ORDER

06.01.2025

FPA-FE-25/MUM/2011

The present appeal is preferred under section 19 of the FEMA,1999 against the Adjudication order No. ADJ/01/B/SDE/RAJ/2011/FEMA/2995 dated 19.01.2011, passed by the Ld. Special Director, whereby a penalty of Rs.25 Lacs was imposed on the Appellant.

FACTS IN BRIEF

2. The brief facts of the case are that information was received from Central Excise & Customs, Surat that M/s Siddha Exports had applied for rebate of Central Excise Duty by producing 15 fake shipping bills, related applications for removal of excisable goods for export (ARE-1s)and other related shipping documents, and fraudulently availed rebate of Central Excise Duty amounting to Rs. 28,61,529/-. It was reported that though the goods were not exported at all against the 15 fake Shipping Bills, M/s. Siddha Exports claimed & availed the rebate of Rs 28,61,529/- fraudulently; that M/s. Siddha Exports received total foreign exchange of US$ 10,54,310.36(FOB Value) against the aforesaid fake export as evident from the Bank Realization Certificates (BRCs) issued by UTI Bank Ltd., Ghod Dod Road, Surat, which was deposited in the Current Account of M/s. Siddha Exports bearing No. 047010200008280 by producing forged shipping documents to the Bank Authorities for negotiation.

3. M/s. Siddha Exports, was found to be a proprietary concern of Shri Kamal, Singh Sancheti. Statement of Shri Kamal Singh Sancheti, Proprietor of M/s. Siddha Exports, Surat was recorded before the Officers of Central Excise Department under Section 14 of Central Excise Act, 1944 on 20.09.2004, 21.09.2004 wherein Shri Sancheti, inter alia, stated that he had seen two letters dated 11.08.2004 &. 30.08.2004 of Customs CFS, Mulund shown to him and admitted that all the 15 Shipping Bills, the details of which are mentioned in those two letters, were forged and that the goods were not exported under those Shipping Bills.

4. Shri Ramasubramaniam V., Manager (Forex, Loans & Advances), UTI Bank, Surat, in his statement dated 04.10.2004 recorded by the Officers of Central Excise Department under Section 14 of Central Excise Act, 1944, stated that the UTI Bank Ltd. had not negotiated any export documents of M/s. Siddha Exports in any of these cases; that the payments in Foreign Exchange were received in their account in advance, i.e., before receipt of export documents by the Bank; and that as per the NOSTRO Statement, fund was remitted by order of M/s. Yakub N. Sons Holding (S) PTE. Ltd., Singapore at the request of M/s. Pee Jay Trading Co., Dubai through United Overseas Bank Ltd., Singapore.

5. Shri Kamal Singh Sancheti made an application for settlement before Settlement Commission, Additional Bench, Mumbai for settlement of the case. The Settlement Commission, vide its order File No. SC/WZ/Cus/225/Siddha/2004/7060 dated 21.02.2005, settled the matter so far as it pertains to the Show Cause Notice F. No. V(CH.54)15-06/OA/05-Addl dated 11.01.2005.

6. Statement of Shri Kamal Singh Sancheti was recorded under Section 37 of FEMA, 1999 read with Section 131 of the Income Tax Act, 1961 on 14.06.06. In his said statements dated 14.06.2006 and dated 10.12.2007, Shri Kamal Singh Sancheti stated that Siddha Exports was floated during financial year 2002-2003 and its account was with U.T.I Bank, Ghod Dod Road Branch, Surat.; that the export remittance was credited to bank account of M/s Siddha Exports with U.T.I Bank.; that the exports were made under DEPB scheme from Mumbai; that the goods exported were 100% Polyster Fabrics; that all exports documents i.e. GR Form, ARE-1, Invoice, Packing List, Bill of Lading etc., wherever applicable, were signed by him; that remittance were received from notifying part Peejay Trading Company. Dubai; that he did not physically make export as such exports were handled by Mr. Rajesh D. Mundra & Mr. Kamal D. Mundra both resident of A-1/401, Vasant Vihar, Udhana, Magdalla Road, Surat; that Mr. Rajesh D. Mundra & Mr. Kamal D. Mundra had told him that they had conf