Customs, Excise and Gold Tribunal - Mumbai
Nova Petrochemicals Ltd. And Ors. vs Commissioner Of Customs on 22 March, 2004
Equivalent citations: 2005(179)ELT95(TRI-MUMBAI)
ORDER Jyoti Balasundaram, Member (J)
1. The brief facts are that M/s. Nohva Petrochemicals Co. Ltd. had exported five consignments stated to be of 100% Polyester printed fabrics vide shipping Bills dt. 23/5/94 under the DEEC Scheme, as per the provisions of which the exempted materials required for manufacture of export product are permitted to be imported duty free in accordance with standard Input Output norms published in the Hand Book of Procedure Volume-II under Export Import Policy AM 1992-97. Export of polyester fabrics was under the category of Quantity Based Advance Licensing under DEEC Scheme where quantity of raw material that could be imported duty free is directly proportionate to the quantity of export fabrics.
2. Pursuant to information that exporters including the appellants herein were obtaining advance licences for import of raw materials under the DEEC Scheme by falsely showing on records, exports of processed synthetic fabrics made out of 100% Polyester Filament Yarn, Central Excise Officers resumed the records of the appellant company, from the scrutiny of which it appeared that the company had misused the DEEC Scheme by resorting to fraudulent documentation of exports (by showing that they goods exported were 100% Polyester printed fabrics made out of grey powerloom cloth) so as to obtain entitlement of duty free imports of Polyester Filament Yarn and other raw materials to which they were not entitled. The investigation also revealed that the transport company through whom grey fabrics said to have been purchased from M/s. Jaikara Textiles, and M/s. Ladharam Textiles of Bhiwandi were said to have been transported from Bhiwandi to Ahmedabad had falsely created evidence of transportation as the goods were never purchased from Bhiwandi and that payments against the so called purchases were never made and therefore never received by the purported sellers of grey fabrics. On this basis the show cause notice was issued proposing confiscation of the export goods and proposing imposition of penalty on the company and on M/s. Shanti Processors Pvt. Ltd. Ahmedabad (supporting manufacturers) and on the transporter as well as on the directors, partners and proprietor of the above. The notice was adjudicated by the Commissioner of Customs Kandla, who held that the export goods were liable to confiscation and since they were not available of confiscation, imposed penalty of Rs. 5 lakhs under Section 114 of the Customs Act, 1962, and imposed penalty of Rs. 2 lakhs each on M/s. Nova Petrochemicals Ltd. and M/s. Shanti Processors Pvt. Ltd. under Section 114 of the Customs Act, 1962 and also imposed personal penalty of Rs. 2,50,000/- on Shri Jyoti P. Agarwal Director of M/s. Nova Petrochemical Ltd. as he was the master mind behind this fraud of making bogus export under DEEC Scheme, and Rs. 1 lakh on each of the four remaining directors for their mis-declaration and collusion in making bogus exports to get the benefit of DEEC scheme; hence these appeals.
3. We have heard Shri V.M. Doiphode Ld. Advocate and Shri K.K. Srivastava Ld. DR and perused the records.
4. We find that prior to export, the goods were checked and allowed to be exported after satisfaction that the goods confirmed in description, size and weight to the declaration in the export documents. There is no dispute that the net foreign exchange m respect of export has been earned and realized. The transporter has also confirmed (Shri Manubhai M. Patel, proprietor of M/s. Nimesh Transport company Ahmedabad) that goods were transported under cover of Lorry Receipts. The Commissioner has rejected this defence on the ground that the transport company did not produce any original records and on the ground that Manubhai Patel failed to reveal the names of the person who took the delivery of the goods transported. We also note that payments for the grey fabrics were made through a broker Shri Datajee, by crossed/bearer cheque. Further M/s. Shanti Processors Pvt. Ltd. has accounted for the grey fabrics in their RG 1 register and before stuffing the cargo in the container, regular Central Excise gate pass and AR 4 forms were prepared by the Central Excise officers. It is relevant to note that the goods have also been tested and found to be in conformity with the description given in the export declaration, as seen from para 20 of the show cause notice. In spite of the above, the Commissioner has held the non furnishing of the proper address of the grey fabrics supplier against the appellants and thus concluded that the appellants have not produced any evidence that such suppliers existed from whom grey fabrics were purchased by them. This to our minds it is not sufficient for holding that the goods exported were not fabrics made out of 100% Polyester Filament Yarn. The overwhelming evidence on record establishes that goods exported were fabrics made out of 100% Polyester Filament yarn, therefore the finding of the Commissioner that the export goods were liable to confiscation and appellants liable to penalty is clearly unsustainable. Accordingly we set aside the impugned orders and allow the appeals.
(Pronounced in Court)