Delhi District Court
Dri vs . M/S Agarwal Distributors (P) Ltd. Cc ... on 3 March, 2014
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IN THE COURT OF SH. SANJAY KHANAGWAL, CHIEF
METROPOLITAN MAGISTRATE, PATIALA HOUSE COURTS,
NEW DELHI
Sh. Y.S. Verma,
Intelligence Officer,
Directorate of Revenue Intelligence,
New Delhi. ..................... Complainant
Versus
1. M/s Agarwal Distributors (P) Ltd.
E-134, Kamla Nagar,
Delhi.
2. M.L. Gupta,
Managing Director,
M/s Agarwal Distributors (P) Ltd,
E-134, Kamla Nagar,
Delhi.
3. Usha Gupta,
Director,
M/s Agarwal Distributors (P) Ltd,
E-134, Kamla Nagar,
Delhi.
( Proceedings against accused quashed vide order dated 29.08.2007 of
Hon'ble High Court of Delhi )
4. Babita Gupta
Director,
M/s Agarwal Distributors (P) Ltd,
E-134, Kamla Nagar,
Delhi.
( Proceedings against accused quashed vide order dated 29.08.2007 of
Hon'ble High Court of Delhi )
..................... Accused
Unique Case ID No. 02403R0028921999
CC No. 158/1/99
U/s 132/135(1)(a) of the Customs Act,1962
DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 1 of 13
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JUDGMENT U/S 355 Cr. P.C.
a) Sl. No. of the case 02403R0028921999
b) The date of commission of the In the year 1997
offence
c) Name of the complainant Sh. Y.S. Verma,
Intelligence Officer,
Directorate of Revenue Intelligence,
New Delhi.
d) Name, parentage & address of 1. M/s Agarwal Distributors (P) Ltd.
accused persons E-134, Kamla Nagar,
Delhi.
2. M.L. Gupta,
Managing Director,
M/s Agarwal Distributors (P) Ltd,
E-134, Kamla Nagar,
Delhi.
3. Usha Gupta,
Director,
M/s Agarwal Distributors (P) Ltd,
E-134, Kamla Nagar,
Delhi.
( Proceedings against accused
quashed vide order dated 29.08.2007
of Hon'ble High Court of Delhi )
4. Babita Gupta
Director,
M/s Agarwal Distributors (P) Ltd,
E-134, Kamla Nagar,
Delhi.
( Proceedings against accused
quashed vide order dated 29.08.2007
of Hon'ble High Court of Delhi )
e) Offence Complained of or proved Under Section 135(1)(a) of The
Customs Act,1962
DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 2 of 13
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f) The plea of the accused No. 2. The accused no. 2 in his statement u/s
and his examination 313 Cr.P.C denied all the material
incriminating circumstances appearing
in the prosecution evidence on record
against him and stated that he is
innocent and has been falsely
implicated in the present case.
He preferred not to lead defence
evidence in this case.
g) The Final order Accused is acquitted U/s 132/35(1)(a)
of The Customs Act, 1962
h) The date of such order 28.02.2014
Date of institution of case : 24.12.1999
Date of reserving judgment/order : 25.02.2014
Date of Pronouncement : 03.03.2014
BRIEF FACTS/ STATEMENT OF THE REASONS FOR THE
DECISION :-
1. The present complaint is filed by Sh. Y.S. Verma, Intelligence Officer, DRI u/s 132/135(1)(a) of The Customs Act, 1962. Initially the complaint was filed against four accused persons i e. accused no. 1. M/s Agarwal Distributors (P) Ltd, accused no. 2 M.L. Gupta, accused no. 3 Usha Gupta and accused no. 4 Babita Gupta. Accused no. 3 and 4 filed petition before the Hon'ble High Court of Delhi and vide order dated 29.08.2007 Hon'ble High Court of Delhi quashed the complaint qua the accused no. 3 and 4 and directed the complainant to proceed only against the accused no. 1 company and accused no. 2 M.L. Gupta.
DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 3 of 13 4
2. As per the brief facts of the case pursuant to an information that accused no. 1 M/s Agarwal Distributors (P) Ltd, E-31 Kamla Nagar, Delhi was indulging in evasion of customs duty by way of importing photographic goods at understated price. The searches were conducted at the premises of accused no. 1 and 2 and during search several documents showing the import of photographic goods were recovered and seized under a panchnama for conducting further investigation. On 26.11.1997 accused no.2 was summoned to appear and tender his statement and in compliance of the same he appeared and tendered his voluntary statement u/s 108 of The Customs Act, 1962 wherein he stated that he is the Director of accused no.1 firm and he was in the business of importing Cameras, Flashes and Black & White papers, Lenses etc for the last two years and importing them from Hong Kong, China and Taiwan and on being inquired he gave the description of overseas suppliers from whom the goods were being imported by accused no.
1. company. He further stated that Camera, Lenses and Flashes etc were being imported from M/s Vivitar (Asia) Ltd, Hong Kong, M/s Jiangxi Optical Instrument General Factory, China, M/s Foma Bohemia Ltd. Czecholovakia, M/s Changzhou Agricultural Machinery and Machinery Equipment Import Export Corporation, China, M/s Kransnogorsky Zavod Russia and M/s Chen Fu Photgographic Mfg. Corporation, Taiwan. In order to import accused used to place orders and demanded proforma invoice then they opened Letter of Credit through their bank and manufacturer / supplier dispatched materials against their Letter of Credit and thereafter they retired DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 4 of 13 5 the import documents from their bank and submitted these document to the Customs for clearance and the payment for all imported consignments were made by their bank and that they confirmed the proforma invoice with the purchase value of goods by endorsing the proforma invoice after agreeing to its value and faxed the same to their manufacturer / supplier as a confirmation of their orders and for the last six months they were importing goods from M/s Vivitar (Asia) Ltd on documents against payment basis and for this purpose they had to make payment through banker for taking the bank delivery orders which they submitted in original to the Air Forwarding Agent in order to receive documents on the basis of which bill of entry was filed and they were importing goods from the above said supplier through Air Cargo, New Delhi and Air Cargo Chennai. The prices were generally offered by the manufacturer / exporters and after negotiations he accepted the same on behalf of the company. It is further alleged that he had been importing Vivitar products from M/s Vivitar (Asia) Limited for about one and a half years and thereby he had imported 13 consignments out of which 11 consignments through Air Cargo, New Delhi and two consignments through Chennai, one by Air Cargo and other by through sea. Accused no. 2 provided the price of import also. It is further stated in his statements u/s 108 of the Customs Act dated 26.11.1997 that the value declared in the bills of entries with the intention of evading customs duty and due to the tough and cut throat competition in the market he was compelled to marketing the same in the market in such a manner. It is further alleged that in such a manner he had DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 5 of 13 6 declared the value only to the tune of 1/5th approximately of the actual value.
3. On the basis of statement of accused no.2 inquiries were made by DRI, New Delhi with Hong Kong Customs and Excise Department and Russian Customs through the Consulate General of India, Hong Kong and High Commission of India, London to ascertain the actual price of photographic products supplied by M/s Vivitar (Asia) Ltd., Hong Kong and M/s Kransnogorsky Zavod Russia to M/s Agarwal Distributors Pvt. Ltd, New Delhi. On inquiry it was revealed from the report that from Hong Kong Customs and Excise Department and Russian Customs through the Consulate General of India, Hong Kong and High Commission of India, London revealed that accused no.1 had imported 13 consignment of photographic products and five consignments of SLR Cameras from M/s Kransnogorsky Zavod Russia. The export declarations submitted at the time of export by the above mentioned foreign suppliers bearing the complete transactions of M/s Agarwal Distributors Pvt. Ltd. On comparison of the value declared in the export declaration / invoices filed by the said exporters and the value declared in the invoices presented to Customs by the accused no.1 at the time of imports, it was observed that the value of the goods declared in the invoices were far less than the actual value of the goods given in the export declaration. It is further alleged that inquiry report received from Hong Kong and London in respect of SLR Cameras shows that the import invoices were lower as compare to the actual value of goods given in the respective export declaration. An inquiry report regarding the same was also received from the DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 6 of 13 7 said countries.
4. The present complaint is filed by alleging that the accused has submitted false and fabricated invoices with an intent to evade customs duty to the tune of Rs. 1,25,15,513/-.
5. Vide order dated 13.10.2008 charge was framed against the accused no. 1 and 2 regarding the suppression and mis-declaration of the value of the photographic products to the tune of Rs. 1,25,15,313/- and charge was framed u/s 135(1)(a) of The Customs Act, 1962.
6. Charge was framed on the basis of evidence adduced by the complainant. Sh. Y.S. Verma is examined as PW-1 who has proved the complaint as Ex PW1/A and also the Sanction accorded by Mr. Virender Singh as Ex PW1/B, he also identify his signatures on Ex PW1/B. PW-2 Sh. V.P. Sharma was examined as PW-2 and proved the search authorization vide Ex PW2/A whereby he conducted the search of residence cum office of the accused no. 1 and 2 and recovered the incriminating documents of the file from there. He also proved the panchnma Ex.PW2/B, annexures to the panchnama Ex.PW2/C. The documents pertaining to bill of entires and connected documents are proved as Ex PW2/C-1 to PW2/C-16.
PW-3 Sh. Anil Kumar Gupta deposed that he was posted as Asstt. Director, DRI, Headquarter and was competent to make inquiries u/s 108 of The Customs Act, 1962. He issued the summons vide Ex.PW3/A and proved the voluntary statement u/s 108 of The Customs Act of accused as Ex.PW3/B DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 7 of 13 8 and deposed that during his statement documents were shown to him which bears his signatures and are Ex.PW3/C1 to Ex.PW3/C40. A letter dated 11.01.99 which was written by Sh. Vipin Handa, the then DD DRI to Sh. Sahib Singh, Counselor General of India Hong Kong regarding the import inquiry of photographic product by M/s Agarwal Distributors Pvt. Ltd. is Ex.PW3/D. The inquiry report dated 26.4.1999 sent by Sh. Sahib Singh is Ex.PW3/E. He also identify his signatures on the said documents. The enclosures of letter Ex.PW2/E are Ex.PW3/E1 to Ex.PW3/E2. The reply to the letter issued by Sh.S.B. Singh is Ex.PW3/F. PW-4 Sh. J.P. Singh who was posted as Asstt. Director DRI (Hq), at the relevant time, deposed that search warrant Ex.PW2/A in the name of Sh. Ved Prakash Sharma was issued by him. On 26.11.1997 he issued summons Ex.PW4/A for appearance of accused no.2, M.D. of accused no.1. In pursuance to summons accused no.1 appeared and tendered his statement u/s 108 of the Customs Act in his own hand Ex.PW4/B. He further deposed that on 09.12.1997 he had written a letter to Sh. Sahib Singh, First Secretary Consulate General of India, Hong Kong regarding the inquires with respect to the import of photographic product by accused no.1 company and exhibited the same as Ex.PW4/C. The list of consignment and the related invoices and the bills of lading airway has been exhibited as Ex.PW4/C1 to Ex.PW4/C38. He also exhibited a letter dated 18.12.1997 as Ex.PW4/D and its enclosures as Ex.PW4/D1 to Ex.PW4/D11.
It has been revealed that in the pre charge evidence as well as in DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 8 of 13 9 post charge evidence only four witnesses as mentioned above were examined. In post charge evidence some of them were again cross examined and the cross examination of remaining witnesses were adopted as recorded during their pre charge examination.
9. Statement of accused was recorded u/s 313 Cr.P.C. in which he denied the allegations of the prosecution. He deposed that no voluntarily statement was tendered by him on 26.11.1997 u/s 108 of The Customs Act, 1962 and same was retracted on 28.11.1997. He further stated that no statement of any of the supplier has been recorded by the department and documents relied upon by the complainant are photocopies and further stated that the originals of export declaration were never produced by the department, hence, unreliable to the effect that the same identical commodities at the same price and from the same supplier were imported by a third party. In foreign countries the exporters place before their Customs enhanced values of their invoices for ulterior motives of getting incentives and other benefits.
10. I have heard the arguments addressed by Sh. Satish Agarwala, ld. SPP for DRI and Sh. Pradeep Jain, ld. defence counsel for accused.
11. In the present case complainant has registered the case under DRI against the accused for evasion of Customs Duty to the tune of Rs. 1,25,15,513/- and it has been alleged against him that being the MD of accused no.1 he imported photographic goods i.e. Cameras, Flashes and Black & White papers, Lenses etc. on an understated prices from M/s Vivitar (Asia) DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 9 of 13 10 Ltd, Hongkong, M/s Jiangxi Optical Instrument General Factory, China, M/s Foma Bohemia Ltd. Czecholovakia M/s Changzhou Agricultural Machinery and Machinery Equipment Import Export Corporation, China, M/s Kransnogorsky Zavod Russia and M/s Chen Fu Photgographic Mfg. Corporation, Taiwan and to prove its case the complainant has examined four witnesses and these witnesses have proved the service of summons upon the accused and his voluntary statement under Section 108 of The Customs Act, 1962 and letters sent to High Commission of India, London to verify authenticity of the price list of M/s Kransnogorsky Zavod Russia which were allegedly undervalued by the accused and the reports were received by the complainant and it was observed that the value of the goods declared in the actual value is less then given in the export by the said exporter. PW-3 has proved a letter dated 11.01.99 Ex.PW3/D which was written by Sh. Vipin Handa, the then DD DRI to Sh. Sahib Singh, Counselor General of India Hong Kong regarding the import inquiry of photographic product by M/s Agarwal Distributors Pvt. Ltd. The inquiry report dated 26.04.1999 sent by Sh. Sahib Singh is also proved as Ex.PW3/E and in the said report it was reported that exporter before each shipment received advance cash deposit equal to the understated amount and after each shipment received the balance equal to the value shown in invoices produce importer through L/C or on D/P terms Hong Kong Customs. Report obtained from the importer as well as from the Customs Department of the said countries has been produced in photocopies. No original document with respect to bill of entries and invoice DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 10 of 13 11 generated vide the transaction taken place between the company of accused no.1 with the said exporter is available there and so far as other reports are concerned which are Ex.PW3/F. ( mention the report of that letter , one report was received from the said department.. but all are annexed with the photocopies of bills, entries etc. ) One letter Ex.PW3/E1 is received from Consulate Deputy Head of Trade Licensing, Investigation Bureau, Hong Kong Customs and Excise shows that the values declared in 13 Export declaration already sent were the actual CIF values of the goods. It further shows that the details of the consignments value i.e. CIF value referred false invoices which were understated from 34.31% to 85.33%. It further shows that the exporter before each shipment received advance cash deposits equal to the understated amount and after each shipment received the balance equal to the false invoice amounts through bank by L/C or on D/P terms. But along with this letter also only details on photocopy has been sent. Original of the records never produced before the Court. It is a well settled law that in evidence a particular document can be proved by the author of the same and in the present case the author of those documents was that department which issued the same. If there was any declaration by the exporter of the said country with respect to the exported goods, the said declaration of the price to their respective Customs department should have been brought on record and the person / exporter who had made the declaration of those prices to their customs department would have been a proper person to explain all the facts and circumstances of the DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 11 of 13 12 transactions taken place out with the accused. So far as document received by the Customs department of the different countries also would have been the proper person to prove those documents which were recovered from them by the High Commission of those countries. PW-3 in his cross examination has stated that we had not seen any other document of import by any other importer at high price. PW-3 in his deposition has further stated that vide Ex.PW3/C he got copies of invoices and customs declaration of M/s Kransnogorsky Zavod Russia, Enforcement Department and further stated that from the High Commission of London also copies of invoices and export declaration vide letter Ex.PW3/C1 to Ex.PW3/C40 were received. In his cross examination he has further admitted that these documents are the photocopies of the documents. This witness in his cross examination has further stated that DRI has not received any statement of Russian Exporter/Hong Kong Exporter. My views are substantiated by the judgment of Rangammal Vs. Kuppuswami and another (2011) 12 Supreme Court Cases 220 wherein it was discussed that - Evidence Act, 1872 - S. 101- Burden of proof - Genuineness of a document - Burden lies on the party who relies on validity of a document to prove its genuineness - only then onus will shift on the opposite party to dislodge such proof and establish that the document is sham or bogus - Fraud / Forgery / Malafides. In the present case complainant has not produced the original documents and has produced the photocopies of the same,hence, the same are not proved.
Accused in his statement u/s 313 Cr.P.C. has truly stated that no DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 12 of 13 13 statement was recorded by the department of any supplier of both countries and the original of export declaration was never produced by the department, hence reliance can not be placed on the same. Complainant has also not examined any importer who has imported the goods of similar nature on higher values. The case of the complainant is totally based on documentary evidence and it is required to be proved that the goods were imported by the accused persons are under valued and the said goods were declared at high price by the exporters of the respective countries but no document in original in this regard has been produced by the department to prove its case, further no exporter has been examined and in the absence of any original documents on record the reliance cannot be placed on the photocopies furnished by the complainant department during trial and hence, accused is entitled to the benefit of the same.
12. In view of the discussions made above, I am of the view that the prosecution has failed to prove its case against the accused, therefore, accused is entitled to acquittal in the present case. Hence, accused no. 1& 2 are acquitted in the present case of the charges under Section u/s 135(1)(a) of The Customs Act, 1962.
File be consigned to Record Room.
Announced in the open court on: 03.03.2014 ( Sanjay Khanagwal ) Chief Metropolitan Magistrate, Patiala House Courts, New Delhi 03.03.2014 DRI Vs. M/s Agarwal Distributors (P) Ltd. CC No. 158/1/99 Page 13 of 13