Customs, Excise and Gold Tribunal - Delhi
Jagmohan Singh Sawhney vs Collector Of Customs on 11 October, 1994
Equivalent citations: 1995(75)ELT350(TRI-DEL)
ORDER S.D. Mohile, Member (T)
1. Heard both sides. The facts of the case are given in the SCN. In brief the appellant has been subjected to a penalty of Rs.35,000/- for trying to clear 2.00 lacs pieces of Tungsten discs valued at Rs.1.60 lac on behalf of a non-existing firm M/s Deep Trading Co., by filling a B/E through one Subhash Dhingra an employee of CHA Licence No. 6/77 of Col. M.L. Sharma (Retd.).
2. Learned Advocate denied that the appellant had filed the B/E for the said goods. He claimed that Jagmohan Singh who was the proprietor of M/s Deep Trading Co., was different from the present appellant and that the appellant had not been identified by Sh. Subhash Dhingra as the person who signed the B/E.
3. Learned S.D.R. reiterated the order in original.
4. Considered. The appellant has claimed that he has been falsely implicated. As against this, there is the statement of Sh. Dhingra against him. He has claimed that he had offered to be confronted by Sh. Dhingra to determine whether he was the same Jagmohan Singh who had signed the B/E. It is seen from the order in original that though a number of summons were issued to him for the above purpose, he failed to appear before the AC.
5. From this only an adverse conclusion has to be drawn that he was the same Jagmohan Singh who was named by Sh. Dhingra. On the basis of preponderance of probability the charge against him has been rightly held as proved and the penalty imposed upon him is confirmed.
6. The appeal is without merits and is rejected.
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(S.D. Mohile)
Dated 17-9-1993 Member (T)
ORDER
S.L. Peeran, Member (J)
7. I have gone through the order drafted by my learned brother but I could not persuade myself to agree with the same, hence, I am recording my separate order.
8. In this appeal, the appellant is aggrieved with the imposition of personal penalty of Rs. 35,000/- by the Additional Collector of Customs, New Delhi, under Section 112 of the Customs Act, 1962, on the allegation that the applicant was trying to clear 2 lakhs pieces of tungsten discs valued at Rs. 1,60,000/-. These goods are sought to be restricted items under Import Trade Control Act.
9. The allegation made against the appellant as made out in the show cause notice dt. 1-4-1987 that the officials of Customs (Preventive) staff of IGI Airport, New Delhi gathered information that two packages arrived by PAN AM Flight PA. 66 on 7-7-1986 covered by PAN AM Airway Bill No. 026-61441015 and Housing Airway Bill No. 005087 and import general manifest No. 517786 consigned to M/s Deep Trading Company, New Delhi containing contrabands. The M/s Deep Trading Company had filed a Bill of Entry No. 34974 dtd. 10-7-1986 through the clearing agent Mr. Sharma, Customs House Agent No. 6/77 for the release of above two packages from the Customs said to contain Tungsten Discs. Enquiries were made which revealed that the above M/s Deep Trading Company was not in existence at the above address given above. The said two packages were, therefore, opened and examined in the presence of two panch witnesses on 17-10-1986 and which revealed that it contained 2 lakhs pieces Tungsten Discs valued at Rs. 1,60,000/- and the same were seized under section 110 of Customs Act, 1962. Further, enquiries were made and Col. M.L. Sharma who denied the above said Bill of Entry. Col. Sharma is said to have stated that the Bill of Entry was filed by one; that his employee Shri Subhash Dhingra has filed the Bill of Entry in the name of M/s Deep Trading Co. and it was later withdrawn. He, further, stated that he had no further knowledge and Sh. Subhash Dhingra would be able to explain the matter. The statement of Shri Subhash Dhingra was recorded on 3-11-1986 who admitted having filed the said Bill of Entry on 10-7-1986. He has further stated that Shri Jagmohan Singh Sawhney claiming to be a proprietor of M/s Deep Trading Company came to him and asked him to return the said Bill of Entry as he was not interested in getting the goods cleared through them. Shri Jagmohan Singh Sawhney, applicant is said to have given a letter to Shri Subhash Dhingra to this effect and therefore, Subhash Dhingra returned the Bill of Entry to Shri Jagmohan Singh. Shri Subhash Dhingra has further stated that he was introduced to M/s Deep Trading Co. through his friend. Shri Subhash Dhingra has further stated that he does not know Shri Jagmohan Singh who was in a position to identify him. Therefore, the applicant Sh. Jagmohan Singh Sawhney was summoned to the office and his statement was recorded. Shri Jagmohan Singh Sawhney in his statement recorded on 28-1-1987 denied having any connection with the said firm M/s Deep Trading Co., has totally denied his connection with the firm or having dealt with any business with the said firm. He has also denied having filed the said Bills of Entry and also denied the signature on the Bill of Entry as well as on the letter-head of M/s Deep Trading Co. He stated that Shri Jagmohan Singh Sawhney said to be the proprietor of the firm may be a different person. Therefore, the Customs Authority issued further summons to Sh. Jagmohan Sawhney who did not turn up to give any statement to the Customs Office prior to confiscation. Therefore, the goods were seized (and confiscated) on 17-10-1986 under Section 110 of the Customs Act. On all these facts the said show cause notice was issued to Shri Jagmohan Singh Sawhney. The Customs Authorities have relied mainly on the statements of Subhash Dhingra given on 3-11-1986 and 3-12-1986 to implicate the applicant Sh. Jagmohan Singh Sawhney. The learned Additional Collector has passed a very brief order. The order reads as follows :
"I order that the above goods i.e. 2 lakhs pieces of Tungsten Discs valued at Rs.1,60,000/- be confiscated under Section 111 of the Customs Act, 1962. I do not give any option to redeem the same because there are no claims for the same. I further, impose a personal penalty of Rs. 35,000/- on Mr. Jaghmohan Singh Sawhney (Rupees thirty five thousand only) for trying to clear the same fraudulently which are restricted under Import Trade Control Act under Section 112 of the Customs Act, 1962. I do not take any action against the CHA or anyone else because they have not been issued the Show Cause Notice."
10. Sh. Naveen Mullick, ld. advocate assailed the findings given in the impugned order and also pointed out to the prima facie findings given by the Bench in the stay order (since reported in 1992 (41) ECR 687) pointing out from the statement of Subhash Dhingra. Sh. Mullick, argued that even Subhash Dhingra's statement is vague and evasive while pointing out to the person, who had filed the Bill of Entry and he had given the name as Jagmohan and not as 'Jagmohan Sawhney'. On summons being received the appellant had appeared before the officers and gave a statement on 28-1-1987 which is at page 10 of the paper book. The appellant had clearly stated that he is Jagmohan Singh Sawhney and he was not at all concerned with the firm M/s. Deep Trading Co. and he never dealt with the said firm nor he had any business interest with this firm and that he had not filed the said Bill of Entry dt. 10-7-1986. The signature on the Bill of Entry as well as on the letter-head of Deep Trading Co. are not his signature and that this Jagmohan Singh, proprietor of the firm is a different person. Shri Mullick pointing out to these materials argued that no reasonable person will come to this conclusion that the appellant is guilty of any offence. Moreover, the statement of Subhash Dhingra had not been corroborated, nor the department had examined him as a witness nor the statement of the agent Col. M.L. Sharma (retired) was recorded. He argued that the department had also not got the signatures on Bill of Entry, letter-head of Deep Trading Co. with those of the appellant checked by a handwriting expert. Nor the department had independently brought forth any evidence to link appellant with M/s Deepak Trading Co. He pointed out that the department ought to have charge sheeted the employee Sh. Subhash Dhingra and Col. M.L. Sharma (Retired), who were the actual guilty persons to have presented the Bill of Entry and by not so doing, the department had failed to prove their case. Shri K.N. Gupta, ld. SDR agreed that there were infirmities in the findings recorded by the learned authority but however, he reiterated the findings. He also pointed out that the goods were not banned one but only prohibited goods.
11. I have carefully considered the pleadings of both sides. The department has not proved the charges. It is well settled and established principle of jurisprudence that a mere statement of a co-accused cannot be used against any accused, unless it is corroborated by unflinching evidence. Further, it is well settled that suspicion, however, grave it might be, it cannot take the place of proof. It is equally well settled that even in a case of circumstantial evidence, each circumstance should point to the guilt of the accused and each circumstance should be proved. It has been laid in number of rulings of the Hon'ble Supreme Court, that in cases where evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should (1) in the first instance, be fully established, (2) and all the facts so established should be consistent only with the hypothesis of the guilt of the accused; (3) again the circumstances should be of a conclusive nature and tendency, (4) and they should be such as to exclude every hypothesis but the one proposed to be proved. In other words, there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that, within all human probability the act must have been done by the accused (see: Hanumant Govind v. State of M.P. AIR 1952 SC 343, Rahman v. State of HP. AIR 1972 SC 110). It has also been held that the court must guard against the danger of allowing conjecture or suspicion to take place of legal proof (see : Charan Singh v. State of U.P. AIR 1967 SC 520). Even if a single circumstance is disproved then the case fails (see: in re Naveen AIR 1958 A.P. 235, in re Madegowda AIR 1957 Mysore 50. Therefore in this case, the statement of Subhash Dhingra is not at all conclusive, he has not identified the appellant nor he gave any identifying features or full name of the appellant. Can his mere uncorroborated and untested testimony sufficient and enough to hold the charges as proved. The answer is emphatic No. Subhash Dhingra is the person, who has railed the Bill of Entry. No show cause notice to him or to the agent Col. M.L. Sharma (Retired) has been issued. This itself raises suspicion in my mind regarding the genuineness of the case. It is not as though the appellant has not appeared before the officers in response to the summons. He has appeared and emphatically denied the allegations. The department except the bald statement of Subhash Dhingra, who is also in a way a person involved in this affair, there is nothing on record to link the impugned Bill of Entry with the appellant. There is practically no reasoning given by the learned authority to hold the appellant guilty. Besides, there is absolutely no justification for imposing penalty of Rs.35,000/- nor any reasons assigned for the same. The goods are not banned items but only prohibited items. To impose penalty, mens rea has to be proved as held in Merch Spares Delhi v. Collector of Central Excise, New Delhi 1983 (13) E.L.T. 1261 in paras 5 to 8. The said paras are noted herein below:
"It is axiomatic that the proceedings relating to the levy of penalty are criminal and penal in character. It is also a fundamental principle of criminal jurisprudence that the requisite metis rea has to be proved before the appellant could have been visited with a penalty.
A perusal of the orders of the Adjudication Officer as well as the Appellate Collector would reveal that they had altogether failed to reveal that the requisite mens rea had been established. In the course of the arguments before us as well, the learned representative for the Revenue had not been able to establish any whatsoever.
Admittedly, the appellant had produced the relevant bills, if not at the time of the search, immediately thereafter. The Bills fully accounted for the entire lot. Even so, the Appellant, as per the statement of the Counsel, is not interested in the release of the goods covered by the first Bill from confiscation. The second Bill relates to 19 set of Main Thin Walled Engine Bearings. There is no finding anywhere in the orders of authorities below either that they were smuggled goods or that they were acquired by the Appellant who knew or had reason to believe that they are liable to confiscation under Section 111 of the Customs Act, 1962. In fact, the orders did not deal with the said charges at all nor did they discuss the mens rea anywhere.
In the premises, keeping in view the case law cited, we have no doubt, whatsoever, that the confiscation of the 19 sets as well as the levy of the penalty on the appellant was unsustainable. We accordingly, allow the appeal, order the release of the 19 sets of Main Thin Walled Engine Bearings confiscated and cancel the levy of penalty on the appellant."
In the result, I hold that the department has not proved their charges and the appeal is thus required to be allowed. Ordered accordingly.
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(S.L. Peeran)
Dated 23-9-1993 Member (J)
POINTS OF DIFFERENCE OF OPINION
In view of difference of opinion between the members the following question arises for determination by third Member. Hon'ble President may be pleased to refer the matter to third Member for resolving the difference as per law:
1. Whether the appellant has attempted to clear the impugned goods fraudulently which are said to be restricted goods under Import Trade Control set under Section 112 of the Customs Act, 1962 and imposition of penalty of Rs. 35,000/- is justified under Section 112 of the said Act, as held by learned Member (T) and appeal to be dismissed.
OR
2. The department has not proved its case and the imposition of Rs. 35,000/- as penalty is not justified and appeal to be allowed as held by learned Member (J)-
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(S.L. Peeran) (S.D.Mohile)
Dated: 5-10-1993 Member (J) Member (T)
DIFFERENCE OF OPINION
G.R. Sharma, Member (T)
12. This case has been referred to me for decision in view of the Difference of Opinion between the two Members of the Bench. The points for decision are :-
"1. Whether the appellant has attempted to clear the impugned goods fraudulently which are said to be restricted goods under Import Trade Control set under Section 112 of the Customs Act, 1962 and imposition of penalty of Rs.35,000/- is justified under Section 112 of the said Act, as held by ld. Member (T) and appeal to be dismissed.
OR
2. The department has not proved its case and the imposition of Rs.35,000/- as penalty is not justified and appeal to be allowed as held by ld. Member (J)."
13. When the case was called, Shri Naveen Mullick, the ld. Advocate appeared for the appellant and more or less repeated arguments and pleas as made before the Bench and quoted extensively by the ld. Member (J). The ld. Counsel emphasised that there was no evidence whatsoever on record except the evidence of Sh. Subhash Dhingra which was not corroborated by any other evidence and that the appellant was never confronted with Sh. Subhash Dhingra to prove the point that Sh. Jagmohan Singh Sawhney was the person who had signed the Bill of Entry and who had presented himself as a Proprietor of M/s Deep Trading Co.
14. Shri V.C. Bhartiya, the ld. JDR appeared for the respondent and reiterated the submissions made before the Bench earlier.
15. Heard the submissions of both sides and considered the judgments proposed by the two Ld. Members. The short point to be examined was whether there was evidence adequate enough to justify the penalty of Rs. 35,000/- on the appellant. I find that the only evidence on record implicating the appellant is the statement of Sh. Subhash Dhingra. However, I also observe that both Shri Subhash Dhingra and the appellant were never together confronted each other to establish the identity of the appellant as the person who had signed the Bill of Entry and had given a letter to Subhash Dhingra requesting the withdrawal of Bill of Entry. Even the signature on the letter given for withdrawal of Bill of Entry as also the signature in the Bill of Entry were not verified to establish the identity of the person who signed these two documents. I also find that the Member(J) had discussed every bit of the evidence in detail and has supported his conclusions by the rulings of the Hon'ble Supreme Court wherever possible. As the Member (J) has rightly held that there is not sufficient evidence warranting imposition of penalty on the appellant, therefore, the appeal is allowed. I agree with the views of the Member(J) and allow the appeal.
16. The papers may be sent to the Bench for issue of the Final Order.
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G.R. Sharma
Dated 26-9-1994 Member (T)
ORDER
17. In view of the majority opinion the appeal is allowed.