Bangalore District Court
The Assistant Commissioner Of Central vs M/S.Sansri Trading Corporation on 20 April, 2019
1 CC.No.61/2012
BEFORE THE SPECIAL COURT FOR ECONOMIC
OFFENCES: AT BANGALORE.
Dated this the 20th day of April 2019.
: Present:
Sri. SHANTHANNA ALVA M., B.A., LL.B.,
Presiding Officer, Special Court
for Economic Offences, Bangalore.
CC. No. 61-2012
Complainant: The Assistant Commissioner of Central
Excise (Legal), O/o the Commissioner
of Central Excise, Bangalore-III,
Commissionerate, C.R. Building,
Queen's Road, Bangalore - 560001.
(By Spl. P.P. Sri. K.M.M.,)
.Vs.
Accused: 1. M/s.Sansri Trading Corporation,
100% EOU, Located at No.110,
Nayandahalli, Behind VRL Press,
Mysore Road, Bangalore - 39.
Rep. by A.2-B.S.Anand.
2. B. S. Anand, Managing Partner,
M/s.Sansri Trading Corporation,
100% EOU, Located at No.110,
Nayandahalli, Behind VRL Press,
Mysore Road, Bangalore - 39.
3. Radhey Shyam Rander, Proprietor,
M/s. Mahalakshmi Enterprises, J.M.
Road, Avenue Road Cross, Bangalore.
4. H.Bhaskar, Formerly Inspector,
Central Excise, R/at.No.1206, C-3,
South City, Bannerghatta Road,
Bangalore.
2 CC.No.61/2012
5. Smt. Shillashree, Proprietor,
M/s. Udde Silks, R/at.No.1206, C-3,
South City, Bannerghatta Road,
Bangalore.
(By A.1 & 2-Sri.BMS., A.3-Sri.MS., A.4-Sri.SSH.,
& A.5-Sri.SK., Advocates)
JUDGMENT
1. The complainant/ Assistant Commissioner of Central Excise (Legal), Office of the Commissioner of Central Excise, Bangalore-III Commissionerate, Central Revenue Building, Queens Road, Bangalore, authorized by the sanction order dated: 03.01.2011 issued by the Commissioner of Central Excise, Bangalore and later by the Commissionerate, Bangalore, filed the complaint u/s. 200 of Cr.P.C. alleging that the accused No.1 to 5 have committed the offence punishable u/s.135 (1)(a) and Sec.140 of the Customs Act, 1962. (Herein after as referred as 'the Act').
2. The case of the complainant in brief is that the accused No.1 - M/s. Sansri Trading Corporation is 100% Export Oriented Unit and were importing duty free raw silk yarn under EOU Scheme and they were to be used in the manufacture of silk fabrics/sarees. The officers of the 3 CC.No.61/2012 Directorate of Revenue Intelligence, Chennai, on 06.05.2003 intercepted a consignment cleared under Invoice No.197 dated: 05.05.2003 from accused No.1 at Chennai. The consignment was to be exported under shipping bill No.2596255 dated:06.05.2003. The examination of documents revealed that the goods to be exported were declared as ""Silk Fabrics" in the shipping bills and in corresponding invoice as "Silk Fabrics"
contained in 23 bundles. It was consigned to M/s.UBS Trading (LLC), P.O. Box No.4279, Dubai, UAE, and FOB value of the consignment was Rs.9,61,825/-. The examination of the consignment revealed that out of 23 bundles, 19 bundles contained 570 sets of cotton chudidar materials and remaining four bundles contained 665.250 meters of polyester textile fabrics. The samples of consignment were drawn and consignment was seized under mahazar dated: 06.05.2003. Then the premises of accused No.1 and its another unit at No.114/10, Nayandahalli, Mysore Road, Bangalore were searched and records relating to diversion of imported raw silk yarn, procurement of fabrics/sarees other than silk were 4 CC.No.61/2012 recovered under mahazar. On 12.05.2003, DRI Officials seized fabric/yarn waste and also lead seals. The search was carried out on 06.05.2003 at another premises of accused No.1 located at No.119/350, Gangadharappa Industrial Estate, Kamakshipalya, Bangalore and the goods such as readymade twisted raw silk, mulberry raw silk yarn of foreign origin and silk waste and samples were drawn under mahazar. The scrutiny of the seized documents revealed that accused No.1 had transactions with M/s. Udde Silks. Bangalore. Therefore, the DRI Officials have searched the premises of M/s.Udde Silks, No.46, First Floor, Opp: Petrol Bunk, Mission Road Cross, Bangalore-
27. In the presence of accused No.5, who happened to be the Proprietrix of the said firm, the fabrics worth of Rs. 24,93,591/- were seized under mahazar. The visiting cards of fourth accused as he was representing of accused No.1 was seized. Then residential premises of accused No.4 was searched and from there, Business/visiting cards of accused No.4 as Director of M/s.UBS Trading LLC, Dubai were seized under mahazar. The statements of accused No.2 was recorded and he admitted that the mis-declaring 5 CC.No.61/2012 the goods and values and the value of the goods was realized from the customers. The remaining amounts were remitted through Hawala transactions and said transactions were handled by accused No.4. Accused No.2 stated about the modus operandi of the transaction. Later, accused No.2 through telegram dated: 08.07.2003 retracted from the statement given on 07.07.2003. Accused No.4 gave statements on different dates and stated as to how he involved in the business of accused No.1 and the modus operandi. Accused No.3 in his statements recorded on various dates stated above his involvement and given the particulars of modus operandi being used in diverting the imported silk yarn and transfer of money. The officials have recorded the statements of the Accountant of accused No.1 and the other persons who supplied the silk materials, and of the job workers. The investigation revealed that in total 108 consignments of duty free raw silk yarn/fabrics totally weighing 187631.49 valued at Rs.14,27,91,409/- involving duty of Rs.5,11,65,081/- were imported during the period from October-2001 to May 2003. Out of that substantial quantity of 172169.56 kgs of imported yarn/fabrics valued 6 CC.No.61/2012 at Rs. 12,97,17,763/- were diverted and sold in the open market. This includes quantity of 99.009.21 kgs., valued at Rs. 7,19,29,630/- diverted and sold through accused No.3 and 443.05 kgs., removed to M/s.Udde Silks for sale. Accused No.2 received the sale proceeds of duty free imported raw silk yarn through accused No.4 and his employees, accused No.3 and from other purchasers. Accused have fabricated the challans issued for job work. The documents seized from the premises of accused No.1 revealed that it had the transaction with M/s. Mahalakshmi Enterprises. The search was conducted and the files containing documents of high sea sales made to the accused No.1 were seized under mahazar. Accused No.3 was present at the time of search and he handed over two CPU vide letter dated: 07.05.2003. The officials have visited the residential premises of one Sampath Kumar working at M/s. Udde Silks and shifted silk fabrics worth of Rs. 3,98,898/- were seized. Mr. Sampath Kumar told that silk fabrics were received from accused No.1. The cash bills, item entry book,"out book" katch bill book maintained by M/s. Udde Silks and also dairy of accused No.5 were 7 CC.No.61/2012 recovered. The computers which contained data relating to receipt of fabrics from accused No.1, sale invoices of M/s.Udde Silks and other transaction was also seized. The officials have searched the premises of M/s. Nikytasha Export and Import owned by one T. Ganashyam and seized the delivery challans reflecting the sales dupion fabrics to Sandhya Silk and shifted to the accused No.1. The scrutiny of the seized documents revealed that accused No.1 had the transaction with M/s. Sandhya Silk run by the father of accused No.4 and the documents were seized under mahazar. Perusal of the documents revealed that substantial quantity of imported raw silk yarn and fabrics had been diverted and non-silk fabrics/sarees/made ups were procured locally were exported by mis-declaring them as silk fabrics/sarees and made ups. During the course of investigation, job work register prepared, without actually issuing such materials for job work were seized. The job workers like M/s.Lakshmi Silk Industries, M/s.Om Silks and M/s.Shanker Industries were fictitious. Accused prepared rubber stamps of these job workers and used them in the challans to show the issue materials for job 8 CC.No.61/2012 work and return of job work materials. The challans were prepared at their premises itself for issue as well as receipt of materials under the challans. The removals of raw silk yarn issued for job work and return under these challans were not for purpose of job work, but for diversion and sale. Accused used only part of the imported duty free yarn in the manufacture of silk fabrics in the EOU during the period from January-2003 to May-2003 and part of the fabrics manufactured were diverted through M/s. Udde Silks and sold in the market. To show that silk fabrics were manufactured out of imported materials in EOU, they procured cheaper silk fabrics from the local market. They also purchased silk waste to show that it was generated during the course of manufacture and that waste was destroyed. Accused manufactured some quantity of fabrics out of imported materials to show that they are engaged in manufacturer of silk fabrics and also kept sufficient stock of locally procured cheaper silk fabrics in their factory to show as if it was manufactured out of the imported raw silk yarn. Accused not maintained the records relating to issue of imported goods for production, finished goods product of 9 CC.No.61/2012 variety wise in process materials issues and receipts for job work, wastages, goods exported out of the manufacturer and local procurements. It is averred that the accused locally procured cheaper silk fabrics/ sarees and also polyester/cotton/nylon/art silk fabrics/ sarees and exported them as high valued silk fabrics manufactured under EOU Scheme to fulfill the export obligation under EOU Scheme. Accused No.1 and 2 got the full remittance of higher value on the cheaper valued fabrics/sarees exported by them with help of accused No.4 and 3 and one Mr.Abubaker. Accused No.1 and 2 exported most of the consignment to UBS Trading LLC, Dubai (U.A.E.) which is a company where accused No.4 is a Director/Partner. Accused No.1 and 2 exported low valued items required and selected by Dubai Customers channelizing the exports through M/s.UBS Trading LLC, Dubai (U.A.E.) mis-declaring as high valued silk fabrics during the period from October- 2001 to May-2003, with the help of accused No.4, who is the Director/Partner of M/s.UBS Trading LLC, Dubai (U.A.E.) and illegal remittance of higher values were received. The difference between the real value of export 10 CC.No.61/2012 goods and the value mis-declared in the export documents was issued by accused No.2 for cash payments made towards the purchase orders placed by Dubai Customers with the local suppliers of fabrics /sarees thus procured by them were packed and exported in the guise of the silk fabrics manufactured under the EOU Scheme. Thus, there is no fulfillment of the export obligation under the EOU Scheme. Accused No.1 and 2 manufactured silk fabrics and diverted, out of which a portion was seized from the premises of M/s.Udde Silks and it included the portion of silk fabrics shifted from M/s.Udde Silks to the premises of Sri.Sampath Kumar, employees of M/s.Udde Silks and a portion was sent through M/s.Udde Silks under the invoices of M/s.Udde Silks. Accused No.1 and 2 manufactured poly spun, viscose, spun and other cheaper fabrics which were not covered by the license/letter of permission given by the Development Commissioner and also without intimation to the Customs Department. Accused No.1 and 2 had the physical stock of locally procured cotton sarees and viscose satin fabrics packed and kept ready for export in the guise of silk fabrics manufactured in the EOU. Accused 11 CC.No.61/2012 No.1 and 2 had attempted to export cotton chudidhars and polyester fabrics vide Invoice No.197/05.05.2003 and Shipping Bill No.6928, dated: 5.05.2003 to M/s.UBS Trading LLC, Dubai, by mis-declaring the same as "Silk Fabrics" of 4895 meters and of an FOB value as Rs.9,61,825/- under seizure at Chennai. It is averred that accused No.1 and 2 with the connivance of accused No.4 and 3 had imported duty free raw silk yarn and diverted the same into the local market during the period from October- 2001 to May-2003 in violation of EOU Scheme. Accused No.1 and 2 not utilized the substantial quantity of duty free raw silk yarn/fabric imported for the purpose of manufacture of silk fabrics/sarees/made ups from the local market and exported through accused No.1 mainly to UBS Trading, Dubai, wherein accused No.4 is a Director for the requirements of Dubai based customers. These exports were shown towards fulfillment of export obligation. Accused No.5 connived with accused No.2, 4 and 3 in the diversion and sale of imported raw silk yarn, fabrics and procurement of local fabrics/sarees etc., through accused No.1. Accused No.4 connived with accused No.2 and 3 in 12 CC.No.61/2012 the importation of duty free raw silk yarn, devised a modus operandi for diversion and sale, which was implemented by accused No.2 and 3. Accused No.2 connived with accused No.5 and procured local fabrics/sarees needed by his Dubai Customers and routed the same through accused No.1 and M/s.UBS Trading. Dubai for the ultimate benefit of his Dubai Customers. For every export order, accused No.4 was getting Rs.15 per meter as commission, apart from a salary of Rs. 15,000/- from accused No.1. All the exports of cotton and other non-silk fabrics etc were made through accused No.1 by mis-declaration of description, quantity and value in the guise of silk fabrics as if manufactured and exported by accused No.1 fulfilling inadmissible export obligation. Accused No.4 obtained the passport declaring his profession as "Business" and procured export orders for the accused No.1. Accused No.5 is the Director of M/s.UBS Trading LLC, Dubai with 24% shareholding and more than 75% of exports of accused No.1 were made to the above firm. Accused No.3 made high sea sales of several consignments to accused No.1 and received copies of bills of entry relating to such 13 CC.No.61/2012 imports. Accused No.3 purchased 99 tons of duty free raw silks yarn removed without payment of duty and without documents. Accused No.3 know that the silk yarn were intended only for the use in the EOU and getting 3.5% of commission on sale price duty free yarn. Accused No.3 connived with accused No.2 and accused No.3 and sold the said materials. Accused No.3 also supplied silk fabrics to EOU which were exported. Accused No.5 was found in possession of silk fabrics of foreign origin. Accused No.5 aware that accused No.1 was a 100% EOU and connived with accused No.2 and accused No.4 in removal of duty free silk yarn and fabrics and also sarees manufactured out of imported duty free raw silk yarn from accused No.1 to the premises of M/s.Udde Silks. These goods were diverted and sold in the local market. Accused No.5 procured cheaper fabrics/Art silk sarees locally and supplied to the accused No.1 and who subsequently exported the same. These exports through accused No.1 were against the orders procured by M/s.Udde Silks. Accused No.5 directed and got shifted the silk fabrics removed from accused No.1 lying at M/s.Udde Silks to the 14 CC.No.61/2012 residential premises of her employees, Sri. Sampath Kumar, to avoid detection and seizure. Accused No.1 to 5 by their acts of omission and commission rendered the imported raw silk/fabric and exported non-silk goods, purchased local silk goods. The evasion of customs duty found at Rs. 4,70,00,227/- and anti-dumping duty of Rs. 57,51,844/-. The Additional Director of DRI issued the show cause notice and then the Commissioner (Adjudication) confirmed the duty besides imposing fine and penalty. Accused No.1 to 5 preferred the appeals before the CESTAT, Bangalore and conditional stay order was passed. Only accused No.3 complied the order, hence the appeals preferred by the other accused persons came to be dismissed. Accused persons have committed the offence punishable u/s.135 (1)(a) of the Customs Act, 1962 by mis-declaration, undervaluation and violation of exemptions under the Export Oriented Units Scheme and hence, the complaint.
3. After the registration of the case, accused No.2 to 4 were arrested and produced on 13.05.2003. On 14.05.2003, the accused No.2 and 3 were released on bail. 15 CC.No.61/2012 The complaint was filed on 11.05.2012 and the case was registered against accused No.1 to 5 for the offence punishable u/s.135 (1) (a) and Sec.140 of the Act. Accused No.2 to 5 have appeared through their respective counsels. Accused No.4 and 5 were also released on bail. Copies of the complaint and other documents were furnished to them. After that the evidence before charge was recorded. The complainant and other witnesses were examined as P.w.1 to P.w.3 and produced documents were marked as Ex.p.1 to 15(a).
4. Thereafter, hearing the learned Spl.P.P. and the counsels of the accused persons, the charge were framed against accused No.1 to 5 as required u/s. 244 of Cr.P.C., for the offence punishable u/s.135(1)(a) and Sec.140 of the Act and read over to them. The accused No.1 to 5 denied the charges leveled against them pleaded not guilty and claimed for trial
5. After framing of charge, P.w.1 to 4 were recalled, P.w.1 was further examined and Ex.p.16 to 47 and Ex.p.48 to 51(e) were marked through P.w.2 and P.w.4. The other witnesses cited by the prosecution were summoned and 16 CC.No.61/2012 examined as P.w.5 to 32 and documents were marked as Ex.p.52 to 191.
6. After closure of complainant's side evidence, the statements of accused No.1 to 5 were recorded as provided u/s. 313 of Cr.P.C. The accused No.1 to 5 denied incriminatory evidence found against them, but not chosen to lead the evidence.
7. Heard the arguments of the learned counsels of the complainant and accused. Perused the complaint and the evidence on record. The points that arise for my consideration are:
Point No.1: Whether the complainant has proved that accused No.1 and 2 had diverted the duty free imported silk yarn in the local market during the period from Oct -2001 to May
- 2003 and they procured the silk and non-silk fabrics/ sarees/made ups from the local market and exported them by mis-declaring that the exported goods as silk products made up with imported silk yarns and thereby committed the offence punishable under section 135(1)(a) of the Act?
Point No.2: Whether the complainant has proved that accused No.3 and 4 connived with accused No.1 and 2 in the importation of duty free raw silk yarn and devised a modus operandi for diversion and sale of imported duty free silk yarn in the open market and exporting of local fabrics by mis-declaring them as the products mad up with imported silk yarns and 17 CC.No.61/2012 thereby committed the offence punishable under section 135(1) (a) of the Act?
Point No.3: Whether the complainant has proved that accused No.5 connived with accused No. 1 and 2 in diverting the imported silks to the local marked and in procuring the local fabrics/ sarees to export them through accused No.1 in the guise that fabrics made out of imported silk yarn and thereby committed the offence punishable under section 135(1)(a) of the Act?
Point No.4: What order?
8. My findings on the above said points are as under:
Point No.1: In the Affirmative, Point No.2: In the Affirmative, Point No.3: In the Negative, Point No.4: As per the Final orders for the following:
REASONS
9. Points No.1 to 3: It is admitted fact that accused No.1 was an EOU Unit and accused No.2 is the Managing Partner. There is no dispute over the fact that accused No.2 was responsible for the conduct of business of accused No.1 and he was in charge of its day today affairs.
The allegation is that accused No.1 imported 1,87,631.50 kgs. of yarn/ fabric worth of Rs.14,27,91,409/- during the 18 CC.No.61/2012 period from Oct - 2001 to May - 2003, on which customs duty of Rs.5,11,64,081/- was forgone. Out of the imported goods, 1,72,169.56 kgs. of imported yarn fabric valued at Rs. 12,97,17,763/- had been illegally sold to the local market, without using them in the manufacture of output goods like silk sarees/made ups. Total quantity of 99,009.21 kgs. Valued at Rs.7,10,29630/- diverted and sold through third accused and 443.05 kgs. were removed to M/s. Udde Silk for sale. i.e., the concern of accused No.5.
10. It is alleged that Accused No.2 received the sale proceeds of duty free imported raw silk yarn through accused No.4 and his employee and also from accused No.3 and other purchasers. They created fabricated the challans prescribed for job work to cover up the diversions of imported yarn, manipulated the figures and details in the prescribed registers without actually issuing such material for job work. Job workers like M/s. Lakshmi Silk Industries, M/s. Om Silks and M/s. Shankar Industries were fictitious. Only parts of the imported duty free yarn were used and remaining part of fabrics manufactured were diverted through M/s. Udde Silks and sold in the open market. To 19 CC.No.61/2012 show that silk fabrics were manufactured out of imported materials, accused use to procure cheaper silk fabrics from the local market. They also purchased silk waste to show that it was generated during the course of manufacture and the waste was destroyed. Some quantity of fabrics were manufactured at the unit only to show that they engaged in the manufacture of silk fabrics and sufficient stock of locally procured cheaper silk fabrics in the factory to show as if they were manufactured out of the imported raw silk yarn. Accused No.1 and 2 not maintained records relating to issue of imported goods for production, finished goods produced variety wise, the process of materials, issues and receipts of job works, wastages goods exported out of the manufacture and local procurements, locally procured cheaper silk fabrics/sarees as also polyester/cotton/nylon/ art silk fabrics/sarees were exported mis-declaring as high valued silk fabrics manufactured under EOU Scheme to fulfill the export obligation under EOU Scheme. Accused No.1 and 2 got full remittance of higher value on the cheaper valued fabrics/sarees exported by them with the help of accused No.3 and 4 and one Sri. Abubaker. 20 CC.No.61/2012
11. Accused No.1 and 2 exported most of the consignments to M/s. UBS Trading, LLC, Dubai, (UAE), wherein, accused No.4 is Director/Partner. Accused No.1 to 3 exported low valued items required and selected by Dubai Customer channelizing through M/s. UBS Trading, LLC, Dubai, (UAE) mis-declaring as high value silk fabrics during the period from Oct-2001 to May-2003 with the help of accused No.4. The difference between the real value of export goods and the value of mis - declared in the export documents was used by accused No.2 for cash payments made towards the purchase orders placed by Dubai Customers on the local suppliers, the fabrics/sarees, thus procured were packed and exported in the guise of silk fabrics manufactured under EOU Scheme. Thus, the accused No.1 and 2 not fulfilled the export obligations under the EOU Scheme.
12. Accused No.1 and 2 manufactured poly spun, viscose spun and other cheaper fabrics which are not covered by the license/letter of permission given by the Development Commissioner and also without intimating to the Customs Department. There was stock of locally 21 CC.No.61/2012 procured cotton sarees and viscose satin fabrics, packed and kept ready for export in the guise of silk fabrics manufactured in the EOU. Accused No.1 and 2 made attempted to export cotton chudidhars and polyester fabrics vide Invoice No.197/05-05-03 and shipping bill No.6928, dated:05.05.2003 to M/s. UBS Trading, LLC, Dubai, mis- declaring them as "silk fabrics" of 4895 meters and of an FOB value as Rs.9,61,825/- . The accused No.1 and 2 with connivance of accused No.3 and 4 diverted the imported duty free raw silk yarn and diverted the same into local market during the period from Oct-2001 to May-2003. Accused No.5 found in possession of silk fabrics of foreign origin and she connived with accused No.2 and 4 with removal of duty free silk yarn and fabrics and also sarees manufactured out of imported duty free raw silk yarn from accused No.1 to the premises of M/s. Udde Silks. Accused No.5 procured cheaper fabrics/art silk sarees locally and supplied accused No.1 against the order procured by M/s. Udde Silks. Accused No.5 got shifted silk fabrics removed from accused No.1 lying at M/s. Udde Silks to the 22 CC.No.61/2012 residential premises of her employee to avoid detection and seizure.
13. Accused No.1 is a 100% Export Oriented Unit and were importing the duty raw silks under EOU Scheme on the condition that imported silks yarns have to be used in the manufacture of silk fabrics/ sarees. The silk fabrics so manufactured were to be exported and they cannot be diverted to the local market. Percentage of waste was prescribed and they were supposed to be destroyed in the presence of the officers meant for that. The selling of imported silks yarns or fabrics manufactured out of the imported silk yarn, in the open market is prohibited. The outsourcing of manufacturing the fabrics out of the imported silks to the job workers is permitted, but it is to be given to the licensed job workers and accused No.1 is supposed to maintain the records in this regard. The complainant's case is that the accused persons have connived with each other and diverted imported silks in the open market and exported the locally made silk and non- silk fabrics representing them as the fabrics made out of imported silk yarn and thereby violated the EOU scheme 23 CC.No.61/2012 and avoided the payable import duty. In the complaint, the role played each accused is stated in detail. In the adjudication proceedings, it is confirmed that accused No.1 to 5 have colluded with each other as asserted in the complaint and imposed the penalty. Based on the confiscation of materials from various places and the statements given by accused No.2 to 5 and others, the complainant is asserting that the accused have committed the alleged offences.
14. C.w.1-Sri.K.Monoheran, the then Intelligence Officer at Directorate of Revenue Intelligence, Chennai, examined as P.w.1 deposed that accused No.1- M/s. Sansri Trading Corporation, Bangalore is a 100% Export Oriented Unit and specific intelligence was received to the effect that accused No.1 has exported cotton and other goods in the name of Silk fabrics in order to misuse the benefits of EOU Scheme. Accused No.1 filed the shipping bill with declaration and certification of truth of declaration for exports of goods to Dubai, wherein, the item is described as silk fabric and declared value is Rs.9 lakhs. Then in the presence of Cargo Agent of Golf Airways, 24 CC.No.61/2012 Assistant Manager of Air India Authority, representative of CHA, the consignments was opened and all the goods therein were found to be cotton fabrics and not of silk fabrics and value of the goods found to be Rs.1.5 lakhs. The goods were seized under mahazar marked as Ex.p.1 and description of seized goods are mentioned in the annexure enclosed to the mahazar. The shipping bill is marked as Ex.p.2.
15. C.w.4-Sri.T.Somashekar, the then Sr. Intelligence Officer, DRI, Bangalore examined as P.w.2 deposed that on 06.05.2003 on the strength of search warrant, visited the premises of accused No.1 and found the incriminating documents and records relating to imports and exports. P.w.2 deposed that he seized the laptop and car belonging to accused No.4 and the rubber stamps, seals, viscose satin fabrics and cotton sarees in addition to raw silk fabrics detailed in the mahazar marked as Ex.p.3 and drawn the samples. P.w.2 deposed that he seized the materials denied in the list marked as Ex.p.4. The impressions of seized seals are imposed in the sheet marked as Ex.p.5. P.w.2 deposed that the details of raw silk and silk fabrics 25 CC.No.61/2012 are mentioned in the list marked as Ex.p.6. The details of viscose satin fabrics and cotton sarees mentioned in the list marked as Ex.p.7. The details of seized finished goods are mentioned in the list marked as Ex.p.8. The details of samples are mentioned in the list marked as Ex.p.9.
16. P.w.2 has further deposed that on 07.05.2003 he along with officials and pancha witnesses visited the premises of another premises of accused No.1 situated at Nayandanahalli, Mysore Road, Bangalore and he twisted yarn and other items detailed in Ex.p.10. The seized items were given to the custody of accused No.2 under suprathanama is marked as Ex.p.11 and the seized records were given to Additional Director. P.w.2 deposed that drawn samples were sent to Central Silk Technological Institute under letter dated: 08.05.2003 is marked as Ex.p.12. P.w.2 deposed that in pursuant to the summons, Accused No.2 appeared and gave statement marked as Ex.p.188. Accused No.2 confirmed the seizure of the goods and document in the premises of accused No.1.
17. P.w.2 deposed that he searched the premises of Mr.Sampath Kumar S., employee of M/s. Udde Silks and 26 CC.No.61/2012 the incriminating documents, silk fabric and computers detailed in the mahazar marked as Ex.p.189 were seized. After seizure, he recorded statement of the Mr. Sampath Kumar S., marked as Ex.p.190.
18. C.w.9 - Sri.R.Rajeevalochan, the then Sr. Intelligence Officer, DRI, Bangalore, examined as P.w.4 deposed that on the strength of search warrant, he searched the residential premises of accused No.4 on 07.05.2003 and found the visiting card of accused No.4 marked as Ex.p.49 and seized them under mahazar is marked as Ex.p.48. From the residence situated at Opposite of Petrol Bank, Mission Road, Bangalore-27, they found business records, swatch register quotations, silk fabrics, silk sarees, packed as well as unpacked and he sealed the premises. P.w.4 deposed that they taken the samples and regarding search and seizure dawn the mahazar marked as Ex.p.50 and annexure is marked as Ex.p.51.
19. C.w.15 - Sri. Girish Vaidya, working as Intelligence Officer, DRI, Bangalore, examined as P.w.5, deposed that on 12.05.2003, he along with officials and witness visited the premises of accused No.1 for the reason information 27 CC.No.61/2012 that it was misusing benefit available to EOU Schemes. In the presence of Mr.A.C.Krishna Murthy, he conducted the search and found the waste fabrics and threads materials. P.w.5 deposed that he drawn the samples, lead samples were found and he seized them under mahazar marked as Ex.p.52 and the seized materials are mentioned in the annexure is marked as Ex.p.53 and taken the undertaking from Mr.A.C.Krishna Murthy marked as Ex.p.54.
20. C.w.30 - Sri. Bijuthampia, the then Intelligence Officer Bangalore, examined as P.w.6 deposed that on 03.06.2003, he searched the premises of M/s.Sandya Silks and found letter head books of M/s.Sandya Silks with torn sheet, files and cheques were seized through the mahazar marked as Ex.p.55.
21. C.w.27 - Sri.Vishwendra Rao, the then Intelligence Officer, DRI, Bangalore, examined as P.w.7 deposed that he conducted the further investigation of the case. The seized records revealed that about 1,87,000/- kgs of silk yarn and fabrics were imported duty free during the Oct- 2001 to May-2003 and out of that 1,87,000/- kgs were of imported silk yarn and fabrics.1,72,000/- kgs were not used 28 CC.No.61/2012 in the manufacture of finished goods, but diverted and sold in the local markets. P.w.7 deposed that he recorded the statements of accused No.2 are marked as Ex.p.56 to 64 on different dates. P.w.7 has deposed that the statements marked as Ex.p.61 to 64 were recorded before the Jail Superintendent. P.w.7 has deposed that accused No.3 had purchased the imported duty free silk yarn from accused No.1 and 2 and sold them in the open market. Accused No.3 had given the sale proceeds to accused No.1 and 2 through the cash and the details of the sale proceeds were reflected in the personal ledger account sent by fax to accused No.1 and 2. The statements of accused No.3 was recorded on 12.05.2003 and 13.05.2003 marked as Ex.p.65 and 66 and further statement is marked as Ex.p.67 was recorded on 11.06.2003. Accused No.3 has admitted that he purchased the duty free imported silk yarn from accused No.1 and 2 and sold them in the open market and paid the sale proceeds in cash to accused No.1 and 2 through accused No.4.
22. P.w.7 has further deposed that he recorded the statements of Mr.Jayasimha, who was working as 29 CC.No.61/2012 Supervisor in accused No.1 marked as Ex.p.68 and Ex.p.70. C.w.32 in his statement stated that locally purchased fabrics were used to be exported and he received the sale proceeds from accused No.3 and handed over to the accused No.2. C.w.32 had given the names of job workers and for those job workers, transaction of job work of converting the duty free imported silk yarn into silk fabrics were given. C.w.32 has given the names of job workers to whom accused No.1 sent the free imported silk yarn. The prescribed challans were misused by accused No.1 and 2 for diversion of duty free imported silk yarn for sale in the open market.
23. P.w.7 further deposed that accused No.4 is serving as the Central Excise and his father C.L. Hanumanthappa is in Silk Trading and accused No.4 also involved in the Silk Trading Business. Accused No.2 and 4 devised modus operandi to sell the duty free silk yarn imported by accused No.1 and 2 in the local market with the help of accused No.4. Accused No.1 to 4 were involved in the sale of the duty free silk yarn imported by accused No.1 in the local market. Accused No.1 to 4 connived themselves to 30 CC.No.61/2012 purchase non-silk fabrics and made ups in the local markets and exports under EOU Scheme from accused No.1. Locally procured cheaper fabrics and made ups were mis-declared in the export documents as silk fabrics manufactured and exported from EOU of accused No.1.
24. P.w.7 has further deposed that accused No.4 was a Director in a Dubai based company called M/s. UBS Trading LLC, Dubai and he was placing orders for export on behalf of overseas company to the EOU of accused No.1 and more than 80% of exports of EOU of accused No.1 were made to M/s. UBS Trading LLC, Dubai. M/s.UBS Trading LLC, Dubai remitted full value of the export involves wherein the description of the exported goods were mis-declared as silk fabrics, though actually the goods exported were cheaper non-silk fabrics. Accused No.4 has admitted that he received the cash from accused No.3 and the said cash was towards the sale proceeds of the duty free imported silk yarn. Accused No.4 has also admitted that he has handed over the cash received from accused No.3 to accused No.2. Accused No.4 had given the statements marked as Ex.p.42 to 74 and statement 31 CC.No.61/2012 marked as Ex.p.74 was recorded in Jail. P.w.7 deposed that on 03.06.2003, he recorded the further statement of accused No.5 marked as Ex.p.75 and the further statement of Sri.Sampath Kumar, who was working in M/s.Udde Silks marked as Ex.p.76. P.w.7 has deposed that the statements of witnesses and collected the delivery notes, receipts books are marked as Ex.p.77 to 129.
25. P.w.7 deposed that on 12.05.2003 he addressed a letter marked as Ex.p.143 to get the travel details of accused No.4 and obtained the details marked as Ex.p.144. He addressed a letter marked as Ex.p.145 to the Regional Passport Office requesting to furnish the passport particulars of accused No.4. The Ministry of External Affairs furnished the copy of the passport application marked as Ex.p.146. The Additional Director General, DRI, addressed a letter dated: 23.05.2003 marked as Ex.p.147 to Dubai Consulate requesting to forward the records. The consulate furnished the enclosures containing the details of share holding under a letter marked as Ex.p.148. Travel details of A-4 marked as Ex.p.149 was received. P.w.7 deposed that Superintendent of Customs, Bangalore vide letter marked 32 CC.No.61/2012 as Ex.p.150 furnished the files pertaining to the A-1 company. He sent the letter marked as Ex.p.151 to the Central Silk Technological Research Institute by seeking clarification. He received the reports marked as Ex.p.152 to
180. The covering letters are marked as Ex.p.181 and 182. P.w.7 deposed that the reports are inconsonance with the descriptions in the Mahazar.
26. P.w.7 deposed that accused No.3 sent the representation to various departments along with copy of the FIR marked as Ex.p.183. On 04.09.2003 he visited the M/s. Sandy Silk and recorded the statement of C.w.82 marked as Ex.p.184. Cw.82 furnished the details of locally purchased fabrics and delivery of the same to accused No.1. Deputy Director of DRI recorded the statement of C.w.83 and 84 as per Ex.p.132 and 133 and sent the same through a covering letter marked as Ex.p.185. P.w.7 deposed that duty quantification chart was prepared as per Ex.p.187 based on the incriminating documents seized during the investigation.
27. C.w.33-Sri.M.R.Jayasimha, the Assistant Manager of accused No.1 Company, Bangalore, examined as P.w.8 33 CC.No.61/2012 has deposed that he was looking after the customs related documents and labour wages of accused No.1. The officials of customs department raided the premises of accused No.1 and recorded his statements marked as Ex.p.68 to 70 and Ex.p.130 and 131.
28. C.w.47 - Sri. Hema Raj K. Jain, examined as P.w.10 deposed that M/s.J.K.Company is a Partnership Firm and he is one of the Partners of the said firm and it being run since 50 years. About 15 Years back; the Customs Officials came to firm and enquired with regard to the supply made by them to the customers. He is unable to recollect the customers' details sought by the Customs Officials and in this regard, the Customs Officials have recorded his statement marked as Ex.p.83. P.w.10 stated that he is unable to remember the details of the supply made to the customers at that time. Generally the representatives use to come and collect the materials and he had no documents regarding sale in respect of sale as it was the transaction about 15 Years back.
29. C.w.46-Sri.Rajendra Kumar, examined as P.w.11 deposed that he is the Proprietor of M/s. Sakaria Silk and 34 CC.No.61/2012 Sarees and it was set up in the Year-1996. About 15 years back, the Customs Officials came to firm and enquired with regard to the supply made by them to one of business concern and he is unable to recollect name. The said concern purchased the sarees on approval basis and then retuned back. He is unable to remember the details of sarees, the date, month and year of transaction and name of the person who placed the order and in this regard, the Customs Officials have recorded his statement marked as Ex.p.82. P.w.11 stated that he is unable to remember the details of the supply made to the customers at that time. Generally the representatives come and use collect the materials and he is not having the documents regarding sale as it was the transaction of 15 Years back.
30. C.w.50-Sri.M.Hema Raj, examined as P.w.12 deposed that Divya Silk Kendra is a Partnership Firm and he is one of the Partners of the said firm and it being run since 25 Years and it is dealing with the business of dress materials and sarees. M/s.Sansri Trading Corporation is a Partnership firm; accused No.2 is the Managing Partner. About 15 Years back, the Customs officials called him and 35 CC.No.61/2012 informed that they arrested accused No.2 and 4 and asked him to come there, he went to the office of the DRI at around 11 a.m., and he stated to the officials, he had supplied art and pure silk materials to accused No.1. Sometime accused No.2 and sometime accused No.4 used to place the orders and accordingly, they were supplying the materials and in this regard, the Customs Officials have recorded his statements marked as Ex.p.86 and 87. P.W.12 stated that he is unable to recollect as to how much materials were sold and for which price.
31. C.w.48-Sri.H.Muniyappa, examined as P.w.13 deposed that about 10 Years back, he was doing the work of Weaving Silk Sarees and he done that work for about 30 Years. He used to supply silk sarees to A-1 concern. A-4 used to meet them and discuss about the sale and accordingly, he used to send the sarees and transactions used to take place is worth of about Rs.4 lakhs. About 15 Years back, DRI officials called him to their office and asked about the details of the sale made to accused No.1 concern and in this regard, he has given statement in 36 CC.No.61/2012 writing marked as Ex.p.84 and at present he is unable to recollect the contents of Ex.p.84.
32. C.w.52-Sri.Babu Rao, examined as P.w.14 has deposed that he is the Proprietor of M/s.Deepal Silk and Sarees and Dealer of dupion silk fabrics and doing this business since about 30 Years. M/s. Sandhya Silks, Cubbonpet is one of his customers. Father of accused No.4 was the Proprietor of M/s. Sandhya Silks. About 15 Years back; DRI Officials have called him to their office and asked about the sales made to M/s. Sandhya Silks. The representatives of M/s. Sandhya Silks used to collect the materials as per the orders and the amounts were paid either by M/s. Sandhya Silks or by accused No.4 and asked about the sales made to M/s.Sandhya Silks and accused No.4 and in this regard, he has given the statement marked as Ex.p.90 and at present he is unable to recollect the contents.
33. C.w.83-Sri.Parimal Shashikant Chhapia, Indenting Agent Mumbai, examined as P.w.15 deposed that he was the partner of M/s. Abhey Traders, Indenting Agents in India for Chinese suppliers of raw-silk. C.w.84 was his 37 CC.No.61/2012 uncle and he was also the Partner of the above firm, and he expired about 4 Years back. On 06.09.2003, he and C.w.84 were called to DRI office at Bombay, shown the photos of Mr.Ananda Sharma and Mr.H.Bhaskar and enquired as to whether they know about them. He identified the photos. In 2001-02, they used to sign contract with China for selling raw-silk yarn in India and out of that they might have given some quantity of raw-silk yarn to M/s.Sansri Trading Corporation. Chinese company used to give 1.5% to 3% commission depending upon the quantity. In this case, they had not get the commission from the China in respect of raw materials, they supplied to M/s.Sansri Trading Corporation. Chinese company told that they have not received the money from M/s.Sansri Trading Corporation. In this regard, he has given statement marked as Ex.p.132 and it is in the handwriting of C.w.84.
34. C.w.75 - Sri.B.S.Bahadur, Retired Joint Director, Bangalore, examined as P.w.16 deposed that he owned a Omni Van in the Year-2003 and sold the same through agent and he is not able to recollect as to whom that vehicle was sold. In this regard, DRI Officials had called 38 CC.No.61/2012 him to the office and enquired and he stated about the selling of the said vehicle.
35. C.w.70-Sri.M.N.Raghavendra, Business, Bangalore examined as P.w.17 deposed that in the Year-2003, he along with one Mr.Jayaram running a Partnership Firm named as M/s.Adithya Designs. They were dealing with the Embroidery Job Work. M/s.Sansri Trading Corporation had given approximately about 500mts of fabric for embroidery job work. They done the embroidery work and handed over the same to M/s.Sansri Trading Corporation, In this regard, in the Year-2003, DRI Officials have called him to their office and enquired in this regard, recorded his statement marked as Ex.p.112.
36. C.w.64-Sri.N.S.Athmaram, Retired Businessman, Maduari T.N., examined as P.w.18 deposed that in the Year-2003, he was doing the job of Agent in Handloom Sarees. In the Year-2002, M/s.Sansri Trading Corporation had purchased 620 meters of handloom polyesters sarees. He is not able to remember as to who placed the order, and he received the commission from the party who supplied the sarees. In the Year-2003, the DRI Officials came to his 39 CC.No.61/2012 residence and enquired about that and recorded his statement is marked as Ex.p.99.
37. C.w.74-Sri.G.Lokesh, examined as P.w.19 deposed that he is running the Proprietorship concern named as M/s. Authenticity since about 20 Years and it deals with the Embroidery Work. About 15 Years back, M/s.Udde Silks have placed embroidery job works. They have completed the job work and returned the same to M/s.Udde Silks. DRI Officials have called him to their office and enquired about their transactions with M/s.Udde Silks and in this regard, recorded his statement marked as Ex.p.118.
38. C.w.58 - Sri.V.Srinivas, examined as P.w.20 deposed that he is doing the Job Work of Dying Silks Yarns in the name of M/s. Nethravathi Dying Works. M/s.Sansri Trading Corporation used to give the job work of Dying Silk Yarns and they used to dye them and return back to them and they used to pay for that, they done that work for M/s.Sansri Trading Corporation for a period of 6 Months about 15 Years back. The DRI Officials have visited their residence and enquired about that and then told him to write the same, and Ex.p.101 and 102 are the statement 40 CC.No.61/2012 given in writing to custom officials. P.w.20 deposed that he is not able to recollect the contents of he documents marked as Ex.p.101 and 102.
39. C.w.59-Sri.C.K.R.Kannan, examined as P.w.21 deposed that in the Year 2000 to 2015, he was doing the Business of Handloom Sarees at Madurai in the name of M/s.CRK Trading Company. In the Year-2002, C.w.64 - an agent approached them and placed the orders for polyesters handloom sarees. The value of the placed order was around Rs.2 lakhs and they have sent the ordered sarees to M/s.Sansri Trading Corporation. In this regard, DRI Officials made enquiry.
40. C.w.54-Sri.Kishore Tekwani examined as P.w.22 deposed that from the Year 1988 to 2009, he was doing the Business of Sarees in the name of M/s. Jai Veshno Silks at Bangalore, dealing with all kinds of Silk Sarees. He is not able to remember as to whether; he had any transactions with M/s. Sansri Trading Corporation. He is not able to recollect as to whether DRI Officials enquired about that and recorded his statement, but not able to recollect anything about the transactions.
41 CC.No.61/2012
41. C.w.57- Sri. A.R. Hari Ram, Business, Paramakudi, T.N., examined as P.w.23 deposed that he is running the Business of Handloom Sarees since 25 Years in the name of M/s.A.V.Ramachary and Co., In the Year-2002, C.w.64 - a agent approached them and placed the orders for cotton and polyesters handloom sarees. The value of the placed order was around Rs.1.20 lakhs and they supplied the ordered sarees to M/s.Sansri Trading Corporation. In this regard, DRI Officials made enquiry.
42. C.w.69-Sri.C.Kamraj, Business, Bangalore, examined as P.w.24 deposed that he is the Proprietor of M/s.AJR Dying and doing the Business of dying works. In the Year-2003, M/s. Sansri Trading Corporation used to give the job work of dying silk yarns and they used to dye them return back to them and they used to pay for that. The DRI Officials have visited their residence and enquired about that and then told him to write the same and he identified the statement marked as Ex.p.103 and stated that without documents they used to give the dying job work.
42 CC.No.61/2012
43. C.w.55-Sri.S.R.Ramaien, Business, Paramakudi, T.N., examined as P.w.25 deposed that he is running the Business of Handloom Sarees since 25 Years in the name of M/s.S.R.Ramaien. In the Year-2002, C.w.64 - an agent approached them and placed the orders for cotton and polyesters handloom sarees. The value of the placed order was around Rs.1.89 lakhs and they supplied the ordered sarees to M/s. Sansri Trading Corporation. In this regard, DRI Officials made enquiry.
44. C.w.56-Sri.T.G.Ramdas, Handloom Weaving, Paramakudi, T.N., examined as P.w.26 deposed that he is a Handloom Weaver since 25 Years. In the Year-2002, C.w.64 - the agent approached them and placed the orders for handloom polyesters sarees. The value of the placed order was around Rs.1.28 lakhs and they supplied the sarees to C.w.64. In this regard, DRI Officials made enquiry.
45. C.w.92-Sri.K.G.Ravindra, Asst. Commissioner, Bangalore, examined as P.w.27 deposed that he served as Superintendent of Customs from May-2001 to May-2002, at EOU-(3) Range, Custom Division, Bangalore. Accused 43 CC.No.61/2012 No.1 Company was coming within his jurisdiction. In the Month of Oct-2001, accused No.1 company approached for Export Oriented Unit license and after verification, the then Asst. Commissioner issued the EOU licence to accused No.1. After obtaining the license, accused No.1 Company started the business of importation of raw materials and export of finished silks. Accused No.1 was represented by accused No.2. During his tenure, he has not found any irregularity or lapses on the part of accused No.1. The inspector incharge of EOU was physically examining the import of raw materials and exports of finished products. He came to know that during the Month of May-2003, DRI booked a case against accused No.1 and other accused for fraudulently replacing the silk fabrics with locally procured fabrics. It is revealed that these fraudulent activities have been going on since Oct-2001. In this regard, the DRI Officials have recorded his statement. He learnt that adjudication proceedings were taken place and orders in originals were passed. One order is pertaining to the import of raw materials. The second one is in respect of export consignments and third one is in respect of confiscation of 44 CC.No.61/2012 seized goods and the orders in originals are marked as Ex.p.134 to 136.
46. C.w.90-Sri.M.K.Davindran, Authorized Officer SEZ, Bangalore, examined as P.w.28 deposed that he served as Inspectors of Customs from Jan-2003 to May-2003, at EQU-(3) Range, Custom Division, Bangalore. A-1 company was coming within that jurisdiction and it had EQU license. At the time of export, accused No.1 company use to submit the Export Shipping Bills before the Superintendent for verification. After verification, the Superintendent used to issue open order authorizing him to visit the unit and examine the goods and allow for export. Accordingly, he used to discharge his duty. During his tenure, he has inspected 71 consignments belong to accused No.1. During that period, he has not found any irregularity or lapses on the part of accused No.1. He came to know that during the Month of May-2003, DRI booked a case against accused No.1 and other accused for fraudulently replacing the silk fabrics with locally procured fabrics. On 29.09.2003, the DRI Official issued summons to him and recorded his statement. The officials enquired him with regard to the 45 CC.No.61/2012 inspection carried out by him on 05.05.2003. He informed that on that day, out of 23 carton boxes, he has opened and examined two carton boxes bearing No.9 and 18. On the inspection, he found that they contain silk products, repacked the same and sealed them along with other 21 carton boxes. The officials have shown the seizure mahazar drawn at Chennai Airport on 06.05.2003. On going through that he found box No.9 and 18 were not available in the consignment. In this regard, he has given the statement and further statement marked as Ex.p.77 and 79. The officials have confronted the shipping bills marked as Ex.p.2. At the time of recording statement, the statement of accused No.2 marked as Ex.p.137 was confronted.
47. C.w.89-Sri.B.Sreeramulu, Retired Superintendent, Ballary, examined as P.w.29 deposed that he served as Superintendent of Customs from March-2003 to May-2003, at EOU-(3) Range, Custom Division, Bangalore. Accused No.1 Company was coming within that jurisdiction and they had EOU License. At the time of export, accused No.1 company use to submit the export shipping bills and after 46 CC.No.61/2012 verification, the Superintendent used to issue open order authorizing inspectors to visit the unit and examine the goods, seal them and allow for export. C.w.90 was the Inspector and he used to inspect the export goods. During his tenure, he hadn't found any fraudulent act by the accused No.1 and he came to know from DRI Officials that while exporting the finished products, accused No.1 mis- declared the same and got misused the EOU benefits. In this regard, DRI officials have recorded his statement.
48. C.w.88 - Smt.A.Savitha, Retired Superintendent, Bangalore, examined as P.w.30 deposed that she served as Inspector at EOU-(3) Range, Custom Division, Bangalore from June-2002 to Dec-2002. Accused No.1 Company was coming within that jurisdiction and they had EOU license. At the time of export, accused No.1 company use to submit the export shipping bills and after verification, the Superintendent is used to issue open order authorizing inspectors to visit the unit and examine the goods, seal them and allow for export. As per the open order issued by the then Superintendent of Customs, she has verified the import and export consignment of accused No.1 company 47 CC.No.61/2012 for about 60 times. At the time of inspection, she found every thing in order and she done the inspection as per the procedure and sealed them. Later, she came to know that DRI Officials have registered the case against accused No.1 Company and others for diverting the imported duty free silks to local manufacturers. In this regard, DRI officials have recorded her statement.
49. C.w.93-Sri.D.Srinivasulu, Superintendent, Mysore, examined as P.w.31 deposed that he served as Inspector at EOU-(3) Range, Custom Division, Bangalore from Oct- 2001 to May-2002. Accused No.1 Company was coming within that jurisdiction and they had EOU license. At the time of export, accused No.1 Company used to submit the export shipping bills and after verification, the Superintendent is used to issue open order authorizing inspectors to visit the unit and examine the goods, seal them and allow for export. As per the open order issued by the then Superintendent of Customs, he has verified the import and export consignment of accused No.1 company for about 32 times. At the time of inspection, he found every thing in order, and he done the inspection as per the 48 CC.No.61/2012 procedure and sealed them. DRI Officials informed that they have registered the case against accused No.1 Company and others for diverting the imported duty free silks to local manufacturers. In this regard, DRI officials have recorded his statement.
50. C.w.91-Smt.Geetha Jagannath, Superintendent, Bangalore, examined as P.w.32 has deposed that she was holding the charge as Inspector at EOU (3) Range, Custom Division, Bangalore from in the Month of Dec-2002. Accused No.1 Company was coming within that jurisdiction and they had EOU license. At the time of export, accused No.1 company use to submit the export shipping bills and after verification, the Superintendent is used to issue open order authorizing inspectors to visit the unit and examine the goods, seal them and allow for export. As per the open order issued by the then Superintendent of Customs, she has verified the import and export consignment of accused No.1 company for about 23 times. At the time of inspection, she found every thing in order, she done the inspection as per the procedure and sealed them. Later, she came to know that DRI Officials have registered the case against 49 CC.No.61/2012 accused No.1 Company and others for diverting the imported duty free silks to local manufacturers. In this regard, DRI officials have recorded her statement. C.w.94- Sri.M.V.Thakur, examined as P.w.33 deposed that he was working as the Asst. Commissioner, Central Excise, Bangalore and on the strength of the sanction orders marked as Ex.p.13 and 14, he filed the complaint marked as Ex.p.15.
51. Ex.p.1 is the mahazar dated: 06.05.2003 drawn at export examination hall of Air Cargo Complex, Meenambakkam, Chennai. The contents of the cargo found during the examination are mentioned. Ex.p.2 is the Shipping Bill, wherein the item to be exported is mentioned as "Silk Fabrics". Ex.p.3 is the mahazar dated:06.07.2003 drawn in the premises of accused No.1 situated at Nayandanahalli and in Kamakshipalya, Bangalore. Ex.p.4 is the description of the files and the documents seized from the premises. Ex.p.5 is the specimen the seals found in the premises. Ex.p.6 is the Yarns of different types found in the premises of accused No.1. Ex.p.7 to 10 are the details of silk and other items seized from the premises of 50 CC.No.61/2012 accused No.1. Ex.p.11 is the under taking given by the accused No.2 while receiving the seized materials mentioned in Annexure-IV. Ex.p.12 is the covering letter dated: 08.05.2003, where under the samples were sent to the Central Silk Technological Research Institute, Bangalore. Ex.p.13 and 14 are the Sanction orders. Ex.P.15 is the complaint.
52. Ex.p.16 is the flat file marked as daily report containing production details. Ex.p.17 is the flat file marked as Daily report file containing daily production. Ex.p.18 is the flat file marked as daily report May-03 containing daily production details. Ex.p.19 is the flat file marked as Daily report Feb-01 to containing daily. Ex.p.20 is the flat containing some photographs, tax correspondences, cash book entries and other papers recovered form Hyundai Accent Car bearing Registration No.KA-05-Z-1366. Ex.p.21 is the Stock Register mentioned at Sl.No.65 of Annexure-IV attached to Ex.p.3. Ex.p.22 and 23 are the Bond Registers mentioned in Sl.No.67 and 70 of the Annexure attached to the mahazar is marked as Ex.p.3. Ex.P.24 to 26 are the Job Work Challans details mentioned a Sl.No.71 to 74 of 51 CC.No.61/2012 Annexure No.9 attached to Ex.p.3. Ex.p.27 is the Annexure-9 Register containing Sl.No.151 to 200 of Annexed to Ex.p.3. Ex.p.28 is the Register containing particulars of daily production of C-Unit described at Sl.No.20 of Annexure attached to Ex.p.3. Ex.p.29 is the Register containing particulars of daily production described at SL.No.81. Ex.p.30 is the Register containing Particulars of daily production particulars of C-Unit described at Sl.No.80. Ex.p.31 is the Register containing particulars of Misc. correspondence packing details at Sl.No.84. Ex.p.32 is the Register containing particulars of Misc correspondence packing details at Sl.No.85. Ex.p.33 is the Register marked as packing 172 containing packing details. Ex.p.34 is the Register marked as Stock book containing details of exported items. Ex.p.35 is the Note book containing misc scribbling at Sl.No.97 in the Annexure attached to Ex.p.3. Ex.p.36 is the Register containing delivery challans at Sl.No.91. Ex.p.37 is the Register containing embroidery details. Ex.p.38 is the Scribbling pad containing certain Misc entries. Ex.p.39 to 44 are the 6 Nos. of voucher books containing issues and receipt of 52 CC.No.61/2012 material sent at Sl.No.94/1 to 94/6 in the Annexure attached to Ex.p.3. Ex.p.45 is the Box file containing details of invoices, bills of purchase of sarees. Ex.p.46 is the box file marked as private accounts of B.S. Anand at Sl. No.104. Ex.p.47 is the Flat file containing fax correspondences at Sl.No.105 described in the Annexure attached to Ex.p.3.
53. Ex.p.48 is the mahazar dated: 07.05.2003 drawn at the premises bearing No.1206, C-3, L/T, South City, Bangalore belonging to accused No.4. In Ex.p.48 it is stated that the incriminating documents detailed in Sl.No.1 to 8 were seized and they contain business cards showing accused No.4 as the Director of M/s.UBS Trading, LLC, Register having entries of fabrics date wise for period from 10.12.2002 to 09.04.2003, eight note books containing the entries of transaction, folder is marked as M/s.Kaveri Silks, seven bills paper reflecting the transactions of materials. Twelve floppy discs, cheque books pertaining to the account in Canara Bank and diary containing miscellaneous entries. Ex.p.49 is the one of the Visiting Card seized from the premises of accused No.4. Ex.p.50 is 53 CC.No.61/2012 the mahazar dated:07.05.2003 drawn at the premises bearing No.46, 1st Floor, Opp. Petrol Bunk, Mission Road Cross, Bangalore-27 (premises of M/s.Udde Silks). In Ex.p.50 the details of seized documents are mentioned and they contain swatch book, bills of paper reflecting the name and address of different firms, quotation for fabrics. Business card and Visiting card. Ex.p.51 is the Annexure attached to the mahazar is marked as Ex.p.50 and wherein, the details of fabrics seized from the premises of M/s.Udde Silks are mentioned.
54. Ex.p.52 is the mahazar dated: 12.05.2003 drawn at the premises of accused No.1 situated at No.110/10, Pantarapalya, Industrial Area, Nayandanahalli, Mysore Road, Bangalore-39. Ex.p.53 is the Annexure containing the details of cut fabrics waste. Ex.p.54 is the undertaking given by the Mr.A.C.Krishna Murthy who was in charge of accused No.1 to the effect that the seized materials would be kept as it is. Ex.p.55 is the mahazar dated:03.06.2003 drawn at the premises of M/s.Sandhya Silks, owned by Mr.L.Hanumanthappa. Ex.p.56 is the details of seized documents are mentioned and they are containing letter 54 CC.No.61/2012 head books, blue folder, invoice books, cheques books of Vijaya Bank and Canara Bank.
55. Ex.p.137 is the statement of accused No.2 dated:
08.05.2003 recorded u/s.108 of the Act, wherein, accused No.2 stated that on the advice of accused No.4, he applied to the Secretariat of Industrial Approvals, New Delhi (SIA) for EOU and details of product was suggested by accused No.4 and as to in what manner the business being carried out. He and accused No.4 obtained the premises for accused No.1 and obtained 15 power looms which were locally purchased for Rs.4.20 lakhs and that amount was paid by accused No.4 and later, it was paid through installments. The unit started its functioning on 30.09.2001 and first import of Mulberry Silk Yarn was made in the Month of October-2001. The unit had no facility of doing twisting, doubling, winding and dyeing of silk yarn and these process were being done out side as arranged by accused No.4 and permission was not obtained for job work nor it was intimated to the customers for under taking job work out side the factory premises. Accused No.4 used to monitor and developing of business activities of accused 55 CC.No.61/2012 No.1. The first export of silk cushion covers was made on 18.10.2001 to M/s.UBS Trading (LLC), Dubai and the other customers were Bobby Fabrics Singapore, Jetha Tulsidas and Sons, Mauritius and Mrs.Gopalakrishna of USA and were arranged by accused No.4. The Majority of exports were made to M/s.UBS Trading (LLC). The customers were arranged by accused No.4. In the Month of November-
2002, accused No.4 visited Dubai and tour expenses were born by him. Visiting Cards of accused No.1 was printed by showing accused No.4 as its representative. The purchase orders of M/s.UBS Trading (LLC), Dubai dated:11.08.2002, 15.06.2002, 17.11.2002 and 14.09.2002 which were created in the factory premises. Accused No.2 stated that he secured the churidhars and polyester textile fabrics. In the export shipment of 23 boxes, 19 boxes were churidhars materials and 4 boxes were of polyester textiles fabrics. The churidhars sets/materials were received from South Handloom, Chennai in the Month of April-2003. The polyester textiles fabrics were received from Sri.Hemaraj in the Month of March-2003. The churidhars sets were packed in 19 boxes and polyester textiles fabrics were 56 CC.No.61/2012 packed in 10 boxes. The shipping bill and invoices were prepared. 27 boxes were packed and wire wound and lead seal was placed on the boxes. Two boxes containing polyester textiles fabrics were kept open for customs examination. Package No.6 and 7 were examined by the Customs Superintendent. The said two packages were replaced and only 23 packages were dispatched. As per the oral agreement, accused No.4 had taken Rs.15-16 lakhs from the payment received for disposal of import duty free silk yard till dated.
56. Ex.p.56 is the statement dated: 09.05.2003 said to have been by accused No.2 and wherein, it is stated that he had purchased the different quantities of silk yarn waste through persons like Mr.Jabbar arranged by accused No.4. This was done to show that a waste is generated during the course of manufacture. Then with the permission of Custom Division, the locally purchased waste were used to be destroyed under mahazar to show that it was the waste if generated during the manufacture of silk fabrics. It is stated that mahazar dated: 01.03.2003 was shown. Accused No.2 stated that other than the eight job workers 57 CC.No.61/2012 mentioned in the list, they have not prepared the challans for clearances of the materials for job work. The permission from the Customs Departments, Bangalore was obtained only for eight job workers. The materials were sent only to four job workers and for others the materials have not actually been sent, but challans were prepared. Accused No.2 stated that accused No.4 was arranging the payment to job workers and also taking active pat in the purchase of sale materials.
57. Ex.p.57 is the statement of accused No.2 said to have been given on 13.05.2003, wherein, it is stated that accused No.2 on seeing the seized seals stated that he was taking extra seals as there was likelihood of loss of seals. As far as book bearing No.93, accused No.2 stated that it contains the details of fabrics given to M/s. Udde Silks for embroidery work/job work. The book bearing No.8 is a packaging registers which reflects the goods for export and different quantities of fabrics were issued to M/s. Udde Silks and others.
58. Ex.p.58 is the further statement of accused No.2 recorded on 24.05.2003, wherein, he sated that in his 58 CC.No.61/2012 presence, the custom officials have examined the looms and looms No.9.,10,14 and 15 were contained polyester fabrics and some were ascertained to be polyester fabrics on burn test and representative samples were taken. Ex.p.59 is the statement given by accused No.2 27.05.2003 and wherein, he stated that they use to manufacture polyester fabrics in the factory of accused No.1 and also use to purchase polyester spun fabrics from the person like Sri. Hemaraju, Sri. Muniyappa and Sri. Dinesh based at Bangalore. The manufactured and purchased polyester fabrics were exported by accused No.1 georgette or chiffon fabrics were never manufactured, but they were purchased and exported under the EOU documents. The purchase was made through cash transactions with or without bills.
59. Ex.p.60 is the statement dated: 07.07.2003, wherein accused No.2 admitted the test results. On seeing the 23 cartons seized on 06.05.2003, accused No.2 stated that those items were purchased in India and they are not manufactured in the factory premises of accused No.1. As on 05.05.2003, 14609 meters of silk fabrics were available 59 CC.No.61/2012 in the factory and remaining quantities of silk fabrics and other fabrics were purchased from various local suppliers including M/s.Udde Silks. Accused No.2 stated that through Mr.K.S.Somashekhar, silk sarees, polyester spun fabrics were issued/supplied to M/s.Udde Silks for job work/ embroidery work. Though they were to be returned, many times, they were not returned. The silk fabrics seized under mahazar dated: 07.05.2003 from the premises of M/s. Udde Silks, were belonging to accused No.2. The seized fabrics were removed from accused No.1 for job work to M/s. Udde Silks and thereafter satisfied to the residential premises of one Mr.Sampath Kumar on coming to know about the search in the premises of accused No.1. In respect of visiting cards seized under mahazar. Accused No.2 stated that the visiting cards as representative of accused No.1 and as Director of M/s.UBS Trading (LLC), Dubai are got printed by him on the insistence of accused No.4.
60. Ex.p.61 is the statement recorded on 22.09.2003 and wherein, accused No.2 admitted the Bank Register at Sl.No.97 was mentioned from 18.05.2002 and aggregate of 60 CC.No.61/2012 140634.885 kgs were shown as received in the book. Accused No.2 given the details of supplying of raw silks yarn to different firms and persons. Ex.p.62 is the statement dated:23.09.2003 and wherein, accused No.2 stated that he had not maintained the proper records for issues of raw silk yarn for production. Accused No.2 stated that the files are marked at Sl.No.22, 23, 24, 25 and 36 containing "Daily Stock Register" and Register at Sl.No.85 and 89 seized from the premises of accused No.1 not belonging to them. Accused No.2 stated that every month, he use to pay Rs.15,000/- as remuneration to accused No.4. The agreed commission of 2% was not paid and they were agreed to be adjusted with the payment made to the accused No.4.
61. Ex.p.63 is the statement dated:24.09.2003 and wherein, accused No.2 stated that around 150 tones of Mulberry Silk Yarn and Dupion Silk Yarn were imported. The required percentage to be used in manufacture of Dupion fabric, plain silk fabric, cara fabric, taffeta fabric were around 35.45%. Accused No.2 stated that there is no document showing the use of fabrics in the permitted 61 CC.No.61/2012 percentage. They have not submitted the periodical reports to the range/division. They obtained material consumption certificate from the Customs Range and submitted along with export documents and copies of export No.1 to 34 are only available. Ex.p.64 is the statement of accused No.2 recorded on 26.09.2003 in the Central Prison Premises, wherein, he has stated that Mr.Pomod Kumar Navalgaria was his sub identifying agent for his imports through M/s.Abhay Traders. Accused No.4 was keeping liason with accused No.4 with M/s.Abhay Traders for identifying imported duty free raw silk yarn to accused No.1. The seized books at Sl.No.91, 92 and 93 were written by his employees. 178.905 kgs of dupion raw silk yarns in three bales valued at Rs.1,69,950/- was dispatched under Challan No.32/02-5-2003 to the address of his own unit which was closed at that time. On seeing the work sheet showing 942.25 meters of silk fabrics, 1740.50 meters of dupion silk fabrics, poly spun fabrics and 571.71 kgs of dupion yarn were sent to M/s.Udde Silks. Accused No.2 stated that accused No.1 not maintained the records to show that they were returned, 44" dupion silk fabrics, 54" 62 CC.No.61/2012
dupion silk fabrics totally measuring 500 meters have not been returned by M/s.Udde Silks. So far there is reference about the showing of book No.91, 92 and 93 pertaining to the period from 202/2003 to 05/2003.
62. Ex.p.65 is the statement of accused No.3 dated:
12.05.2003 and wherein, accused No.3 stated that he offered the raw silk yarn from China on high sea sales basis become of less demand on the goods arranged for import by him and the accused No.2 started to procure the raw silks in the name of accused No.1. Then, accused No.2 started to sell the imported silks to him for further trading and the sale proceeds were given to accused No.2 in cash after deducting the commission of 3.5% and from that he used to give 2.5% cash discount to its customers. In some cases, the goods were being delivered to its customers directly. The records for the transactions for purchase and sale of raw of raw silks imported were not available. The ledger account details to accused No.1 were deleted from his computer, when the transactions were over. The fax messages sent on various dates reflecting bale details and amounts of transaction were sent by him to accused No.1. 63 CC.No.61/2012
Accused No.3 stated that he purchased 70 to 80 tons of imported raw silk yarn of various types from accused No.1 and total value may come around Rs.6.0 crores. Accused No.4 given the details of purchased imported raw silk yarn. Accused No.3 stated that amount towards the purchases were paid by him personally in cash on receipt of the material. The amount was paid in cash either to accused No.2 or to accused No.4. He had purchased the imported silk yarn from accused No.1 even after coming to know that accused No.1 was a 100% EOU. Accused No. 3 have stated that initially he was not knowing that accused No.1 is a 100% EOU and he came to know about this in the market while inquiring about the registration of case against Sri.D.K.Jain by DRI Office, Bangalore, some time back in Jan-2003. He had not received any document to cover the sale of imported silk yarn. Accused No.4 was present whenever any discussion, meetings and negotiations with reference to import of Chinese Silk were made. Accused No.4 had taken the cash only from him several times to the extent of Rs.15 lakhs at a time being the sale proceeds. Accused No.4 also taken the cash to the extent of Rs.5 to 6 64 CC.No.61/2012 lakhs as being the advance adjusted towards the purchase of imported raw silk yarn. Some times the cash advance in between Rs.5 to 15 lakhs were given for release of import documents by bank was paid back by accused No.1 by way of cheques from M/s.UCO Bank. The fax messages contain the details of payments made for purchases. Whenever part consignment was purchased by him, but not delivered by accused No.1 on a particular date. The ledger amount would not reflect the transaction. On the receipt of full lot, the details were used to be entered in the ledger accounts. The fax messages reflect purchase of yarn from Oct-2002, but he had been purchasing the imported duty free silk yarn from accused No.1 from July-2002 onwards. He supplied 500 numbers of polyester sarees and crepe silk fabric of about 6000 meters to accused No.1. Accused No.4 stated in detail about particulars in the personal ledger accounts faxed by him on various dates and contained in a file seized on 06/07.05.2003 mentioned in Sl.No.105 of the Annexure attached to the mahazar. Ex.p.67 is the statement of accused No.3 dated:
11.06.2003, wherein, accused No.4 has stated that the 65 CC.No.61/2012 amount received through cheques in respect of high sea sales are reflecting in the books of accounts. The duty free imported silk yarns purchased from Accused No.1 were sold in the open market. Accused No.4 stated that the details of the transaction, accused No.4 stated that he purchased ten tons of imported silk yarns for accused No.1.
63. Ex.p.68 and 69 are the statements of Mr.M.R. Jayasimha, the Accountant of accused No.1. It is stated that he was handling the customs related work and he was aware the sale of duty free raw silk yarns in the local market. The non - silk fabrics were used to be exported in the guise of silk fabrics/sarees/made ups. The details of imported goods were entered in the Bond Register. There are records prior to January-2003. There are no records of issue of the raw material for various purposes. The register of issue and stocks were not maintained. The silk waste destroyed under the mahazar was purchased from the local market and that was not out of the production. Accused No.1 had the permission for job work in respect of dyeing, weaving and embroidery for the firms namely 1) M/s.Laxmi Silk Industries, 2) M/s.Shankar Industries, 3) M/s.Om Silk, 66 CC.No.61/2012
4) M/s.S.Vadamalai, 5) M/s.Netravati Dyeing Works, 6) M/s.Adithya Designs and 7) H.Muniyappa. Out of them, accused No.1 sent the job work only to M/s.Netravati Dyeing Works and M/s.Adithya Designs. Documents were not sent with goods, but challans were made at a later date. Without permission, from the customs, accused No.1 used to send the raw materials to 1) M/s. Sudha Enterprises, 2) M/s. Maruti Textile Processing, 3) Mr. Monohar, 4) M/s. Sunrise, 5) M/s. Authenticity, 6) Mr. Kanakaraj, 7) Mr. Prasad, 8) Mr. Anwar and 9) Mr. Velu. The embroidery works were used to be done through accused No.5.
64. Ex.p.71 is the statement dated: 30.05.2003 given by accused No.4, wherein, he has stated that he joined M/s.UBS Trading, LLC, Dubai, with 24% share as Director and total share capital was 3 lakhs Dirhams and visited different places to solicit export orders. The travel expenses were born by accused No.1 Ex.p.72 is the statement of accused No.4 dated: 31.05.2003, wherein, accused No.4 has stated that non-silk sarees purchased on behalf of Mr.Gulab Chand of M/s.UBS Trading, LLC, Dubai. 67 CC.No.61/2012 All the locally procured low valued non-silk saress were exported through accused No.1 to M/s. UBS Trading, LLC, Dubai, n the guise of high valued silk fabrics/sarees. He is aware of the fact of under invoicing of the imported raw silk yarn from the premises of accused No.1. The importing of duty free silk yarn from the premises of accused No.1 was not used for manufacture of silk fabrics, but sold to accused No.3 and that transaction were made in his presence. He used to disclose wiling accused No.3. Ex.p.72 is the statement of accused No.4 recorded on 31.05.2005, wherein, he given the M/s. UBS Trading, LLC, Dubai. The firms and persons like "J. R. Company," "Dinesh" had sold different varieties of Art Silk/fabrics either directly to first accused or through M/s. Udde Silks, to accused No.1. Locally purchased low valued non-silk sarees were exported to M/s. UBS Trading, LLC, Dubai, through accused No.1. In the statement, the modus operandi adopted by the accused persons stated in detail. Ex.p.73 is the statement of accused No.4 said to have been recorded on 01.06.2003 and wherein, the details of money transfers are given. The details of fax message; the 68 CC.No.61/2012 purchase of local products, giving of bales to the local weavers are stated. It is stated that seized documents were confronted to accused No.4 while recording the statement and he had given the explanation regarding the contents of the documents shown to him. Ex.p.74 is the further statement of accused No.4 recorded on 24.09.2003 and wherein, he stated that his visits to Dubai, Mauritius, Singapore and Shrilanka were sponsored by the accused No.1.
65. Ex.p.75 is the statement of accused No.5 recorded on 03.06.2003, wherein, it is stated that she used to undertake embroidery on fabrics supplied by accused No.1 and getting job work from accused No.1. On oral orders and giving work to other embroider of her choice and that charges were paid by accused No.1 and given the other particulars. Ex.p.76 is the statement of one Sampath Kumar dated: 02.10.2003. Ex.p.77 is the statement of Sri. Davindran, the then Inspector recorded on 29.09.2003, wherein, it is stated that he examined the export consignment. Ex.p.78 the invoice and the details of the export made by accused No.1. Ex.p.79 is the further 69 CC.No.61/2012 statement of M.K. Davindran. Ex.p.80 is the statement of Gulshan Talwar Vicky. Ex.p.81 is the statement of Gulshan Talwar @. Vicky and in his statement stated that accused No.1, 4 and 5 purchased materials from him. Ex.p.82 is the statement of Sri. Rajendra Kumar Jain and he stated that he sold about 493 sarees to Sri. Dinesh. Ex.p.83 to Ex.p.90, Ex.p.96 to 103 and Ex.p.113 to 115 are the statements given different trades and weavers. Ex.p.91 to 95 and Ex.p.104 to Ex.p.111 are the invoices, delivery notes and receipts. Ex.p.112 is the statement of Sri. N. M. Raghavendra and wherein, it is stated that he used to receive the embroidery work from accused No.1. Ex.p.116 and Ex.p.117 are the one bill and the receipts. Ex.p.118 and 119 are the statements given by the persons who are the job were for weaving and dying works.
66. Ex.p.120 is the mahazar dated: 02.06.2003 drawn at the premises of M/s. Nikytasha Export and Imports, where under sundry creditors, purchase registers, cash monthly summary, sales account and sales register monthly summary were seized. Ex.p.121 is the letter dated:
17.06.2003 given by CSTRI. Ex.p.122 and 123 are the 70 CC.No.61/2012 statements of Sri. A.C. Krishnamurthy, Sr. Intelligence Officer recorded on 02.10.2003 and wherein, he confirmed that fabrics entered in the registers were not being sold in the open market and in fact, they were exported. Ex.p.124 to 129 are the statements of Sri. K.S. Somashekar, employee of accused No.1. Ex.p.130 and 131 are the statements of Sri. M.R. Jaisimha, accountant of accused No.1. Ex.p.132 is the Statement of Sri. Parimal Shashikant Chhapia. Ex.p.133 is the statement of Sri. Vinodrai V. Chhapia. Ex.p.134 to 136 are the orders - in - original.
Ex.p.137 is the statement of accused No.2 recorded on 08.05.2003. Ex.p.138 is the statement of accused No.4 recorded on 12.05.2003. Ex.p.139 is the statement of accused No.4. Ex.p.140 is the statement of accused No.5 recorded on 07.05.2003.
67. Ex.p.142 is the mahazar dated:06.05.2003 at the premises of accused No.1 located at Kamakshipalya, where under twisted raw silk, mulberry raw silk and silk wastes were seized. Ex.p.143 is the letter dated:
12.05.2003 issued by the Addl. Director General stating that accused No.4 had traveled abroad. Ex.p.144 is the 71 CC.No.61/2012 information furnished by the Deputy Director of DRI, Mumbai regarding the travel of accused No.4 out of India and came to India. Ex.p.145 is the letter dated:12.06.2003 submitted to the Regional Passport Officer. Ex.p.146 is the covering letter containing the personal particulars of accused No.4 along with photograph. Ex.p.147 is the letter dated: 23.05.2003 sent by Addl. Director General seeking verification at Dubai regarding export of cotton fabric and polyester fabric by accused No.1. Ex.p.148 is the reply received by the Consulate General of India stating that Mr. Bhaskar Hanumanthappa, (accused No.4), Indian National is having 24% share of partnership in M/s. UBS Trading, LLC, Dubai. Ex.p.149 is the letter dated: 25.08.2003 containing the departure details of accused No.4.
68. Ex.p.150 is the letter dated: 08.05.2003 addressed by the Superintendent of Customs to Senior Intelligence Officer. Ex.p.151 is the letter dated: 13.06.2003 addressed to the Director of Central Silk Technological Research Institute. Ex.p.152 to 180 are the tests reports. Ex.p.181 is the letter dated: 28.05.2003 addressed to the Director of Central Silk Technological Research Institute seeking the 72 CC.No.61/2012 testing of samples. Ex.p.182 is the letter dated: 26.05.2003 to test the samples. Ex.p.183 is the representation dated:
28.07.2003 is the complaint lodged by accused No.3 requesting not recommend for issue of detention order under COFEPOSA.
69. Ex.p.184 is the statement of L. Hanumanthappa recorded on 04.09.2003, where under he given the details of transaction with accused No.1. Ex.p.185 is the covering letter for having sent the recorded statements of Sri. Vinodrai V. Chhapia and Sri. Parimal Shashikant Chhapia. Ex.p.186 is the copy of order dated:17.07.2008, where under the appeal preferred by accused No.1, 2, 4 and 5 were dismissed. Ex.p.187 is the copy of the duty quantification chart. Ex.p.188 is the statement of accused No.2 recorded on 07.05.2003. Ex.p.189 is the mahazar and the annexure dated: 09.05.2003 drawn at the premises of Mr. Sampath Kumar S. Ex.p.190 is the statement of Mr. Sampath Kumar S., recorded on 09.05.2003. Ex.p.191 is the mahazar dated: 07.05.2003 drawn at the premises of accused No.3.
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70. The above are brief account of the oral and documentary evidence made available by the complainant to prove that the accused persons have committed the alleged offences. Ld. Spl.P.P. argued that the evidence on record clearly establishes that accused persons have knowingly involved in mis-declaration of goods and illegally claimed the benefit under EOU scheme. The statements recorded u/s.108 of the Act is admissible in evidence. There is no proper retraction. Most of the statements are in the handwriting of the accused persons and accused themselves stated about their role in mis-declaration of goods and they admitted regarding their knowledge. It is argued that while recording the statements relevant documents were confronted to the accused and also to the witnesses. Ld. Counsel relied upon the ruling rendered by our Hon'ble Supreme Court, in the case of K.I. Pavunny Vs. Asst. Collector (Hq.) Central Excise collectorate, reported in (1997) 3 SCC 721, in support of the argument that statement recorded u/s.108 of the Act is admissible in evidence and conviction is sustainable based on the statement. Ld. Spl. P. P. argued that minor discrepancies 74 CC.No.61/2012 will not make the evidence non-admissible. In support of this line of argument, relied upon the ruling rendered in the case of Lallan Vs. State of U.P reported in 1990 Crl. L.J.,
463.
71. Ld. Counsel of accused argued that there is no proper sanction to prosecute the accused. It is also argued that alleged interception of consignment was at Chennai, thus this court has no jurisdiction. It is argued that search warrants are not produced. Ld. Counsels argued that the officials who checked the consignment in their statements stated that the consignment contained the silk products. The statements were obtained by coercion and they are not voluntary. Ld. Counsels referred the oral evidence of the witnesses and argued that their evidence is materially inconsistent. There is no legal bar for exporting the other products. Ld. Counsel argued that accused No.4 lodged the complaint against K.S. Bhat, Addl. Director, DRI, for having demanded an illegal gratification of Rs.20,00,000/-. Being agitated, he hatched up the case against the accused persons.
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72. It is argued that complainant not produced the bill of lading and there is no evidence to the effect that consignment seized at Chennai being identified by accused No.1 and 2. The sample said to be drawn at Chennai are not produced. There is no evidence to the effect that accused No.1 and 2 not complied the export obligation under E.O Scheme and there is no evidence for diversion of imported silk to the local market. The complainant not produced the sanction obtained for searching the premises. The search and seizure is motivated and complainant has acted illegally. The complainant not produced the proof that the statement made by accused No.2 is voluntary and in facts, statement is not voluntary, but made under pressure.
73. In support of the argument relied upon the ruling rendered by the Hon'ble Supreme Court in the case of Assistant Collector of Customs (Preventive) Vs. Pascoal Dias, reported in 2011 15 SCC 191, wherein, it is held that "burden of proving the seizure of gold biscuits and in fact, it was biscuit is upon the prosecution. It is further held that non-examination or failure to examine the witnesses is fatal to the case of the prosecution." In the 76 CC.No.61/2012 case of Assistant Collector of Central Excise, Rajamundry Vs. Ducan Agro Industries Ltd., and others, reported in (2000) 7 Supreme Court Cases 53, wherein, it is held that "statement recorded u/s.108(3) of the Customs Act, 1962 is admissible in evidence subject to the conditions in Sec.24 of the Customs Act." In the case of Narendra Singh and another Vs. State of M.P., reported in (2004) 10 SCC 699, wherein, it is held that "suspicion, however grave may be, cannot take the place of proof and there is long distance between "may be" and "must be" and it is further held that in case of possibility of two views, the view which favours the accused should be upheld." In the case of Suchand Pai Vs. Phani Pal and another, reported in (2003) 11 SCC 527, wherein, it is held that "the prosecution can succeed by substantially proving the version it alleges. It must stand on its own legs and cannot take advantage of the weakness in the defence case. The court cannot on its own make out a new case for the prosecution and convict the accused on that basis."
74. By referring to the above rulings, it is argued that statement recorded u/s.108 of the Act is admissible subject 77 CC.No.61/2012 to Sec.24 of the Evidence Act. Here, the statements were recorded under threat and inducement. The burden is entirely upon the prosecution and the court cannot make out a case. In this type of case false implication cannot be ruled out. The back ground fact and the conduct of the parties together with their legal requirements are required to be taken into consideration. In the case of two views, then benefit of doubt has to be extended to the accused. It is argued that entire case is based on circumstantial evidence and all links in the chain must be proved. The prosecution must substantially prove its case and it cannot take the advantage of weakness of defence case.
75. It is argued that there are reasons to believe that search and seizure by the officer is for extraneous reasons. The "Reasons to Believe" as contemplated u/s.110 (1) of the Act, should be judicious and not for any extraneous reasons. In support of this lien of argument relied upon the ruling rendered by the Hon'ble Supreme Court, in the case of Assistant Collector of Customs Vs. Charan Das Malhotra, reported in 1971 (1) SCC 697, wherein, it is held that "under Section. 110(1) of the Act, the expression 78 CC.No.61/2012 "Reasons to Believe" on the part of the concerned officer though it does not contemplate an enquiry as such by him, it is not entirely subjective. The reasons for his belief have to be relevant and not extraneous."
76. Ld. counsel relied upon the ruling rendered by the Hon'ble Supreme Court, in the case of Noor Aga Vs. State of Punjab and another, reported in (2008) 16 SCC 417, which was followed in the case of Nirmal Singh Pehlawan @. Nimma, vs. Inspector, Customs, Customs House, Punjab, reported in (2011) 12 SCC 298. In Noor Aga case, the court had deviated from the earlier position of law that customs officer was not a police officer and a confession made to him under section.108 of the Act, was admissible in evidence. In this case, it has been held that as a customs officer exercised police powers and a confession made by an accused could result in a conviction and sentence, such a confession was hit by the embargo placed by Sec.25 of the Evidence Act, 1872 and was therefore, not admissible in evidence. Ld. counsel relied upon the ruling of the Hon'ble Apex Court, in the case of Varkey Joseph Vs. State of Kerala, reported in 1993 79 CC.No.61/2012 Supp (3) SCC 745, wherein, it is held that "suspicion is not substitute for proof." In the case of Superintendent of Customs Vs. Bhanabhai Khalpabhai Patel and another, reported in 1993 Supp(1) SCC 475, wherein, it is held that "statements of accused persons recorded u/s.108 of the Act - Evidence of, cannot be used to corroborate that of PW who was initially arrayed as accused in the complaint."
77. Ld. Counsel of the accused No.3 argued that accused No.3 had no role in the export of goods seized at Chennai. There are no materials to establish that accused No.3 had the business affairs with accused No.1 and 2 and that accused No.3 had the knowledge of day to day affairs of accused No.1 firm. It is argued that the sanction order was passed without application of mind. It is stated that accused No.2 is the Managing Partner of M/s. Mahalakshmi Enterprises, in fact, it is wrong. In support of the argument that sanction order without application of mind vitiates the entire criminal proceedings relied upon the ruling rendered by the Hon'ble Apex Court, in the case of State of Karnataka vs. Ameer, in Appeal (Crl.) 766/2001. 80 CC.No.61/2012
78. It is argued that in none of the documents, there is mentioned about the role of accused No.3 and there is no materials to the effect that accused No.3 procured the duty free silk yarn and sold the same in the open market. Accused No.3 was not the importer of duty free silk yarn; he was not the partner of accused No.1 Company. The statements of local purchasers were not recorded. There is no evidence regarding the cash transactions. The statements said to be of accused No.3 were recorded under coercion and threat and prepared as dictated by the officials. The statements recorded u/s.108 of the Act, failed to the test of Sec.24 of the Evidence Act and benefit of doubt has to be extended to accused No.3. The statements of the witnesses are not voluntary one. Ld. counsel in support of this argument relied upon by the order of the Tribunal in the case of Dinesh Ishwarlal Patel Vs. Collector of Customs, Bombay, reported in 1988 (34) ELT 382 (Tribunal), wherein, it is held that "penalty not imposable in the absence of knowledge of smuggled nature of goods."
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79. In the case of I. Longkumar Vs. Collector of Customs (prev.), reported in 1991 (52) ELT 560 (Tribunal), wherein, it is held that "a bonafide purchaser of contravened goods cannot be liable for penalty." The Government of India, in the referred case of M. Darshibhoy and Co., reported in 1993 (68) ELT 707 (GOI), wherein, it is held that "penalty for dealing with contravened goods, lenient view be taken if applicant not directly involved in purchasing or procuring of goods." In the case of Vijaykumar vs. Collector of Customs, Delhi, reported in 1995 (78) ELT 62 (Tribunal), wherein, it is held that "penalty is not imposable in absence of smuggled nature of seized goods." In the case of P. S. Sethupathy Vs. Collector of Customs, Trichy, wherein, it is held that "penalty not imposable when appellant had nothing to do with importation of Engine or had any knowledge about its contraband nature." In the case of PSU Pipe Coaters Private Ltd., Vs. Commissioner of Customs, Kandla, reported in 2000 (117) ELT 478 (Tribunal), wherein, it is held that "penalty not imposable when assessee's belief about non - dutiability reasonable." In the case of Pawan 82 CC.No.61/2012 Goel Vs. Commissioner of Customs, New Delhi, reported in 2001 (135) ELT 1425 (Tri-Del.), wherein, it is held that "when there is no evidence to show the connections of persons with procurement, sale and disposition of goods in question and their knowledge, penalty not imposable."
80. Ld. Counsel argued that the independent mahazar witnesses not examined, thus, they are not admissible in evidence. In support of this line of argument, relied upon the ruling rendered by Our Hon'ble High Court, in the case of Asst. Commissioner of Customs and C. Excise, Belgaum Vs. Imtiaz Hussain, reported in 2012 (279) ELT 365 (Kar.), wherein it is held that "non-examination of spot mahazar witnesses during trial is bad at law and accused is entitled for benefit of doubt." Ld. counsel argued that finding given by the adjudicating authority and statements alone are not sufficient to prove the criminal charges. The criminal charges has to be proved on the strength of prosecution materials and not on the weakness of the defence. There is no direct evidence against accused No.3 and only on the basis of the statements of other accused; it 83 CC.No.61/2012 cannot be held that he committed the alleged offence. In support of this line of argument, relied upon ruling rendered by the Hon'ble Apex Court, in the case of Dhan Raj @. Dhand Vs. State of Haryana, reported in (2014) 6 SCC 745, wherein, it is held that "in case of circumstantial evidence, each circumstances must be proved beyond reasonable doubt by independent evidence excluding any chance of surmise of conjecture." In the case of Jose @. Pappachan Vs. Sub-Inspector of Police, Koyilancy, reported in (2016) 10 SCC 519, wherein, extract of the treatise on the Law of Evidence, Fifth Edition by Lan Donnis at Page No.483 is extracted and it reads that "where the case against the accused depends wholly or partly on inferences from circumstantial evidence, fact finders cannot logically convict unless they are sure that inference of guilt are the only ones that can reasonably be drawn. If they think that there possible innocent explanation for circumstantial that are not "merely fanciful," it must follow that there is a reasonable doubt about the guilt. There is no rule, however, that judges must direct juries in terms not to convict unless they are sure that the evidence 84 CC.No.61/2012 bears no other explanation than guilt. It is sufficient to direct simply that the burden on the prosecution is to satisfy the jury beyond reasonable doubt, or so that they are sure."
81. Ld. counsel of accused No.3 relied upon the ruling rendered by the Hon'ble Apex Court, in the case of M.G. Agarwal Vs. State of Maharastra, reported in AIR 1973 SC 2773, wherein, it is held that "another golden threat which runs through the web of the administration of justice in criminal case is that if two views are possible on the evidence adduced in the case one pointing to the guilt of the accused and the other to his innocence, the view which is favorable to the accused should be adopted." In the case of M.G. Agrawal Vs. State of Maharashtra, reported in AIR 1963 SC 200, wherein, it is held that "if the circumstances proved in a case are consistent either with the innocence of the accused or with his guilt, then the accused is entitled to the benefit of doubt." In the case of Dev Kanya Tiwari Vs. State of Uttara Pradesh, reported in (2018) 5 SCC 734, wherein, it is held that "much acclaimed notion is the administration of criminal justice is that, if two views are possible basing on the evidence 85 CC.No.61/2012 adduced in the case, one painting to the guilt of the accused and other to the innocence of the accused, the view which is favourable to the accused should normally be adopted." The Judgment of Our Hon'ble High Court, in the case of Asst. Commissioner of Customs and C. Ex. Vs. Imtiaz Hussain, reported in 2012 (279) ELT, 365, wherein, it is held that "acquittal was upheld for the reason not proving the search and seizure in accordance with Sec.100 to 105 of the Customs Act."
82. Ld counsel argued that it is the settled legal proposition that the standard of proof required in a criminal proceedings is higher than what is required in the adjudication proceedings. Ld. counsel relied upon the ruling rendered in the case of P. Jayappan Vs. S.K. Perumal, reported in AIR 1984 Supreme Court 1693, the Hon'ble Apex Court wherein it is held that "in criminal cases all the ingredients of the offence in question have to be established in order to secure the conviction of the accused. The criminal court no doubt has to give due regard to the result of any proceeding under the Act having a bearing on the question in issue and in an appropriate 86 CC.No.61/2012 case it may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that the result in a proceeding under the Act would be binding on the criminal court. The criminal court had to judge the case independently on the evidence placed before it." It is argued that the reason that in adjudication proceedings, it is held that he imported goods were sold in violation of EOU Scheme and the accused No.3 made liable to pay the penalty, it cannot be held that criminal charge also held proved. If two views are possible, then benefit of doubt has to be extended towards accused persons.
83. It is argued that statements recorded u/s.108 of the Act alone cannot be made as basic for conviction, especially when they are not inconsistent with other evidence on record. The statements were recorded in the way as if they committed the offence and explanation being sought. In this type of interrogation, there is every chance of accused giving explanation to avoid their involvement and put the blame on others. Thus, unless their contents are corroborated by other evidence, only, on the basis of answers to the questions and explanation, it cannot be held 87 CC.No.61/2012 beyond reasonable doubt that the accused committed the alleged offence. In support of this line of argument relied upon the ruling rendered in the case of A. Tajudeen Vs. Union of India, reported in 2014 TIOL-84-SC-FEMA, wherein, it is held that "the statements can under no circumstances constitute the sole basis for recording the finding of guilt against the appellant. If findings could be returned by exclusively relying on such oral statements, such statements could easily be thrust upon the persons who were being proceeded against on account of their actions in conflict with the provisions of the 1973 Act. Such statements ought not to be readily believable, unless there is independent corroboration of certain material aspects of the said statements, through independent sources. The nature of the corroboration required, would depend on the facts of each case."
84. Ld counsel argued that statements which are recorded u/s.108 of the Act, should pass the test u/s.24 of the Indian Evidence Act. As per Sec.24 of the Indian Evidence Act, that "confessions caused by inducement, threat or promise are irrelevant in criminal proceedings. In 88 CC.No.61/2012 this regard, the statement of P.w.8 is obtained by causing inducement, threat and putting fear on P.w.8, who has given statement before the customs officials. P.w.8 deposed that his statement was recorded by causing inducement and threat. Statements of P.w.9 to 22, and P.w.24 were recorded by causing undue influence, by using force and by threat and P.w.9 to 22 and P.w.24 have admitted that the statements which were recorded by the customs officials were under inducement and threat. Further admitted during the cross examination that they are not aware of the contents of their statements, the said statements were written as per the directions of DIR officials, the said statements were recorded without explaining Sec.108 of the Act, most of the statements were recorded under threat, hence, no reliance can be laced on the statements of accused No.3, since his statements are obtained under threat and inducement. The alleged statements are hit by Sec.24 of the Evidence Act.
85. Ld Counsel argued that Sec.108 of the Act provides for recording of statements of accused as well as witnesses. U/sec.108 of the Act, the officer in charge have 89 CC.No.61/2012 the powers of arresting accused persons, powers of detention, powers of seizure, powers of investigation and other powers except submitting a report before the jurisdictional Magistrate u/s.154 of the Cr.P.C., have the powers provided to police, hence, any confession statements made before custom official u/s.108 of the Act are hit by Sec.25 and 26 of Indian Evidence Act. The customs official who records the statements u/s.108 of the Act is not a Magistrate and said statements made before customs officials shall not be used against the accused No.3 herein. Sec.108 of the Act itself implies threat of criminal prosecution and is violative of Article.21 of Indian Constitution. A person summoned u/s.108 of the Act is bound to appear and state the truth when giving the evidence. If he does not answer he would render himself liable to be prosecutor under Sec.228 of IPC, if on the other hand, he answers and gives false evidence, he would be liable to be prosecuted under Sec.193 of IPC for giving false evidence in a judicial proceedings. In short, a person summoned u/s.108 of the Act is told by the statue itself that 90 CC.No.61/2012 under threat of criminal prosecution, the person summoned u/s.108 of the Act, shall record his statement.
86. The accused No.3 being indenting agent/buying agent who working on commission basis has helped accused No.2 in import and export business since accused No.2 was new to export and import business. Further, as stated by accused No.2, in his statement recorded at Central Prison, Bangalore under Ex.p.61 to 63 stating that he approached the accused No.3 to book his requirements of imported raw silk yarn. Initially, accused No.3 has offered some documents which he has having regarding import and export and accused No.2 offered 3.5% commission towards import of raw silk yarn. Except, this transaction, there was no financial transaction between accused No.2 and 3.
87. Ld. Counsel of the accused No.4 argued that accused No.4 was in the department and he cannot be prosecuted without there being sanction from the appointing authority. It is argued that the officer who issued the show cause notice had no authority; so the proceedings initiated is not legally sustainable. It is argued that Sec. 135(1) of the Act 91 CC.No.61/2012 covers only the importer and the importer and not covers the department officer. Ld. counsel argued that there is no proper sanction. The seized consignments at Chennai were brought here. The samples drawn, but they were not analyzed. Ld. counsel referring to oral evidence argued that accused No.1 and 2 complied the export obligation and foreign exchanges were realized. This falsifies the entire charge made in the complaint. It is argued that the statements recorded u/s.108 of the Act alone cannot be made on basis for conviction. In support of the argument Ld. counsel relied upon the rulings rendered by the CEGAT, South Regional Bench, Madras, in the case of Prehlad Singh Chaddha Vs. Collector of Customs, Madras, reported in 1985 (22) E.L.T., 595 (Tribunal), wherein, it is held that "grant of sanction is not an idle formality or an acrimonious exercise but a solemn and sacrosanct act which affords protection to persons against prosecutions and without a valid and proper sanction, the very institution of a prosecution and cognizance of the same by court would be completely without jurisdiction and ab-initio-void." The Hon'ble High Court of Bombay, in the 92 CC.No.61/2012 case of Asst. Collector of Cus., R & I (P) Vs. Hussain Abbas Shaikh and others, reported in 1992 (59) ELT 394 (Bom.), wherein, it is held that "trial of accused persons u/s.135 of the Customs Act, 1962 without obtaining a prior valid sanction u/s.137(1) ibid is without jurisdiction." In the case of Y.S. Bawa, Supdt. Customs and Central Excise Vs. Siri Niwas Jain, New Delhi, reported in 1985 (21) ELT 382 (Del.), wherein, it is held that "grant of sanction is not an idle formality or an acrimonious exercise but a solemn and sacrosanct act which affords protection to person accused of any offence against frivolous prosecution. It is further held that charge of possessing incriminating goods can be established by extraneous evidence if not proved on the fact of sanction. In the case of Assistant Commissioner of Customs, Chennai Vs. Athishtarajan, in Crl. Appeal No.1032/2007, wherein, at Para No.16, it has been held that "the prosecution of innocence is available to him and the fundamental principle of criminal justice delivery system is that every person, accused of committing an offence shall be presumed to be innocent, unless his guilt is proved by a competent court of law." In 93 CC.No.61/2012 the case of Commissioner of Customs Vs. Akash Enterprises, wherein, it is held that "it is a matter of great public importance that there should be as far as possible no conflict or clash of jurisdiction between two equally competent authorities. The principle at stake is the principle of comity." Hon'ble Delhi High Court, in the case of Directorate of Revenue Vs. Jagdish Raj and Ors., reported in 120 (2005) DLT 598, wherein, it is held that "as per Sec.177 of the Code of Criminal Procedure provides that every offence should be ordinarily tried by a court within whose local jurisdiction it was committed." In the case of Customs vs. Surender Kumar Jain & Ors., in Crl.M.C.No.412/2013, wherein, discharge of accused No.3 to 5 was upheld stating that "there were no prima facie materials." In the case of Vishal Footwear Ltd., Vs. Commissioner of Customs, reported in 2000 (67) ECC 281, wherein, demand is sent aside on the ground that "even in the event of failure to make or continue exports, the Development Commissioner's recommendation is required before duty demands can be confirmed by the Customs authorities before raising the demand." 94 CC.No.61/2012
88. Ld. Counsel of the accused No.5 argued that there are no materials to confirm that fabrics given to accused No.1 and 2 were imported under the EOU scheme. The foreign origin silk said to have been seized from the possession of the accused No.5 were not produced. Without holding of this material evidence demonstrates the falsity of the cases and seizure is held to be not proved. There is no reliable evidence to the effect that ledger book found with accused No.5 and even if, it is held so, the contention of the ledger not proves that accused No.5 connected to the case of the complainant. Accused No.5 is in the business of embroidery and affiliated activities and she was doing job work for clients, hence, it is for the complainant to prove that alleged fabrics given to the accused No.5 were of foreign origin. Even if, it is held that foreign origin fabrics/materials were with accused No.5, that itself not sufficient to prove the offence. There must be evidence to the effect that accused No.5 had the knowledge that said possession is illegal. Mens-rea is made part of Sec.135 of the Act. In support of this line of argument, relied upon the ruling rendered by Our Hon'ble 95 CC.No.61/2012 High Court, in the case of Central Excise Department, Bangalore Vs. P. Somasundaram, reported in 1980 Cri.L.J., 533, wherein, it is held that "seeking to adduce evidence of a person u/s.45, should in the first instance show to the court from the evidence of such witness that the witness is specially skilled in the particular science and then only such witnesses is called expert."
89. It is argued that conspiracy has to be proved against each and every participant beyond all reasonable doubt. In this case, what available is the bald allegation only. From the statement recorded u/s.108 of the Act alone, the charges held cannot be proved. The burden of proving that the statements were made voluntarily and with knowledge and without coercion is upon the complainant. Especially in case where, there was retraction. Thus, the statements recorded u/s.108 of the Act cannot be relied upon and it cannot even considered as corroborative piece of evidence let alone a substantial one.
90. Accused have taken up three technical objections to substantiate that the complaint itself is not maintainable. The first one is regarding jurisdiction and it is argued that 96 CC.No.61/2012 consignment was seized at Chennai, thus the complaint could have been filed at the jurisdictional court at Chennai. This line of argument cannot be accepted for the simple reason that the consignment originated from here and EOU unit is existing within the jurisdiction of this court. The alleged omission and commission taken place within the jurisdiction of this court. The rulings relied in this regard is not applicable to the facts of the case.
91. Secondly, it is argued that Sec.135 of the Act applies only to the importer and exporter and at the best Sec.136 of the Act is attracts to the alleged act of accused No.4. Sec.135 (1)(a) of the Act says that without prejudice to any action that may be taken under this Act, if any person (a) is in relation to any goods in any way knowingly concerned mis-declaration of value or in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any prohibition for the time being imposed under this Act or any other law for the time being in force with respect to such goods." The provision is wide enough to include the person who assists the evasion of chargeable duty in any form. Thus, if the alleged roles played by accused No.3 to 5 97 CC.No.61/2012 are proved, then, it has to be held that they committed the offence punishable u/s.135(1)(a) of the Act along with accused No.1 and 2. The offence u/s.136 of the Act attracts to the different situation.
92. The argument of the Ld. counsels that there is no proper sanction and non - application of mind is also not sustainable. Initially, the Commissioner of Central Excise accorded the sanction and later due to the change in administrative control of 100% EOU units from Customs Commissionerate, Bangalore to jurisdictional Central Excise Commissionerate with effect from 01.08.2010, the Commissioner of Customs issued the sanction dated:
31.03.2010. Perusal of the sanction discloses that the sanctioning authority considered the materials collected during the course of investigation while according the sanction. A typographical mistake crept in mentioning accused, but for that reason, it cannot be held that sanction is not valid. There is no merit in the contention of the accused that sanction is not valid. The rulings relied by the Ld. Counsel of the accused in this regard, are not applicable to the case on hand.98 CC.No.61/2012
93. The acts and omission alleged against the accused No.1 to 5, if proved results in commission of offence punishable u/s.135 (1)(a) of the Act. The complainant relied upon the seized documents and the statements recorded u/s.108 of the Act, to prove the charges alleged against the accused persons. First legal question arises is whether the statements recorded u/s.108 of the Act is admissible as substantive evidence. Ld. Spl. P.P., relied upon the ruling of the Hon'ble Apex Court, in Kanhaiyalal vs. Union of India, reported in (2008) 4 S.C.C 668 wherein, it is held that "statements recorded u/s.108 of the Act is admissible in Evidence Act." Ld. Spl. P.P. also relied upon the ruling rendered by the Larger Bench of the Hon'ble Apex Court, in the case of K.Y. Pavunny Vs. Asst. Collector (Hq0, Central Excise Collectorate Cochin, reported in (1997) 3 SCC 321. Ld. counsel of the accused have relied upon the rulings rendered by the Hon'ble Supreme Court, in A. Tajudeen case and the ruling of the High Courts in other cases, in support of the argument that the statement recorded u/s.108 of the Ac alone cannot be made as basis for conviction.
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94. Ld counsel of the accused No.1 and 2 relied on Noor Aga case and Nirmal Singh Pehlwan case. And argued that customs officials are police officers and the statement recorded by them is hit by Sec.25 of the Evidence Act. Earlier to the ratio laid down in Noor Aga case, the larger Bench of the Hon'ble Apex Court in K.I. Pavunny case referred above it is held that "Customs Officer recording the statements of a person who is suspected of having committed an offence under the Act. Status of such officer and admissibility of such statement in evidence - Held, such an officer, although not a police officer, is an authority within the meaning of Sec.24 of the Evidence Act. However, a confessional statement recorded by reason of statutory compulsion or given voluntarily by accused pursuant to his appearing against summons or on surrender, held cannot be said to have been obtained by threat, inducement or promise - Hence, is admissible in evidence for prosecution u/s.135 of the Customs Act or other relevant statutes. Such a confessional statement although subsequently retracted, if on facts found voluntarily and truthful, can form the exclusive basis for 100 CC.No.61/2012 conviction. It is not necessary that there should be corroboration from independent evidence adduced by the prosecution to corroborate each detail contained in the confessional statement. The court is required to examine whether the confessional statement is voluntary; in other words, whether it was not obtained by threat, duress or promise. It the court is satisfied from the evidence that it was voluntary then it is required to examine whether the statement is true, if the court on examination of the evidence finds that the retracted confession is true, that part of the inculpatory portion could be relied upon to base the conviction. However, prudence and practice require that the court would seek assurance getting corroboration from other evidence adduced by the prosecution." The Hon'ble Supreme Court, in the case of National Small Industries Corporation Limited Vs. Harmeet Singh Paintal and another, reported in (2010) 3 Supreme Court Cases 330, wherein, it is held that "Division of Smaller Bench (Two - Judge Bench), retracted, cannot over rule decision of larger bench (Three-Judge Bench). Thus, the ratio laid down in K.I. Pavunny case holds good. 101 CC.No.61/2012
95. Perusal of the rulings referred above and admissible argument makes clear that if it is shown that the statements were given voluntarily and there is no proper retraction, then it can be relied upon. Of course, some corroboration is required to ascertain the truthness of the statements. There is no need of corroboration on each and every factual aspects contained in the statements. It is true that for the reason that adjudicating authority held that charges are proved, it cannot be held that criminal charges are also proved. However, that finding becomes a piece of evidence. There would not be contra argument to the settled legal proposition that the burden of proving the criminal charges s upon the prosecution and standard of proof is high compared to evidence required to prove the charge by Adjudicating authority.
96. As far as the argument that mens-rea is not proved is concerned Sec.138A of the Act says that "in any prosecution for an offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he 102 CC.No.61/2012 had no such mental state with respect to the act charged as an offence in that prosecution." Thus, in case the alleged acts and omissions are proved, then the burden is upon the accused to prove that they had no such intention to mis-declare the exported goods and divert the imported silk yarn to the local market
97. The arguments of the Ld. Counsel of the accused that independent mahazar witnesses not examined and the warrants issued by authorizing the search were not produced, hence search and seizure are not proved cannot be accepted. There is law to the effect that examination of independent mahazar witnesses is must to prove the mahazar. The officials who conducted search and seizure have deposed in this regard and no reason is made to disbelieve their evidence. It is very difficult to accept that without there being proper authority, officials have searched the premises. Even if, it is so, the seizure is illegal; the evidence collected during the course of search cannot be thrown out. In the case of Pooran Mal Vs. Director of Inspection, reported in AIR 1974 SC 348, wherein, it is held that"it would be thus seen in India, as in 103 CC.No.61/2012 English where the test of admissibility of evidence lies in its relevancy, unless them is an express or necessarily implied prosecution in the constitution or the other law, evidence obtained as a result of illegal search or seizure is not liable to be shutout." Added to this except the search at Chennai, the other search and seizure are seriously not disputed.
98. Ld. Counsels of the accused argued that entire case is stage managed because accused No.3 lodged the complaint against one K.S. Bhat, D.R.I. alleging corruption. The evidence on record discloses that accused No.4 lodged the complaint against K.S. Bhat, alleging corruption on 29/06/2003 i.e., after registration of the case against the accused persons. In fact, FIR registered against that officer based on the complaint lodged by accused No.4. Ex.p.183 is the letter addressed to the Secretary (Revenue) and others, wherein, accused No.3 admitted that the receiving of imported silk yarn from accused No.1. Accused No.3 contented that he was not aware that purchased silk yarn was removed by accused No.2 from him 100% EOU contrary to the conditions of Notification No.53/9-Cus. Dated: 03.06.1997. However, the contents of the 104 CC.No.61/2012 statements given by accused No.3 and the seized documents established that accused No.3 knowingly purchased the imported yarn. Thus, the argument of the accused that for the above reason false case was registered and documents were created is difficult to accept.
99. The accused No.3 to 5 have so far not retracted from their statements and it is only during the course of trial contentions was taken up that statements were recorded under threat. It is not explained in what way the threats was exerted upon them. Accused No.3 to 5 are not illiterate and are in the business filed. They were in the position of understanding the consequence of giving the statements and if statements were not voluntarily, certainly, they could have retracted immediately. It is to be seen that most of the statements were hand written and recorded elaborately by explaining each and every aspect and by confronting the seized documents and properties.
100. Statements of accused No.2 is concerned, it is stated that he issued a letter dated:16.05.2003 stating that the statements recorded on 7th, 8th, 9th of May - 2003 were 105 CC.No.61/2012 obtained by the Officials by coercion and putting him under lot of pressure. Then once again informed that he voluntarily given those statements. This shows the lack of consistency on the part of the accused No.2. There was no reason for the officials to get the statements under threat. Accused No.2 being the in charge of EOU which could have answered the question and clarified the issues raised by the officials. There is no direct implication of the accused No.1 and 2. The clarification was sought and questions relating to the import and export were put. The seized documents were confronted, the detailed statements were recorded. The statements of employees of accused No.1 were also recorded and they are in consonance with the statements of accused No.2. Thus, the argument that statements were recorded under threat is not acceptable.
101. Ld. Counsels argued that the exported consignments were checked by the concerned officials and found correct and foreign exchanges were realized. Documents were not collected from the importer to establish that the low quality fabrics were exported instead 106 CC.No.61/2012 of silk fabrics. The officials in their statements stated that they checked only the samples and entire consignment were not checked and they had not found the mis declaration. For the reason that consignments were passed on to the importer, it cannot be held that consignment included silk fabrics. It is for the accused No.1 and 2 to place the records for having obtained the order for supply of silk fabrics and also show that silk fabrics were exported. It is true that there is no legal bar for exporting non-silk fabric by the EOU unit, but for this permission is to be obtained from the concern and exemption should not be claimed for such export.
102. The contents of the shipping bills, mahazar and the statements of accused No.2, employees of accused No.1 and the concerned officials discloses that consignment cleared under Invoice No.197, dated:05.05.2003 were seized at Chennai Air Cargo Complex. Then, the premises of accused No.1 and another unit were searched on 06/07.05.2003 and the goods and the documents mentioned in the annexure to the mahazar were seized. Ld. Counsel of the accused by referring to the answers given 107 CC.No.61/2012 by P.w.1 argued that interception of consignment at Chennai Air Cargo is not proved. It is argued that photos were not taken, accused No.2 was not called for identification and in fact, the wrong consignment was intercepted. This line of arguments is very difficult to accept. If wrong consignment was seized then the person who sent that consignment could have raised the objection. It is true that P.w.1 had not taken the expert while preparing the estimation, but for that reason only, it cannot be held that the consignments consisted only fabrics made out of imported silks. The defence that P.w.1 on the say of higher officials created the documents and gave false evidence is not acceptable without material to substantiate.
103. The evidence of P.w.2 regarding the search of premises of accused No.1 and seizure of documents remained unshaken. While cross examining P.w.2 much of the questions were asked regarding manner in which searches were made. There is no denial of search and seizing of the documents and materials under mahazar marked as E.xp.3 and the details of the seized documents 108 CC.No.61/2012 and raw silk fabrics as per Ex.p.4 to 10. The sending of samples to CSTRI is also not denied.
104. P.w.2 stated that on 07.05.2003, accused No.2 appeared and gave statements marked as Ex.p.188 and he searched the premises of Mr. Sampath Kumar S., seized the incriminating materials and recorded his statements as per Ex.p.190. This evidence remained almost unchallenged. Nothing has been brought out to disbelieve the evidence of P.w.4 that he searched the premises of accused No.4 and 5 and seized the visiting cards of accused No.4 and other documents under mahazar. The evidence of P.w.4 regarding the recording of statements of accused No.4 and 5 remained unshaken. Except putting the suggestions that statements given by accused No.4 is not voluntary and they prepared to suit the case and accused No.4 was not in free mind, there is nothing to substantiate. Mere suggestions will not take away the reliability of evidence and there must be some materials to corroborate the said stand. The evidence of P.w.4 that he recorded the statement of accused No.4 and conducted the search in the premises of accused No.5 and recorded her 109 CC.No.61/2012 statement remained unshaken. Except, denial and suggestion nothing else is brought out to disbelieve his evidence. P.w.5 is evidence regarding search, seizing of led seal and drawing sample of fabrics was challenged stating that seizure is illegal. There is material to substantiate that mahazars were created. P.w.6 deposed about the search taken place at M/s. Sandhya Silks and seizing of incriminating documents.
105. P.w.7 is the officer who carried out the investigation in his evidence deposed about the collection of evidence and recording of statements. While cross examining P.w.7 much of the question were asked regarding non-collection of some material evidences and procedural irregularity. However, except denials and suggestions nothing has been elicited to discard his evidence in respect of the investigation carried out by him. In the cross examination P.W.7 stated the reasons for the inability to collect some of the material evidence. It was suggested that whatever goods given for job work was received by accused No.1, but the evidence on record shows otherwise. For the suggestion as to why accused 110 CC.No.61/2012 No.2 was not taken Chennai and shown the goods for identification, P.w.7 answered that accused No.2 in his statement admitted the mis - declaration of goods. For the reasons of not collecting the account particulars and the documents from Development officer, the other evidence on record cannot be discarded.
106. The other witnesses in their evidence deposed about that customs officials came and recorded the statements and obtained the documents. Their evidence substantiates the case of the complainant with respect to the acquiring of non-silk fabrics from the local market and silk wastes. None of the witnesses have specifically stated that their statements being recorded by putting them under threat. There are no reasons for the officials to create the statements and obtain the signatures of the witnesses. It is practically impossible to imagine the things and prepare the statements inconsonance with the case. The investigation was commenced not after registering the case and after investigation; it concluded that accused committed the alleged offence. The mahazar and statements discloses that premises of M/s. Udde Silks, M/s. Mahalakshmi 111 CC.No.61/2012 Enterprises, rented premises of accused No.4 were also searched and incriminating material were seized.
107. The statements of accused No.2 to 5 were recorded and the seized documents were confronted. The employees of accused No.1 and M/s. Udde Silks gave their statements. The persons who supplied the fabrics have given the statements. Accused No.2 in his statements stated the manner in which the transactions being done and how the imported silk being diverted to the open market and about the exporting of low quantity fabrics in place of silk fabrics. Accused No.2 also stated about the involvements of accused No.3 and 4. It is true that there is no evidence to the effect that sample drawn from the consignment seized at Chennai were sent for test, but that alone will not be fatal to the case of the complainant. The other evidence made available have to be looked into.
108. Accused No.2 who is in charge of day today affairs of accused No.1, in his statements by referring to the documents seized during the course of search stated in details as to how the imported silk being diverted to open market and to adjust the short comings how locally 112 CC.No.61/2012 manufactured fabrics being added in the consignment. The statements of the employees and others have confronted to accused No.2, while recording statements. In the statements accused had given the details of exported polyester/stain fabric which were obtained from local market. These particulars verified from the manuscripts available in the file No.104 at Invoice No.95 to 190 marked as Ex.p.46. Had, it been wrong statement, then accused No.2 could have placed at least probable evidence to the effect that the imported silk yarns were used to manufacture the silks fabrics and exported the same.
109. Sri. M.R. Jayasimha, employee in accused No.1, in his statements stated in detail about the manner in which the exported silk being diverted and how the locally manufactured fabrics being used to adjust. He examined as P.w.8 deposed that DRI Officials raided the accused No.1 premises and thereafter, recorded his statements. P.w.8 deposed that documents were confronted at the time of recording the statements. In the cross examination, P.w.8 stated that officials have slapped and obtained the signatures by force, however, in the chief examination, 113 CC.No.61/2012 P.w.8 not stated so and no much importance can be given to the blanket allegation made against the officials.
110. Sri. A.C .Krishnamurthy and Sri .K.S. Somashekar, the employees of accused No.1, in their statements stated in details as to how the transaction of accused No.1 being carried out. The officials recorded the statement of Sri. Krishnaswamy, C & F Agent, who handled the cargo, sent by accused No.1 and Sri. Gopinath, Marketing Executive of Surf Logistic. They stated about the handling of export consignment. The statements of the persons who supplied the non-silk fabrics also recorded. The statements of the persons who use to take the job work form accused No.1 also recorded. There is no evidence to the effect that these statements are created documents. The statements coupled with statements of accused No.2 and other documents on record clearly established the charge leveled against accused No.1 and 2.
111. The test report on record discloses that materials seized from the premises of accused No.1 and M/s. Udde Silks were subjected to the test. Accused No.3 in his statement by referring to seized documents admitted that 114 CC.No.61/2012 he purchased the imported silk from accused No.1. Accused No.3 in his statement had given the details of imported raw silk yarn purchased from accused No.1. Had accused No.3 purchased them legally, then he would have maintained the proper accounts and payments should have been made through proper channels. Accused No.3 in his statements categorically admitted that he know that purchased silks were diverted silks and they were not meant for the sale at local market. Ex.p.183 is the letter addressed to the Secretary (Revenue) and others wherein accused No.3 stated that he did purchase the imported silk from accused No.1. The modus operandi adopted by accused No.3 in dealing with accused No.1 to 3 clearly establishes that accused No.3 knowingly purchased the imported silks and thereby assisted in evasion of duty.
112. Perusal of the statements given by accused No.4 and the documents such as visiting cards, travel details and the evidence on record disclose that accused No.4 actively involved in the activities of accused No.1 and 2. The material on record substantiates the allegation that accused No.3 procured the locally manufactured fabrics 115 CC.No.61/2012 and played to the active role in exporting them to M/s. UBS Trading, LLC, Dubai, and other concerns at Dubai. The evidence on record also discloses that he along with accused No.2 and 3 planned for the disposal of imported silks to the local market.
113. The statement of accused No.4 coupled with documents such as visiting card, traveling particulars and the documents obtained from M/s. UBS Trading LLC, Dubai, discloses that he actively participated in exporting of fabrics. The evidence discloses that accused No.4 actively participated in diversion of imported silk to open market and also in procuring the fabrics from the local market for export. The evidence on record discloses that he assisted accused No.2 and taken assistance of accused No.3 for the purpose of diversion of imported silks. There is also evidence to show that he gained monitory benefits. The evidence on records shows beyond reasonable doubt that accused No.4 actively involved in diversion of imported silk to open market and in managing the same with locally manufactured fabrics and thereby avoided the duty. 116 CC.No.61/2012
114. Accused No.5 is the Proprietor of M/s. Udde Silks and she use to under take embroiders works. There is evidence to the effect that silk fabrics imported by accused No.2 found in the premises of M/s. Udde Silks and also in the house of the employee of accused No.1. It is also come in the evidence that accused No.5 exported some fabrics through accused No.1. But, these aspects alone is not sufficient to prove that accused No.5 also connived with accused No.1 to 4 in diverting the imported silk fabrics to the local market. Accused No.5 in her statement stated that she coordinated with accused No.2 for getting the embroidery work done on their fabrics through various companies in Bangalore.
115. Accused No.5 taken up the contention that except the fact that she took fabrics for embroidery work, she had no done anything else. Accused No.5 stated that accused No.4 being her husband used to manage the affairs of M/s. Udde Silks and its transaction with accused No.1. Sampath Kumar employed at M/s Udde Silks in his statement stated that as per the directions of accused No.4 he removed fabrics, computer and documents to his 117 CC.No.61/2012 residence. He further stated though accused No.5 is the propreitrix, accused No.5 always used to give directions to him about all work. This substantiates the defense of accused No.5 that she had connived with accused No. 1 and 2 in diverting the imported silks to the local market.
116. As argued by the Ld. counsel of accused No.5, mere possession of imported silk obtained for embroidery, it cannot be held that accused No.5 know that the imported silks were meant for diversion in the local market. There is no evidence to the effect that the accused No.5 received the consideration for having diverted the computed silk fabrics in the local market. There is no evidence to prove beyond reasonable doubt that accused No.5 connived with accused No.1 to 3 for removal of duty free silks and got removed the duty free raw silk yarn as if it is for embroidery work and she supplied the cheaper fabrics/Art silk to accused No.1 to export the same to balance the diversification of imported silk yarn.
117. Thus, on appreciation of evidence on record, I hold that complainant has succeeded the charges leveled against accused No.1 to 4, but failed to prove the charge 118 CC.No.61/2012 against accused No.5. Accordingly, points No.1 and 2 are answered in affirmative and point No.3 is answered in negative.
118. Point No.4: In the discussion made supra, it is held that accused No.1 to 4 have committed the offence punishable u/s.135 (1)(a) of the Act. Accordingly, I proceed to pass the following:
ORDER By exercising the power conferred u/s. 248(1) of Cr.P.C. accused No.5 is acquitted for the offence punishable u/s.135 (1) (a) of the Customs Act, 1962.
By exercising the power conferred u/s. 248(2) of Cr.P.C. accused No.1 to 4 are convicted for the offence punishable u/s.135 (1)(a) of the Customs Act, 1962.
Bail bond of accused No.5 stand cancelled. To hear regarding sentence on accused No.1 to 4. (Dictatedto Stenographer directly on computer, typed by her corrected and then th pronounced by me, in open court on this the 20 day of April - 2019) PRESIDING OFFICER.119 CC.No.61/2012
25.04.2019 ORDER ON REGARDING SENTENCE
119. Heard the accused No.2 to 4, then Ld. Counsels and Spl. P.P., on the quantum of sentence.
120. Accused No.2 submitted that he suffered loss and the firm was closed. There is no avocation for earning. He is having the responsibility of maintaining wife and children. Accused No.2 submitted that he was detained for more than hundred days under the provisions of COFEPOSA Act. He is suffering from ill-health. Thus, prayed to award minimum possible sentence.
121. Accused No.3 submitted that he was Commission Agent and because of this incident, he lost the agency. He submitted that he is having the responsibility of maintaining the family. He submitted that he was detained for more than hundred days under the provisions of COFEPOSA Act. He is suffering from ill-health. Thus, prayed to award minimum possible sentence.
122. Accused No.4 submitted that he lost the job and at present not having the avocation to earn. He 120 CC.No.61/2012 submitted that he is aged and suffering from ill-health and having the responsibility of maintaining the aged mother. He submitted that he was detained for more than hundred days under the provisions of COFEPOSA Act. Thus, prayed to award minimum possible sentence.
123. Ld. Counsels of the accused No.2 to 4 argued that the period detained under COFEPOSA Act may be awarded as set-off. Ld. Spl. P.P. argued that the offence committed by the accused No.2 to 4 is serious one and prayed to award maximum sentence.
124. The offence u/s.135 (1)(a) of the Act is punishable with imprisonment for a term which may extend to seven years and with fine. The proviso says that in the absence of adequate of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than one year. Accused have stated the financial difficulty, old age and responsibility of maintaining family members as reasons for reduced sentence.
121 CC.No.61/2012
125. It is true that economic offences have to be viewed seriously. It is settled principle law that punishment must be inconsonance with the gravity of offence. At the same time, the court has to considered the surrounding circumstances. The offence is of the year 2003. The complaint was filed in the year 2012 and it has taken almost seven years to conclude the matter. Accused No.2 to 4 were detained under COFEPOSA Act and in detention for a period of more than hundred days. The submissions and other materials on records discloses that accused No.2 suffered heavily and it compelled him to close the firm. Accused No.2 is having the responsibility of maintaining the family members. Considering all these aspects, court is of the considered view that one year imprisonment and the fine is to be imposed. As far as accused No.4 is concerned, he lost the job and marital life also affected. It is submitted that he is having responsibility of maintaining old aged mother. Considering all these aspects, I hold that imprisonment of one year and fine as to be imposed.
122 CC.No.61/2012
126. Accused No.3 was a Commission Agent and compared to accused No.2 and 4, his role in the commission of offence is less. The accused No.3 was the Commission Agent and his role is limited to the purchase of imported silk yarn for commission. Accused No.3 lost the Commission Agency and it is submitted that he is having the responsibility of maintaining the family members. Thus, accused No.3 is to be sentenced for lesser period then one year and he is to be imprisoned for period of six months and to pay fine.
127. As far as submission that the detention period under COFEPOSA Act may be given as set-off is concerned, Hon'ble Apex Court, in the case of Maliyakkal Abdul Azeez Vs. Asst. Collector, Kerala and another, reported in (2003) 2 SCC 439, held that "accused not entitled to the benefit of set-off as provided under Sec.428 of Cr.P.C. for the period of detention under COFEPOSA Act." Accused No.2 to 4 were not in the custody in this case and they were 123 CC.No.61/2012 released on bail on the day of their production. Accordingly, I proceed to pass the following:-
ORDER Accused No.1 is sentenced to pay fine of Rs. 25,000/-.
Accused No.2 and 4 are sentenced to under go imprisonment for a period of one year and to pay fine of Rs .20,000/- each and in default of payment of fine, the accused No.2 and 4 shall under go further sentence for period of two months.
Accused No.3 is sentenced to under go imprisonment for a period of six months and to pay fine of Rs.10,000/- and in default of payment of fine, the accused No.3 shall under go further sentence for period of one months.
Accused No.2 shall pay the fine imposed on accused No.1.
Bail bonds of accused No.2 to 4 and their sureties shall stand cancelled.
(Dictatedto Stenographer directly on computer, typed by her corrected and then th pronounced by me, in open court on this the 25 day of April - 2019.) PRESIDING OFFICER.124 CC.No.61/2012
ANNEXURE:
ON BEHALF OF THE COMPLAINANT: Witnesses:
P.w.01 - K.Monoheran, P.w.02 - T.Somashekar, P.w.03 - M.V.Thaakur, P.w.04 - R.Rajeevalochan, P.w.05 - Girish Vaidya, P.w.06 - Bijuthampia, P.w.07 - Vishwendra Rao, P.w.08 - M.R.Jaisimha, P.w.09 - Praveen, P.w.10 - Hema Raj K. Jain, P.w.11 - Rajendra Kumar, P.w.12 - M.Hema Raju, P.w.13 - H.Muniyappa, P.w.14 - Babu Rao, P.w.15 - Parimal Shashikant Chhapia, P.w.16 - B.S.Bahadur, P.w.17 - M.N.Raghavendra, P.w.18 - N.S.Athmaram, P.w.19 - G.Lokesh, P.w.20 - V.Srinivas, P.w.21 - C.K.R.Kannan, P.w.22 - Kishore Tekwani, P.w.23 - A.R.Hari Ram, P.w.24 - C.Kamraj, P.w.25 - S.R.Ramaien, P.w.26 - T.G.Ramdas, P.w.27 - K.G.Ravindra, P.w.28 - M.K.Davindran, P.w.29 - B.Sreeramulu, P.w.30 - Smt.A.Savitha, P.w.31 - D.Srinivasulu, P.w.32 - Smt.Geetha Jagannath, P.w.33 - V.Ramesh.
Documents:-
Ex.p.001 - Panchanama, Ex.p.001 - (a) Sig. of P.w.1, Ex.p.001 - (b) Sig. of Bharthi Dasan, 125 CC.No.61/2012 Ex.p.001 - (c) Sig. of B.Manimaran, Ex.p.001 - (d) Sig. of Lucein, Ex.p.001 - (e) Inventory, Ex.p.002 - Shipping Bill, Ex.p.002 - (a) Sig. of P.w.28, Ex.p.003 - Mahazar, Ex.p.003 - (a) Sig. of P.w.2, Ex.p.003 - (b) Sig. of Pancha, Ex.p.003 - (c) Sig. of Pancha, Ex.p.003 - (d) Sig. of Ananda, Ex.p.003 - (e) Sig. of Jayasimha, Ex.p.004 - List of Records enclosed to Mahazar, Ex.p.005 - Impressions of Seals seized enclosed to Mahazar, Ex.p.006 - List/Details of Raw - Silk & Silk fabrics seized enclosed to mahazar, Ex.p.007 - List/Details of viscose satin fabrics and Cotton sarees seized enclosed to mahazar, Ex.p.008 - List/Details of finished goods seized enclosed to mahazar, Ex.p.009 - List/Details of samples drawn enclosed to Mahazar, Ex.p.010 - Annexure, Ex.p.011 - Suprathnama, Ex.p.011 - (a) Sig. of A.2, Ex.p.012 - Central Silk Technological Research Institute, Ex.p.012 - (a) Sig. of P.w.2 Ex.p.012 - (b) Sig. of Representative of CSTRI, Ex.p.013 - Sanction Order by Commissioner, Customs, Ex.p.014 - Sanction order by Commissioner, Central Excise, Bangalore, Ex.p.015 - Complaint, Ex.p.015 - (a) Sig. of P.w.3, Ex.p.016 - Flat file marked as daily report containing production details, Ex.p.017 - Flat file marked as Daily report file containing daily production, Ex.p.018 - Flat file marked as daily report May-03 containing daily production details, Ex.p.019 - Flat file marked as Daily report Feb-01 to containing daily, 126 CC.No.61/2012 Ex.p.020 - Flat containing some photographs, tax correspondences, cash book entries and other papers recovered form Hyundai Accent Car bearing Registration No.KA-05-Z-1366, Ex.p.021 - Stock Register mentioned at Sl.No.65 of Annexure-IV attached to Ex.p.3, Ex.p.022 & 023 - Bond Registers mentioned in Sl.No.67 and 70 of the Annexure attached to the mahazar is marked as Ex.p.3, Ex.p.024 to 026 - Job Work Challans details mentioned a Sl.No.71 to 74 of Annexure No.9 attached to Ex.p.3, Ex.p.027 - Annexure-9 Register containing Sl.No.151 to 200 of Annexed to Ex.p.3, Ex.p.028 - Register containing particulars of daily production of C-Unit described at Sl.No.20 of Annexure attached to Ex.p.3, Ex.p.029 - Register containing particulars of daily production described at Sl.No.81, Ex.p.030 - Register containing Particulars of daily production particulars of C-Unit described at Sl.No.80, Ex.p.031 - Register containing particulars of Misc.
correspondence packing details at Sl.No.84, Ex.p.032 - Register containing particulars of Misc correspondence packing details at Sl.No.85, Ex.p.033 - Register marked as packing 172 containing packing details, Ex.p.034 - Register marked as Stock book containing details of exported items, Ex.p.035 - Note book containing misc scribbling at Sl.No.97 in the Annexure attached to Ex.p.3, Ex.p.036 - Register containing delivery challans at Sl.No.91, Ex.p.037 - Register containing embroidery details, Ex.p.038 - Scribbling pad containing certain Misc entries, Ex.p.039 to 044 - 6 Nos. of voucher books containing issues and receipt of material sent at Sl.No.94/1 to 94/6 in the Annexure attached to Ex.p.3, Ex.p.045 - Box file containing details of invoices, bills of purchase of sarees, Ex.p.046 - Box file marked as private accounts of B.S. Anand at Sl.No.104, 127 CC.No.61/2012 Ex.p.047 - Flat file containing fax correspondences at Sl.No.105 described in the Annexure attached to Ex.p.3, Ex.p.048 - Mahazar, Ex.p.048 - (a) Sig. of P.w.4, Ex.p.048 - (b) Sig. of Prasad, Ex.p.048 - (c) Sig. of Prakash, Ex.p.048 - (d) Sig. of Javeria Naseer, Ex.p.048 - (e) Sig. of A.5, Ex.p.049 - Visiting Card, Ex.p.050 - Mahazar, Ex.p.050 - (a) Sig. of P.w.4, Ex.p.050 - (b) Sig. of Suresh Kumar, Ex.p.050 - (c) Sig. of P.Kumar, Ex.p.050 - (d) Sig. of A.5, Ex.p.050 - (e) Specimen Seal Impression, Ex.p.051 - Annexure, Ex.p.051 - (a) Sig. of P.w.4, Ex.p.051 - (b) Sig. of Suresh Kumar, Ex.p.051 - (c) Sig. of P.Kumar, Ex.p.051 - (d) Sig. of A.5, Ex.p.051 - (e) Sig. of Javeria Naseer, Ex.p.052 - Mahazar dated:12.05.2003, Ex.p.052 - (a) Sig. of P.w.5, Ex.p.052 - (b) Sig. of Nagaraj, Ex.p.052 - (c) Sig. of Nataraj, Ex.p.052 - (d) Sig. of A.C.Krishnamurthy, Ex.p.052 - (e) Specimen Seal Impression of Dept., Ex.p.053 - Annexure to the Mahazar, Ex.p.053 - (a) Sig. of P.w.5, Ex.p.053 - (b) Sig. of Nagaraj, Ex.p.053 - (c) Sig. of Nataraj, Ex.p.053 - (d) Sig. of A.C.Krishnamurthy, Ex.p.054 - Undertaking, Ex.p.054 - (a) Sig. of A.C.Krishnamurthy, Ex.p.055 - Mahazar, Ex.p.055 - (a) Sig. of P.w.6, Ex.p.055 - (b) Sig. of Praveen, Ex.p.055 - (c) Sig. of J.Venkateshan, Ex.p.055 - (d) Sig. of L.Hanumanthappa, Ex.p.056 - Statement of A.2 dated:09.05.2003, 128 CC.No.61/2012 Ex.p.056 - (a) Sig. of P.w.7, Ex.p.056 - (b) Sig. of A.2, Ex.p.056 - (c) Sig. of Jain Superintendent, Ex.p.057 - Statement of A.2 dated:13.05.2003, Ex.p.057 - (a) Sig. of P.w.7, Ex.p.057 - (b) Sig. of A.2, Ex.p.057 - (c) Sig. of Jain Superintendent, Ex.p.058 - Statement of A.2 dated:24.05.2003, Ex.p.058 - (a) Sig. of P.w.7, Ex.p.058 - (b) Sig. of A.2, Ex.p.058 - (c) Sig. of Jain Superintendent, Ex.p.059 - Statement of A.2 dated:27.05.2003, Ex.p.059 - (a) Sig. of P.w.7, Ex.p.059 - (b) Sig. of A.2, Ex.p.059 - (c) Sig. of Jain Superintendent, Ex.p.060 - Statement of A.2 dated:07.07.2003, Ex.p.060 - (a) Sig. of P.w.7, Ex.p.060 - (b) Sig. of A.2, Ex.p.060 - (c) Sig. of Jain Superintendent, Ex.p.061 - Statement of A.2 dated:22.09.2003, Ex.p.061 - (a) Sig. of P.w.7, Ex.p.061 - (b) Sig. of A.2, Ex.p.061 - (c) Sig. of Jain Superintendent, Ex.p.062 - Statement of A.2 dated:23.09.2003, Ex.p.062 - (a) Sig. of P.w.7, Ex.p.062 - (b) Sig. of A.2, Ex.p.062 - (c) Sig. of Jain Superintendent, Ex.p.063 - Statement of A.2 dated:24.09.2003, Ex.p.063 - (a) Sig. of P.w.7, Ex.p.063 - (b) Sig. of A.2, Ex.p.063 - (c) Sig. of Jain Superintendent, Ex.p.064 - Statement of A.2 dated:26.09.2003, Ex.p.064 - (a) Sig. of P.w.7, Ex.p.064 - (b) Sig. of A.2, Ex.p.064 - (c) Sig. of Jain Superintendent, Ex.p.065 - Statement of A.3 dated:12.05.2003, Ex.p.065 - (a) Sig. of P.w.7, Ex.p.065 - (b) Sig. of A.3, Ex.p.066 - Further Statement of A.3 dated:13.05.2003, Ex.p.066 - (a) Sig. of P.w.7, Ex.p.066 - (b) Sig. of A.3, 129 CC.No.61/2012 Ex.p.067 - Statement of A.3 dated:11.06.2003, Ex.p.067 - (a) Sig. of P.w.7, Ex.p.067 - (b) Sig. of A.3, Ex.p.068 - Statement of C.w.32-Jayasimha dated:14.05.2003, Ex.p.068 - (a) Sig. of P.w.7, Ex.p.068 - (b) Sig. of C.w.32-Jayasimha, Ex.p.069 - Further St. of C.w.32-Jayasimha dated:19.05.2003, Ex.p.069 - (a) Sig. of P.w.7, Ex.p.069 - (b) Sig. of C.w.32-Jayasimha, Ex.p.070 - Further St. of C.w.32-Jayasimha dated:22.05.2003, Ex.p.070 - (a) Sig. of P.w.7, Ex.p.070 - (b) Sig. of C.w.32-Jayasimha, Ex.p.071 - Statement of A.4 dated:30.05.2003, Ex.p.071 - (a) Sig. of P.w.7, Ex.p.071 - (b) Sig. of A.4, Ex.p.072 - Further Statement of A.4 dated:31.05.2003, Ex.p.072 - (a) Sig. of P.w.7, Ex.p.072 - (b) Sig. of A.4, Ex.p.073 - Further Statement of A.4 dated:01.06.2003, Ex.p.073 - (a) Sig. of P.w.7, Ex.p.073 - (b) Sig. of A.4, Ex.p.074 - Further Statement of A.4 dated:24.09.2003, Ex.p.074 - (a) Sig. of P.w.7, Ex.p.074 - (b) Sig. of A.4, Ex.p.075 - Further Statement of A.5 dated:03.06.2003, Ex.p.075 - (a) Sig. of P.w.7, Ex.p.075 - (b) Sig. of A.5, Ex.p.076 - Further St. of Sampath Kumar dated:02.10.2003, Ex.p.076 - (a) Sig. of P.w.7, Ex.p.076 - (b) Sig. of Sampath Kumar, Ex.p.077 - St. of M.K.Davindran dated:29.09.2003, Ex.p.077 - (a) Sig. of P.w.7, Ex.p.077 - (b) Sig. of M.K.Davindran, Ex.p.078 - Self Attested Invoice copies, Ex.p.079 - Further St. of M.K.Davindran dated:30.09.2003, Ex.p.079 - (a) Sig. of P.w.7, Ex.p.079 - (b) Sig. of M.K.Davindran, Ex.p.080 - St. of Gulshan Talwar Vicky dated:04.06.2003, 130 CC.No.61/2012 Ex.p.080 - (a) Sig. of P.w.7, Ex.p.080 - (b) Sig. of Gulshan Talwar Vicky, Ex.p.081 - Another St. of Gulshan Talwar Vicky dated:06.06.2003, Ex.p.081 - (a) Sig. of P.w.7, Ex.p.081 - (b) Sig. of Gulshan Talwar Vicky, Ex.p.082 - St. of Rajendra Kumar Jain dated:04.06.2003, Ex.p.082 - (a) Sig. of P.w.7, Ex.p.082 - (b) Sig. of Rajendra Kumar Jain, Ex.p.083 - St. of H.K.Jain dated:04.06.2003, Ex.p.083 - (a) Sig. of P.w.7, Ex.p.083 - (b) Sig. of H.K.Jain, Ex.p.084 - St. of H.Mniyappa dated:05.06.2003, Ex.p.084 - (a) Sig. of P.w.7, Ex.p.084 - (b) Sig. of H.Muniyappa, Ex.p.085 - St. of Ghanshyam T., dated:06.06.2003, Ex.p.085 - (a) Sig. of P.w.7, Ex.p.085 - (b) Sig. of Ghanshyam T., Ex.p.086 - St. of M.Hema Raju dated:07.06.2003, Ex.p.086 - (a) Sig. of P.w.7, Ex.p.086 - (b) Sig. of M.Hema Raju, Ex.p.087 - Further St. of M.Hema Raju dated:09.06.2003, Ex.p.087 - (a) Sig. of P.w.7, Ex.p.087 - (b) Sig. of M.Hema Raju, Ex.p.088 - Annexed document, Ex.p.089 - St. of S.M.Chidananda dated:25.06.2003, Ex.p.089 - (a) Sig. of P.w.7, Ex.p.089 - (b) Sig. of S.M.Chidananda, Ex.p.090 - St. of Babu Rao dated:08.07.2003, Ex.p.090 - (a) Sig. of P.w.7, Ex.p.090 - (b) Sig. of Babu Rao, Ex.p.091 - Cash Bill, Ex.p.092 - Cash Bill, Ex.p.093 - Cash Bill, Ex.p.094 - Cash Bill, Ex.p.095 - Cash Bill, Ex.p.096 - St. of M.R.Padmanabhan dated:03.07.2003, Ex.p.096 - (a) Sig. of P.w.7, Ex.p.096 - (b) Sig. of M.R.Padmanabhan, Ex.p.097 - St. of Narayana @. Muttu dated:26.09.2003, Ex.p.097 - (a) Sig. of P.w.7, 131 CC.No.61/2012 Ex.p.097 - (b) Sig. of Narayana @. Muttu, Ex.p.098 - St. of Dinesh Kumara B. Jain dated:24.09.2003, Ex.p.098 - (a) Sig. of P.w.7, Ex.p.098 - (b) Sig. of Dinesh Kumara B. Jain, Ex.p.099 - St. of K.N.S.Athmaram dated:18.06.2003, Ex.p.099 - (a) Sig. of P.w.7, Ex.p.099 - (b) Sig. of K.N.S.Athmaram, Ex.p.100 - St. of S.Vadamalai dated:22.06.2003, Ex.p.100 - (a) Sig. of P.w.7, Ex.p.100 - (b) Sig. of S.Vadamalai, Ex.p.101 - St. of V.Srinivas dated:23.06.2003, Ex.p.101 - (a) Sig. of P.w.7, Ex.p.101 - (b) Sig. of V.Srinivas, Ex.p.102 - Further St. of V.Srinivas dated:24.06.2003, Ex.p.102 - (a) Sig. of P.w.7, Ex.p.102 - (b) Sig. of V.Srinivas, Ex.p.103 - St. of C.Kamaraj dated:01.07.2003, Ex.p.103 - (a) Sig. of P.w.7, Ex.p.103 - (b) Sig. of C.Kamaraj, Ex.p.104 to 111 Delivery Notes & Other Documents, Ex.p.112 - St. of N.M.Raghavendra dated:01.07.2003, Ex.p.112 - (a) Sig. of P.w.7, Ex.p.112 - (b) Sig. of N.M.Raghavendra, Ex.p.113 - St. of V.Manohar dated:20.05.2003, Ex.p.113 - (a) Sig. of P.w.7, Ex.p.113 - (b) Sig. of V.Manohar Ex.p.114 - St. of Nedumaran dated:04.07.2003, Ex.p.114 - (a) Sig. of P.w.7, Ex.p.114 - (b) Sig. of Nedumaran, Ex.p.115 - St. of V.Venugopal Gupta dated:07.07.2003, Ex.p.115 - (a) Sig. of P.w.7, Ex.p.115 - (b) Sig. of V.Venugopal Gupta, Ex.p.116 - Receipt and Bill, Ex.p.117 - Receipt and Bill, Ex.p.118 - St. of G.Lokesh dated:10.07.2003, Ex.p.118 - (a) Sig. of P.w.7, Ex.p.118 - (b) Sig. of G.Lokesh, Ex.p.119 - St. of Pramod Kumar Navilgaria @. Munna dated:05.09.2003, Ex.p.119 - (a) Sig. of P.w.7, Ex.p.119 - (b) Sig. of Pramod Kumar Navilgaria @. Munna, 132 CC.No.61/2012 Ex.p.120 - Mahazar, Ex.p.120 - (a) Sig. of P.w.7, Ex.p.121 - Test Reports, Ex.p.122 - St. of A.C.Krishnamurthy dated:07.06.2003, Ex.p.122 - (a) Sig. of P.w.7, Ex.p.123 - Further St. of A.C.Krishnamurthy dated:02.10.2003, Ex.p.123 - (a) Sig. of P.w.7, Ex.p.124 - St. of K.S.Somashekar dated:20.05.2003, Ex.p.124 - (a) Sig. of P.w.7, Ex.p.125 - Further St. of K.S.Somashekar dated:21.05.2003, Ex.p.125 - (a) Sig. of P.w.7, Ex.p.126 - Further St. of K.S.Somashekar dated:23.05.2003, Ex.p.126 - (a) Sig. of P.w.7, Ex.p.127 - Further St. of K.S.Somashekar dated:27.06.2003, Ex.p.127 - (a) Sig. of P.w.7, Ex.p.128 - Further St. of K.S.Somashekar dated:01.07.2003, Ex.p.128 - (a) Sig. of P.w.7, Ex.p.129 - Further St. of K.S.Somashekar dated:19.09.2003, Ex.p.130 - Statement of P.w.8 dated:07.05.2003, Ex.p.130 - (a) Sig. of P.w.8, Ex.p.131 - Statement of P.w.8 dated:08.05.2003, Ex.p.131 - (a) Sig. of P.w.8, Ex.p.132 - Statement of P.w.15, Ex.p.132 - (a) Sig. of P.w.15, Ex.p.133 - Statement of C.w.84, Ex.p.133 - (a) Sig. of C.w.84, Ex.p.134 - Original Order, Ex.p.135 - Original Order, Ex.p.136 - Original Order, Ex.p.137 - Confronted St. of A.2, Ex.p.138 - St of A.4, Ex.p.138 - (a) Sig. of P.w.4, Ex.p.138 - (b) Sig. of A.4, Ex.p.139 - St of A.4, Ex.p.139 - (a) Sig. of P.w.4, Ex.p.139 - (b) Sig. of A.4, Ex.p.140 - St of A.5, Ex.p.140 - (a) Sig. of P.w.4, Ex.p.140 - (b) Sig. of A.5, Ex.p.141 - St of A.5, 133 CC.No.61/2012 Ex.p.141 - (a) Sig. of P.w.4, Ex.p.141 - (b) Sig. of A.5, Ex.p.142 - Mahazar, Ex.p.142 - (a) Sig. of P.w.33, Ex.p.142 - (b) Sig. of C.w.7, Ex.p.142 - (c) Sig. of A.2, Ex.p.142 - (d) Sig. of Basavaraj, Ex.p.143 - O/c of Letter dated:12.05.2003 with copy of Passport, Ex.p.144 - O/c of Letter dated:02.06.2003 with a/copy of particulars, Ex.p.145 - O/c of Letter dated:12.06.2003, Ex.p.146 - Letter copy of Application, Ex.p.147 - O/c of Letter dated:23.05.2003, and copy of enclosures, Ex.p.148 - Letter dated:17.07.2003, along with enclosures, Ex.p.149 - Letter dated:25.08.2003 with details, Ex.p.150 - Letter dated:08.05.2003 and enclosed documents, Ex.p.151 - O/c of Letter dated:13.06.2003, Ex.p.152 to 180 Reports, Ex.p.181 & 182 Covering Letter along with details of Samples sent to CSTRI for test, Ex.p.183 - Representation along with copy of FIR, Ex.p.184 - St. of C.w.82, Ex.p.184 - (a) Sig. of C.w.82, Ex.p.184 - (b) Sig. of S.B.Narayan, Ex.p.185 - Covering Letter dated:18.09.2003, Ex.p.186 - A/c of order of CESTAT dated:17.07.2008, Ex.p.187 - Duty Quantification Chart, Ex.p.188 - St. of A.2, Ex.p.188 - (a) Sig. of P.w.2, Ex.p.188 - (b) Sig. of A.2, Ex.p.189 - Mahazar & enclosed List, Ex.p.189 - (a) Sig. of P.w.2, Ex.p.189 - (b) Sig. of Sampath Kumar S., Ex.p.190 - St. of Sampath Kumar S., Ex.p.190 - (a) Sig. of P.w.2, Ex.p.190 - (b) Sig. of Sampath Kumar S., Ex.p.191 - Mahazar and seized documents. 134 CC.No.61/2012 MATERIAL OBJECTS:- Nil.
ON BEHALF OF THE ACCUSED:
Witnesses & Documents: - Nil.
(SHANTHANNA ALVA M.) PRESIDING OFFICER, SPL. COURT FOR ECONOMIC OFFENCES, BANGALORE.135 CC.No.61/2012