Full Judgment
Therefore, they were taken up together and are disposed of under this common order.
2. We have perused the record and heard the learned Counsel appearing for appellant Shri Rajesh Sharma. In regard to appellant Shri Krishan Kumar, Counsel is not present despite notice.
3. The material facts leading to the passing of the impugned order (under which both the appellants have been penalised.) are that during May 1998, 3 ready-made garment consignments were exported from Ludiana, One M/s Indeep Implex, Ludhiana was the exporter and M/s Pooja Travels and Cargo Services, Ludhiana was the Custom House Agent in regard to the consignments. The consignments were declared at a total value of about Rs. 2.3 crores. The exporter was paid a drawback amount of about Rs. 40 lakhs towards these consignments.
4. Subsequently, one of the consignments was auctioned at the Port of the import Dubai for a paltry amount of Rs. 60,000/- (1% of the export value). This was because the consignee did not take the delivery of the goods. No Page 0313 payments were also received in India for the consignments. Thus, even as revenue paid Rs. 40 lakhs, no foreign exchange was earned.
5. Customs authorities carried out investigation as it appeared that a fraud had been committed and drawback claimed without carrying out exports of goods of commercial value for receipt of payment in foreign exchange. When the clearing agent Shri Krishan Kumar (second appellant) was asked about the exports on 7.9.99, he informed that he acted as an agent and the exports were arranged by Shri Mohinder Singh of M/s Riat Cycles and the first appellant Shri Rajesh Sharma. He also gave details about the export arrangements. His statement was to the effect that Shri Rajesh Sharma had delivered the export documents and OR forms. In his statement, Shri Mohinder Singh also stated to the involvement of Shri Rajesh Sharma in the export. The evidence collected was to the effect that the exporting firm was created for the purpose of carrying out false exports and Shri Rajesh Sharma was to arrange export consignments, buyers abroad and to receive payments from exports. Shri Krishan Kumar also stated that the drawback cheques were handed over to Shri Rajesh Sharma. He further admitted to receiving substantial commission from the drawback amounts.
6. Penalties have been imposed on the present appellants in the above facts and circumstances. We arc not going into the evidence and penalties imposed on other parties, since those issues are not relevant to the present appeals.
7. Contention of the learned Counsel for Shri Rajesh Sharma is that there is no documentary evidence whatsoever to link Shri Sharma to the export documents and banking transactions or receipt of the drawback cheque amounts or their encashment. It is the submission of the learned Counsel that a penalty of Rs. 12 lakhs has been imposed on Shri Rajesh Sharma only on the uncorroborated testimony of co-accused. Learned Counsel also points out that since Rs. 10 lakhs drawback amount has been returned by the exporting firm, it is to be held that exporting firm was the beneficiary of the drawback amounts and not Shri Rajesh Sharma himself.
8. We have heard the learned SDR, whose contention is that the entire evidence on record points to the fact that Shri Sharma and Krishan Kumar were the persons who engineered the fraud. He points out that in the export of valueless goods under false declarations, the role of Shri Rajesh Sharma is particularly important inasmuch as export documents (mentioning the particulars of the alleged foreign consignee) were handed over to the clearing agent by him. It is also on evidence that Shri Rajesh was present during the export of the goods. Learned SDR also points out that Shri Sharma would also appear to be the beneficiary of the fraud inasmuch as it is the evidence of Shri Krishan Kumar that drawback cheques were handed over to him. With regard to Krishan Kumar, the contention of the learned SDR is that, as a clearing agent. Shri Krishan Kumar abused his position by filing false papers and deriving profit from it. Learned SDR would conclude by saying that perpetration of huge fraud is clear and remains established from the fact that the alleged consignee has not even taken delivery of the Page 0314 goods abroad at all and no payments were received for the goods.
Further, the exporting firm was closed along with its bank account shortly after committing the fraud. From the closing of the bank account, it is clear that exporters had intention or hope of receiving any payment towards the export carried out. They deliberately only committed fraud on the Government by deriving drawback amount, Learned SDR would also submit that it is on evidence that despite the filing of GR forms with the export consignments these papers were never filed with the bank for receiving payments.
9. Clearly, fraud has been deliberately committed and State deprived of about Rs. 40 lakhs. A close consideration of the evidence on record brings out that appellant Shri Rajesh Sharma was the one to arrange to the export goods, purchasers abroad and to arrange remittances. While statements have been recorded from many persons, no other person has come up as the one arranging these vital pans of the fraudulent transactions. The statement of Shri Krishan Kumar in particular, who dealt with the goods is to the fact that export consignments and documents were arranged by Shri Rajesh Sharma. In these circumstances, imposition of penalty on Shri Rajesh Sharma is fully justified. As regards the objection that the only evidence is that of co-accused, we find that the clearing agent was not in the position of an accused at the time of recording his statement. Since he played a part in the export process, investigating authorities considered him as the first person to contact to verify facts known to him and Shri Krishan Kumar narrated events, persons and roles. Therefore, we are of the view that evidence of Shri Krishan Kumar cannot be considered as evidence of a co-accused. There is also no evidence that Krishan Kumar bore any malice towards Shri Sharma and falsely implicated him.
10. As regards Shri Krishan Kumar, we find that he has admitted to playing a role in carrying out the exports and benefiting from it. He held a position of trust as a Customs agent. It was entirely wrong on his part to file false papers knowingly, and to derive benefit from it.
Therefore, imposition of penalty on him is also entirely justified.
11. In the findings we have readied above, there is no reason to interfere with the order of adjudication. The appeals fail and are rejected.