“The conspiracy of money-laundering, which is a three-staged process, is hatched in secrecy and executed in darkness, thus, it becomes imperative for the State to frame such a stringent law, which not only punishes the offender proportionately, but also helps in preventing the offence and creating a deterrent effect.”
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld penalty on fraudulent availment of Excise Rebate.
The appellants in the present appeal are Riyaz Rafiq Padela and Mangaldas K. Patel.
During the period from 19.07.2005 to 24.03.2006, eighty-five claims of rebate were filed by five entities claiming themselves to be the merchant exporter with valid IEC number. After causing verification of Central Excise duty paid status of the goods from the Central Excise Range where the goods were manufactured and from JNCH from where the goods were exported, 19 rebate claims and which were sanctioned.
Based upon the intelligence and on subsequent investigations it was found that the goods were neither manufactured nor were exported and rebate claims were filed on the basis of fake documents. Thus, it was alleged that five merchant exporters along with various other co-noticees had defrauded the government exchequer. It was also found that the three merchant exporters whose rebate claims were sanctioned did not existed at all and were only created to defraud the government exchequer.
The Counsel for the first appellant submitted that the appellant has not forged or fabricated any documents. The allegation regarding making some entry in the seal covers is totally incorrect and without any basis. The Appellant has not made any entry in any of the documents as alleged.
The Counsel for the second appellant contended that the provisions of the Rule 26 of the Excise Rules are not attracted in the present case as sole allegation against the Appellant is with respect to the handling of documents for claiming the rebate.
The Counsel for the Revenue submitted that in the instant case detailed investigations have been carried out and it was comprehensively established that a conspiracy was hatched, fake documents viz. ARE-1, invoice etc, were fabricated, proof of exports was also fabricated, and claims submitted to Maritime Commissioner and even ineligible rebate was obtained by defrauding the Revenue.
The Coram comprising Sanjiv Srivastava, Member (Technical) and Dr. Suvendu Kumar Pati, Member (Judicial) observed that “From the facts as stated in the impugned order we are very clear in our mind that the appellants had conspired and perpetuated the alleged fraud by filing these rebate claims to defraud the exchequer of the amount claimed by them as rebate without payment of any central excise duty and without exporting any goods.”
The Tribunal also opined that “fraud vitiates everything”.
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