Custom, Excise & Service Tax Tribunal
Shri. Ajit Kumar Agarwala vs Commissioner Of Customs(Exports), ... on 12 May, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. C/86530 TO 86532/15 [Arising out of Order-in- Appeal No. 49 to 51(Adjn./Exp)/2015-JNCH/Appeal-I dated 11/5/2015 passed by the Commissioner of Customs (Appeals-I), JNCH, Nhava Sheva ] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
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the Order for publication as per Rule 27 of the
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Shri. Ajit Kumar Agarwala
Shri. Rajendra Kanodia
M/s. Terai Overseas Pvt Ltd
:
Appellant
VS
Commissioner of Customs(Exports), JNCH, Nhava Sheva
:
Respondent
Appearance
Shri. G.B. Yadav, Advocate for the Appellants
Shri. S.J. Sahu, Asstt. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 12/5/2016
Date of decision: /2016
ORDER NO.
These appeals are arising out of the Order-in- Appeal No. 49 to 51(Adjn./Exp)/2015-JNCH/Appeal-I dated 11/5/2015 passed by the Commissioner of Customs (Appeals-I), JNCH, Nhava Sheva, whereby Ld. Commissioner(Appeals) dismissed the appeal filed by the appellant and upheld the Order-in-Original No. 174/2011-12 dated 15/2/2012.
2. In the impugned order penalties imposed upon the appellants M/s. Terai Overseas Pvt Ltd, Shri. Ajit Kumar Agarwala and Shri. Rajendra Kanodia on the ground that they were actively involved in the fraudulent exports and claiming fraudulent drawbacks. In the investigation it was found that one M/s. Chanakya Exports vide three shipping bills attempted the export of garment. The actual value of the garment was found to be approximately Rs. 16 lacs whereas the value declared in the export documents were 3.5 crores, accordingly they claimed 15% draw back on the declared value. There is separate proceedings with regard to the fraudulent claim of drawback. In the present case, the issue involved is whether these three appellants were involved in the fraudulent claim of drawback. Investigating authority after carrying out the detailed investigation found that export was made by M/s. Chanakya Exports but on account of M/s. Terai Overseas Ltd. Shri. Rajendra Kanodia was Managing Director of the M/s. Terai Overseas Ltd and Shri. Ajit Kumar Agarwala was the ex-director of M/s. Terai Overseas Ltd. During the investigation statements of Shri. Rajendra Kanodia, Shri. Raju Taneja of M/s. Kap Cargo, shri. S.M. Owais of M/s. Sotra Transport(I) Pvt Ltd and Prithipal Singh of M/s. Chanakya Exports, Delhi were recorded. In all the statements they have implicated that Shri. Rajendra Kanodia and Shri. Ajit Kumar Agarwala are the key persons involved in exports and fraudulent claim of drawback. The adjudicating authority, after remand twice by this Tribunal, confirmed the imposition of penalties on the appellants for their involvement of aiding and abetting fraudulent claim of drawback. Being aggrieved by the Order-in-Original, appellants filed appeals before the Commissioner(Appeals), who has dismissed the appeals therefore appellants are before me.
3. Shri. G.B. Yadav, Ld. Counsel for the appellant submits that the impugned order is in the gross violation of principle of natural justice inasmuch as he upheld the order of the additional commissioner, who did not allow cross examination of Shri. Raju Taneja of M/s. Kap Cargo, shri. S.M. Owais of M/s. Sotra Transport(I) Pvt Ltd and Prithipal Singh of M/s. Chanakya Exports, Delhi, whose statements were used against appellant despite twice remand orders dated 30/8/2007 and 21/5/2015 of this Tribunal. He submits that as per the Adjudicating authority witnesses were not available for cross examination, therefore statements should not have been relied upon and if it is so no case can be made out against appellant as the sole basis of penalizing appellants are statements of the aforesaid persons therefore order of the lower authorities are in gross violation of natural justice. In this regard, he place reliance on Honble Delhi High Court judgment in case of Basudev Garg Vs. Commissioner of Customs[2013(294) ELT 353(DEL)] and Tribunals decision in case of Swiber Offshore Construction Pvt Ltd Vs. Commr. Of Cus., Kandla[2014(301) ELT 119(Tri. Ahmd.)] He also submits that appraising officer who allowed the drawback claims were also not presented before the Adjudicating authority for cross examination in respect of the request made by the appellant. He submits that letter of credit No. 7131, which is relevant for drawback claim was utilized by another 3rd party, Aruna Impex and not M/s. Chanakya Exports and dealing with Chanakya exports goods on behalf of the appellant had got cancelled before the goods were exported by M/s. Chanakya Exports were made by M/s. Chanakya Exports by manipulating documents like, LC, contract and even shipping bills which shows that account of M/s. Terai Overseas Pvt Ltd was typed later after the exports. The statement of Rajiv Gupta of M/s. Rainbow Collection, Jaipur alleging that duty drawback amount received by M/s. Rainbow collection made on behalf of the M/s. Terai Overseas Pvt Ltd have been adjusted with job work charges payable to M/s. Terai Overseas Pvt Ltd is not relevant to this case but to case where the goods were exported by M/s. Rainbow on behalf of the M/s. Terai Overseas Pvt Ltd. There is nothing in the statement of Shri. Rajiv Gupta to show that goods exported by M/s. Chanakya Exports were manufactured or sold by M/s. Rainbow Collection of Jaipur. He submits that Shri. V.P. Singh has accepted that he got drawback and the same was corroborated. The statement of Shri. Raju Taneja on 4th June which clarifies, he exported the goods and received the drawback of Rs. 41 lacs out of which he returned Rs. 15 lacs to the department. The appellant has neither got any benefit of drawback nor any foreign exchange as their letter of credit was not utilized for this export at all. He alternatively submits that the penalty imposed on the appellant are otherwise excessive and disproportionate to the offence if any committed by the appellant inasmuch as full drawback of Rs. 41.15 lacs was taken by Shri. P.P. Singh and not by appellant, who did not receive even foreign exchange for which exports is alleged to have made on their behalf. He therefore prays to reduce penalties.
4. On the other hand, Shri. S.J. Sahu, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that the penalty on the appellants were imposed for aiding and abetting the fraudulent claim of drawback, therefore even if it is accepted that appellants have not been benefited as regard the receipt of drawback. As per the overall facts it is coming out that they have active role in the entire modus operadi, accordingly they were rightly charged under Section 114(iii) of Customs Act, 1962. He placed reliance on the Honble Supreme Court judgment in case of Collector of Customs, Madras and Others Vs. D. Bhoormull[1983(13) ELT 1546(S.C.)] according to which department is not required to prove its case with mathematical precision, but what is required is the establishment of such a degree of probability that a prudent man may on its basis believe in the existence of the facts in issue. In view of the judgments in the present case there are corroborative evidences and conduct of thus persons which clearly indicates that they were involved in the entire episode of fraudulent claim of drawback.
5. I have carefully considered the submissions made by both sides and perused the record.
6. As regard the fraudulent drawback claim against exports made through M/s. Chanakya exports on account of M/s. Terai Overseas Pvt Ltd, the same has been established. Now the only issue to be decided in these appeals is whether the appellants are involved in aiding and abetting fraudulent claim of drawback. In the entire facts and circumstances and the evidences relied upon in the case, I find that M/s. Terai Overseas Pvt Ltd and its directors are the main persons who planned entire modus operandi for export of low valued garment valued at Rs. 16 lacs and value declared is Rs. 3.29 crores. Accordingly the drawback of Rs. 41.15 lacs was fraudulently availed. The letter of credit towards export of goods was issued by Bank of Foreign Economic Affairs Masco in favour of M/s. Terai Overseas Pvt Ltd Kolkatta. In the LC, the value of LC was replaced by Shri. P.P. Singh which was done with the collective knowledge of Shri. P.P. Singh, Shri. Ajitkumar Agarwala on behalf of the M/s. Terai Overseas Pvt Ltd. The beneficiary of the exports was M/s. Terai Overseas Pvt Ltd as reflected in shipping bills of the subject goods consignment. It was observed that even the movement of the goods meant for export was coordinated by Ajit Kumar Agarwala with Shri. Bhim Agarwal, who sent the material from Jaipur to Mumbai and again back to Mumbai only on the instructions of the Shri. Ajit Kumar Agarwala. It is M/s. Terai Overseas Pvt Ltd who applied to obtain import export code and Shri. Ajit Kumar Agarwala and his wife Smt. Shashikala Agarwala with Shri. Rajendra Kanodia as the other Director Shri. Ajit Kumar Agarwala even after resigning from the directorship, he is authorized signatory in the bank account. Even Shri. Ajit Kumar Agarwal resigning from the director ship of the company but he is holding stock of 50% of total share capital of M/s. Terai Overseas Pvt Ltd and of other two companies. Shri. Ajit Agarwala remained the guarantor for packing credit finance extending for Terai Overseas Pvt Ltd. Documents pertaining to agreement for export by M/s. Terai Oversease Pvt Ltd were found in the corporate office of Agarwala group of companies. In respect of M/s. Chanakya Export on account of M/s. Terai Overseas Pvt Ltd the premium for marine insurance policy was paid by cheque from the account current of M/s. Terai Overseas Pvt Ltd. This shows that even Shri. Ajit Kumar Agarwala said to have resigned from the directorship but did not disassociated himself from the affairs of the company M/s. Terai Overseas Pvt Ltd and actively controlling the affairs of the company. Shri. Ajit Kumar Agarwala and his associate were actively involved in the export made in the name of M/s. Chanakya Export. The fraud was committed by the personal in the name of Chanakya Export with active cooperation of those persons. On basis of various evidences it was established that fraud was committed in the exports by M/s. Chanakya Export by forging the documents for which legitimate documents were provided by M/s. Terai Overseas and controlled by Shri. Rajendra Kanodia and Shri. Ajit Kumar Agarwala. It is observed that it is not only one statement but various persons involved in the entire episode indicated active involvement of shri. Ajit Kumar Agarwala and Shri. Rajendra Kanodia in the illegal exports and fraudulent availment of drawback. From the facts available on record, it is clearly revealed that M/s. Terai Overseas Pvt Ltd devised a plan to get drawback by exports of goods having no commercial value in the name of M/s. Chanakya Export, supplying them necessary documents to forge and produced forged documents so that the exports could be made and drawback amount received from the exchequer. As regard the repeated request of the appellant for cross examination of various persons, I find that Adjudicating authority has called witnesses for cross examination but they were not available therefore case was denovo adjudicated on the basis of available evidences. I do not find anything wrong in deciding the case on the basis of evidences or whatsoever documents available with the Adjudicating authority. Apart from the statement there are ample documentary evidences which clearly establish that appellants were involved in aiding and abetting fraudulent availement of drawback. Therefore even if cross examination of the witnesses could not be conducted the same will not vitiate the proceedings carried out by the Adjudicating authority. As per facts and circumstances of the case and the evidences relied upon by the Adjudicating authority, I do not find any infirmity in the order. The impugned order is upheld and appeals are dismissed.
(Order pronounced in Court on _________________) Ramesh Nair Member (Judicial) sk 9 C/86530 TO 86532/15