Relied upon document - verbal communication?
The Judge asked, "Tell me, what is the Criminal charge against the accused?" The Prosecutor replied, "His neighbour feels this fellow is a criminal". Judge asked, "Neighbour feels!!! Is there any proof of guilt?" The prosecutor replied, "No, My Lord! It is only a gut feel. But the neighbour is a distinguished person!" The Judge threw, both the case and the prosecutor, out of the Court!
This is not an imaginary scene but a real nightmare! DDT came to know of a spate of show cause notices issued to assessees, based on frivolous grounds, across the Central Excise Commissionerates of South India. The facts are :
A merchant exporter has procured cotton yarn from various spinning mills, following the prescribed procedures ( B1 bond, CT 1, etc). All these goods were consigned to various destinations in Bangladesh. Subsequently, all the necessary documents and endorsements required for the "proof of export" have been duly obtained by the merchant exporter and the respective departmental officers have duly accepted the "proof of export".
Now, the Additional Director General, DRI, New Delhi receives a letter from the Embassy, stating that the goods exported by the said merchant exporter, have not reached the destinations. In the said letter, it is also mentioned that the said information is based on a "Verbal Communication" by the Commissioner of Customs, Benapole, Bangladesh. This letter has been duly communicated to the Departmental officers having jurisdiction over the various spinning mills, which had supplied the yarn to the merchant exporter.
Based on the said communication, the Department has religiously started issuing Show Cause Notices to the various spinning mills alleging that the exports have not taken place and has proceeded to demand duty from the spinning mills, for such exports made through the merchant exporter. There is no whisper, whatsoever, in the Show Cause Notices except the reliance based on the "Verbal communication".
Having got all the essentials to prove the exports have duly taken place and also having been issued with the "proof of export" by the department itself, the assesses are aghast, as to how to defend their case! It is also learnt that, when the hapless assessees approached the Colonels of the department for redressal, the officers made them run from pillar to post, finally suggesting a Royal Solution! "Approach the Embassy!" Even though ultimately the merchant exporter is going to fight and win the case, because of the fact that, except the "Verbal communication" there is no other extra evidence placed on record to prove that the exports are bogus, it shall take the pain and time of the adjudication process, to come out successfully. It is an easy guess that the issue may travel to the CESTAT to get redressed. Over and above, does anyone care for the irreparable loss of face, it shall cause to the merchant exporter with the spinning mills?