Document Fragment View

Matching Fragments

Lajja Ram

1. For hearing their appeal, M/s. Discware Private Limited (formerly known as Cyber Express Pvt. Ltd.) are required to pre-deposit a sum of Rs.1,00,00,000/- (Rupees One Crore only) imposed on them by way of penalty under Section 114 (1) of the Customs Act, 1962 (hereinafter referred to as the 'Act'). The allegations levelled against the appellants concerned fraudulently over invoicing the 205000 Compact Disc (CD) Roms for availing inadmissible higher credit under the Duty Entitlement Pass Book (DEPB) Scheme, in violation of the provisions of Section 18 (1) (a) of the Foreign Exchange Regulations Act, 1973, read with Section 11 of the Act, Section 11 of the Foreign Trade (Development & Regulation) Act, 1992 and Rule 11 of the Foreign Trade (Regulation) Rules, 1993. Among other allegations, it was alleged in the show cause notice dated 2.11.99 that some of the items entered for export were unsalable for non-technical fault of CD themselves, and in some cases, the goods in question were sub-standard/pirated softwares of little commercial value, traded in violation of the copyrights law. The adjudicating authority after discussing the defence of the appellants came to a finding that the transaction was not genuine. He noted that the buyers and the consignees did not have identifiable business and location, and concluded that the deal was "mysteriously ungenuine". For earlier consignments, he noted that there was sufficient evidence to conclude that neither the transactions were genuine nor the disclosed value was correct and obviously, one of the motives behind mis-declaration of value was to avail DEPB amount in an un-lawful manner in excess of that, which was actually admissible. The Commissioner of Customs, the adjudicating authority levied a redemption fine of Rs.50,00,000/- and a penalty of Rs.1,00,00,000/- on the noticee company.

3. We have carefully considered the matter. Serious charges regarding fraudulent availment of export promotion benefits had been levelled against the appellants in these proceedings. Serious irregularities in the repatriation of foreign exchange in respect of the exports already made were detected. In para-13 of the show cause notice, it was alleged that the whole transaction of attempting to export 205000 pieces of CD Roms under the 8 shipping bills mentioned in that notice, was bogus and not bonafide and was with intent to wrongly and fraudulently avail export benefits under the DEPB scheme. The declared FOB value of the consignment was of Rs.15,41,04,062/- while, it was found that a number of CD Roms attempting to be exported contained sub-standard/pirated software of little commercial value.

6. Presently, we are concerned with the disposal of the stay application. However, we note that in their communication dated 11.09.2000 the appellants had conveyed that the buyer was prepare to accept the consignment at reduced price if the shipment could take place by 30.09.2000, and had requested that if the export was allowed even on provisional basis, they would forgo the benefits of DEPB. We also take note of the allegations fact that two items in the CD were un-usable for non-technical fault of CD itself and that in case of some games, it was found that they were sharewares development by people proceeding in USA itself and it appeared that the CD Roms attempted to be exported contained sub-standard/pirated software of little commercial value and were being attempted to be traded in violation of the copy right provisions. (refer page 10 of the show cause notice). The adjudicating authority had come to a finding as under:-