(1.) The petitioner faces prosecution under Section 135 of the Customs Act for alleged evasion of customs duty to the tune of Rs.1.27 crores.
(2.) The petitioner, as proprietor of M/s Pioneer Soap and Chemicals, imported Crude Palm Oil (non-edible grade) for manufacture of washing soap at concessional rate of customs duty during the period of 13th January, 2005 to 11th August, 2005 against 6 bills of entry. He thus against 65% of normal customs duty, while seeking exemption in respect of six consignments of imported raw material, deposited in cash duty at concessional rate of 20% and out of balance of 45%, 20% was secured by FDR and the rest of 25% by furnishing bonds. The petitioner in all imported consignment to the extent of 1371.878 MT during the said period availing benefit of payment of only part of duty. Against six bills of entry, bonds against four bills of entry were later discharged and FDRs returned to the petitioner.
(3.) According to the prosecution, the petitioner availed benefit of concessional rate of customs duty by furnishing false returns and fabricated documents to the jurisdictional Central Excise Authorities. The statements of witnesses show that the consignments were, in fact, diverted to the Ghee manufacturers in U.P. and Haryana and no washing soap was actually manufactured by him, as claimed. It was pointed out that the applicant was functioning under Self Assessment Scheme and as such he was only to maintain a simple account in respect of receipt and consumption of the imported raw material for production before the Assistant Commissioner of Central Excise as and when so required. As a certain degree of trust had to be reposed under the Self Assessment Scheme in the matter of maintenance of the records by the petitioner, the records maintained by him, were not being officially checked. The bonds in respect of four bills of entry out of six were discharged and FDRs released to the petitioner on a bonafide assumption that the relevant records were being truly and correctly maintained.