Customs, Excise and Gold Tribunal - Delhi
Cc vs R.K. International And Ors. on 25 June, 2003
Equivalent citations: 2003(89)ECC582, 2003(159)ELT961(TRI-DEL)
ORDER S.S. Kang, Member (J)
1. Brief facts of the case as narrated by the Revenue are that specific intelligence was received by DRI, Zonal Unit, Ahmedabad on 7.8.93 that a consignment of Lead Scrap has been imported in the name M/s. Ram Metal Industries, Baroda, which is pending clearing for at Kandla Fort and actually contains Ball Bearings of foreign origin being illicitly imported and cleared in the guise of Lead Scrap and Shri Solly Perumal, Director of M/s. Trinity Shipping & Allied Services Pvt. Ltd., Ahmedabad in association with Shri Om Prakash Punjabi of Ahmedabad is said to be actively involved in the smuggling of Ball Bearings into India by way of mis-declaring import cargo.
2. On scrutiny and verification of the related import documents by the Customs Officers, it was found that a Bill of Entry No. F-4316 dated 30.7.93 was filed under; 'Self' by the importer on the basis of Bill of Lading dated 25.7.93 and invoice No. 0106 dated 20.3,93. In the Bill of Entry, the goods imported were mentioned as Lead Scrap. On opening of the container, it was found to contain total 85 drums and the six drums in the front row taken out of the container, which were found to contain Lead Scrap only, whereas the remaining 79 drums contained few pieces of lead scrap over the packages of various types and sizes of Ball Bearing of foreign origin concealed thereunder, The lead scrap pieces were used merely as a cover/concealment of the total 442389 pieces of Ball Bearings of different makes, sizes and numbers recovered and seized by the officers, under the provisions of the Customs Act, 1962. The lead scrap weighing 1460 kgs. valued at Rs. 10,000 approx. recovered from the aforesaid drum bearing Sr. No 1-79, used for concealment/cover was also placed under seizure alongwith the Ball Bearings for which the market value was estimated at Rs. 2,40,26,202.
3. The preliminary investigations conducted by the officers revealed that earlier also a similar consignment was cleared in the name of M/s. Natraj Metal Pvt. Ltd., Vadodara for which Bill of Entry No. F-2120 dated 21.7.93 was filed under 'Self for the import of 19.680 M.T. lead scrap and similarly Bill of Entry No. F-3058 dated 4.6.93 was filed by M/s. Trinity on behalf of the importer for the import of 16.880 M.T. of lead scrap imported and cleared at Kandla port in the name of M/s. R.K. International, Ahmedabad.
4. Inquires were made from M/s. Trinity Shipping & Allied Services Pvt. Ltd. Firm and statements of its Director Shri Solly Perumal as well as other related persons said to be involved in this case were recorded under Section 108 of the Customs Act, 1962.
5. Shri Jolly Perumal in his statements recorded on 8.8.93, 15.8.93, 28.8.93, 8.9.93, 9.9.93, 10.9.93, 11.9.93, 21.9.93 inter alia stated that:
(i) The original import documents in respect of import consignment of M/s. R.K. International and M/s. Natraj Metal Pvt. Ltd. were received by him from Shri K. V. Gopalkrishnan and he had filed the Bill of Entry for clearing these two consignments as per instructions received from Shri Gopalkrishnan.
(ii) He was present during the examination of the goods imported in the aforesaid two consignments.
(iii) The Bill of Entry for clearing the consignment of M/s. R.K. International was filed by the Company, whereas the Bill of Entry for clearing consignment of M/s. Natraj Metal Pvt. Ltd., and M/s. Ram Metal Industries were prepared by Shri S.D. Rao under the instructions and both these Bills of Entry were prepared by his employee Shri M.K. Devis as importer as per his instructions.
(iv) The import documents for clearing the consignment of M/s. Ram Metal Industries were received from Shri Om Prakash Punjabi, who had telephonically contacted him on 28.7.93 and requested to process the documents for clearance of this consignment.
(v) He had received an amount of Rs. 3 lakhs in cash from Shri Gopalkrishnan during the second week of June 1993 as consideration for clearing the consignments of M/s. R.K. International and M/s. Natraj Metals Pvt. Ltd.
(vi). Shri Gopalkrishnan had given him IEC Code No. written on a plain paper along with the other documents in original for filing the Bill of Entry in respect of M/s. R.K. International and that this Code number has been mentioned on the concerned Bill of Entry.
(vii) Shri Gopalkrishnan had also given him IEC Code number written on a plain paper at the time of filing the Bill of Entry for M/s. Natraj Metals Pvt. Ltd., whereas while filing the Bill of Entry for M/s, Ram Metals Industries, he had received a photocopy of the IEC Code No. allocated to M/s. Ram Metals Industries. The was received by him alongwith other import documents from Shri Om Prakash Punjabi.
6. That, immediately after the seizure of import consignment of M/s. Ram Metal Industries at Kandla Port on 8/9.8.93, inquiries were got conducted at Baroda to trace M/s. Ram Metal Industries, Kalali Road, at Ladra, Vadodara and M/s. Natraj Metrals Pvt. Ltd. but the Assistant Collector, Central Excise, Vadodara vide his letter dated 10.8.93 informed that there was no such Firms in existence at the above-said addresses.
7. That, inquiries were also conducted in the office of the Director General of Foreign Trade, Ahmedabad, which revealed that the IEC Code number used for M/s. Ram Metal Industries and M/s. Natraj Metals Pvt. Ltd. are fictitious. The IEC Code stated in respect of M/s. Ram Metal Industries really belonged to M/s. Transpak Industries Ltd., Kalaji Road, at Ladra, Vadodara. The IEC Code used in respect of M/s. Natraj Metal Pvt. Ltd. is 091002758, whereas IEC Code of M/s. R.K. International, is 0891002758. It appears that they had manipulated the IEC Code number of M/s. R.K. International by omitting digit 8 used as IEC Code for M/s. Natraj Metals Pvt. Ltd.
8. That, statement of Shri K.V. Gopalkrishnan was recorded under Section 108 of the Customs Act, 1962 on 4.9.1993 and 15.9.1993, wherein he has inter alia stated that he is working as an Executive Director of M/s. Shri Radhakrishnan Shipping Pvt. Ltd. at Gandhidham and that he knows Shri Solly Perumal and that their intimacy grew into friendship about two years ago, that in the month of February/March, 1993, he introduced Shri Hasmukh Shah of M/s. Crown Timbers, Gandhidham to Shri Solly Perumal, when Shri Hasmukh Shah wanted to clear a consignment of Tin Dross and that Shri Solly Perumal agreed for clearing the same. Thereafter, Shri Hasmukh Shah asked Shri Solly Perumal for the clearance of one consignment of metal scrap to which Shri Solly perumal agreed. After some time Shri Gopalkrishnan came to know that this consignment was cleared under the name of M/s. R.K. International for which Bill of Entry No. F-3058 dated 4.6.93 was filed by M/s. Trinity; that this he came to know from Shri Solly Perumal when he told that Shri Hasmukh Shah had not made full payment for clearance of this consignment; that he (Gopal) should remind Shri Hasmukh Shah for the balance amount. Shri Gopalkrishnan was told by Shri Solly Perumal that Shri Hasmukh Shah does not have any money and he (Hasmukh) gave a chit containing a telephone number of some persons of Jamnagar telling that the balance amount can be collected from Jamnagar. Shri Solly Perumal had told him (Gopal) that the consignment of Ball Bearings and Scrap meant for M/s. R.K. International was of Shri Om Prakash Punjabi of Ahmedabad.
9. It appeared from the investigation conducted so far that both Shri Solly Perumal and Shri Gopalkrishhan had not disclosed full facts as known to them with regard to the arrangements for clearing the consignments imported in the names of M/s. R.K. International, M/s. Natraj Metals Pvt. Ltd. and M/s. Ram Metal Industries. Summons were, therefore, served to them from time to time for their appearance, but they avoided presenting themselves before the Investigating Officers on one pretext or the other. Ultimately, Shri Gopalkrishnan presented himself on 28.12.1993 at Bombay, with a request that he may be examined at Bombay since he was being threatened continuously by the interested parties and it was not safe for him to appear at Ahmedabad or Gandhidham.
10. That Shri K.V. Gopalkrishnan, in his statement recorded under Section 108 of the Customs Act, 1962 on 28.12.1993 at Bombay stated that on 4.9.93 and 15.9.93 he had given his depositions before the Investigating authorities, which were not based on the facts and that now he wanted to give the factual position of the enquiry, that he has been working as an Executive Director with M/s. Sri Radhakrishnan Shipping Pvt. Ltd., Gandhidham since 1982 and that he knows Shri Hasmukh Shah of M/s. Ranchhoddas Pumshottam & Co. and M/s. Crown Timer, Gandhidham since 1988 and they are close friends/that he also knows Shri Solly Perumal of M/s. Trinity since 1982 as a CHA, that he has been giving him (Solly) the Customs clearance job, which are not undertaken by his Firm (Shri Radhakrishnan); that their acquaintance grew into friendship after some time, that in the month of Feb./March 1993 he had entrusted the clearing job of consignment of Tin Dross imported by Shri Hasmukh Shah, that some time in the, month of May 1993, Shri Hasmukh Shah visited his office and told him that he (Hasmukh) intend to import a Metal Scrap consignment in which Ball Bearings will be included and asked him if he can get it Customs cleared through Shri Solly Perumal, that during the course of discussion with Shri Hasmukh Shah, one Customs Officer of Kandla Customs, namely Shri Valson was also present in his office, that Shri Valson has been visiting his office occasionally and known to him since 1990, that he discussed the proposal of Shri Hasmukh Shah with Shri Solly Perumal who told him that he (Solly) would check up and let him know later, that after two/three days later Shri Solly perumal informed him on phone that he (Solly) had discussed the matter with some customs officers who had given green signal for the import with the condition that 30% of the duty amount of the value of the Ball Bearings, thus concealed in the consignment of Metal Scrap is to be paid to him (Solly) for getting the work done through the Customs, that accordingly he conveyed Solly's term and conditions to Shri Hasmukh Shah, who readily agreed for the same.
He, further, stated that in the first week of June i.e. 4.6.93, Shri Hasmykh Shah had phoned him that Shri Hasmukh Shah is sending the import documents and draft for the Customs duty for the clearance of a consignment imported in the name of M/s. R.K. International and after 15 minutes one Shri Vasant Dave who is the peon of Shri Hasmukh brought an envelope containing documents which he had sent to Shri Solly Perumal and told Solly Perumal on phone that the documents for the above consignment are being sent and also informed Shri. Solly that the goods are to be delivered to Shri Hasmykh's local godown at Gandhidham; that in the evening Shri Solly Perumal informed him that, the clearance has been effected and asked him complete address of the godown where the goods were to be unloaded and accordingly he enquired about the address of the godown to which Shri Hasmukh Shah told him that the goods will be delivered at Ahmedabad, that then he phoned Shri Solly Perumal and told him about the same but Shri Solly told him, back that he (Solly) is coming, to his office for discussion in the matter, that in the meantime he called Shri Hasmukh Shah also to his office; that a short-while later Shri Solly alongwith, Shri Valson, Customs (Docks) wanted to verify the goods at the godown and in case the goods are despatched to Ahmedabad, he (Solly) would not be in a position to satisfy Shri Doshi requirements, that Shri Solly took the delivery-address of Ahmedabad party from Shri Hasmukh Shah, that while noting down, the address as "Om Tower", Shri Solly Perumal had asked. Shri Hasmukh whether these goods belonged to Shri Om Prakash Punjabi to which. Shri Hasmukh confirmed; that next day morning i.e. 8.6.93, Shri Solly rang up and told him that Shri Solly alongwith Shri Doshi is going to Ahmedabad in the afternoon and requested him to pass on instructions to Shri Hasmukh to see that the container is not de-stuffed since the goods are to be examined/verified by Shri Doshi at Ahmedabad, that after two days Shri Solly informed him on phone that he (Solly) and Shri Doshi had been to Ahmedabad and they had seen the stuff, which is Ball Bearings only, that Shri Solly had asked him (Gopalkrishnan) about the value of the goods i.e. Ball Bearings which had been cleared illicitly in guise of lead scrap for which he had told him (Solly) that Shri Hasmukh had told him that the same is worth of Rs. 40 Lakhs; that Shri Solly had asked him to arrange the payment from Hasmukh Shah. He further stated that on 20.6.93 Shri Hasmukh Shah called him as well as Shri 'Solly to his residence; that during their visit to Shri Hasmukh's house, Shri Killubhai of M/s. Sadhana Transport Co. was already present there; that he knows Shri Killubhai as he had met him once or twice earlier at Gandhidham; that during the course of discussion Shri Hasmukh told him that he (Hasmukh) will arrange the payment for the consignment already cleared within a day or two and asked Shri Solly Perumal to think of the possibility of clearing such another consignments; that both Shri Hasmukh and Shri Killubhai complained at the same time that other CHA's are arranging clearance of such type of consignments with a consideration of 25% and that Shri Solly should also accept at 25% only instead of 30% to which Shri Solly replied that as regards the consignment which has already been cleared, they shall have to pay at the rate of 30% since it was" already decided and so far as the future consignment is concerned he (Solly) will discuss the matter with concerned Customs Officers and shall revert to them; that later on he had received a phone call from Shri Hasmukh informing that Shri Solly has agreed for the clearance of second consignment with the consideration of 25% and also got his (Solly's) own charges' fixed @ Rs. 50,000 per container, that he had collected Rs. 4 lakhs from Shri Hasmukh Shah and passed on Shri Solly's instructions to Shri Hasmukh Shah the balance amount was to be paid at Bombay.
He further stated that on 21.7.93, Shri Hasmukh told him that he (Hasmukh) is sending to him a sum of Rs. 1,55,000 in cash and he should inform Shri Solly to obtain a demand draft for Customs duty in respect of M/s. Natraj Metals Pvt. Ltd., Baroda; that on receipt of the money from Shri Hasmukh, he contacted Shri Solly at Kandla Office and asked to collect the amount for which he (Solly) told him that he (Solly) is sending Shri Chako from his Gandhidham Office and he should hand over the amount to him, that after some time Shri Chako came to his office and collected the amount from him, that later on Shri Solly Informed him that the clearance has been effected and delivery of the container has been given to Shri Manoj (Employee of Shri Killubhai's Transport Co.) of M/s. Sadhana Transport Co., who had contacted Shri Solly at Kandla Port for delivery, that afterwards, Shri Hasmukh Shah informed him that he (Hasmukh) has asked the party i.e. M/s. Natraj Pvt. Ltd. to send a Demand Draft in favour of M/s. Trinity for a sum of Rs. 1,55,000.
11. He, further, stated that few days after the clearance of the consignment cleared in the name of M/s. Natraj Metals Pvt. Ltd. vide Bill of Entry No. F-4120 dated 21.7.93, Shri Solly reminded him for the payment due from Shri Hasmukh Shah and also told him that he (Solly) required the whole amount i.e. Rs. 10,00,000 i.e. 25% of Rs. 40,00,000 at Gandhidham accordingly he conveyed the message to Shri Hasmukh Shah who is turn replied him that at present he (Hasmukh) is not having any funds and if the money is required urgently, Shri Solly has to collect the same from Jamnagar that, thereafter, Shri Hasmukh gave him (Solly) a chit of paper bearing telephone number and name of the Jamnagar party, which was written in Gujarati; that he does not remember from whom the sum of Rs. Three lakhs was collected; that he handed over the same paper chit to Shri Solly at his residence in the morning hours of the day that in his presence Shri Solly rang his office and called one Shri Ashok to his resilience and gave him necessary instructions for collection of money from Jaminagar Party, that the next day Shri Solly informed that Jamnagar party has given Rs. 2,50,000 only instead of Rs. 3 lakhs.
12. Further, on being asked, he stated that he does not know anything about the consignment of Ball Bearings attempted to be smuggled in the guise of Lead Scrap, imported by M/s. Ram Metal Industries.
13. On 29.12.93, Shri Solly Perumal presented himself in Bombay and in his statement corroborated the fact as stated in the statement of Shri K.V. Gopalkrishnan.
14. Shri Solly Perumal further stated in his statement dated 9.12.1993 that when the Customs cashier at Kandla had refused to accept the Demand Draft issued by a bank other than State Bank of India, being the amount of duty in respect of M/s. Natraj Metals Pvt. Ltd. and when he informed Shri Gopalkrishnan about this, was in turn conveyed the same to Shri Hasmukh Shah; that Shri Hasmukh Shah had arranged a Bank Draft bearing No. 062061 of State Bank of Bikaner and Jaipur, D.N. Market Branch, Ahmedabad for Rs. 1,55,000 issued on 21.7.93 in favour, of M/s. Trinity Shipping and allied Services Pvt. Ltd. and the same was deposited in his (Solly) Company's current Account Number 690 of State Bank of Indore, Gandhidham Branch on 22.7.93. Further, Shri Solly produced a counterfoil of the pay-in-slip of State Bank of Indore of Gandhidham, from period of 1.3.1993 to 9.9.1993 in respect of the deposit of Rs. 1,55,000 received under aforesaid Draft.
15. That, further statement of Shri Solly Perumal was recorded on 30.12.1993, wherein he stated that immediately after the clearance of the consignment of M/s. Natraj Metals Pvt. Ltd., Customs Officer Shri Valson met him and told that his colleague (Valson) had a talk with a party for the import of Ball Bearings in the same manner as was done in the case of M/s. R.K. International and M/s. Natraj Metals Pvt. Ltd. and in case he is willing to take up the job he (Valson) would take him (Solly) to Ahmedabad to introduce the party; that he (Valson) also told him that this was the same party who had come to Hotel Madhuban in the month of June 1993, when Shri Sheikh had introduced him and that the party in Shri Om Prakash Punjabi, that as he already attended to previous two consignments cleared in the name of M/s. R.K. International and M/s, Natraj Metal Pvt. Ltd., he had no hesitation in attending to this job also, that hence he showed his willingness to take up the job; that after a day or two of this talk, Shri Valson had asked him to accompany him (Valson) to Ahmedabad; that they met and discussed the matter regarding import of another consignment; that at this moment Shri Valson told Shri Om Prakash that he has already talked to the Departmental Officers and there will not be any problem for its clearance at Kandla; that Shri Om Prakash got them (Solly and Valson) introduced to a person named Shri Sureshbhai and told that he (Sureshbhai) would be looking after the affairs for this consignment; that after discussing the matter with Shri Om Prakash Punjabi, he alongwith Shri Valson left Shri Om Prakash's Office on the same evening and came back to Gandhidham in Shri Valson's white colour Fiat Car early in the morning of the next day; that after a day or two Shri Valson visited his office and told him that Shri Om Prakash will be sending the import documents of lead scrap which will be containing Ball Bearings also; that next day Shri Om Prakash called him on phone and said the he (Om Prakash) is sending documents through a person and that he should collect the same at Gandhidham Railway Station in the morning train; that in the morning about 7.30 to 8.00 A.M. on 28.7.1993, he had received a phone call from a person who told that he was sent by Shri Om Prakash and he (Om Prakash's man) is standing at the Railway Station Gandhidham; that Shri Solly Perumal got collected the documents through his peon viz., Shri Kantibhai, and the said documents which he had collected from Shri Om Prakash through his man were the documents such as Bill of Lading, Invoice, Packing List in respect of consignment of Lead Scrap in the name of M/s. Ram Metal Industries, Vadodara along with the documents there was TEC Code letter and cash of Rs. 1,50,000 to cover the Customs duty for the said consignment; that on receipt of the aforesaid consignment he got prepared the Bill of Entry from Shri S.D. Rao and typed out by Shri Devis and signed by Shri M.K. Devis as Rajendra Prakash as per his instructions; that the said Bill of Entry was filed by him as self for M/s: Ram Metal Industries.
16. Whereas, in his further statement dated 30.12.1993, Shri Solly Perumal stated that he had mentioned in his earlier statement dated 29.12.1993 that the Importer was to pay 30% of the duty payable on the goods, which would be concealed in the Import consignment, in this regard he clarified that normally they take 100% duty for calculating the payment to be made and, therefore, after the consignment was cleared he had enquired about the value of the goods; that he had worked out the amount of Rs. 12,00,000 taking the duty as 100% on value of Rs. 40,00,000. He, further, stated that M/s. R.K. International had given him a letter of authority to clear the consignment of Lead Scrap imported in their name. This letter of authority was sent to him alongwith other import documents which had already been mentioned in his statement dated 29.12.1993. As stated by his earlier statement dated 29.12.1993 that the drums were unloaded from the trucks at Ahmedabad godown after he alongwith Shri Doshi and Shri Sharadbhai reached the spot and drums were opened in their presence. On being specifically asked he clarified that the top portion in each drum was lead scrap of different sizes (used merely as a cover/concealment for Ball Bearings) that this was about 4 to 5 inch and below that were packets packed in white transparent polythene; that Ball Bearings packed inside the packets were visible, and, therefore, these packets were not opened that he does not remember how many packets were there in each drum; that there was some lead scrap on the sides of the drums scrap; without any packets of Ball Bearings.
He further stated that he knows Shri Shrikant of M/s. Fibro Metals Pvt. Ltd., Ahmedabad, who had advanced some loan to Shri P.C. Chacko; and he had asked Shri Shrikant to book the room in Hotel Nalanda but he clearly remembers that he had not paid the Bill for their stay in this hotel on 6.6.1993 and he cannot say who had booked the call after 11.00 hrs. on Baroda telephone number 325033, but he remembers that they had left the Hotel before 11.00 hrs. and had their lunch at Baroda. He further admitted that he had received a Bank Draft alongwith the Import document of M/s. R.K International and the said Draft was submitted to the Customs for payment of duty in respect of import consignment of M/s. R.K. International; that he is not able to remember which bank had issued the said Demand Draft. In his earlier statement dated 29.12.1993, he had mentioned that he had received a Bank Draft for the payment of duty on the consignment imported in the name of M/s. Natraj Metals Pvt. Ltd.; that said Demand Draft was not accepted by the Customs; that he had returned the draft to Shri Gopalkrishnan; that he does not recollect which Bank had issued the said Demand Draft.
17. That, in his statement dated 30.12.1993, Shri K.V. Gopalkrishnan confirmed that he had sent the import documents in respect of import consignment of Lead Scrap imported in the name of M/s. Natraj Metals Pvt. Ltd., which he had received from Shri Hasmukh Shah on 28.7.1993 to Shri Solly Perumal that Shri Solly Perumal had informed him on the same day that the Demand Draft received along with the Import Documents was not acceptable to the Customs and, therefore, he should make necessary arrangements to send him (Solly) the amount of duty; that he had accordingly informed Shri Hasmukh Shah in this respect, that in a short time Shri Hasmukh Shah arranged and sent to him the sum of Rs. 1,55,000 in cash with instructions that he should ask Shri Solly to take a duty draft from the amount, that Shri Hasmukh Shah also told him that he (Hasmukh) had informed the party in Ahmedabad to send: a Demand Draft of Rs. 1,55,000 in favour of M/s. Trinity Shipping and Allied Services Pvt. Ltd., Gandhidham. The Demand Draft which was not accepted by the Customs was returned to him by Shri Solly and he had sent it back to Shri Hasmukh on the same day i.e. 21.7.1993.
18. That, statement of Shri P.C. Chacko, Cashier of M/s. Trinity, Gandhidham was recorded on 6.1.1994 at Gandhidham under Section 108 of the Customs Act, 1962, wherein he deposed that he had a Saving Bank Account No. 1780 in the State Bank of Indore at Gandhidham which was opened in the month of November 1993; that earlier he had Saving Bank Account No. 18 in the aforesaid Bank which was opened on 3rd March 1984 and closed on 24.8.1993; that he produced before the investigating officer his bank passbook of the same bank account, he categorically admitted that an amount of Rs. 1,54,272 was paid towards Customs duty in respect of M/s. Natraj Metals Pvt. Ltd., Vadodara vide Cheque No. 196248 dated 21.7.93; that the amount of Rs. 1,54,272 covers the Bank charges for making Demand Drafts as well as amount in respect of Customs duty; that the amount of Rs. 1,55,000 was given to him in cash by Shri K.V. Gopalkrishnan of M/s. Radha Krishnan Shipping Co. Pvt. Ltd. towards payment of duty and since he had a balance of Rs. 1,50,234.56 in his account hence he deposited an amount of Rs. 5,000 in cash on 21.7.93 and issued a Cheque No. 195248 for Rs. 1,54,272 in favour of 'Y/Self' for making Demand Draft in favour of 'Assistant Collector of Customs, Kandla'. He, further, admitted that he had paid an amount of Rs. 1,42,367 vide Cheque No. 196249 dated 29.7.1993 in favour of 'Y/Self' to the Bank for issuing Demand Draft in favour of "Assistant Collector of Customs, Kandla" towards Customs Duty in respect of M/s. Ram Metal Industries, Baroda. He, further, clarified that an amount of Rs. 1,50,000 was given to him in cash by Shri Solly Perumal for Customs duty towards M/s. Ram Metal Industries, Vadodara.
19. That, statement of Shri O.K. Shukla, Branch Manager of the State Bank of Indore, Gandhidham was recorded on 13.1.94 under Section 108 of the Customs Act, 1962 under which he had produced two cheques in original bearing numbers 196248 dated 21.7.93 for Rs. 1,54,272 and 196249 dated 29.7.93 for Rs. 1,42,367 drawn by Shri P.C. Chacko in his saving Bank A/c No. 18 with the State Bank of Indore at Gandhidham. In his statement Shri Shukla stated that the proceeds of the above cheques have been utilized by Shri Chacko in preparing two Demand Drafts payable at the State Bank of India, Kandla favouring Assistant Collector of Customs, Kandla.
20. Whereas, further inquiries were extended to various local banks at Ahmedabad and the investigating officers visited the State Bank of Bikaner and Jaipur, D.N. Market, Ahmedabad and the Ahmedabad Urban Co.-Op Bank Ltd., having its Head Office at Ashram Road and Branch Office at Sarangpur, Ahmedabad on 7.1.94.
21. Whereas statement of Shri V.K. Bhatt, Dy. Manager of State Bank of Bikaner and Jaipur, D.N. Market, Ahmedabad was recorded on 7.1.94 wherein it confirmed that on 21.7.93 they had issued a Demand Draft No. 62061 favouring M/s. Trinity Shipping Gandhidham for Rs. 1,96,000 and the purchaser of the aforesaid was Ahmedabad Urban Co.-Op Bank Ltd., Ahmedabad, that the above Demand Draft was issued against cheque issued the Ahmedabad Urban Co. Op. Bank Ltd., Ahmedabad; that the amount of the above cheque was for Rs. 1,90,663 that it covers the above Demand Draft of Rs. 1,55,000. The relevant documents pertaining to the aforesaid transactions were withdrawn from the Bank Officials by the investigating officers.
22. Whereas statement of Shri Jitendra B. Shah, acting manager of the Ahmedabad Urban Co.op Bank Ltd., Sarangpur Branch, Ahmedabad was recorded on 7.1.94 under which he had produced the following documents /records for further verification and investigation:
(i) Cash Receipt Register dated 17.5.93 to 20.8.93
(ii)Draft Issue Register pertaining to the period from 3.4.93 to 7.1.94.
(iii) Draft Supplementary Register pertaining to the period from 3.12.93 to 7.1.94.
(iv) Head Office credit voucher as per enclosed advice Rs. 1,55,193.75.
23. Whereas, on being specifically asked about the requisition slip for Rs. 1,55,000 drawn on M/s. Trinity Shipping by his Bank on 21.7.93, he inter alia stated that, the said application filled up by the applicant remains with the Bank Records, which could not be traced out from their records, that they had checked all their records on 7.1.94 but could not find the same.
24. Whereas, statement of Shri Manilal Jayantilal Akahni, Ex-Manager of Ahmedabad Urban Co. Op. Bank Ltd., Sarangpur Branch, Ahmedabad, was recorded under Section 108 of the Customs Act, 1962 on 7.1.94 wherein the inter alia stated that he knows Shri Om Prakash Punjabi as Chairman of the Ahmedabad Urban Co. Op Bank Ltd., Ahmedabad that during his working at aforesaid Bank he used to talk to him (Om Prakash) over the telephone regarding banking work and he (Om Prakash) has his current account as well as loan accounts in the Sarangpur Branch; that on 21.7.93 at about 11.30 hrs. the Chairman Shri Om Prakash Punjabi had phoned him and told him that his office man is coming with cash and instructed him to arrange for the issuance of Demand Draft for Rs. 1,55,000 in the name of M/s. Trinity Shipping Gandhidham; that he told Om Prakash that as per instructions of Reserve Bank of India draft of such a big amount cannot be issued against cash; but he (Om Prakash) told him specifically the Demand Draft is to be issued against cash and demanded the same; that, thereafter, the man from his office came with cash of Rs. 1,55,400 on 21.7.93.
On being further asked whether he knows persons who had come with cash to get the demand draft prepared, he stated that two persons of the Chairman always used to come for banking work and he knows both of them and their names are Shri Kishorbhai and Shri Ashishbhai; that these two persons used to come to do all the banking work of the Chairman and Ashishbhai holds his saving account with the Branch; that the aforesaid draft against cash was issued under the instructions of Shri Om Prakash, the Chairman that he had seen the voucher of the Head Office, which is dated 21.7.93 in the name of State Bank of Bikaner and Jaipur for Rs. 1,55,193.75 bearing the signature of Shri B.S. Jani as the Office and there is an advice regarding the Draft on the reverse of the voucher wherein there is mention of the name of M/s. Trinity Shipping, Gandhidham and the advice bears the signature of Baharabhai Jani working as an Officer in Sarangpur Branch; that Shri Om Prakash Punjabi had instructed him that the draft is to be issued in favour of a party at Gandhidham and so, the draft for the party of Gandhidham was got issued from State Bank of Bikaner and Jaipur, Ahmedabad by the Head Officer and had collected commission according to banking rules; that on 7.1.94 he had searched the slip for the cash deposited by the party for the draft, in his Sarangpur Branch Office, but he could not find the slip and from the register it is found that the name of the applicant on the draft could not be made out because, somebody has deliberately erased the same and has deliberately tried to spoil the respective entries at the particular page; that he had been shown page No. 140 of the cash register and page No. 89 of the draft supplementary register, and page No. 9 of the draft issue register, wherein there were evidence of details in respect of the Draft issued on 21.7.93.
25. Whereas there was clear indication that the bank documents/records were tempered with in order to hide the identity of the applicant, corroborating statements of the concerned person were recorded under Section 108 of the Customs Act 1962 on 7.1.94 and 10.1.94.
26. Whereas statement of one Shri Kamlesh P. Thakkar, Apprentice Clerk in the Ahmedabad Urban Co-op Bank, Sarangpur Branch, Ahmedabad was recorded on 10.1.94 wherein he deposed that he has been writing supplementary register of clearing and this register remains with him on the counter of the bank, that he as seen and verified page No. 89 of the supplementary register pertaining to the period from 3.12.92 to 6.9.93 and he had put his signature thereon; looking to that page, an entry on 21.7.93 has been written which was a cash entry on Rs. 1,55,387 and somebody has deliberately removed/erased the said entry; that he does not know as to who, when and why it has been done. On being specifically asked he stated that there are very rare entries for issuance of Demand Drafts against cash and it is being done so only when they receive instruction from the Head Office.
27. Whereas, statement of Shri Bharat Sumanlal Jani, in connection with the above; was recorded on 10.1.94 wherein he stated that he is serving as an officer with the Ahmedabad Urban Co-op. Bank, Sarangpur Branch, Ahmedabad since more that 1 1/2 years ago that in the morning of 21.7.93, as per the instructions of Shri Manilal Jayatilal Akani, then manager of the said branch draft slip had come to him from the Cashier after the receipt of cash for issuance of demand draft for Rs. 1,55,387 in favour of M/s. Trinity Shipping & Allied Services Pvt. Ltd., Gandhidham; that as the amount of the said draft was received in cash he had to draw the attention of the Manager because his bank is not issuing demand drafts against cash; that the Manager has signed in the draft slip and had instructed him to inform the Head Office for the issuance of the aforesaid draft; that on the basis of the draft slip; he had prepared advice and voucher to be sent to the Head Office; that advice regarding the issuance of the said draft was sent to the Head Office and the said draft No. 062061 drawn on State Bank of Bikaner and Jaipur D.N. Market Branch, Ahmedabad had come to him in the evening; that he had made an entry of the said draft in the draft issue Register and, thereafter, he delivered the draft to the party after obtaining his signature.
28. In the follow up action conducted by DRI, Bhuj and Customs (P), Bhuj the statements of various person connected with the import and transport of the said goods were recorded to show that the goods imported were Ball Bearings.
29. During investigation statement of Shri Kantibhai Manavbhai, Ex-peon of Shri Solly Perumal was recorded on 6.1.94 wherein he inter alia admitted that on 28.7.93 he had gone to Gandhidham Railway Station as per the instruction of Shri Solly Perumal; that he contacted a person at the station who handed over a black colour bag to him which he had brought and handed over the same to Shri Solly Perumal; that he does not know the contents of the bag; that the also does not know about the names and addresses of those two persons to whom he had met at the Gandhidham Railway Station.
30. Whereas, statement of Shri Om Prakash Punjabi was recorded under Section 108 of the Customs Act, 1962 on 1.9.93 in which he inter alia stated that he is the Proprietor of M/s. R.K. International, Ahmedabad and has partnership in other firms like M/s. Jyoti Exports etc. that Shri Suresh Dhoka looks after his (Om Prakash's) export work that Shri Sureshbhai gets the commission on purchase from M/s. Gulf Waves Trading Est. Dubai whose Manager is Shri Deepak Rampal; that Shri Sureshbhai is neither holding any post in his firm for any power of Attorney. Shri Om Prakash Punjabi has further stated that he had imported four containers in all which include three consignments of Yello Brass "Honey" and one container of Lead Scrap; that out of these four consignments, two consignments of Brass scrap and one consignment of lead scrap were imported in the name of M/s. Jyoti Exports; that the last container of lead scrap was cleared at Kandla Port vide Bill of Entry No. E 3058 dated 4.6.93 in the name of M/s. R.K. International, Ahmedabad and that he had sold the lead scrap covered under Bill of Entry No. E 3058 dated 4.6.93 to one Shri Noor Mohmmad of Ahmedabad.
31. In his further statement recorded under Section 108 of the Customs Act, 1962 on 3.9.93, 22.9.93, 27.9.93 and 1.10.93 Shri Om Prakash Punjabi had repeatedly stated that the details regarding the sale of lead scrap by M/s. R.K. International could be ascertained from Shri Suresh Dhokai and that Suresh Dhokai is not contacted.
32. Whereas show cause notice in respect of the aforesaid case has been issued proposing liabilities to confiscation of the Ball Bearings and lead scrap in this case on 27.10.93 by the Assistant Collector of Customs (SIB), Kandla and subsequently, an Adjudication order has been passed by the Collector of Customs Kandla on 5.1.94 ordering absolute confiscation of the goods.
33. The contention of the Revenue is that there are similarities in many ways in the consignment of M/s. R.K. International, Ahmedabad, M/s. Natraj Metals and M/s. Ram Metal Industries inasmuch as:
(i) Supplier is the same part i.e. M/s. Gulf Waves Trading list, Dubai.
(ii) Port of Shipping is the same.
(iii) All three consignments have been attended by the same C.H.A.
(iv) Shipping agent at Kandla Port is the same i.e. M/s. Mercatore Shipping & Ship Management Ltd., Gandhidham
(v) Commodity, Unit price of lead scrap and packing etc. are the same.
(vi) Country of Origin is the same.
(vii) The importers had resorted to manipulate the IEC code Nos. and signatures on the Bill of Entry and other connected Import documents.
(viii) The Bill of Entry in respect of M/s. Ram Metal Industries was assessed on the same day as in the case of M/s. R.K. International and M/s. Natraj Metals P. Ltd., Vadodara.
34. It would therefore, appear that the Invoice submitted by the Importer to the Customs House, Kandla at the time of clearance was not a genuine/authentic one. Over and above, similar such discrepancies have also been noted in respect of the invoice addressed to M/s. Ram Metal Industries, recovered from the C.H.A's (Trinity) Office on comparison with the Shipper's Invoice being received from the Department of Ports and Customs, Dubai such as:
(i) The Invoice number mentioned in the supplier's invoice is -- 105 whereas in the invoice recovered from the C.H.A's Office the number mentioned is 0106.
(ii) The signature appearing in the invoice No. 0106 recovered from C.H.A's Office.
(iii) The words (Freight Dubai to Kandla Pre-Paid) mentioned in the description column of the invoice recovered from the C.H.A. are different from the one received from Dubai.
(iv) Amount in words is wrongly mentioned in the C.H.A's copy (invoice No. 0106) whereas it differs that from the particulars mentioned in invoice No. 0105 received from Dubai.
35. Whereas, statement of Shri Om Prakash Punjabi was again recorded under Section 108 of the Customs Act, 1962 on 3.11.93 wherein he stated that in his earlier statement dated 27.9.93 he had assured the investigating officer that he would produce the evidence in respect of the sale particulars of the goods which he had sold to Noormohammad Nathubhai on 6.6.93 and which were imported by his firm M/s. R.K. International that he had made inquires about Shri Noormohammad Nathubhai and it was learnt by him that he (Sr. Noormohammad) had gone to Dubai and as such he could not produce the same under his statement dated 1.10.93 but, thereafter, he had contacted Shri Noorbhai over the telephone at Dubai and he had informed him (Noorbhai) and demanded his payment; that in reply thereof Shri Noorbhai had sent him a Fax message on 5.10.93 and he submitted a copy of the said fax message. He, further, stated that the goods which he had sold to Shri Noormohammad was the consignment of lead scrap imported vide Bill of Entry No. 3058 in the name of M/s. R.K. International on 4.6.93; that in the reply thereof Shri Noormohammad had sent a fax message that he had already sold about ten tons of goods out of that consignment and that remaining goods are lying in the godown of one Shri Mohammed Adambhai; that he does not know the person whose name was being mentioned in the fax message and he does not know his address even. Further, on being asked he stated that he does not know Shri Noorbhai's Dubai telephone and fax number; that he does not remember about the date when he had talked to Shri Noorbhai over the telephone and that the phone call was made by Shri Noorbhai.
36. Repeated summons were issued to Shri Om Prakash Punjabi on 17.12.93; 1.3.94; 22.3.94; 11.4.94 which were duly received either by his mother or his Manager but he did not appear before the investigating authority and his statement in the form of evidence was not recorded.
37. The contention of the Revenue is that the facts and evidence on record proves that Shri Om Prakash Punjabi smuggled Ball Bearings of foreign origin total 442,389 pcs. Valued at Rs. 2,40,26,202 in guise of lead scrap illicitly imported in the name of M/s. Ram Metal Industries, Kalali Road, Atladra, Vadodara, a fictitious/non-existing firm with the help of a CHA namely Shri Solly Perumal of M/s Trinity Shipping & Allied Services (P) Ltd., Gandhidham, who as per the instructions of Shri Om Prakash Punjabi had arranged to file a Bill of Entry under 'Self with assistance of his employee Shri M.K. Davis, who had signed the said Bill of Entry and other related import documents, under 'Self as per the instructions of Solly Perumal.
38. Shri Om Prakash Punjabi has also managed to smuggled in two earlier consignment imported and cleared in the same manner in the name of M/s. R.K. International, Ahmedabad vide Bill of Entry No. 3058 dated 4.6.93 and vide Bill of Entry No. 4120 dated 21.7.93 in the name of the fictitious non-existing firm Viz., Natraj Metals (P) Ltd., Nandesari, Vadodara with the help of Shri Solly Perumal and these two consignments also contained contraband goods. Shri Om Prakash Punjabi is the person behind the import in terms of financing and indenting of the consignment of Ball Bearings, illicitly imported in the guise of lead scrap. He has repeatedly involved himself in the fact of smuggling. The Customs Officers/Officials are also be liable as they abetted in illegal import of Ball Bearings.
39. It also appears that S/Shri Hasmukh N. Shah, Vinod Kumar Kalyan Vasant, Killubhai and Sharad K. Vasant are knowingly concerned and abetted in the smuggling of the above said Ball Bearings consignments.
40. It is also found from the evidence on record that Shri Kanaiyalal K. Punjabi and Jay Punjabi who has signed the import documents on the reverse of the Bill of Lading No. MOS/KDL/037 dated 14.7.93 in respect of M/s. Natraj Metals (P) Ltd., Vadodara is also concerned and part of conspiracy with the smuggling of Ball Bearing in the said consignment.
41. It also appears that Shri Kavil Gopalakrishnan was instrument in the clearance of consignment imported in the name of M/s. R.K. International and M/s. Natraj Metals (P) Ltd., Vadodara and he handed over the relevant import documents alongwith Customs duty Demand Draft to Shri Solly Perumal. Further, Shri Solly Perumal, K.V. Gopalkrishnan, Hasmukh R. Shah, Vinod Kumar Vasant and Killubhai and K. Valson Chandershekhar were present when the matter regarding the amount of consideration to be paid to the Customs Officers for clearance of contraband goods in guise of lead scrap was discussed.
42. Further, it appears that Shri Mahendra Doshi, then Assistant Collector at Kandla Port knowingly connived at the smuggling of ball Bearing imported in the guise of lead scrap by M/s. Natraj Metals and M/s. R.K. International, Ahmedabad. From the evidence on record, it appears that Shri Mahendra Doshi has gone upto the extent of going from Gandhidham to Ahmedabad with the CHA Shri Solly Perumal in his car dated 5.6.93 to verify the goods illicitly imported by M/s. R.K. International, Ahmedabad which were stored in the godown at 14, Ishwar Krupa Society, Aslali, Ahmedabad. Shri Doshi stayed in the same room in a Hotel with Shri Solly Perumal on 6.6.93 at Ahmedabad.
43. Further, it appears from the evidence on record that Shri K. Valson Chandrashekher, the then Inspector of Customs Kandla Port has played an important role by participating in the meeting held between Solly Perumal, Kavil Gopalkrishnan, Hasmukh Shah and Vinod Kumar Vasant and Killubhai when the amount of consideration to be paid to the Customs Officers for the clearing the aforesaid consignments. Further, it appears that Shri K. Valson Chandrashekher had also accompanied Shri Solly Perumal CHA to Ahmedabad and introduced Shri Solly Perumal with Shri Om Prakash Punjabi. It further appears that Shri Valson was at the time aware of the activities of the above-said persons involved in this case and their intentions to evade Customs duty by way of mis-declaring the goods.
44. It also appears from the evidence disclosed above that M/s. Trinity Shipping & Allied Services (P) Ltd., Gandhidham through its Director Solly Perumal and M/s. Radhakrishna Shipping (P) Ltd., Gandhidham through its Executive Director Shri K.V. Gopalkrishnan have knowingly abetted in the smuggling of Ball Bearing in the aforesaid consignments. It further appears that Inspector of Customs and Central Excise S/Shri K. Valson and J.N. Shaikh have knowingly abetted in the smuggling of Ball Bearings in the aforesaid consignments.
45. It also appears from the facts disclosed above that S/Shri M.K. Davis and P.C. Chacko, employees of M/s. Trinity Shipping and Allied Services (P) Ltd., Gandhidham are knowingly concerned with the smuggling of Ball Bearings in the aforesaid consignments.
46. It also appears that Shri Sunil Vadilal Mehta of Ahmedabad of knowingly concerned with the storage of Ball Bearings imported in the consignment of M/s. R.K. International and M/s. Natraj Metals (P) Ltd., Vadodara and Shri Noormohammad of Ahmedabad is knowingly concerned with the disposal of the Ball Bearings imported in the aforesaid consignment of M/s. R.K. International, Ahmedabad.
47. That all the respondents in appeals filed by the Revenue have conspired to smuggle in Ball Bearings of different make, size and number totally 442,389 pieces under the concealment of 1460 kgs. of lead scrap collectively valued at Rs. 2,40,26,202 and smuggled in two consignment of Ball Bearings in the name of M/s. R.K. International and M/s. Natraj Metals, Vadodara.
48. Therefore, their acts of omission/commission by way of making conspiracy to import illegally (smuggled in) are in contravention of Section 111 of the Customs Act, 1962 read with Section 3 of the Import & Export Control Act, 1972 read with Clause 3 of the Import Trade Control Order, 1955. Therefore, the Ball Bearings attempted to be imported under Bill of Entry No. 004315 dated 30.7.93. In respect of M/s. Ram Metal Industries, under the guise of lead scrap were confiscated absolutely by the Collector of Customs, Kandla vide his order in original issued from F. No. S/10-4/94 on 11.1.94. Also the Ball Bearings imported illegally under the Bill of Entry No. 004120 dated 21.7.93 and 003-58 dated 4.6.93 of M/s. Natraj Metals and M/s. R.K. International respectively are also liable for confiscation (in absentia) under Section 111(d), 111(f), 111 (i) and 111(m) of the Customs Act, 1962 and the persons mentioned at Serial No. (i) to (xviii) are liable for penalty under Section 112 of the Customs Act, 1962.
49. Therefore, (i) M/s. R.K. International, Ahmedabad (ii) M/s. Ram Metal Industries, Vadodara (iii) M/s. Natraj Metals (P) Ltd., Vadodara (iv) Shri Om Prakash Punjabi (v) Shri Kanai Kumar Vasant and Killubhai (viii) Shri Sharad K. Vasant (ix) Shri Solly Perumal, Director of M/s. Trinity Shipping & Allied Services (P) Ltd. Gandhidham (xii) M/s. Trinity Shipping & Allied Services (P) Ltd., Gandhidham (xv) S/Shri M.K. Davis & P.C. Chacko, employees of M/s. Trinity Shipping & Allied Services (P) Ltd., Gandhidham (xvi) Shri Sunil Vadilal Mehta (xvii) Shri Noormohammed Ghoghari and Noorbhai cause to the Collector of Customs, Customs House, New Kandla as to why penalty should not be imposed on them under Section 112 of the Customs Act, 1962 for their act of ommission/commission as narrated above and why the goods viz., Ball Bearing imported illegally and cleared under Bill of Entry No. 004120 dated 21.7.93 and Bill of Entry No. 003058 dated 4.6.93 should not be confiscated absolutely alongwith lead scrap in absentia under Section 111(d),(f),(i) and (m) of the Customs Act, 1962.
50. Thereafter, subsequent to the issue of the subject Show Cause Notice, the statements of S/Shri Solly Perumal and K.V. Gopalkrishnan were recorded under Section 164 of the Criminal Procedure Code before the Metropolitan Magistrate,. Ahmedabad on 16.12.95. Similarly, the statements of S/Shri Nitin Nagakar and K.K. Mistry were also recorded by officers of the Directorate of Revenue Intelligence (DRI), Mumbai on 5.12.94. These statements have been incorporated in the Show Cause Notice by issuing as an addendum to Show Cause Notice.
51. S/Shri Solly Perumal in his statement dated 16.12.95 before the Metropolitan Magistrate, Ahmedabad under Section 164 of the Criminal Procedure Code inter alia stated that in the month of May 1993, Customs Inspector Shri Chandra Shekhar Valson came to his office in the evening and informed him that Shri K.V. Gopalkrishnan would give him documents for Customs clearance of lead scrap with bearings; that he should attend to it, that after 34 days K.V. Gopalkrishnan contacted him and he (Solly Perumal) told him that he would let him know after discussing the matter with the Assistant Collector Shri Mahendra Doshi; that he talked to Mahendra Doshi and was told that he (Mahendra Doshi) would decide the matter within 2-3 days; that after deciding the matter, he (Mahendra Doshi) told him that 30% amount would have to be paid that he communicated the same to Kavil Gopalkrishnan and he agreed to the same; that thereafter, Kavil Gopalkrishnan sent him the documents and as agreed, the goods were cleared without Customs checking; that Kavil Gopalkrishnan had given him the documents in the name of M/s. R.K. International and the goods cleared in the same name; that after clearance of the goods Shri Mahendra Doshi informed him that he wanted to see the goods; that he communicated the same to Kavil Gopalkrishnan; that Kavil Gopalkrishnan told that the goods would be shown in Gandhidham but later on, he informed that the goods could not be examined in Gandhidham as the consignment was being sent to Ahmedabad and in case the goods were to be seen, the officers would have to be taken to Ahmedabad; that Doshi Sahib agreed to examine the goods in Ahmedabad; that Kavil Gopalkrishnan gave him a slip (chit) on which a telephone number was mentioned and he was told that after reaching, Ahmedabad, he should contact on that phone number; that afterwards, he and Doshi Sahib went to Ahmedabad and phoned the number given by Kavil Gopalkrishnan; that the person who received the phone call informed them that they should wait there only and he was sending a vehicle; that thereafter, a black Fiat car came near their car and the driver of black Fiat car asked them to follow his car; that after some time, black Fiat car stopped in the city and from there they went in lift upto first floor and then the driver took them to a person in the office and the person introduced himself as Shri Sharadbhai, brother of the owner of Sadhana Transport Killubhai; that then Sharadbhai introduced Om Prakash Punjabi to Doshi Sahib; that thereafter, Sharadbhai took both of them for showing the goods; that Sharadbhai sat in their car and told the driver of the black Fiat to drive the car to the place where the goods were stored and they were to follow them; then they drove quite a far distance; that when the Fiat car stopped as also their car; they got down from their car and the driver of black Fiat car asked them to sit in their car and drove them to the godown; that the goods sent in the container were there and after unloading, they saw lead scrap and Ball Bearings; that thereafter, they returned to the place where their car was parked and went together for dinner; that after dinner, he along with Doshi Sahib went to Hotel Nalanda; that next day, he along with Doshi Sahib went to Vadodara from Ahmedabad; that there they went to Doshi Sahib's friend's office and then went for lunch along with friend and after lunch they left for Vallabh Vidyanagar for Doshi Sahib's father's house; that after sitting there for half an hour, they left for Gandhidham; that then after a day or two.
He (Mahendra Doshi) called him in his office and asked him the value of the goods; that he asked Kavil Gopalkrishnan, the value of goods and was told, it was Rs. 40 lakhs that 30% of Rs. 40 lakhs comes to Rs. 12 lakhs, which were to be given to the officer, that he told Doshi Sahib the value of goods; that he told him to ask Collector Nagarkar Sahib as to how much amount out of Rs. 12 lakhs was to be given to him; that accordingly, he visited Nagarkar Sahib's residence and was told by him (Nagarkar Sahib) that out of Rs. 12 lakhs, Rs. 8 lakhs was to be delivered at Mumbai and that he would tell afterwards where the amount was to be paid; that after a day or two, he (Nagarkar Sahib) called him in his office and gave him Bombay Telephone numbers 4126006 and 4136468 and was further told that Shri Mistry would be on those numbers and the amount was to be paid to him; that Hasmukhbhai phoned him and called him to his residence that when he went to his residence, then Killubhai and Kavil Gopalkrishnan were also there, that he told them to make payment early, as the officers were insisting the same; that Hasmukhbhai told that it would be done within a day or two and also told that other Clearing Agents charge 25% for such jobs and he should also arrange accordingly; that the promised to discuss the same with the officer; that thereafter, he talked over the matter with Doshi Sahib and he agreed that the amount for the next consignment would be at the rate of 25% and the same would have to be paid in Gandhidham only; that he communicated the same to Hasmukhbhai and that he agreed to it.
Shri Solly Perumal further stated that in the second or third week of July 1993, Kavil Gopalkrishnan gave him the documents of Natraj Metals and asked him to check up from Nagarkar Sahib that he had received Rs. 8 lakhs from Mumbai or otherwise; that he went to his office and enquired about it; that Nagarkar Sahib told him that he had received Rs. 8 lakhs; that the balance amount of Rs. 4 lakhs was given to him by Kavil Gopalkrishnan and same was given to Doshi Sahib; that Doshi Sahib told him to give Rs. 1 lakh to Dock Appraiser Shri Meena Sahib, out of that amount and as such, he delivered Rs. 1 lakh to Meena Sahib; that the documents which he received for Natraj Metals, he got the goods Customs cleared and handed over the container to Manojbhai Sadhana Transport, who told him that he was sent by Killubhai; that the goods in the container were not examined by the Customs; that Kavil Gopalkrishnan had given him a draft for Customs duty in respect of Natraj Metals but the Draft was not accepted by the Customs, as it was not of State Bank of India, Kandla Port; that Kavil Gopalkrishnan sent him in cash the amount of Draft which he got deposited in the Bank account of his employee Shri Chacko and got Draft issued for the payment of Customs duty; that later on Kavil Gopalkrishnan gave him a Draft of Rs. 1.5 lakh in the name of Trinity Shipping and that amount had been sued on payment to the officers; that he informed Kavil Gopalkrishnan that that amount was not sufficient and he told him that he would let him know within a day or two; that after a day or two, Kavil Gopalkrishnan informed him that in case there was urgency in getting the money he should send his man to Jamnagar to collect Rs. 3 lakhs; that he sent his employee Ashokbhai to Jamnagar to bring the cash but he brought Rs. 2.5 lakhs; that by adding Rs. 2.5 lakhs to the earlier collection of Rs. 1.5 lakhs; he gave Rs. 4 lakhs to Doshi Sahib.
Shri Solly Perumal further added that in the last week of July 1993, Chandrashekhar Valson came to him and asked him to accompany him to Ahmedabad and also advised to stop working with Kavil Gopalkrishnan; that he came to Ahmedabad and Chandrashekhar Valson took him to Jyoti Exports and introduced him to Shri Om Prakash Punjabi; that Chandrashekhar Valson assured Om Prakash Punjabi not to worry as he (Valson) would take care of all that; that then Om Prakash Punjabi introduced him to a person named Sureshbhai; that he was looking after all his affairs; that further, he alongwith Chandrashekhar Valson returned to Gandhidham, that after a day or two, he received a phone call from Om Prakash Punjabi who informed him that he was sending a man with documents alongwith duty draft; that next day, he received a phone call from a person who had been sent by Om Prakash Punjabi and he requested him to come; that he sent his employee, who brought the document and Rs. 1.5 lakhs in cash sent by Om Prakash Punjabi; that after half an hour, he received a phone call from Om Prakash Punjabi telling him as to why the cash had been sent and why duty draft could not be obtained and sent; that he (Om Prakash Punjabi) also told him that it was a small matter and he should get the draft prepared; that he got the draft made and submitted the documents in the name of Ram Metals for clearance; that after five days the consignment was seized. Shri Solly Perumal in his statement dated 16.12.95 further deposed that if any thing is left out in the said statement, the same had already been admitted in his statements recorded under Section 108 of the Customs Act on 29.12.93 and 30.12.93.
52. Shri Kavil Gopalkrishnan in his statement dated 16.12.95 rendered under Section 164 of Criminal Procedure Code before Metropolitan Magistrate, Ahmedabad inter alia disclosed the same fact.
53. In another case booked by the Directorate of Revenue Intelligence (DRI), a statement of Shri Nitin Nagarkar residing at 601, Primerose Society, Juhu Road, Santacruz (West), Mumbai was recorded under Section 108 of the Customs Act, 1962 on 5.12.94 wherein he, inter alia, stated that he was the Director of M/s. Sanija Marketing Private Limited having his office at 1014, Dalmal Tower, Nariman Point, Mumbai-21; that he was doing the business of Marble and Granite; that they were importing rough marble consignments from Dubai; that those consignments were imported under DEEC Scheme. He, further, stated that since he was new in the line of Marble import, the importation work was looked after by Shri K.K. Mistry, who is his friend and partner in M/s. Simplex Enterprises, Mumbai-12; that the clearing Agent was also introduced by Shri K.K. Mistry only. He further stated that since much of the work regarding import was handled by Shri K.K. Mistry, the details of all the imports of M/s. Sanija Marketing could be obtained from Shri K.K. Mistry.
54. In this regard, the statement of Shri Kerman K. Mistry, Partner of M/s. Simplex Enterprises, Mumbai-12 was recorded on 5.12.94 under Section 108 of the Customs Act, 1962 wherein he, inter alia, stated that M/s. Sanija Marketing had been advised by him to import marble under DEEC Scheme for which he arranged DEEC licences; that since Nitin Nagarkar of M/s. Sanija Marketing was not well versed, he gave all the guidance of all the imports; that he introduced Shri Nitin to Shri Harash Patel, a businessman in Dubai; that he had also accompanied Shri Nitin Nagarkar to Dubai where they arranged export consignment of marble in the name of M/s. Sanija Marketing Private Limited under DEEC Scheme. In his statement he also mentioned his telephone number as 4137919 and 4136468.
55. The statement dated 16.12.95 rendered by Shri Solly Perumal under Section 164 of the Criminal Procedure Code before the Magistrate stating that Shri Nagarkar, the then Commissioner of Customs, Kandla had desired to deliver Rs. 8 lakhs to Shri Mistry of Bombay Telephone Nos. 4126006 and 4136468 has been corroborated in the statement of Shri K.K. Mistry to the effect that Shri Mistry was available at Mumbai on telephone No. 4136468. Moreover, Shri Mistri is well known to Shri Nagarkar.
56. Thereafter, the Show Cause Notice was also issued to Shri Z.B. Nagarkar on the ground that he knowingly connived and abated in the smuggling of Ball Bearings imported in the guise of lead scrap by M/s. Natraj Metals and M/s. R.K. International, Ahmedabad.
57. The adjudicating authority imposed a penalty of Rs. 25 lakhs under Section 112-A of the Customs Act on Shri Solly Perumal and dropped the proceedings against the other notices. The present appeals have been filed against that order of adjudication.
58. Heard both sides.
59. The disputes arising in these appeals are to be examined in the backdrop of facts relating to three imports at Kandla between 4.6.93 to 30.7.93. One of the main issues to be considered is whether Om Prakash Punjabi is the real importer in all the three imports. Further, question to be considered is whether the goods imported under Bill of Entry dated 4.6.93 in the name of R.K. International and Bill of Entry dated 21.7.93 in the name of Natraj Metals Pvt. Ltd. contained ball bearings in the guise of lead scrap as was found in the case of import made in the name of M/s. Ram Metal Industries under Bill of Entry dated 30.7.93 and whether import of ball bearing was made in the guise of lead scrap or attempted to be made in the guise of lead scrap with the knowledge and connivance of the noticee officers.
60. It is the case of the Revenue that Om Prakash Punjabi who is admittedly the importer under Bill of Entry dated 4.6.93 in the name of R.K. International was the real importer under the fictitious name M/s. Natraj Metal Pvt. Ltd. and Ram Metal Industries. The adjudicating authority was not inclined to accept the above case put forward by the Revenue. It is contended before us by the Revenue that the Commissioner has erred in the above finding. After going through the entire gamut of evidence in this case we find that there are sufficient materials to connect Shri Om Prakash Punjabi with the imports made in the name of Ram Metal Industries and Natraj Metals Pvt. Ltd.
61. It is true that the main evidence on the issue lies in the statements made by Solly Perumal. We are not inclined to accept the contention that solly Perumal's evidence has to be rejected in toto for the reason that he had made several statements one after the other. On going through these statements we find that they cannot be rejected on the ground of contradiction. As a matter of fact, his statements are not contradictory as he is consistent in the allegations against different persons. On the other hand he comes out with more details in the later statements referring to involvement of more persons. It is relevant to note that as regards involvement of Om Prakash Punjabi in all the three imports, reference is made by Solly Perumal in his earliest statement itself. We also find that there are independent evidence to corroborate this part of the Solly Perumal's evidence.
62. In a statement given on 8.8.93 on the very day on which goods imported in the name of Ram Metal Industries were seized, Shri Solly Perumal refers to his filing Bill of Entry on 4.6.93 in the name of R.K. International on behalf of Shri Om Prakash Punjabi and to an information which he received later that the consignment contained ball bearings under the guise of lead scrap. He also states that Bill of Entry dated 30.7.93 was filed in the name of M/s. Ram Metal Industries on the instruction of Shri Om Prakash Punjabi. He further states that Shri Om Prakash Punjabi was found to be filing documents in different names. In the two statements which he had given on 8.8.93 he has referred to name of Suresh Dhoka (Suresh Bhai) a close associate of Shri Om Prakash Punjabi who used to bring shipping documents on behalf of Shri Om Prakash Punjabi. Solly Perumal has stated that Om Prakash Punjabi had sent the amount and all relevant papers such as invoice, packing list Bill of Lading and IEC Code through his carrier which was received by Shri Kanthibhai who was waiting at Gandhidham Railway Station. In his statement dated 1.1.94 Kanthibhai has corroborated the above statement of Perumal. Thereafter the money was handed over to P.C. Chacko, an employee of Solly Perumal who got the draft for payment of Customs duty.
63. When investigation was taken up by DRI in the matter of import in the name of Ram Metal Industries, Om Prakash Punjabi was in Bombay. Solly Perumal in his statement refers to the attempt made by Om Prakash Punjabi to get in touch with him during that time. This statement is corroborated by the statement of Suresh Kumar Dhoka on 18.11.93 which would show that Om Prakash Punjabi was making desperate attempt to get in touch with Solly Perumal on coming to know about the investigation by DRI. Om Prakash Punjabi has admitted that Suresh Kumar Dhoka is close associate in business.
64. According to Solly Perumal on 2.9.93 Shri Om Prakash Punjabi visited him at Hotel Natraj, Ahmedabad and talked with him for about 15 to 20 minutes. Om Prakash Punjabi specifically asked as to how the Customs people got the information in respect of the illicit import of ball bearing and Solly Perumal was asked not to reveal his name. There was also discussion regarding seeking anticipatory bail and other legal matters. It is true that Om Prakash Punjabi denies any connection with the consignment imported in the name of Ram Metal Industries. It is relevant to note that immediately after the seizure of the goods Om Prakash Punjabi had gone abroad and he was available for questioning only on 1.9.93.
65. We will now examine the case put forward by the Revenue connecting Shri Om Prakash Punjabi with the import in the name of M/s. Natraj Metal which is also admittedly a non-existing firm. Goods alleged to be lead scrap were imported under Bill of Entry dated 21.7.93 in the name of Natraj Metals Pvt. Ltd. In this case also it was found that IEC Code Number was fictitious. The allegation of the Revenue is that it was manipulated by omitting digit 8 from IEC Code of M/s. R.K. International. IEC Code of R.K. International is 098002578. The IEC Code used in respect of M/s. Natraj Metal Industry is 091002758.
66. There is ample independent evidence in this case to prove that Om Prakash Punjabi had made arrangements for payment of Customs duty in order to clear the goods imported in the name of M/s. Natraj Metal Pvt. Ltd. Shri V.K. Bhatt, Deputy Manager, State Bank of Bikaner & Jaipur, D.N. Market Ahmedabad had confirmed that on 21.7.93 they had issued a demand draft No. 62061 in favour of M/s. Trinity Shipping Gandhidham for Rs. 1,55,000 and the purchaser of the aforesaid draft was Ahmedabad Urban Bank Cooperative Bank Ltd., Ahmedabad. The demand draft was issued against cheque of the Ahmedabad Urban Cooperative Bank Ltd. In his statement recorded under Section 108 of the Customs Act, 1962 Shri Manilal Jayantilal Akhani, former Manager of Ahmedabad Urban Cooperative Bank Ltd. Sarangpur Branch, Ahmedabad stated that on 21.7.93 Om Prakash Punjabi who is the Chairman of Ahmedabad Urban Cooperative Bank Ltd. instructed him to issue a draft for Rs. 1,55,000 in the name of Trinity Shipping Gandhidham. He had also stated that two persons who came with the cash, namely Kishorbhai and Ashish Bhai are associated with Om Prakash Punjabi and they always used to come to the Bank in connection with the Banking transaction of the Chairman. He had to point to Shri Om Prakash Punjabi that there are instructions from Reserve Bank not to issue drafts for large amounts against cash. There is also evidence of Kamlesh P. Thakkar, Apprentice Clerk in the Ahmedabad Urban Cooperative Bank and Shri Bharat Sumanlal Jani, an officer of the Ahmedabad Urban Cooperative Bank, Sarangpur Branch which would all go to prove the active part played by Om Prakash Punjabi in getting the draft in the name of Trinity Shipping for the purpose of clearing the consignment in the name of M/s. Natraj Metal Pvt. Ltd. These officers' evidence would further show that subsequently there had been attempt to tamper with the records kept in the bank. The statement of Manilal Jayantilal would also show that in view of the instructions issued by Reserve Bank of India not to issue a draft for a large amount against cash, draft was got prepared from State Bank of Bikaner and Jaipur on the basis of cheque issued by Ahmedabad Cooperative Bank.
67. The overwhelming evidence as above connecting Om Prakash Punjabi in arranging the draft for clearing the consignment of M/s. Natraj Metal Pvt. Ltd. cannot be ignored. Apart from the above, no reason was placed before us by the learned counsel appearing on behalf of Om Prakash Punjabi to show that the above-mentioned Bank Officers had any motive to give statements connecting Om Prakash Punjabi with the issue of the draft.
68. We find merit in the contention of the Revenue that there are conspicuous similarities between the three imports. Eight items of such similarities have been referred in the earlier portion of this order (paragraph 33). It is relevant to note that Om Prakash Punjabi had not replied to the show cause notice which culminated in the adjudication order dated 5.1.94 confiscating the goods imported in the name of M/s. Ram Metal Industries. His conduct was one which would justify an adverse inference against him even though it was not so dealt with in the adjudication order dated 5.1.94. Taking into consideration all these facts, circumstances and the evidence adduced by the Revenue we are inclined to hold that Om Prakash Punjabi was the real importer of the consignment imported under Bill of Entry dated 30.7.93 in the name of M/s. Ram Metal Industries.
69. We will now examine the issue whether the Revenue has succeeded in proving that the two earlier consignments in the name of R.K. International and Natraj Metals Pvt. Ltd. contained ball bearings. There are sufficient metarials brought out by the Revenue to raise doubts about the genuine nature of imports by R.K. International and Natraj Metal Pvt. Ltd. Om Prakash Punjabi was exporting goods in the name of Jyoti Exports to Gulfwares Trading, the supplier of the three consignments in question. It is significant that there is no evidence regarding payment received for such export or payment made for the import by R.K. International. Suresh Kumar Dhoka had denied the statement of Om Prakash Punjabi that he had received remunerati on by way of commission from M/s Gulfwares Trading, Dubai. Shri Dhoka has also stated that he had prepared a local invoice dated 6.6.93 in the name of Noorbhai Ghoghari Ahmedabad but it was issued later as instructed by Om Prakash Punjabi. He also admits that amount of Rs. 3,89,928 shown in the invoice was not received from Ghoghari. The goods imported in the name of Natraj Metals Pvt. Ltd. were transported from Kandla to a warehouse at Ahmedabad even though the address of Natraj Metals Pvt. Ltd. was shown at Vadodara. The goods were stored in a warehouse for a short time and without any proper records. Revenue has relied on the statements of Solly Perumal and others to trace the movement of the goods under the above two imports. But when it comes to the actual identification of Ball bearings in these consignments there is lack of conclusive proof. Investigation has failed to prove the last link. There is no explanation forthcoming for the failure to verify the claim of Ghoghari that part of the consignment purchased by him was still kept in the godown.
70. Since we hold that the Revenue has failed to prove conclusively presence of ball bearings in the earlier two consignments, no liability could be fixed on other notices including the officers who allegedly were party to smuggling of ball bearings in the guise of lead scrap. Still it will not be out of place to observe that the conduct of some of the officers who were notices is not befitting their office for example Shri Mahendra Doshi who was the Assistant Commissioner, Kandla during the relevant period. In his statement dated 8.3.94 he had given the details as to how examination of the consignment imported by R.K. International and Natraj Metals Pvt. Ltd. was made. He was party to the procedure in both cases. He states that the consignment imported in the name of Natraj Metals Pvt. Ltd. was examined in the same manner as it was done in the case of R.K. International. He admitted that presence of Solly Perumal at the time of examination even though the CHA was shown as 'self. He, further, admits that Shri Solly Perumal brought the Bill of Entry as usual and he had not observed so keenly that the Bill of Entry was 'self. Thereafter when a specific question was put to him as to the where all he has met Solly Perumal, he answered that at his office and at the office of Solly at Gandhidham. The meeting at Gandhidham was in the first week of August 1993 in connection with the investigation regarding lead scrap. He categorically stated that he had not met Solly at any other place. When he was asked whether he was away from Kandla during the period from 4th to 7th June 1993, his answer was that mostly he was at Kandla and might have gone to his father at V.V. Nagar and he had not gone anywhere else. When a specific question was put to him as to whether he went to Baroda between 4th to 7th June 1993, his answer was in the negative. Thereafter when a statement was taken on 9.3.94 he admitted that he travelled with Solly Perumal during first week of June 1993 in the car belonging to Solly, they stayed in Hotel Nalanda at Ahmedabad overnight next day he went in the car with Solly to Baroda to meet Jaish at his office and therefrom to V.V. Nagar to see his father. He admits that he remained with his father only for half an hour and returned with Mr. Solly by car to Gandhidham. He admits that the stay at Hotel was arranged by Solly and the bill was paid by him. When he was asked whether he had taken permission from the Collector to leave the station, he answered that permission was taken over telephone. It is relevant to note that it is after the above trip with Solly that consignment in the name of Natraj Pvt. Ltd. was cleared. We need not expatiate much to observe that Mr. Doshi's conduct is not one expected of an officer of his cadre.
71. We do not intend to refer each and every officer involved in this case (because that enquiry is more appropriately in the area of administration) but generally we find that there is evidence in this case to show that they were associating too closely with CHA, which is inappropriate, given the nature of their duties. The then Commissioner of Customs, Kandla who passed the adjudication order dated 5.1.94 has also failed to coordinate the investigations of his officers with the investigations of DRI and to give a correct direction to the whole proceeding; On seizure of the consignment in the name of Ram Metal Industries, if immediate steps had been taken to follow up the movement of the goods cleared immediately before it in the name of Natraj Metals Pvt. Ltd., the result could have been different.
72. We have already entered a finding that Shri Om Prakash Punjabi is the real importer of the goods imported in the name of M/s. Ram Metal Industries. That was clear case of smuggling of ball bearing in the guise of cheap lead scrap. As against the declared value of less than Rs. 2 lakhs the assessed value is Rs. 2.4 crores. He is, therefore, clearly liable to penal action under Section 112 of the Customs Act. Taking into account the deliberate fraud involved and the value of the smuggled goods, we impose a penalty of Rs. 50 lakhs on Shri Om Prakash Punjabi. Appeal No. E/474/2000 filed by the Revenue is allowed as above. All other appeals filed by the Revenue are dismissed.
73. Now we come to the appeal filed by Shri Solly Perumal. Appellant does not dispute the role played by him in the smuggling of ball bearing in the consignment imported in the name of Ram Metal Industries. The only plea is that penalty imposed is too high keeping in view the fact that he was only an agent and he was an inexperienced youngster who entered business on the untimely death of his father. Taking into consideration all the facts and circumstances of the case we reduce the penalty imposed on Shri Solly Perumal from Rs. 25 lakhs to 5 lakhs. The appeal filed by Shri Solly Perumal is partly allowed as above.