provided various clues for enquiry both in India and abroad. Oral evidence recorded from Shri Sanjay Madan who was Manager of M/s Albatross Shipping Pvt. Ltd. confirmed the position that on the advice of the agent from Colombo, Shri Madan applied for amendment to IGM to change the name of consignee from M/s Maya Trading Company to M/s Aman Traders. A copy of E-mail dated 6.10.03 submitted by him established the fact. But none of the owners of the said concerns appeared to prove their bonafide and credence.
51. Ownership of the firm M/s Aman Traders was known to the investigating authority from letter dated 3.11.03 filed by Shri Surya Narayan Mishra who claimed to be proprietor thereof. He stated in that letter that the goods seized were of Srilankan origin and not attracting anti-dumping duty. But whereabouts of Shri Mishra could not be traced and the claim was found to be fictitious. Oral evidence of Shri Gajinder Singh Uniyal of M/s Uniyal Cargo Movers Pvt. Ltd. showed that their services were utilized by Shri Aman Traders, M/s Maya Traders and M/s Devsons which were controlled by Shri Anil Goel of M/s KMG International. All Bill of Entries were filed using the CHA licence of that concern. Such fact remained un-rebutted.
52. Investigation found that one Shri Mukesh Kumar Gupta assisted Shri Anil Goel consciously for manipulation of documents which came to light only upon investigation. His oral evidence recorded on 4.11.03 brought out the story that he was instrumental to start the firm M/s Maya Trading Company in Rohini along with Shri Ram Kishan Tiwari at the behest of Shri Anil Goel of KMG International. Shri Mukesh Kumar Gupta was given an impression that M/s Maya Trading Co. was owned by Shri Ram Kishan Tiwari and under advise of Shri Anil Goel signature of Shri Ram Kishan Tiwari was obtained on blank import documents and bank cheque books and those were delivered to Shri Anil Goel. He also stated that he was acting under advise of Shri Anil Goel to form a firm named M/s Devsons situated in Rohini. He further stated that he also started a company named as M/s Aman Traders for Shri Anil Goel and one Shri Surya Narayan Mishra was stated to be the owner of that firm. He reiterated that he was acting under advice of Shri Anil Goel, who was showing him different persons as owner of different firms. He also confirmed that he had knowledge of operation of the godown by Shri Anil Goel owned by his brother-in-law situated at 138-C Main Road, Ghazipur, Delhi and that godown was searched by investigating authorities resulting in seizure of the goods which was subject matter of O-I-O No. 105/2005 dated 30.11.2005. None of these statements were contradicted leading any evidence.
53. Statement recorded from Sri Anil Goel, appellants in appeal case No.C/149/06 and C/152/06 on 12.12.2003 revealed that he alongwith his Brother-in-law, Sri Basudev Garg who is appellant in appeal case No.C/151/06 and with other two formed a group of companies in the name of KG International having its office at 375, Main Road, Ghazipur, Delhi. Appellant Sri Basudev Garg was designated as chairman of that group of company. Sri Anil Goel was one of the Director of that group. Sri Goel took a godown located at 138C, Main Road, Ghazipur, Delhi. That godown was taken from Sri Arun Gupta who was brother-in-law of Sri Goel. Sri Anil Goel did not contradict statement recorded from Sri Gautam Chatterjee and Sri Ashok Pathak relating to Bill of Entry No.367208 dated 17.10.2003 which is subject matter of adjudication in OIO No.100/05 dated 28.11.2005 in respect of import of goods made in the container BLJU 2201574. He agreed that owner of M/s.Aurea Industries Pvt.Ltd, Sri Lanka had arranged to import Chinese origin bearing of KG brand through Sri Lanka from Dubai and manipulated country of origin certificate with a view to evade anti dumping duty. Chinese ball bearings were purchased from KG group owned by one Sri Kedar Gupta who is Dubai based and who got those ball bearings made in China on job work basis. Sri Anil Goel also confirmed that consignment brought through bill of entry No.361632 dated 19.6.2003 was by M/s.Maya Trading co. which was bogus firm created by Sri Mukesh Gupta and clearance was done by one Sri Surya Narayan Mishra, proprietor of M/s.Aman Traders. Invoices and country of origin certificate were manipulated to evade anti dumping duty. He also admitted that part of goods were stored in the godown of Sri Anil Goel which he had taken from his brother-in-law, Sri Arun Gupta. It was also admitted that clearance of goods was done through Sri Ashok Pathak of M/s.Uniyal Cargo Movers Pvt.Ltd.,Delhi. His investment in the business alongwith Sri Gagan Thapar also came out in his statement. He also admitted that KG brand ball bearings were fetching better price in the market. Empty cardboard ball bearings were used for selling the goods with that brand. Such empty cardboards were recovered in the course of investigation. He confirmed import made in the name of M/s.Devsons, at B 4/114, Sector 8, Rohini, Delhi was in similar way as that was imported by M/s.Aman Traders and M/s.Maya Trading Co.
54. Oral statement recorded from Sri Gagan Thapar on 20.4.2006 brought out his connection with Sri Anil Goel from 6.11.2003. He also confirmed that Sri Anil Goel requested him to claim ownership of ball bearings seized from his godown on 1.11.2003 and offered him to compensate him suitably. Same offer was also given by Sri Basudev Garg, who is major shareholder and chairman of KG International. He also confirmed that impugned ball bearings were routed from M/s.Aurea Industries Pvt.Ltd., Sri Lanka, a company jointly owned by Sri Suresh Pal Gupta and Ms. Preeti Daga.
55. Shri Suresh Pal Gupta of M/s.Metal Trading, Metal Trading Co.(LLC) P.O.Box 20395, Dubai (UAE) issued invoice in respect of import made in the name of M/s.Aman Trader and M/s.Maya Trading Co. In terms of letter dated 3.4.2004, he stated that goods in respect of M/s.Aman Traders were shipped directly by M/s.Aurea Industries Pvt.Ltd., Sri Lanka. He only prepared documents to secure nominal profit. His signature was forged in the documents shown to him as director/shareholder of M/s.Aurea Industries Pvt.Ltd. Sri Suresh Pal Gupta by his letter dated 1.11.2004 informed that Metal Trading Co was neither a buyer nor a seller nor the importer or exporter of goods but they were responsible for preparing the documents for nominal profit.
56. In his oral evidence, Sri Dilip F.Mehta stated that he was employee of M/s.Aurea Industries Pvt.Ltd. as resident manager by Sri Suresh Pal Gupta of M/s.Metal Trading Co. He continued to sign the documents for that company. He stated that during his tenure with that concern, the said concern imported only ball bearings of Chinese origin in the finished form. Those goods were packed in carton by M/s.Aurea Industries Pvt.Ltd.,Sri Lanka to give impression that the goods were of Srilankan origin. That was done at the instance of Sri Suresh Pal Gupta. He also stated that Sri Anil Goel was the importer in India and the ball bearing supplied by Sri Suresh Pal Gupta of KG brand were manufactured on job work basis in China and those were supplied in the name of various firms as per instruction of Sri Anil Gupta.
57. Intelligence Unit of Sri Lanka made visit to the address of M/s.Aurea Industries Pvt.Ltd., Sri Lanka. They found that the said premises were closed. Upon enquiry, they ascertained that proprietor of that company was Mumbai based and no manufacturing and assembling of ball bearings was done on that place. They also could not ascertain whereabouts of the proprietor of that concern.
58. Non-existence of M/s Aurea Industries Pvt. Ltd and questionable act of M/s Metal Trading Company, Shri Suresh Pal Gupta remained uncontradicted and their role endangering Revenue by misdeclaration could not be ruled out by the appellants. Documentation was modality to cause export of the Chinese origin goods impressing that to be of Sri Lankan origin. Cogent evidence brought out by investigation showed that goods job worked in China came to Sri Lanka for ultimate export to India. Intimate connection of Shri Dilip F. Mehta manipulating the documents causing mis-declaration was successfully proved by investigation. Shri Ashok Pathak who was instrumental to submit Bills of Entry before the Customs Authorities stated against Shri Anil Goel and brought out his intimate connection with all the imports covered by above five Bills of Entry discovered in the course of search. All certificates of country of origin produced by appellants were fake and forged as revealed from overseas enquiry. None of the appellants came forward with clean hands to prove their bonafide nor were the documents led by them proved to be genuine. When investigation successfully proved the documents to be fake, no cross examination was desirable.
59. Oral evidence recorded and the documentary evidence gathered by investigation in no uncertain terms proved that Shri Anil Goel was perpetrator of illicit imports and maker of fraudulent design. He was masterminded to occasion all the imports of offending goods adopting dubious practice, covered by five Bills of Entry dealt by the Orders of Adjudication. While Bill of Entry No.367208 dated 17.10.2003 related to order of Adjudication No. 100/05 other four crucial B/E related to the order of Adjudication No. 105/05. Recovery of the offending goods from the godown situated at 138-C Main Road, Gazipur, New Delhi showed intimate connection of goods with Shri Anil Goel as well as Sri Anil Gupta, the godown owner and others connected with the illicit import. Such nexus was not ruled out leading any evidence by any of the appellants. Recovery of empty cartons, disfigured by paints, proved modus operandi followed by Sri Anil Goel and his associates suppressing description, identity and country of origin of the offending goods remained inside such containers. Those were used as means to facilitate mis-declaration as to description and country of origin of the contents (goods) therein. Such act being detrimental to the interest of Revenue causing evasion of Revenue consciously done by deliberate act, contumacious conduct of Sri Anil Goel as well as his associates was proved and mens rea was well established by Revenue to penalise them.
60. No technical test nor technical evidence was required to identify country of origin of the seized goods when the goods themselves submitted to prove their identity from the markings thereon and from market parlance as well as from long standing experience and knowledge of Customs Authorities who frequently examine imports during their day to day discharge of duties and well acquainted with the nature of the goods. Oral evidence gathered u/s 108 Customs Act 1962, not being contradicted, the goods were found to be of Chinese origin and in absence of any cogent evidence led by the Appellant Sri Anil Goel and others to show that the goods seized were not of KG brand nor were of Chinese origin, the brand and country of origin remained uncontroverted. Consequently bald plea of no technical data on record showing country of origin of the seized goods seized was liable to be discarded being baseless.
61. Nothing came out to the rescue of the appellants in absence of their bonafide. Series of acts of appellant and chain of evidence gathered by investigation proved their ill intent and close association in the smuggling racket. No circumstantial or direct evidence was led to show that the investigation was perverse. Only one report received from overseas enquiry belatedly was challenged to have been used behind back of the appellants was baseless when that report was consequence of follow up enquiry and substantial as well as material and relevant evidence were very well available on record speaking against the appellant to level charge against them through Show Cause Notice. Weighty and credential evidence available on record were sufficient enough to hold all acts of the appellant to be detrimental to the interest of Revenue even in absence of that report disputed to be belated when the oral evidence and goods seized established illicit imports. Investigation is a time consuming affair and adjudication follows investigation. Therefore there was no delay at all abnormally done causing prejudice to the appellants and the plea of delay in adjudication is mere opportunistic to escape the charge against them. Adjudication does not suffer from any of the legal infirmities and cannot be faulted.
62. Close relationship of Shri Basudev Gupta and Arun Gupta with Shri Anil Goel was well proved by investigation and nothing contradicted. While Shri Gupta let out his godown to Shri Anil Goel for storing the offending goods, Shri Basudev Gupta was aware of the entire malicious design made by he group against Revenue. Drivers of the carriers including the CHA agent all proved transportation of goods from the place of arrival to the godown controlled by Shri Anil Goel.
63. Although it was pleaded in the course of hearing that there was denial of natural justice for no permission to conduct cross-examination, that did not weigh consideration heavily when documentary and oral evidence established beneficial interest of all members of the smuggling group who perpetuated the offence playing their role one way or other without ruling out their intimate connection to the offence committed. Their motive was found to be oblique. Therefore plea of the appellants for cross-examination was rightly discarded in absence of any cogent evidence being brought to show that they were deprived of process of justice and enquiry was perverse or prejudiced to be interest of justice. Investigation successfully proved the case bringing out entire chain of evidence discovering misdeclaration of the goods to be of Sri Lankan origin and the document relied upon by the appellant were proved to be false followed by recovery of goods hidden in the godown.
64. Overseas enquiry was not challenged to be motivated. Result of enquiry remained uncontradicted except bald plea of denial of cross examination when the goods recovered by search operation proved motive of appellants as well as their ill will and part of goods smuggled was proved to be without proof of import. The case of mis-declaration was proved beyond doubt by cogent evidence gathered by Investigation. Natural justice did not appear to have been violated when cogent evidence brought out by Investigation left no doubt about involvement of the group promoting smuggling through various conduits. The appellants lead their defence and their case was in entirety considered by the learned Adjudicating Authority considering their reply to show cause notice. When the investigation in Sri Lanka by the Intelligence Authority of that country supported the case of investigation in India, credibility of evidence gathered by Investigation remained undoubted. Evidence Act not being applicable to quasi judicial proceeding, preponderance of probability came to rescue of Revenue and Revenue was not required to prove its case by mathematical precision. Exposing entire modus operandi through allegations made in the show cause notice on the basis of evidence gathered by Revenue against the appellants was sufficient opportunity granted for rebuttal. Revenue discharged its onus of proof and burden of proof remained un-discharged by appellants. They failed to lead their evidence to rule out their role in the offence committed and prove their case with clean hands. Nothing was repelled by them to show that KG brand ball bearings were not of Chinese origin. They failed miserably to prove their bonafide. The import documents mis-declared the imported goods to be of Sri Lankan origin. The duty free exemption scheme available to goods manufactured in Sri Lanka was abused by appellants and customs duty was evaded on the Ball Bearings imported. Abuse of Notification benefit granting exemption to goods manufactured in Sri Lanka was proved by Investigation.
65. The oral evidence of Sri Mukesh Gupta, Shri Suresh Pal Gupta, Sh. Dilip F. Mehta and Shri Vasudev Garg demonstrated entire fraudulent design made by Shri Anil Goel with the help of all these people resulting in recovery of the bearings with mis-declaration from the godown maintained in 138-C, Main Road, Gazipur, New Delhi. Sri Mukesh Gupta opting to remain silent to reply to Show Cause Notice and failing to cooperate in adjudication proceeding proved his intimate connection with Sri Anil Goel who was proved to be master minded person in the entire offence committed causing loss of Revenue. Even role of Sri Mukesh Gupta assisting in unloading the offending goods imported in the name of M/s Maya Trading Co. and M/s Devsons for storing such goods in the godown belonging to Sri Anil Gupta and used by Sri Anil Goel was proved. Recovery of the offending goods from the godown identified as 138 C, Main Road Ghazipur, Delhi proved its hidden place of storage. This brought out all the people to the chain of illegal trade.
66. Principal grievance of the learned counsel Sri Pradeep Jain was violation of principles of natural justice. That did not weigh consideration when material on record suggested that oral evidence recorded in the course of investigation were neither recorded under whims and fancies nor caprice. Allegations were properly brought out by show cause notice bringing the modus operandi for leading defence. None of the evidence was gathered behind back of the appellants. The report from Sri Lankan Customs was a follow up of the investigation itself. The outcome of investigation was exposed in the Show Cause Notice bringing out the chain of smuggling activities. Appellants failed to rule out questionable role of each othe, but contributed to the promotion of smuggling. None of the evidence gathered by Investigation were liable to be discarded merely because those gave rise to adverse consequence against the appellants, in view of their credence and trustworthiness as well as reasonability. Entire argument of revenue on the point of law relating to cross examination and nature of evidence as well as concealed nature of smuggling activities were forceful. Therefore there is no scope to hold that the adjudication proceedings suffered from violation of natural justice when the unfair deal of appellant surfaced. Accordingly the citations made by the appellants in the course of hearing were misplaced by them who failed malafide of Investigation or the investigation by any means was liable to be vitiated.
67. Plea of Sri Jain learned Counsel for the appellant Sri Anil Goel that the goods were not of Chinese origin was without any evidence led by him in support of his arguments. As submitted by Revenue that preponderance of probability goes in favour of Revenue making allegation that the goods were of Chinese origin was sufficient enough to hold against the appellant in view of the goods seized from the godown were without any evidence of import shown by Shri Anil Goel. Once illicit import came to light, burden of proof was on the possessor thereof to be discharged. The Appellant failed to prove otherwise of the goods.
68. Anti dumping duty was not levied on any of the appellants in these batches of appeals nor their lis related to such levy. They faced penal consequences of law under the provisions of Customs Act, 1962 for their own acts and omissions as well as for their contumacious conduct being engaged in smuggling. Anti dumping duty plea raised was thus baseless. The persons who faced antidumping duty liability in the aforesaid two Adjudication orders were not before Tribunal in these bathes of appeal since their whereabouts were not known. Argument of Ld. Counsels that levy of antidumping duty was uncalled for when law was not in force was baseless since they had not faced such levy to ask the Tribunal to decide on the matter that was not before it. The appellants have untenable plea of Anti dumping duty not being in force at the material time they were not liable to the charge. Rather the appellants established their case that they were instrumental to cause evasion of Revenue through benami transactions using Sri Surya Narayan Mishra floating M/s Aman Traders, Sri Ramakrishna Tiwari floating M/s Maya Trading Company and Sri Raju floating M/s Devsons.
69. Materials on record revealed that neither investigation nor process of investigation was challenged to be perverse or futile. Modus operandi of the group proved to be malafide due to various dubious practices adopted and secret arrangements made by them to hide the goods. Benami transactions came to light. What was apparent was not proved to be real. Chain of evidence established nexus of import with the persons involved and goods recovered serving their ill will. Reasonable belief of Investigation followed by search and seizure brought entire deliberate acts and omissions of appellants to the fold of law. Nexus of each other and their close proximity to the impugned imports as well seized goods was unearthed by niceties of investigation. Ill intent and motive of appellants came to light by investigation and conduct of the parties was proved.
70. Crystal factual findings of the learned Adjudicating Authority and echoing evidence on record do not demonstrate that Adjudications were made suspiciously or under surmise. All pleadings of the appellants were ill founded. Show cause notice properly brought them to charge exhibiting civil and evil consequences for opportunity of rebuttal. Nothing was dealt behind their back. Investigation story was backed by evidence and not impeachable. Corroborative and cogent evidence gathered by investigation directly and surrounding circumstances proving nexus of the appellants to the entire deal does not make investigation story unbelievable. Looking to the entire genesis of the case it can irresistibly be concluded that investigation has very successfully proved its case and what was apparent was proved not to be real. Modus operandi of the group proved that they had endangered Revenue.
71. Active involvement of Ms. Preeti Daga in the smuggling was not proved by investigation. Nor her conscious knowledge to the offending act came to light from the result of investigation. But modus operandi of the group only brought her to the chain of investigation.
72. Once all the aforesaid contributing factors called for confiscation of the goods, learned Adjudicating Authority had done so properly under law. Appellants failed to prove their innocence. Shri Anil Goel made himself liable for recovery of the Customs duty in respect of 5,81,813 pcs. of bearings valued at Rs.10,43,765/- recovered from the godown under his control and stocked thereat without any evidence relating to import of such goods Entire consequence of Adjudication against Shri Anil Goel warrants confirmation in view of his conscious, deliberate and active involvement in defrauding Revenue. That is confirmed. So far as Shri Arun Gupta is concerned, he having allowed his godown to be used by his brother-in-law Shri Anil Goel to store offending goods should also face penal consequence of law for which the penalty imposed by authority below does not appear to be unwarranted and that is also confirmed. Shri Vasudev Garg and Shri Suresh Pal Gupta including Shri Dilip F. Mehta and Sri Ashok Pathak contributed for the cause of defrauding revenue by various manipulations and malicious design and they wee conduit to cause evasion of duty for which they do not deserve any consideration for waiver of penalty imposed on them. Therefore the penalty levied on them is also confirmed. However, Ms. Preeti Daga deserved consideration finding her no active role or conscious knowledge to become instrumental to cause evasion of Revenue. Consequently penalty imposed on her is waived. All the appeals are disposed in the manner and to the extent order as above.
(Pronounced in the open Court on.) (Dr. CHITTARANJAN SATAPATHY) TECHNIAL MEMBER (D.N.PANDA) JUDICIAL MEMBER mk