ORDER
S.S. Sekhon, Member (T)
1. Appellant was issued along with others a Show Cause Notice proposing, as regards this appellant, as –
i) Why the amount of drawback Rs. 18,16,612/- against the export of goods for which full remittance has not been received should not be demanded or recovered under Rule 16 & 16A of the Custom & Central Excise Duty Drawback Rules 1995 read with Section 76(1) (b) of the Custom Act 1962.
ii) Why the duty drawback of Rs. 3,58,486/- against the export of the goods vide shipping bill No. 1093202 dated 9.11.1998 for which the remittance has not been recovered should not be denied.
iii) Why the goods should not be held liable to be confiscated under Section 113(d) & 113 (1) of the Customs Act 1962 and in case of their non-availability, why the redemption fine in lieu of confiscation be imposed.
(iv) & (v) Why the penal action should not be taken against him under Section 114 and why interest should not be demanded under Section 75A(2) of the Customs Act 1962 on the wrongly paid amount.
2. During the course of an enquiry against M/s. Surendra Exports Pvt Ltd regarding fraudulent avail the DEPB credit, it was also learnt that the company had also exported 5 consignment of garments of overvaluing the same and exported them to M/s. Mondial General Trading, Post box No. 1154, Ajman, UAE & had claimed a drawback of Rs. 21,75,098/- and had been sanctioned and paid by Commissioner Nhava Sheva a sum of drawback amount of Rs. 18,16,612/- and amount of Rs. 3,58,486/- was kept pending. The director of the exporting company’s statement and enquires revealed –
i) Balance of US $ 222625.00 of total amount of US $ 286687.50 was outstanding as remittance was not received by the bank.
ii) Director gave the statement that the appellant, herein, the proprietor of M/s. Jain Enterprises, was the real owner of the Exporting Company, and he was paying him salary of Rs. 25,000/- per month.
iii) Appellant has said to have purchased the exporting firm, from Shri. R.K. Jain, CA and made the two persons, as directors, and was paying their expenses and that he had admitted to the purchases and exports of the garment in question of declared value at Rs. 7 – 8 lakhs. Value declaration was inflated for Rs. 15 Lakhs to Rs. 1 crores and an amount of Rs. 5 lakhs was paid to our Shri. Chandragupta, a Custom House Agent of Nhava Sheva.
iv) The show cause notice was issued to the exporting firm, the two directors & Shri. Chandragupta. The adjudicator ordered the recovery of drawback from the exporter firm with interest, denied the pending drawback and ordered the confiscation of the goods under Section 113 (d) and 113 (i) as exported on all the five shipping Bulls and found that as the goods were not physically available for confiscation, he imposed penalty of Rs. 10 lakhs on the present appellant amongst others. Hence this appeal.
3. Heard both sides and considered the issues –
a) There is no meterial on record that the appellant had acted in any manner, as regards the activity of Export of the goods subsequent to filling of Shipping Bill under Section 50 of Customs Act, 1962. The statements recorded are contradictory, while the statement of the appellant, as relied, records that Shri. Chandragupta is a Custom House Agent, who was paid; this Shri. Chandragupta statement, as relied upon, reveals that he only came to know Shri. Rajesh Agarwal as an Exporter through the appellant and he had introduced Shri. Rajesh Agarwal to Shri. J.N. Pandey an employee of the Custom House Agent. Rajesh Agarwal, as it appears from Paragraph 4 of the impugned order is a self-admitted liar prone to giving false statements. The paragraph records –
….that in his previous statement he had wrongly stated that he had received his salary from Shri. Deep Sarup Agarwal and that had been introduced to Shri. Deep Samp Agarwal by Shri. Bimal Kumar Jain’.
This shifting, in stand by the Director of the Exporting Co, and the retractions of the admissions, allegedly made by the appellant, in the statements recorded from him, when produced before the Magistrate, the admitted position, of paragraph 5 of the order, that Shri. Rajesh Aggarwal gave incorrect false address of his residence and also about his relationships with owner of the firm, are reasons enough to induce the rejection of the only material on implication of this appellant, in and knowledge, about the affairs of the exporting company. A conclusion that Rajesh Aggarwal is trying to shield and transfer the blame on some one else by implicating the appellant can be inferred. There is no material to attribute any pre-concert or post, Section 50, concert of the appellant herein.
b) There is no material which could be relied upon of the involvement to extend a remote concert of the appellant with the subject exports, especially as regards any act or abetment thereof or to any act or omission which would render the goods liable to confiscation. The appellants alleged acts about procurement of the exporting firm by purchase from a Chartered Accountant, is not corroborated in any manner in the impugned order as also the alleged knowledge about procurement of the garments. Introduction of Shri. Chandragupta established, would only render such abetment & assistance in the realm of ‘Preparation to Export’ and not ‘attempt or successful exports’. “Preparation to Export” is not covered under Section 113(d) which covers ‘attempts’ and or Section 113 (1), which covers “goods entered for exportation under claim for drawback which do not correspond in any material particular with the entry made under the Act or…” As entry in the case of Exports would, as per Section 2 (16) of Customs Act, 1964 would be’ entry’ made only on the Shipping Bill filed, under Section 50 of the Act, No actions, wilful participation or knowledge there off in this activity, after such an entry was made, under Section 50 of the Customs Act 1962, is brought out in the order against the appellant. The penalty under Section 114 of the Custom Act 1962 as arrived could be therefore not upheld.
4. The appellant is not contesting the liability to confirmation or the drawback recovery, no finding on that aspect are being arrived in this case.
5. Consequent to the finding herein, the penalty on the appellant is required to be set aside. The order of the Commissioner is to be set aside only to that extent and the appeal allowed in these terms.
6. Ordered accordingly