Custom, Excise & Service Tax Tribunal
Sunil Kumar Agarwal vs Kolkata(Port) on 13 February, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO. 1
Customs Appeal No. 79616 of 2018
(Arising out of Order-in-Original No. KOL/CUS/COMMISSIONER/PORT/42/2018 dated
15.05.2018 passed by the Commissioner of Customs (Port), Custom House, 15/1,
Strand Road, Kolkata - 700 001)
M/s. Sibco Overseas Private Limited : Appellant
P-3, New C.I.T. Road,
Kolkata - 700 073
VERSUS
Commissioner of Customs (Port) : Respondent
Custom House, 15/1, Strand Road,
Kolkata - 700 001
WITH
Customs Appeal No. 79623 of 2018
(Arising out of Order-in-Original No. KOL/CUS/COMMISSIONER/PORT/42/2018 dated
15.05.2018 passed by the Commissioner of Customs (Port), Custom House, 15/1,
Strand Road, Kolkata - 700 001)
M/s. Bersons Electronics Private Limited : Appellant
P-3, New C.I.T. Road,
Kolkata - 700 073
[Alt: 23/1, Mandeville Gardens, Kolkata - 700 009]
VERSUS
Commissioner of Customs (Port) : Respondent
Custom House, 15/1, Strand Road,
Kolkata - 700 001
AND
Customs Appeal No. 79718 of 2018
(Arising out of Order-in-Original No. KOL/CUS/COMMISSIONER/PORT/42/2018 dated
15.05.2018 passed by the Commissioner of Customs (Port), Custom House, 15/1,
Strand Road, Kolkata - 700 001)
Shri Sunil Kumar Agarwal, Director, : Appellant
M/s. Sibco Overseas Private Limited
P-3, New C.I.T. Road,
Kolkata - 700 073
VERSUS
Commissioner of Customs (Port) : Respondent
Custom House, 15/1, Strand Road,
Kolkata - 700 001
Page 2 of 23
Appeal No(s).: C/79616,79623 & 79718/2018-DB
APPEARANCE:
Shri A.K. Dugar, Advocate,
For the Appellant
Shri Faiz Ahmed and Shri Tariq Sulaiman, both Authorized Representatives,
For the Respondent
CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NOs. 75345-75347 / 2025
DATE OF HEARING: 29.01.2025
DATE OF DECISION: 13.02.2025
ORDER:[PER SHRI K. ANPAZHAKAN] These three appeals were filed against the Order-in-Original No. KOL/CUS/COMMISSIONER/PORT/42/2018 dated 15.05.2018 passed by the Commissioner of Customs (Port), Custom House, 15/1, Strand Road, Kolkata - 700 001. As the issue involved in all the three appeals are the same and dealt in the common Order-in- Original referred to above, all the three appeals are taken up together for decision by a common order.
2. Briefly stated the facts of the case are that Appellant no.1 and 2, namely, M/s. Sibco Overseas Private Limited (in brevity "SOPL") and M/s. Bersons Electronics Private Limited (in brevity "BEPL"),inter alia, made import of Ten (10) consignments of PVC Flex Banner in Rolls / PVC Sheeting in Rolls(Flex Banner) of Malaysian Origin falling under Customs Tariff Item Nos.39209932 / 39201012 / 39204900 from an overseas supplier by name, Topaz Plastic Industries (M), SDN, BHD, Malaysia, during the period from December, 2012 to June, 2013. The business Page 3 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB affairs of the appellant companies, viz. SOPL and BEPL, have been looked after by Sri Sunil Kumar Agarwal, Appellant no. 3 herein, who was director of SOPL and father of Sri Subham Agarwal, one of the directors of BEPL.
2.1. Out of said 10 Consignments, seven consignments were imported by SOPL at Kolkata / Haldia Port, one consignment was imported through Chennai Port and the balance two Consignments were imported by BEPL at Kolkata / Haldia Port. Out of the said 10 consignments, SOPL purchased 06 consignments directly from said overseas supplier, Topaz Plastic Industries (M) and 3 Consignments on high seas sale basis from an indigenous supplier, G.R. Agarwal. BEPL imported 01 consignment directly from the said overseas supplier, Topaz Plastic Industries (M) and 3 consignments on high seas sale basis from the indigenous supplier, G.R. Agarwal. All the four consignments sold by the said G R Agarwal on high seas sale basis to SOPL and BEPL were imported from the same overseas supplier.
2.2. As per Customs Notification No.82/2011-Cus. dated 25.08.2011, definitive Anti-Dumping Duty @0.538 was leviable on import of PVC Flex Film originating in or exported from Peoples Republic of China. Further, as per Customs Notification Nos.46/2011-Cus. dated 01.06.2011 and 053/2011- Cus. dated 01.07.2011, duty exemption to the extent of @3% was available to goods of ASEAN / Malaysian Origin. As the said PVC Flex Films were originated and exported from Malaysia, the appellant-companies did not pay any Anti-Dumping Duty at the time of clearance of the said ten consignments from Customs inasmuch as the said consignments originated and Page 4 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB exported from Malaysia. The Appellant companies also availed the benefit of the exemption in terms of the Customs Notification Nos.46/2011-Cus. dated 01.06.2011 and 053/2011-Cus. dated 01.07.2011 inasmuch as the said consignments originated and exported from Malaysia and appellant companies were able to produce the ASEAN India Free Trade Area Preferential (AIFTAP) Certificate of Origin issued by Malay Chamber of Commerce, Malaysia.
3. Intelligence was received at the Directorate of Revenue Intelligence (DRI), Kolkata Zonal Unit that several persons were involved in import of PVC Flex Banner Sheeting of Chinese Origin under the guise of Malaysian Origin so as to evade Anti-Dumping Duty. Acting on the said intelligence, DRI inter alia conducted enquiry and investigation followed by search and seizure operations at the place of business of the appellant companies and residence of the Sunil Kumar Agarwal (Appellant no.3 herein). The authorities collected the documents and issued summons to various persons including the Appellant no.3.
3.1. The investigation relied on the statements recorded from the following persons:
(i) Shri Syamal Kumar Mukherjee, Senior Manager of Forbes & Company Limited, which handled the shipment from Port Klang to Kolkata Only;
(ii) Shri Arup Bandhu Guha, Senior General Manager of Marine Container Services India Private Limited, which handled the import of one consignment of PVC Flex Banner on account of Page 5 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB G.R. Agarwal, which was subsequently sold to SOPL on high seas sale basis;
(iii)Shailesh Kumar Choudhary, proprietor of S.K. Shipping Agency, which processed the nine Bills of Entry of SOPL as CHA;
(iv) Shri Ashish Modak, Director of Emerald Logistics Private Limited, which deals with international freight forwarding;
(v) Shri Manoj, an Indian national in the employment of said overseas supplier, Topaz Plastic Industries, Malaysia, 3.2. On the basis of the above statements and the documents collected from said persons as well as appellant's bank and others, the DRI officers concluded as under:
a) Shri Ashish Modak, Director of the Emerald Logistics Private Limited, submitted copy of master Bill Of Lading No. CNBOCCU13040016 dated 10.04.2013, CSHACCU13030102 dated 27.03.2013 and related house bill of lading No.PKGNNA201303124 dated 11.04.2013 and other documents. Upon scrutiny of the said master bill of lading and Bills of Entry collected from different shipping lines / freight forwarders, it was found that the said consignments of PVC Flex Banners in dispute, were actually originated from China; the containers were sent to India via Malaysia but instead of issuing one Bill Of Lading for the entire journey, two separate house Bills Page 6 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB Of Lading were issued to cover the journey between China and Malaysia and again from Malaysia and India; to suppress the fact that the goods were actually originated from China, the Bill Of Lading for transportation from China to Malaysia was not submitted to Indian Customs Authorities; in the Bills of Entry submitted in India for clearance of goods, country of origin of the imported goods were declared as Malaysian Origin and the 2nd House Bill of Lading covering the journey between Malaysia and India as submitted along with the bills of entry; the containers noted in the master Bill Of Lading were same as noted in the house Bill Of Lading issued for transportation from Malaysia to India.
b) AIFTA Certificate of Origin was also got issued from the Ministry of International Trade & Industry, Malaysia utilising the influence of Mr Goh of Topaz Plastic Industries, Malaysia.
c) Most of the payments against import of said consignments were made to a bank in Hong Kong instead of a bank in Malaysia.
d) Therefore, appellant have mis-
declared the country of origin as Malaysia instead of China and did not pay the Anti- Dumping Duty and wrongly availed the benefit of Customs exemption Notification Page 7 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB Nos.46/2011-Cus. dated 01.06.2011 and 053/2011 dated 01.07.2011.
3.3. During the course of said investigation, SOPL, the Appellant no.1 herein, and BEPL, the Appellant no. 2 herein, paid sums of Rs.44,11,922/- and Rs.11,62,944/- respectively, which they claim to have paid under coercion.
3.4. On the basis of the documents collected during the course of investigation, the Ld. Additional Director General, DRI, Kolkata issued a Show Cause Cum Demand Notice dated 03.06.2015 under Section 124 and 28 of the Customs Act, 1962, proposing for confiscation of the goods, levy and recovery Of Anti- Dumping Duty and Customs Duty, along with imposition of penalty and appropriation of the amount of Rs.55,74,866/- paid by SOPL, Appellant no.1 herein.
4. Being aggrieved by the said Show Cause Notice dated 03.06.2015, the appellants filed several Writ Petitions before the Hon'ble Calcutta High Court. The appellants has referred to the outcome of those writs, as they have a bearing on the present appeal.
4.1. By an Order dated 29.11.2016 passed in W.P. No. 24993(W) of 2016, the Hon'ble High Court was pleased to permit the appellant to cross examine the persons/witnesses whose statements were relied upon in the proceedings. In deference to direction of the Hon'ble Court, the Department presented only one witness, Sri Arup Bandhu Guha, Senior General Manger of Marine Container Services India Private Limited, for cross examination on 18.01.2017 out of the four persons, whose statements were relied upon for issuance of impugned Show Cause Notice.
Page 8 of 23Appeal No(s).: C/79616,79623 & 79718/2018-DB 4.2. By an Order dated 29.11.2017 passed in intra court Appeal being no. M.A.T. 1406 of 2017, the Division Bench of the Hon'ble Calcutta High Court was pleased to direct the authorities to provide the copy of the statement of witnesses examined by the appellant before resuming the proceedings. Accordingly, the authorities provided the statement of Shri Arup Bandhu Guha dated 18.01.2017 to appellants on 18.12.2017.
4.3. Thereafter, appellant filed a written submission dated 21.12.2017 summarising its oral submission made in the personal hearing. On 18.01.2018, the appellants wrote a letter to the adjudicating authority to communicate the formal order passed on the issues "a" to "d" mentioned in page 3 of the letter dated 21.12.2017 so that the adjudication can be taken to its logical end. The appellant submits that the adjudicating authority did not pay any heed to the said submission and passed an order dated 15.05.2018.
4.4. By the said order dated 15.05.2018 (impugned order), the ld. adjudicating authority passed the following orders in respect of imports made through Kolkata Port:
"(i) .................
......... I refrain from confiscation (of 206.753 MT PVC Flex Sheeting / Banner imported by SOPL) as the said goods are physically not available for confiscation, as they were already cleared for home consumption.
(ii) ....................
..... I refrain from confiscation (of 40.00 MT PVC Flex Sheeting / Banner imported by BEPL) as the said goods are physically not available for confiscation, as they were already cleared for home consumption.
(iii) I confirm the duty demand from M/s. Sibco Overseas Private Limited in respect of Anti-dumping Page 9 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB duty amounting to Rs.77,73,738/- (Rupees seventy seven lakh seventy three thousand seven hundred thirty eight only) & customs duty of Rs.3,97,481/- (Rupees three lakh ninety seven thousand four hundred eighty one only) not paid by mis-declaring the country of origin and wrong availment of the benefit of Customs exemption Notification No.46/2011-Customs dt. 01.06.2011 & 053/2011- Customs dt. 01.07.2011 at the time of import of the said goods under section 28(8) of the Customs Act, 1962 along with applicable interest in terms of section 28AA of the Customs Act, 1962.
(iv) I confirm the duty demand from M/s. Bersons Electronics Pvt. Ltd. in respect of Anti-dumping duty of Rs.12,28,254/- (Rupees twelve lakh twenty eight thousand two hundred fifty four only) & customs duty of Rs.46,162/- (Rupees forty six thousand one hundred sixty two only) not paid by mis-declaring the country of origin and wrong availment of the benefit of Customs Exemption Notification No.46/2011-Customs dt. 01.06.2011 and 053/2011-Customs dt. 01.07.2011 at the time of import of the said goods under section 28(8) of the Customs Act, 1962 along with applicable interest in terms of section 28AA of the Customs Act, 1962.
(v) I impose penalty of Rs.77,73,738/- (Rupees seventy seven lakh seventy three thousand seven hundred thirty eight only) on M/s. Sibco Overseas Private Limited under Section 114A of the Customs Act, 1962.
(vi) I impose penalty of Rs.12,28,254/- (Rupees twelve lakh twenty eight thousand two hundred fifty four only) on M/s. Bersons Electronics Pvt. Ltd. under Section 114A of the Customs Act, 1962.
(vii) I also impose penalty of Rs.9,00,000/- (Rupees Nine Lakh only) on Sri Sunil Kr Agarwal under section 112(a)(ii) of the Customs Act, 1962.
(viii) I also impose penalty of Rs.10,00,000/- (Rupees ten Lakh only) on Sri Sunil Kr Agarwal under Section 114AA of the Customs Act, 1962.
(ix) I order for appropriation of Rs.55,74,866/- (Rupees fifty five lakhs seventy four thousand eight hundred & sixty six only) voluntarily deposited by the importer in the course of investigation against the demand confirmed at (iii) & (iv) above."
Page 10 of 23Appeal No(s).: C/79616,79623 & 79718/2018-DB 4.5. By the said order dated 15.05.2018, the ld. adjudicating authority also passed the following orders in respect of imports made through Chennai Port:
"(i) .........
..... I refrain from confiscation (of 51 MT PVC Flex Sheeting / Banner imported by SOPL) as the said goods are physically not available for confiscation, as they were already cleared for home consumption.
(ii) I confirm the duty demand from M/s SOPL in respect of Anti-dumping duty of Rs.15,06,346/- (Rupees fifteen lakh six thousand three hundred forty six only) and customs duty of Rs.1,34,965/- (Rupees one lakh thirty four thousand nine hundred and sixty five only) not paid by mis declaring the country of origin and wrong availment of the benefit of Customs Exemption Notification No.46/2011- Customs dt. 01.06.2011 and 053/2011 Customs dt. 01.07.2011 at the time of import of the said goods under Section 28(8) of the Customs Act, 1962 along with applicable interest in terms of Section 28AA of the Customs Act, 1962.
(iii) I impose penalty of Rs.15,06,346/- (Rupees fifteen lakh six thousand three hundred forty six only) on M/s. Sibco Overseas Pvt. Ltd. under Section 114A of the Customs Act, 1962.
(iv) I also impose penalty of Rs.1,00,000/- (Rupees One lakh only) on Sri Sunil Kr Agarwal under Section 112(a)(ii) of the Customs Act, 1962.
(vi) I also impose penalty of Rs.1,00,000/- (Rupees One lakh only) on Sri Sunil Kr Agarwal under Section 114AA of the Customs Act, 1962.
(vii) I order for appropriation of Rs.55,74,866/- (Rupees fifty five lakhs seventy four thousand eight hundred & sixty six only) voluntarily deposited by the importer in course of investigation against the demand confirmed at (ii) above."
4.6. Aggrieved by the confirmation of demands of duty, interest and imposition of various penalties on the appellants, all the three appeals have been filed.
Page 11 of 23Appeal No(s).: C/79616,79623 & 79718/2018-DB
5. The appellants submit that the whole case of the demand of Anti-Dumping Duty and Customs duty and consequential interest and penalty rests upon the following:
A) Statements of four persons i) Shri Syamal Kumar Mukherjee, Senior Manager of Forbes & Company Limited, (ii) Shri Arup Bandhu Guha, Senior General Manager of Marine Container Services India Private Limited, (iii) Shri Ashish Modak, director of Emerald Logistics Private Limited, and (iv) Shri Manoj, an Indian national in the employment of said overseas supplier, Topaz Plastic Industries, Malaysia.
B) Five Master Bill of Lading and House Bill of Lading submitted by Shri Ashish Modak, director of Emerald Logistics Private Limited, and One Bill of Lading submitted by Shri Arup Bandhu Guha, Senior General Manager of Marine Container Services India Private Limited, and Four Master Bills of Lading submitted by Shri Syamal Kumar Mukherjee, Senior Manager of Forbes & Company Limited.
C) The documents forwarded by the United Bank of India, Calcutta Branch showing that payments in most of the cases was not made to beneficiary bank, Public Bank, Berhad, Mont Klara Solaris Branch, Kuala Lumpur, of the overseas supplier Topaz Plastic Industries but to banks situated in Hongkong / New York, London.Page 12 of 23
Appeal No(s).: C/79616,79623 & 79718/2018-DB 5.1. The appellants submits that as only one witness, namely, Shri Arup Bandhu Guha, presented himself for cross examination, the statements made and documents submitted by the rest of the three witnesses should not be given any cognizance or relevance for deciding instant case in terms of provision laid down under section 138B of the Customs Act because the ld. adjudicating authority did not utter a single word as to why said witnesses could not be produced. In support of the above contention, the appellants rely upon the observations made by the Hon'ble Calcutta High Court in the case of Ajay Saraogi Vs. Union of India [(2023) SCC Online Cal 2564)] , wherein the Hon'ble Calcutta High Court observed that completing the adjudication proceedings without allowing cross examination of the persons who have given the statements and relied upon in the adjudication order would vitiate the entire proceedings, for violation of principles of natural justice.
5.2. Further, the appellants submit that Shri Arup Bandhu Guha made vague/unclear/incomplete/incorrect/self- contradictory answers to questions put by the appellants in cross examination like question no.2, 6,10, 12, 14, 16, 18, 21, 24, 25, 26, 29, 30, 36, 40, 41, 44, 46, 48; thus, his statement cannot be relied upon in the adjudication proceedings. Also, it is their submission that the documents submitted by him cannot be considered as admissible evidences. The appellants state that the said Shri Arup Bandhu Guha failed to provide the source of said master Bill of Lading as well as the date of receipt of said master Bill Of Lading; the so called Master Bill of Lading was Page 13 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB unsigned; Original of the alleged Master Bill of Lading was never produced nor any enquiry was conducted to find out the genuineness of same; EGM shows that said goods were released based on Bill Of Lading bearing endorsement "Country of Origin: Malaysia"
presented by the CHA and genuineness of the certificate of origin issued by the Malay Chamber of Commerce was never verified; it is also submitted that no independent documentary evidences excepting the so called master Bill Of Lading was brought on record by the ld. adjudicating authority in the impugned order. Thus, the appellants submit that it can be safely held that there was no such actual and real master Bill Of Lading but it was created to make out a false case against the appellants. It is therefore their argument that as the copy of the alleged master Bill of Lading was unsigned and original of the said document was never produced or examined by the authorities, the said master Bill of Lading cannot be taken and used as evidence against the appellants in view of Section 64 of the Indian Evidence Act, 1872 read with Section 59 of Bhartiya Sakshya Adhiniyam, 2023.
5.3. The appellants submit that it is an admitted fact vide paragraph 7.1 of the impugned order that Shri Arup Bandhu Guha stated that his company, Marina Container Services India Private Limited, handled only one consignment of PVC Flex Banner imported from Malaysia on account of GR Agarwal, who sold the same on high seas sale basis to SOPL vide B/L 500001910 dated 03.06.2013 and container nos. TEMU4672462 and TEMU 4672483.Page 14 of 23
Appeal No(s).: C/79616,79623 & 79718/2018-DB 5.4. The appellants further submit that no adverse action can be taken based on the statements made and documents submitted by other witnesses in absence of their cross examination and any independent evidence or documents. On this score too, it is contended that the impugned Order-in- Original demanding Anti-Dumping Duty, Customs Duty, interest and penalty on all the ten consignments is patently illegal, arbitrary, without and basis and legal nexus.
5.5. In all the payment advices/swift transfer message provided by the UBI, there were four banking institutions:
(a) Ordering Institution i.e. Bank of the Importer;
(b) Account with Institution i.e. Wells Fargo Bank, New York remitting the money on behalf of UBI to beneficiary Institution;
(c) Beneficiary Institution i.e. Wells Fargo Bank Hongkong receiving the payments from Wells Fargo Bank New York;
(d) Account with institution of exporter i.e. Public Bank Berhad, Kualalumpur, receiving the payments from Wells Fargo Bank Hongkong.
5.6. The appellants state that in all the swift transfer messages, name of the overseas supplier of Malaysia was given; there is no allegation that the money was transferred to supplier appearing in the alleged master Bill of Lading; the entire payments were remitted to said overseas supplier and there is no evidence that said supplier had not received the Page 15 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB payments remitted by the appellants. In view of said facts, the appellants contend that the impugned order demanding Anti-Dumping Duty, Customs Duty, interest and penalty on all the ten consignments is patently illegal, arbitrary, without and basis and legal nexus.
5.7. In view of the above submissions, the appellants submit that the impugned adjudication order demanding Anti-Dumping Duty, Customs Duty, interest and penalty based on such master Bill Of Lading is bad, illegal, arbitrary, and not warranted. Accordingly, they have prayed for setting aside the impugned order and allowing their appeals.
6. The Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. He submits that the Master Bills of Lading submitted by Shri Arup Bandhu Guha clearly establishes that the goods have originated from China and not from Malaysia; he has confirmed the existence of another Mater Bill of lading having the same container number in it, which establishes that the goods have actually originated from China. Accordingly, he supported the demands of duty, interest and penalties confirmed in the impugned order.
7. Heard both sides and perused the appeal documents.
8. We observe that the appellants imported Ten (10) consignments of PVC Flex Banner in Rolls / PVC Sheeting in Rolls(Flex Banner) from an overseas supplier by name, Topaz Plastic Industries (M), SDN, BHD, Malaysia, during the period from December, 2012 to June, 2013. As per Customs Notification Page 16 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB no.82/2011-Cus. dated 25.08.2011, Anti-Dumping Duty @0.538 was leviable on import of PVC Flex Film originating from Peoples Republic of China. Further, as per Customs Notification nos.46/2011-Cus. dated 01.06.2011 and 053/2011-Cus dated 01.07.2011, duty exemption to the extent of @3% was available to goods of ASEAN / Malaysian Origin. The appellants claimed that the goods imported were of Malaysian Origin and accordingly, they availed the benefit of the above said exemptions and did not pay any Anti- Dumping Duty at the time of clearance of the said ten consignments from Customs.
8.1. We observe that officers of DRI initiated investigation against the appellants on the allegation that the goods were of Chinese origin and mis- declared by the appellants as 'Malaysian' origin with a view to avail the benefit of concessional rate of duty provided under Customs Notification Nos.46/2011- Cus. dated 01.06.2011 and 053/2011-Cus. dated 01.07.2011 and not to pay Anti-Dumping Duty. The allegation has been made mainly on the basis of the statements recorded from five persons as detailed in paragraph 3.1 of this Order supra.
8.2. During the course of investigation, we observe that Five Master Bills of Lading and House Bill of Lading were submitted by Shri Ashish Modak, Director of Emerald Logistics Private Limited, and One Bill of Lading was submitted by Shri Arup Bandhu Guha, Senior General Manager of Marine Container Services India Private Limited, and Four Master Bills of Lading were submitted by Shri Syamal Kumar Mukherjee, Senior Manager of Forbes & Company Limited.
Page 17 of 23Appeal No(s).: C/79616,79623 & 79718/2018-DB 8.3. Shri Ashish Modak, Director of the Emerald Logistics Private Limited, submitted a copy of Master Bill of Lading no. CNBOCCU13040016 dated 10.04.2013, CSHACCU13030102 dated 27.03.2013 and related house bill of lading No.PKGNNA201303124 dated 11.04.2013 and other documents. After scrutiny of the said Master Bill of Lading and Bills of Entry collected from different shipping lines / freight forwarders, it was alleged that the said consignments of PVC Flex Banners in dispute, had actually originated from China; the containers were sent to India via Malaysia but instead of issuing one bill of lading for the entire journey, two separate house bills of lading were issued to cover the journey between China and Malaysia and again from Malaysia and India; to suppress the fact that the goods were actually originated from China, the Bill of Lading for transportation from China to Malaysia was not submitted to Indian Customs Authorities.
8.4. We observe that the Appellant wanted cross examination of all the persons whose statements were relied upon in the impugned notice. However, the ld. adjudicating authority arranged for cross-examination of only one witness, namely, Shri Arup Bandhu Guha, who has presented himself for cross examination. Thus, it is the submission of the appellants that the statements made and documents submitted by the rest of three witnesses should not be given any cognizance or relevance for deciding instant case in terms of provision laid down under section 138B of the Customs Act.
8.5. With regard to the statements given and documents submitted by the three persons who could not be cross- examined, we observe that the entire Page 18 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB case has been built up by the investigation on the basis of the statements recorded and documents submitted by these persons. The appellants have questioned the veracity of these documents as the originals of these documents were never given to them. The appellants also submitted that the persons who handed over the documents never disclosed the origin of the documents and from where they got them. Thus, we are of the view that if the Department wanted to rely upon the statements recorded from them and the documents submitted by them, then the Department should have allowed cross examination of all those persons. In stead, cross examination only one person by name Shri Arup Bandhu Guha was conducted. Thus, we hold that the statements recorded and documents submitted by all persons, other than Shri Arup Bandhu Guha, are not admissible as evidence in the adjudication proceedings as they have not fulfilled the tests prescribed in Section 138B of the Customs Act, 1962. We observe that this view has been held by the on'ble Calcutta High Court in the case of Ajay Saraogi Vs. Union of India [(2023)SCC Online Cal 2564)] . For ready reference, the relevant portion of the said decision is reproduced below:
"58. Such a contention of the Enforcement Directorate has currency should the confessional statement stands corroborated by independent documents and should the Enforcement Directorate not introduced documents seized from Mr. Nirmal Kumar Karmakar and statement made by Mr. Nirmal Kumar Karmakar in the adjudication proceedings. Independent of such documents seized from and the statements of Mr. Nirmal Kumar Karmakar the Enforcement Directorate had to prove the charges as against the appellant, on Page 19 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB a preponderance of probability if not beyond reasonable doubt, given the quasi criminal nature of the proceedings. Having introduced the statement of Mr. Nirmal Kumar Karmakar and documents seized from him in evidence in the adjudication proceedings, it was incumbent upon the Enforcement Directorate to allow cross-examination of Mr. Nirmal Kumar Karmakar. Not having done so, the proceedings both at the order in original stage as also in the appellate stage have been vitiated by the breach of principles of natural justice."
8.6. Thus, by relying on the decision of the Hon'ble Calcutta High Court referred above, we hold that the statements given and documents recovered from those persons who have not been cross examined, cannot be relied upon in the adjudication proceedings in this case.
8.7. Regarding the statements recorded and the documents submitted by Shri Arup Bandhu Guha, whose cross examination was conducted, we observe that during the cross examination Shri Guha has given vague and unclear answers to the questions put by the appellants. From the answers given by Shri Arup Bandhu Guha to question no.2, 6,10, 12, 14, 16, 18, 21, 24, 25, 26, 29, 30, 36, 40, 41, 44, 46, 48, we make the following observations:
(i) He did not have any knowledge of the date of receipt/submission of the house bill of lading as well as the master bill of lading (Ref.
Question 2,6, 19-20)
(ii) He did not have receipted copy of master bill of lading (Ref. Question 7), Page 20 of 23 Appeal No(s).: C/79616,79623 & 79718/2018-DB
(iii) He said that country of origin was not mentioned as Malaysia in bill of lading No.S00001910 whereas the said bill of lading clearly shows the country of origin as Malaysia (Ref. Question no.8-13),
(iv) He stated that IGM (Import General Manifest, a document that contains detailed information about the cargo carried on a vessel or an aircraft entering a country, and is a mandatorily presented by the carrier at the receiving port before the shipment's arrival) was filed on the basis of Master Bill of Lading but he did not have any occasion to look into IGM in respect of the consignment whereas screenshot of IGM shows that there is no reference of said Master Bill of Lading (Ref. Question no.13-18),
(v) He did not have any knowledge who handed over the master bill of lading to him (Ref. question no.21)
(vi) He stated that he made the statement on 13.08.2013 based on the documents shown to him and it shows that said Master Bill of Lading was not produced by him (Ref. Question no.25),
(vii) He admitted that alleged master bill of lading was non-negotiable and unsigned and Marine Container Services I Private Limited was consignee and notified party, etc., but goods were released in favour of SOPL based on house Bill of Lading.
Page 21 of 23Appeal No(s).: C/79616,79623 & 79718/2018-DB 8.8. We therefore observe that Shri Arup Bandhu Guha failed to provide the source of said Master Bill of Lading as well as the date of receipt of said Master Bill of Lading; the so called Master Bill of Lading was unsigned; Original of the alleged Master Bill of Lading was never produced nor any enquiry was conducted to find out the genuineness of same; EGM shows that said goods were released based on bill of lading bearing endorsement "Country of Origin: Malaysia"
presented by the CHA and genuineness of the certificate of origin issued by the Malay Chamber of Commerce was never verified; No independent documentary evidences excepting the so called Master Bill of Lading was brought on record by the ld. adjudicating authority. As the copy of the alleged Master Bill of Lading was unsigned and original of the said copy was never produced or examined by the authorities, we hold that the said Master Bill of Lading cannot be relied upon as an evidence against the appellants in view of Section 64 of the Indian Evidence Act,1872 read with Section 59 of Bhartiya Sakshya Adhiniyam, 2023.
8.9. Regarding the origin of the goods, we observe that the appellants have produced AIFTA Certificate of Origin, which was issued by the Ministry of International Trade & Industry, Malaysia. We observe that the investigation has not established that the said Certificates are not genuine. The investigation only alleges that the said certificates have been obtained by influence, but it is observed that the said claims were not supported by any evidence.Page 22 of 23
Appeal No(s).: C/79616,79623 & 79718/2018-DB 8.10. Regarding the payments made by the appellant to the imported consignments, it is alleged that money has been transferred to Hong Kong and not to the exporters who are located in Malaysia. On that basis, it has been alleged that the goods were not originated from Malaysia. In this regard, we observe that all the payment advices/swift transfer message provided by the UBI, there were four banking institutions namely,
(a) Ordering Institution i.e. Bank of the Importer;
(b) Account with Institution i.e. Wells Fargo Bank, New York remitting the money on behalf of UBI to beneficiary Institution;
(c) Beneficiary Institution i.e. Wells Fargo Bank Hongkong receiving the payments from Wells Fargo Bank New York;
(d) Account with institution of exporter i.e. Public Bank Berhad, Kualalumpur, receiving the payments from Wells Fargo Bank Hongkong.
8.11. In all the swift transfer messages, name of the overseas supplier of Malaysia was given. We find that there is no allegation that the money was transferred to supplier appearing in the alleged master bill of lading. The entire payments were remitted to said overseas supplier and there is no evidence that said supplier had not received the payments remitted by the appellants. Thus, we hold that the evidences available on record indicate that the Malaysian exporter was the actual beneficiary of the money transfer.
Page 23 of 23Appeal No(s).: C/79616,79623 & 79718/2018-DB 8.12. Thus, we hold that the evidences available on record indicate that the goods are of Malaysian origin and thus no Anti-Dumping Duty is payable on the 10 consignments imported by the appellant. We also hold that appellant is eligible for the benefit of concessional rate of duty provided under Customs Notification nos.46/2011-Cus. dated 01.06.2011 and 053/2011- Cus. dated 01.07.2011.
9. In view of the above findings, we hold that the demands of Anti-Dumping Duty, Customs Duty and interest confirmed in respect of all the ten consignments imported by the appellants is legally not sustainable and accordingly, we set aside the same. Since, the demands of duty are not sustainable, the question of imposition of penalties does not arise. Accordingly, we set aside all the penalties imposed on the appellants.
10. In the result, we set aside the impugned order and allow the appeals filed by the appellants, with consequential relief, if any, as per law.
(Order pronounced in the open court on 13.02.2025) Sd/-
(ASHOK JINDAL) MEMBER (JUDICIAL) Sd/-
(K. ANPAZHAKAN) MEMBER (TECHNICAL) Sdd