Custom, Excise & Service Tax Tribunal
S. No vs Unknown on 15 February, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH, CHENNAI S. No Appeal No. Appellant and Respondent
Order-in-Original No. and Date
1. C/182/08 Satish Mohan Agarwal (Prop. M/s. Casino Electronics) Vs.CC (Sea-Export) Chennai 6933/07 dt. 26.11.2007
2. C/183/08 Satish Mohan Agarwal Vs.CC (Sea-Export) Chennai 6934/07 dt. 26.11.2007
3. C/177/08 Satish Mohan Agarwal Vs. CC (Sea-Export) Chennai 6875/07 dt. 16.11.2007
4. C/181/08 Satish Mohan Agarwal Vs. CC (Sea-Export) Chennai 6932/07 dt. 26.11.2007
5. C/179/08 Satish Mohan Agarwal Vs. CC (Sea-Export) Chennai 6930/07 dt. 26.11.2007
6. C/180/08 Satish Mohan AgarwalVs.CC (Sea-Export) Chennai 6931/07 dt. 26.11.2007
7. C/178/08 Satish Mohan Agarwal Vs.CC (Sea-Export) Chennai 6876/07 dt. 16.11.2007
8. C/187/08 Satish Mohan Agarwal Vs. CC (Sea-Export) Chennai 6947/07 dt. 30.11.2007
9. C/184/08 Satish Mohan Agarwal Vs.CC (Sea-Export) Chennai 6944/07 dt. 30.11.2007
10. C/188/08 Satish Mohan Agarwal Vs.CC (Sea-Export) Chennai 6948/07 dt. 30.11.2007
11. C/186/08 Satish Mohan Agarwal Vs.CC (Sea-Export) Chennai 6946/07 dt. 30.11.2007
12. C/185/08 Satish Mohan Agarwal Vs.CC (Sea-Export) Chennai 6945/07 dt.30.11.07 Appearance ShriHariRadhakrishnan, Advocate for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent CORAM HonbleShri D.N. Panda, Judicial Member HonbleShri R. Periasami, Technical Member Reserved on : 21.01.2016 Pronounced on:15.02.2016 Final Order Nos. 40200-40211 / 2016 Per D.N. Panda In pursuance of the direction of the Honble High court of Madras in CMA No. 421/2013 disposed on 7.3.2013, this batch of 12 appeals was taken up. Honble court noticing that the appellant was not heard by the Tribunal at the time of passing Final Order No. 701 767/2012 dated 14.6.2012, set aside that part of order insofar as that related to the appellant with direction tohim to file an appropriate application before Tribunal for redressal of his grievance in accordance with law. Accordingly, appellant filed such applications. Those were disposed by Tribunal vide Misc. Order Nos. 41035 to 41046/2015 on 5.8.2015 restoring these 12 appeals to its file for hearing on merit. Accordingly all theseappeals were heard analogous and disposed by this common order for the common cause, material facts and evidence involved in such appeals including the law applicable equally to all such appeals.
2. Appeal registered asNo. C/146/2002although arose out of the same cause and evidence as is involved in the above batch of appeals, that could not be listed pending search of that record by Registry. Registry, upon tracing that record, shall list the same issuing appropriate notice for hearing.
3. It was alleged by investigation that the Appellant stationed in Delhiat the address: No.1598, Main Bazar, Paharganj, New Delhi 110 055had sold fake, forged and fabricated DEPB scripscovered bydifferent Telegraphic Release Advice (TRA)by his concern:M/s.Casino Electronic Private Ltdto one Sri SashiPrakashLohiya of Chennai raising debit notes and collecting the sale proceeds on that basis. Those were later soldby Sri Lohiyato different importers in Chennai through brokers and were used by imports to clear the imports duty free. Thatcaused huge loss of Revenue for which the appellant was called upon to explain the reason why he shall not be penalized under law. Following due process of law, adjudications were made and penalty of different descriptions were levied on the appellant u/s 112(a) of the Customs Act, 1962 by different adjudication orders as depicted in the Table below holding himguilty. Against such adjudications, appellant came in appeal before Tribunal:
S. No Appeal No. Order-in-Original No. Penalty (Rs.)
1.
C/182/08 6933/07 dt. 26.11.2007 12,00,000/-
2. C/183/08 6934/07 dt. 26.11.2007 25,00,000/-
3. C/177/08 6875/07 dt. 16.11.2007 25,00,000/-
4. C/181/08 6932/07 dt. 26.11.2007 12,50,000/-
5. C/179/08 6930/07 dt. 26.11.2007 15,00,000/-
6. C/180/08 6931/07 dt. 26.11.2007 10,00,000/-
7. C/178/08 6876/07 dt. 16.11.2007 5,00,000/-
8. C/187/08 6947/07 dt. 30.11.2007 5,00,000/-
9. C/184/08 6944/07 dt. 30.11.2007 75,000/-
10. C/188/08 6948/07 dt. 30.11.2007 2,00,000/-
11. C/186/08 6946/07 dt. 30.11.2007 75,000/-
12. C/185/08 6945/07 dt.30.11.07 1,50,000/-
4. Duty Entitlement Pass Book (DEPB) is a scheme formulated under Para 7.43 of the Hand Book of Procedure of EXIM Policy 1997-2002 and Para 4.3 of Hand Book of Procedure of EXIM Policy 2002-2007 issued under Section 5 of the Foreign Trade (Development & Regulation) Act, 1992, to facilitate and augment foreign trade by genuine importersneutralizing the incidence of Customs duty on the import content of the export product.
4.2 Under the above scheme, DEPB scripsare issuedby DGFT to an exporter againstgenuine exports made by him to enable him to make future imports duty free to the extent of the value of the scrips issued. Suchscripsare alsoregistered at the port of export and are freely transferableas well as permitted for use at a port other than the port of export through TRA (Telegraphic Release Advice)in terms of Notification No.34/97-Cus dated 7.4.1997 and 45/2002-Cus dated 22.4.2002 issuedby the Department of Revenue, Ministry of Finance, Govt. of Indiavide. So also, imports are allowed to avail the benefit of Nil rate of Special Additional Duty (SAD) under Notification No.23/02-Cus dated 1.3.2002.
BACK GROUND OF THE CASES 5.1 Subsequent to the impugned imports made through different Bill of Entries at the Chennai Port using the impugned TRAs and DEPB scrips as mentioned in different adjudication orders, it was noticed by Investigation that certain TRAsmentioned therein used by the importers for clearance of the imports werefalse, fake, forged and fabricatedand the DEPB scripsmentioned therein were either not at all transferred by owners thereof to the importers or the DEPBscrips mentioned in the TRAs were found to be false being different from the scrips registered at the port of export.
5.2 Investigation noticed that Appellant was Traderof the impugned TRAs and sold the same to one Sri SashiPrakashLohiya, whoultimately sold that to different importers through brokers and were used at the Chennai Port to make imports duty free. The DEPB scrips mentioned in the TRAs although were claimed to have been registered at the Jawaharlal Nehru Customs House, NhavaSheva, Mumbai, were not at all lawfully transferred by the owners thereof to the importers of Chennai and even the scrips mentioned in some of the TRAs differed with the scrips registered at the above port of export.
5.3 Search was made to premises of Sri SashiPrakashLohiaand hisstatement was recorded by investigation u/s 108 of Customs Act, 1962 on 17.11.2004. Thatrevealed that he was the Proprietor of M/s.PankajImpex having office at No.1, 6th floor, Alsa Towers, P.H.Road, Kilpauk, Chennai-10 and was mastermind behind the deal of the false, forged, fake and fabricated TRAs with DEPB scripsmentioned therein. Those were supplied to him by the appellant at a very low price. When premise of the appellant wassearched, he was absent and did not cooperate with investigating agency thereafter evading summons issued by that agency.
5.4 Sri Lohiyafurther stated in his statement that he wastrading in REP/DEPBscrips in the name of M/s.Sashi Trading Corporation from No.83, NSC Bose Road, Chennai 600 001and closing that concern, he startedPankajImpex in the year 1996. He had also another firm in the name of M/s.Prabha International with his wife as Proprietrix thereof. He was also using his brother-in-laws concern viz. PI Trading Corporation to trade the DEPB scrips. He got IE code for both firms and was purchasing DEPB scripsfrom the appellant.
5.5 Investigationgathered evidence suggesting that the impugned TRAs were not at all issued by Mumbai Customs to Chennai Custom Houseand were not at all genuine. Inquiry made from the original DEPB scrips holders revealed that the said scrips were sold to some other importers and were presented at different ports for clearance of import as has been recorded by the adjudicating authority in Para 17 of the adjudication order involved in Appeal No. C/177/2008 and similar such finding made in other adjudication orders. The Commissioner of Customs, Chennai (Seaport) vide his letter dated 29.8.2005 informed the investigation that the impugned TRAs in sealed cover along with the DEPB scrips were received through the CHA of the importer and registered for clearance of imports duty free. This made clear that the said TRAs were not at all received by Chennai Customs by registered post from NhavaSheva Customs House.
5.6 On the aforesaid back drop and evidence gathered by investigation, adjudications were made holding that that appellant was actively, consciously and deliberately involved in the deal of the false, fake, forged and fabricated TRAs causing jeopardy to the interest of Revenue when appellant failed to demolish the allegations made against him adducing any cogent and credible evidence to the contrary.
ARGUMENT ON BEHALF OF APPELLANT 6.1 Learned counsel ShriHariRadhakrishnan appearing on behalf of the appellant submitted that for no infraction of law made by the appellant he shall not be liable to penalty under law. If at all, the allegation against the appellant is proved by Revenue, his action/omissions made prior to clearance of the goods does not bring him to the fold of law for penalty following the decision of the Honble High Court of Gujarat in the case of Commissioner of Customs Vs. Sanjay Agarwal 2011 (269) ELT 153 (Guj.).
6.2 In spite of the right to be heard, the appellant was not at all heard by the authority below before passing the order even though on several occasions lawyer for the appellant appeared before the Commissioner of Customs.
6.3 The proceeding is time-barred since the notice itself was belatedly issued to unreasonably bring the appellant to consequence of penalty. There was no forgery of DEPB scrips or TRA done by the appellant.
6.4 Learned Commissioner in Para 24 of his order has found that the appellants role was only to introduce Mr.Sajiad Khan, to Sri Lohiya. Sri Khan as an employee at Customs House, NhavaSheva, had access to DEPB register, had colluded with sriLohiyato hatchconspiracy against Revenue divulging the details of DEPB scrips to him. Therefore, appellant is not liable to any penalty under law. Further,Sri Khan having been made scot-free, he shouldbe brought to recordfor discovery of truth.
6.5 Appellant cannot be said to be mastermind of the team who made the alleged fraud following the ratio laid down in M/s. Geogeress Vs. Commissioner of Customs 2003 (151) ELT 336 [ICI India Ltd. Vs. CC, Calcutta 2003 (151) ELT 336]. Since there is no finding as to the collusion of the appellant with any person for forging and issuing DEPB scripss to evade duty, learned Commissioner manifestly erred in holding that the appellant was absconding and penalized him unlawfully although he was prepared to participate in the enquiry. Investigating authority for no reason insisted appellant to go to Chennai to participate in investigation. Complaint filed against appellant before the Magistrate Court is vexatious. Therefore, whole proceeding made violating principles of natural justice is void.
6.6 The cases of the appellant have been dealt verycasually and in a cursory manner without examining the evidence on record. Adjudication is therefore not sustainable. The issues raised in reply to show cause notice having been ignored by the adjudicating authority, the adjudication order suffers from legal infirmity for the violation of natural justice.
6.7 When the customs officer allowed clearance of the goods on the basis of the TRA, the appellant is not liable to any allegation made in the show cause notice.
6.8 There was no credible evidence at all against the appellant to impute him to the charge of forgery and fabrication of DEPB scrips as well as TRAs. ShriSashiPrakashLohiaas co-accused was hostileand deposed against the appellant. His deposition neither being credible nor admissible in lawcan be used against the appellant.
6.9 When Sajid Khan, an employee of Customs Department was fearlessly offering DEPB scrips at a cheaper price, he should have been punished without the appellant being questioned.
6.10 When no incriminating evidence was found during search from the premises of the appellant there cannot be any allegation of any forgery or fabrication of DEPB scrips or TRAs against the appellant.
6.11 The DGFT being an authority to deal with any infraction of law relating to DEPB, Customs has no jurisdiction to initiate any proceeding against the appellant. Therefore, the adjudication is unsustainable and appellant is entitled to appropriate relief exonerating him from penalty.
ARGUMENTS OF REVENUE
7. Learned DR appearing for Revenue supporting the adjudication orders, submitted that the appellant as well as sriSashiPrakashLohia were mastermind of the racket selling false, fake, forged and fabricated TRAs with the DEPB scripsmentioned therein to defraud Revenue for which the adjudications have been rightly made. That should not be interfered or the appellant granted any immunity from penalty. Entire material on record speaks against him. He hatched conspiracy against Revenue. Loss of Revenue is attributable to his malafide. When he neither controverted any of the allegations made against him nor impeached the evidence gathered by Revenue to prove his case, all his appeals are liable to be dismissed.
FINDINGS AND CONCLUSION BY TRIBUNAL 8.1 Heard both sides and perused records.
8.2 The issues involved in this batch of appeals is whether the DEPB scrips/TRAs used to discharge import duty liability were fake, forged and fabricated causing jeopardy to the interest of Revenue and whether the appellant committed any act in this regard to defraud Revenue and incurred liability u/s 112(a) of the Customs Act, 1962.
8.3 Investigation gathered evidence demonstrating that the impugned TRAs were not at all issued by Mumbai Customs to Chennai Custom House. Rather those were produced by Customs House Agents (CHA) in sealed cover to Chennai customs and basing on such TRAs, imports made at the Chennai port were cleared duty free. Letter dated 9.8.2005 of Commissioner of Customs; Chennai (Sea port) is testimony of the fact of submission of TRA by CHAs in Customs House, Chennai without that being received from Navsheva Customs, Mumbai. Those werefalse, fake, forged and fabricated and not at all genuine for the reason that the owners of the DEPB scrips mentioned therein had never transferred the same to the importers of Chennai. Evidence on record also exhibited that the DEPB scrips registered in the port of export i.e, Jawaharlal Nehru Port, NhavaSheva, Mumbai were transferred by the owners thereof to different transferees and those were used in different ports. Further, the DEPB scrips mentioned in some of the TRAs were different from the scripsregistered in NhavaSheva, Mumbai. The impugned TRAs causedhugeloss of Revenueto which appellants role as seller thereof is attributable.
8.4 Inquiry from the original DEPB scrips holders corroborated the fact that the said scrips were sold to some other importers as is found by learned adjudicating authority in para 17 of the adjudication order involved in Appeal No. C/177/2008.Such fact remained uncontroverted by the appellant in the course of hearing before Tribunal leading any cogent evidence. Verification of records of both the Customs House revealed serious discrepancy proving that the TRAs utilized at Chennai Port were not at all valid instruments nor genuine but were fake, forged and fabricated.
8.5 The impugned TRAs were sold in open market at a very low price. Both, appellant and sriLohiya colluded to cause loss to Revenue as is evident from the statement of sriLohiyarecorded u/s 108 of the Customs Act, 1962. That remained un-rebutted in the course of hearing in absence of any cogent and credible evidence led. Appellant only pleaded innocence.
8.6 Appellant being member of the racket engineered fraud against Revenue and avoided summons issued against him by the investigation under Section 108 of the Customs Act, 1962 to cause appearance on 28.03.05, 04.04.05, 15.04.05, 21.04.05 and 09.05.05. He did not come out with clean hands to defend him. Summonseswere also issued to ShriSashiPrakashLohiato cause appearance on 02.12.04, 30.03.05, 25.04.05 & 27.05.05.He also avoided the same.Deliberate defiance of law made by appellant dragged him to criminal prosecution filing complaint against him under Section 174 & 175 of Indian Penal Code read with Section 108 of the Customs Act, 1962 in the Court of learned Additional Chief Metropolitan Magistrate Court, Economic Offence-I, Egmore.
FRAUD IN THE EYES OF LAW 9.1 If a party makes representations which he knows to be false and injury ensues therefrom although the motive from which the representations proceeded may not have been bad is considered to be fraud in the eyes of law. It is also well settled that misrepresentation itself amounts to fraud when that results in deceiving and leading a man into damage by willfully or recklessly causing him to believe on falsehood. Of course, innocent misrepresentation may give reason to claim relief against fraud. In the case of Commissioner of Customs, Kandlav.Essar Oil Ltd. - 2004 (172) E.L.T. 433 (S.C.) it has been held that by fraud is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from the ill-will towards the other is immaterial. Fraud involves two elements, deceit and injury to the deceived.
9.2 Undue advantage obtained by the deceiver will almost always cause loss or detriment to the deceived. Similarly a fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by anothers loss. It is a cheating intended to get an advantage. (See :S.P. Changalvaraya Naidu v.Jagannath [1994 (1) SCC 1 : AIR 1994 S.C. 853]. It is said to be made when it appears that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly and carelessly whether it be true or false [Ref : RoshanDeenv.PreetiLal [(2002) 1 SCC 100], Ram PreetiYadavv. U.P. Board of High School and Intermediate Education [(2003) 8 SCC 311], Ram Chandra Singhs case (supra) and Ashok Leyland Ltd. v. State of T.N. and Another [(2004) 3 SCC 1].
9.3 Suppression of a material fact would also amount to a fraud on the court [(see Gowrishankarv. Joshi Amha Shankar Family Trust, (1996) 3 SCC 310 and S.P.Chengalvaraya Naidus case (AIR 1994 S.C. 853)]. No judgment of a Court can be allowed to stand if it has been obtained by fraud.Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity. When fraud is established that unravels all. [Ref: UOI v. Jain ShudhVanaspati Ltd. - 1996 (86) E.L.T. 460 (S.C.) and in Delhi Development Authority v. Skipper Construction Company (P) Ltd. - AIR 1996 SC 2005]. Any undue gain made at the cost of Revenue is to be restored back to the treasury since fraud committed against Revenue voids all judicial acts, ecclesiastical or temporal and DEPB scrips obtained playing fraud against the public authorities are non-est. So also no Court in this country can allow any benefit of fraud to be enjoyed by anybody as is held by Apex Court in the case of Chengalvaraya Naidu reported in (1994) 1 SCC I : AIR 1994 SC 853. Ram PreetiYadavv. U.P. Board High School and Inter Mediate Education (2003) 8 SCC 311.
9.4 A person whose case is based on falsehood has no right to seek relief in equity [Ref: S.P. Chengalvaraya Naidu v.Jagannath, AIR 1994 S.C. 853]. It is a fraud in law if a party makes representations, which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. [Ref:Commissioner of Customs v.Essar Oil Ltd., (2004) 11 SCC 364 = 2004 (172) E.L.T. 433 (S.C.)].
9.5 When material evidence establishes fraud against Revenue, white collar crimes committed under absolute secrecy shall not be exonerated as has been held by Apex Court judgment in the case of K.I.Pavunnyv. AC, Cochin - 1997 (90) E.L.T. 241 (S.C.). No adjudication is barred under Section 28 of the Customs Act, 1962 if Revenue is defrauded for the reason that enactments like Customs Act, 1962, and Customs Tariff Act, 1975 are not merely taxing statutes but are also potent instruments in the hands of the Government to safeguard interest of the economy. One of its measures is to prevent deceptive practices of undue claim of fiscal incentives.
9.6 It is cardinal principle of law which is enshrined in Section 17 of Limitation Act that fraud nullifies everything for which plea of time bar is untenable following the ratio laid down by Apex Court in the case of CC. v. Candid Enterprises - 2001 (130) E.L.T. 404 (S.C.). Non est instruments at all times are void and void instrument in the eyes of law are no instruments. Unlawful gain is thus debarred.
9.7 Fraud and justice do not dwell together for which penal provisions are enacted to eradicate evils of defrauding Revenue which is anti-social activity adversely affecting public revenue. Such provisions are construed in the manner which curbs the mischief, promote their object, prevent their subtle evasion and foil their artful circumvention. Thus construed, the term fraud within the meaning of these penal provisions is wide enough to take in its fold any one or series of unlawful acts committed or omissions made. An act of fraud on Revenue is always viewed seriously. Fraud and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descripstive of human conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter.
10.1 Impugned DEPB scrips/TRAs came into circulation by the collusion of Sri SashiPrakashLohiyaand the appellant. Appellant was consciously involved in the commitment of fraud against Revenuetrading with the fake, forged and fabricated TRAs. He was not at all a stranger to the commission of the offence, but a perpetrator of fraud against Revenue with a predetermined mind. Therefore, he isliable to the penal consequence u/s 112(a) of the Customs Act, 1962.
10.2 Evidence Act does not insist on absolute proof for the simple reason that perfect proof in this imperfect world is seldom to be found. That is why under Section 3 of the Evidence Act, a fact is said to be proved when, after considering the matters before it, the Court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, acts upon the supposition that it exists. This definition of proof does not draw any distinction between circumstantial and other evidence. Preponderance of probability comes to rescue of Revenue and Revenue is not required to prove its case by mathematical precision. Thus, if circumstances establish that there is high degree of probability that a prudent man ought to act on the supposition that there was design to secure fake, false, forged or illegitimate DEPB scrips to clear imports duty free in contravention of the law or abetting to achieve such ill object, such act against public Revenue calls for penal consequence to curb such mischief.
10.3 Penal?provisions are enacted to suppress the evil of defrauding Revenue which is an anti-social activity adversely affecting the public revenues, the earning of foreign exchange, the financial stability and the economy of the country. Such provisions should be construed in a manner which would suppress the mischief, promote their object, prevent their subtle evasion and foil their artful circumvention. Thus construed, the term fraud within the meaning of these penal provisions is wide enough to take in its fold any one or series of acts committed. Such act or acts being reasonably proximate to the clearance of imports duty free on the basis of forged documents, the appellant as a trader, is liable to penalties under law.
11.1 It was the argument of the appellant that there was neither infraction of law made by the appellant nor Revenue proved its case for which penalty under section 112(a) of the Customs Act, 1962 is not imposable. It may be stated that Revenue need not prove its case with mathematical precision. Appellant perpetuated fraud against Revenue knowing fully well that the scrips sold by him under the cover of TRA shall be used by importers for duty free import and that shall cause subterfuge to Revenue. Provision of section 112(a) brings an offender to its fold, who in relation to any goods commits or omits any act rendering that confiscable are abets to do so. Appellant not only committed the offence but also abetted the commitment thereof for which he is liable to penalty u/s 112(a) of the Customs Act, 1962.
11.2 Appellant also contended that he shall be benefited by the judgment of the Honble High Court of Gujarat in the case of Commissioner of Customs Vs. Sanjay Agarwal 2011 (269) ELT 153 (Guj.). It may be stated that the said judgment was delivered in the context of role of a broker who organized purchase of DEPB scrips by an importer. But present case is a case of seller of the fake TRAs covering the DEPB scrips mentioned therein, who knowingly sold the same malafide to defraud Revenue. Therefore appellants case is different from the facts of that case.
11.3 Appellant says that there was no hearing granted to him. But learned authority in Para 43 of the adjudication order under appeal number C/177/2008 has recorded that this appellant was heard and his defence were recorded. Similar is the situation in other appeals. Appellant had submitted reply to show cause notice on 20.5.2006 and the defence pleaded therein were considered by the adjudicating authority. Natural justice is said to have been followed when show cause notice is issued to the noticee describing the allegation, evidence relied upon to make such allegation and consequence of breach of law and reply thereon is asked for. Second such opportunity granted is through the process of hearing. Both the opportunities having been granted to the appellant, there cannot be allegation of violation of natural justice.
11.4 Appellants grievance is that the main offender is Sajid Khan who as an employee of Mumbai Customs had access to the DEPB register maintained in the Mumbai Customs house and had sold the DEPB information to Sri Lohiya. When both of them colluded to do wrong if any, to custom, appellant should not penal consequences of law, having no access to public record. But as the evidence on record reveals appellant was the master mind behind the screen and had colluded with Lohiya to defraud revenue dealing with fake TRAs with DEPB scrips, he cannot escape from penal consequence under law. He wilfully evaded summons issued by investigation and failed to cooperate with them to discover the truth. That proved that apprehending his own guilt, he did not come out with clean hands to defend him. Learned authority below has not acted casually, or in any cursory manner to deal the appellant. He had very minutely and meticulously scrutinised the evidence and evaluated the same as well as passed a reasoned and speaking order.
11.5 Further contention of the appellant was that ShriSashiPrakashLohia was hostile to impute the appellant to the charge. But such allegation has no basis without any material brought to the record by investigation. Appellant being aware that he was unduly enriched at the cost of Revenue, he crippled himself to claim immunity under law.
11.6 Appellant raised the plea that no discovery of incriminating evidence by search party from the premises of the appellant during search makes the adjudication fatal is of no avail when surrounding circumstances and cogent evidence on record suggest involvement of the appellant in commitment of the offence against Revenue.
11.7 The last contention of the appellant was that DGFT is the only authority to deal with the forgery of DEPB scrips if any and Customs Authority has no power to deal with the same does not find support in law for the reason that the goods in question is confiscable under section 111 of the Customs Act, 1962 by customs authority. Once section 111 of the Customs Act, 1962 operates, section 112(a) of the said Act comes into play on the facts and circumstances of the case. Law is well settled that power vested on the Customs Authority cannot be taken away by any presumption. Honble supreme Court in the case of Sheshank Sea Foods Pvt. Ltd. Vs. Union of India 1996 (88) ELT 626 (SC) has held that the EXIM Policy or Handbook of Procedure has neither taken away nor abridged any power of the customs authorities or prohibited them from investigating into any violation of law under customs Act, 1962. Therefore, customs authorities cannot be denuded of their power without any express provision to the contrary. DGFT exercises its jurisdiction on the subject entrusted to it and cannot encroach over the powers of the Customs Authority. Similar to that is the judgment of Honble High Court of Madras in the case of Commissioner of Customs Vs. Pattu Exports Pvt. Ltd. - 2015 (317) ELT 663 (Mad.). Therefore entire defence plea of the appellant as to no power exercisable by the Customs Authority fails to stand.
ADJUDICATIONS WERE NOT TIME BARRED 12.1 It is cardinal principle of law which is enshrined in Section 17 of Limitation Act that fraud nullifies everything. Cogent evidence gathered by investigation established role of appellant in defrauding Revenue supplying the false, forged and fabricated TRAs covering the DEPB scrips not legitimately acquired but were used in clearance of imports at Chennai port, causing huge loss to Revenue. The instruments were non est in the eyes of law and were void. The importers had not acquired any good title over the DEPB scrips use to discharge duty liability on import. Therefore adjudications are not time-barred following Apex Court judgment in the case of CC. v. Candid Enterprises - 2001 (130) E.L.T. 404 (S.C.).
12.2 Nothing was demonstrated by the appellant in the course of hearing that the Authority below merely acted on surmise, suspicion or imagination. Rather adjudicationswere made objectively on basis of cogent evidence,following due process of lawand granting fair opportunity of hearing to the appellant. Therefore plea of violation of natural justice made by appellant fails.
12.3 When fraud was established that has unravelled all. Revenues stand is fortified from the Apex Court judgment in the case of UOI v. Jain ShudhVanaspati Ltd. - 1996 (86) E.L.T. 460 (S.C.). So also fraud nullifies everything as held by Apex Court in CC v. Candid Enterprises - 2001 (130) E.L.T. 404 (S.C.) and in the case of Delhi Development Authority v. Skipper Construction Company (P) Ltd - AIR 1996 (SC) 2005. The fraud committed by the appellant void all judicial acts, ecclesiastical or temporal and there was no good title over the DEPB scrips/TRAs. When the material evidence established fraud against Revenue, white collar crimes committed under absolute secrecy shall not be exonerated from penal consequence of law following Apex Court judgment in the case of K.I. Pavunny v. AC, Cochin - 1997 (90) E.L.T. 241 (S.C.). Thus, the adjudications were not time-barred and Section 28 of the Customs Act, 1962 was rightly invoked by the Adjudicating Authority in view of fraud committed against Revenue.
12.4 Upholding the decision of the Tribunal in the case of R.S. Trade Link v. CC New Delhi 2010 (255) ELT 572 (Tri.-Del.), the Honble High Court of Delhi has held in the case of Rahuljee& Company Ltd. v. CC New Delhi 2011 (267) ELT 313 (Del.) as follows :-
15. We do not find any illegality in the reasoning recorded by the Tribunal in this regard which is as under:-
6.1.1.As regards the duty liability, since there is no dispute about the fact that the advance license against which duty fee imports of copper/brass scrap have been made by these importers, are forged and had never been issued by DGFT, in view of -
(a) Honble Madras High Courts judgment in case of?East West Exporters v. AC, Customs reported in 1993 (68) E.L.T. 319 (Mad.)
(b)Honble Calcutta High Courts judgment in case of ICI India Limited v. CC, Calcutta reported in 2005 (184) E.L.T. 339 (Cal.), the SLP to Honble Supreme Court against which has been dismissed vide orderreported in 2005 (187) E.L.T. A31(S.C.), and
(c) Judgment of Honble Punjab & Haryana High Court in case of CC, Amritsar v. ATM International reported in 2008 (222) E.L.T.194 (P & H), the imports would have to be treated as if made without any advance licence and accordingly the customs duty exemption would not be available and since the goods had beencleared by availing full duty exemption, the imports would be liableto pay the duty.
6.1.2 As regards the applicability of extended period for?6.1.2 recovery of duty under proviso to Section 28(1) of the Customs Act, 1962, the legal position on this point is now very clear in view of Honble Supreme Courts judgment in case of CC (P) v. Afloat Textiles (I) P. Ltd. reported in 2009 (235) E.L.T. 587 (S.C.) wherein invoking the principle of Caveat Emptor the Apex Court has held that in such cases the extended period for recovery of duty under Section 28(1) of the Customs Act would be applicable. Inthis regard, para 23, 24, 25, 26, 27, 28 and 29 of this judgment are reproduced below:-
23. Caveat emptor, qui ignorare non debuit quod jus alienum emit. A maxim meaning Let a purchaser beware; who ought not to be ignorant that he is purchasingthe rightsof another.
24. As the maxim applies, with certain specific restorations, not only to the quality of, but also to the title to, land which is sold, the purchaser is generally bound to view the land and to enquire after and inspect the title deeds; at his peril if he does not.
25. Upon a sale of goods, the general rule with regard to their nature or quality is caveat emptor, so that in the absence of fraud, the buyer has no remedy against the seller for any defect in the goods not covered by some condition or warranty, expressed or implied. It is beyond all doubt that, by the general rules of law thereis no warranty of quality arising from the bare contract of sale of goods, and that where there has been no fraud, a buyer who has not obtained an express warranty, takes all risk to defect in the goods, unless there are circumstances beyond to mere fact of sale from which a warranty may be implied.
26. No one ought in ignorance to buy that which is the right of another. The buyer according to the maxim has to be cautious, as the risk is his and not that of the seller.
27. Whether the buyer had made any enquiry as to the genuineness of the licence within his special knowledge. He has to establish that he made enquiry and took requisite precautions to find out about the genuineness of the SIL which he was purchasing. If he has not done that, consequences have to follow. These aspects do not appear to have been considered by the CESTAT in coming to the abrupt conclusion that even if one or all the respondents had knowledge that the SIL was forged or fake that was not sufficient to hold that there was no omission of commission on his part so as to render silver or gold liable for confiscation.
28. As noted above, SILs were not genuine documents and were forged. Since fraud was involved, in the eye of law such documents had noexistence. Since the documents have been established to be forged or fake, obviously fraud was involved and that was sufficient to extend the period of limitation
16. In view of the above discussion, we do not find any infirmity or perversity in the findings of the learned Tribunal. Consequently, the question as framed is answered in the affirmative in favour of the Department and against the appellants. [Emphasis supplied] CONCLUSION 13.1 Enactments like Customs Act 1962, and Customs Tariff Act 1975, are not merely taxing statutes but are also potent instruments in the hands of the Government to safeguard interest of the economy. One of its measures is to prevent deceptive practices of undue claim of fiscal incentives. Evidence Act not being applicable to quasi-judicial proceeding, preponderance of probability came to rescue of Revenue and Revenue was not required to prove its case by mathematical precision. Exposing entire modus operandi through allegations made in the show cause notice on the basis of evidence gathered by Revenue against the appellant, was sufficient opportunity granted for rebuttal. Revenue discharged its onus of proof and burden of proof remained un-discharged by appellant. Evidence gathered by Revenue provided basis to adjudication and that could not be demolished by appellant by any means. He failed to lead any cogent evidence to rule out his role in commitment of offence against Customs andthereby did not come out with clean hands.
13.2 Result of investigation remained unchallenged. Appellant acted mala fideand to the detriment of interest of Revenue. Ill will of the appellant came to record. Entire pleading of the appellant is ill-founded. Show Cause Notice has properly brought the appellant to charge exhibiting civil and evil consequences of law granting opportunity of rebuttal to him. Nothing was dealt behind his back by the adjudicating authority. Crystal clear factual findings of the learned Adjudicating Authority remained un-rebutted before Tribunal and echoing evidence on record demonstrated that adjudications were made quite reasonably as the facts and circumstances warranted.
13.3 Direct and corroborative evidence gathered by investigation were so believable, that lent credence to the case of Revenue. Genesis of the casecompels toirresistiblyconcludethat Revenue has very successfully proved its case and oblique motive of the appellant enriched him at the cost of Revenue. Therefore all the appeals are liable to be dismissed. That is ordered accordingly
14. Having come across with certain sensitive aspects of the matter in the course of hearing, itisproper to state that this a case where serious lapse of the Officers of Customs and DRI has come to record for stern action since TRAs not received from Mumbai customs under sealed cover were allowed to be used for duty free import and sriShajid who is complained to have access to DEPB register of Navsheva, Mumbai had colluded to defraud Revenue was not brought to the fold of law. Silence of the Officers causedjeopardy to the interest of the economy for which they are answerable. Proper enquiry shall bring the erring officials to the fold of law and also shall send a message to others that law is an instrument of social order. A democratic Government does not mean a lax Government. The rules or procedure and/or principles of natural justice are not meant to enable the guilty to defeat objects of Customs Act, 1962. The wheels of Justice may appear to grind slowly but it is the duty of all of us to ensure that they do grind steadily and grind well and truly. The justice system cannot be allowed to become soft, supine and spineless. Hence, it is left to the CBE&C to deal the matter with the DG (Vigilance), CBEC and make the nation corruption free.
15. In the result all the appeals are dismissed.
(Pronounced in open court on 15.2.2016) (R. PERIASAMI) (D.N. PANDA) Technical Member Judicial Member Rex 2 Satish Mohan Agarwal in C/182/2008 and other 11 appeals Satish Mohan Agarwal in C/182/2008 and other 11 appeals