Customs, Excise and Gold Tribunal - Delhi
Shri Krishna And 12 Ors. vs Commissioner Of Customs on 28 February, 2000
Equivalent citations: 2000(69)ECC305
ORDER G.R. Sharma, Member (T)
1. These 13 appeals were heard together as they arise out of the same impugned order and are being disposed of by this common order. No appeal was filed by Shri Shivraj Tiwari, Shri Guru Dev, Shri Mangla Prasad and Shri Rakesh Kumar.
2. The facts of the case in brief are that acting on specific information, Customs Officers intercepted 13 bundles of carpets at Tikonia Railway Station. These 13 bundles of carpets were found to contain 133 pcs. of carpets. When the Asstt. Station Master was contacted he informed that none had turned up till then to take delivery of the carpets. The Asstt. Station Master also informed that proper invoice has not been sent alongwith goods; that 'A Kachha Memo' has been received which bears railway mark; that the goods were booked from Bhadhohi for Tikonia. As the officers had specific intelligence in the case that the goods were meant for export to Nepal illegally, the goods were examined and seized. On examination and trade opinion obtained the goods were found to be of export quality and valued at Rs. 44,45,000. Detailed enquiries were conducted. Statement of one Shri Biggan was recorded who indicated that the goods were meant for Nepal and were to be taken to Nepal by one Shri Shivraj Tiwari who is a resident of Tikapur (Nepal). One Shri Srikrishna appeared before Supdt. of Customs on 12.2.92 and claimed ownership of the goods stating that he came to know that about 5/6 days back, the carpets have been seized by the Customs Department; that for clearance of the goods he took the Railway Receipt; that he was given the Railway Receipt by Shri Hafiz at Tikonia; that Hafiz is a resident of Shah jahanpur; that he did not know the full address of Hafiz; that Hafiz deals in carpets; that he knew Hafiz for last one year and met him at Tikonia; that on 4.2.92 he met one Customs Officer who asked him to go to Lucknow in connection with the seizure of his goods; that he came to Lucknow on 5.2.92 but could not meet the A.C. who was on tour and was to be back on 12.2.92; that the seized carpets were purchased by Hafiz from Bhadohi and the same were booked for Tikonia; that he also invested his money; that some money was invested by Hafiz. Shri Srikrishan replied that he invested Rs. 25,000. When asked about the size and number of carpets he replied that there were 138 carpets in 13 bundles and that the carpets were half small and half big size. Shri Srikrishan in reply to the question as to whether the carpets were made of cotton, silk or woolen stated he did not know. When asked about the value of carpets he replied that the carpets are ordinary. On the question of availability of funds of Rs. 25,000 he stated that Rs. 20,000 was taken from his father and Rs. 5,000 was taken on loan. On the question as to the amount invested by Hafiz he replied that Hafiz invested about Rs. 1,25,000. When questioned whether nobody else invested any money in the carpets he replied no one else. On the question as to when Hafiz did give him the Railway Receipt he replied that Hafiz gave him the R.R 3/4 days after the booking of the goods. No further statement could be recorded as Shri Srikrishna did not turn up on 13.2.92 as promised by him and though summons were issued to him he did not turn up in response of the summons. Investigations were conducted in respect of the purchase of the carpets which revealed that the bills produced were of a firm which closed down a few years back and was not conducting any business currently in carpets. The Commissioner, therefore, after examining the facts of the case framed three issues for examination. The first issue was the lawful owner of the impugned carpets valued at Rs. 44,45,000. The seconed issue was whether there was an attempt to export the same to Nepal in violation of provisions of Clause 3(1) of Export Control Order, 1988. Issue No. 3 was whether the accused whose names were furnished by Shri Srikrishna as persons who had advance money for purchase of carpets were liable to penalty under Section 114 of the Customs Act, 62. After examining these three issues in detail based on the evidence the Commissioner confiscated 133 pcs. of woollen carpets valued at Rs. 44,45,000 imposed a penalty of Rs. 5 lakhs on Shri Srikrishna and of Rs. 25,000 on the remaining appellants.
3. Arguing the Appeal Shri Vivek Sood, Ld. Counsel submits that he would like to argue the matter on points of law. He submits that the two points of law that arise in the present case are whether penalty can be imposed when a person makes a wrong claim and the second point is whether the goods can be confiscated inside the Indian Territory when the place of seizure is well within the Indian Territory and the attempt to export is not proved.
Ld. Counsel submitted that the authorities below stated that there was violation of Section 113(d) and 113(e) of the Customs Act and therefore, penalty was imposable under Section 114 of the Customs Act. He submitted that Section 113(d) reads:
Any goods attempted to be exported or brought within the limits of any Customs area for the purpose of being exported contrary to any prohibition imposed by or under this Act or any other law for the time being in force.
He submits that there are two limbs of this sub-section of Section 113. The first limb is that the goods should have been brought within the limit of any Customs area. He submits that the appellants have taken the stand that the goods were seized inside Indian Territory which was not a Customs area and that this plea of the appellant has not been rebutted and therefore, the presumption would be that the place of seizure was not a Customs area. He, therefore, submitted that this limb is not applicable to the facts of their case. He submits that the second limb of this sub section of Section 115 is any goods attempted to be exported. He submitted that the Department has not been able to prove that the goods were attempted to be exported. He submitted that the Hon'ble Supreme Court in the case of Malkiat Singh and Anr. v. State of Punjab held that:
The test for determining whether the act of the accused person constituted an attempt or preparation is whether the overt acts already done are such that if the offender changes his mind and does not proceed further in its progress, the acts already done would be completely harmless.
Ld. Counsel submitted that the Apex Court further held that:
The accused persons could not be convicted under Section 7 as there was no contravention of the order. The truck loaded with paddy being seized at Samalkha inside the Punjab boundary there was no export of paddy within the meaning of Para 2(a) of the order. There was merely a preparation on the part of the accused to commit the offence of export. It was quite possible that the accused might have been warned that they had no licence to carry the paddy and they might have changed their mind at any place between Samalkha Barrier and the Delhi-Punjab boundary and not have proceeded further in their journey.
4. Ld. Counsel also referred to the judgment of Hon'ble Madras High Court in the case of Ranjit Export Pvt. Ltd. v. Collector of Customs, Madras , wherein in Para 24 the Hon'ble Madras High Court held:
24. In the language of the Supreme Court, attempt defies a precise and exact definition. Section 511 of the Indian Penal Code punishes "attempt", but it does not define "attempt". All said, the question is really one of fact depending upon the peculiar features and circumstances of each case and the provisions of law, the attempted breach of which is complained of. In the context of the present case, we cannot lose sight of the definition of 'export' found in Section 2(18) of the Act. The essential ingredient of export is the taking out of India. The acts complained of must fall in the course of movement of the goods with an intention to take them out of India. All other acts done anterior to this step, namely, movement would only partake the character of preparations. If the petitioner has done any act towards the exportation, namely, taking of the goods out of India and if the act or acts could be fitted in the course of such movement of the goods, or in other words, the act could fall in the course of progress towards the actual physical taking of the goods out of India, the mischief of Section 113(d) would be attracted. There should be a direct physical movement towards the taking of the goods out of India after all the preparations are made and which preparations may also fall within the satisfaction of the provisions and completion of the formalities under the Act. There must be an act or acts done towards the actual physical movement of the goods with an intention to take them out of India. That alone, in my view, would constitute an attempt to export the goods, that too depending on the facts and circumstances of the case. As stated above, I am not expressing any opinion with reference to the violation of any of the provisions of the Act which would involve penal consequences, since such a stand is not expressed before me by the respondent. The essential feature to be taken note of for assessing this question is as to whether the act of the person did reach a point which constituted an actus revs. This question is one of law depending upon the facts and circumstances of the case to be decided by the Court. If there is no taking of the goods out of India, there is no exportation. Hence, "attempt" must also have relevance to the taking of the goods out of India, we are not concerned only with the actual completion of the exportation. We are concerned only with the attempt. But, if no feature which would constitute actus revs or physical element towards taking of the goods out of India is made out on the facts and circumstances of the case, it will be far fetched to invoke the first limb of Section 113(d) of the Act. That is the point on facts in the present case. The definition of "Export" as found in Section 2(18) and the concept of "attempt" as I could evolve with reference to the export, as defined in the Act, being what they are, I am of the view that the respondent is not in order to detain the goods on the ground that Section 113(d) or the Act is attracted and the goods are liable to confiscation on that ground.
5. We have perused these two decisions on of the Hon'ble High Court of Madras and the other of the Hon'ble Supreme Court. We note in the instant case that 133 pcs. of carpets arrived at Tikonia Railway Station. Purchasing invoices or other documents did not accompany the consignment. According to Customs Tikonia Railway Station is nearer Nepal Border. The R.R. simply indicated the name of Shri Srikrishna both as consignor and consignee. Enquiries revealed that some other person had booked the consignment at Bhadohi, it was not Shri Srikrishna. Shri Srikrishna in his statement also confirmed that he never went to Bhadohi nor did he know anything about the carpets. Shri Srikrishna also could not specifically furnish the detailed particulars of the carpets, when certain invoices were produced. Enquiries about these invoices revealed that the firm which was supposed to have issued these invoices, was closed and all the documents of the firm including invoices were sealed as there was a dispute of property in that case. The value of the carpets and the quality of the carpet were such as was not traded in the area where the carpets were seized. Shri Biggan had given the statement that these carpets were meant for Nepal. Shri Srikrishna in his statement recorded on 12.2.92 could not disclose the destination of the carpets. All these enquiries lead us to believe that the carpets were meant for illegal export to Nepal. Now whether it was an attempt or it was a preparation in terms of the above two decisions cited and relied upon by the appellants. We find that the preparation was when the carpets were purchased and booked from Bhadohi. The carpets had reached Tikonia since Tikonia is nearer Indo Nepal Border, they could at any point of time be carried across the Border to Nepal and thus, the attempt also in this case was completed. We note that the Apex Court in the case of State of Maharashtra v. Mohd. Yakub and Ors. reported in 1983 ELT1637 held that there is a distinction between 'preparation' and 'attempt'; that attempt begins where preparation ends; that a person commits the offence or attempts to commit a particular offence when he intends to commit that particular offence and he, having made preparations and with the intention to commit the offence, does an act towards its commission. The Apex Court in this case further held that to constitute an 'attempt' first, there must be an intention to commit a particular offence, second, some act must have been done which would necessarily have to be done towards the commission of the offence and that such act must be proximate to the intended result; that the measure of proximity is not in relation to time and action but in relation to intention; that in other words, the act must reveal, with reasonable certainty, in conjunction with other facts and circumstances and not necessarily in isolation an intention as distinguished from a mere desire or object to commit the particular offence. Seen in the light of these observations of the Apex Court, we note that preparations were made at Bhadohi by collecting the carpets and booking them for Tikonia Railway Station. Bills/invoices were managed which on enquiry were found to be fictitious. Name of the person who booked the consignment at Bhadohi was also fictitious as the person was not traceable. Railway Receipt was without complete address of the consignee. The consignee and consignor were shown to be the same person whose address was not given. The goods did not have the requisite invoice and other documents giving detailed particulars of the goods. Thus, it was an attempt to export the goods illegally to Nepal.
6. This Tribunal in the case of United Veneers (P) Ltd. v. Collector of Customs, Cochin , observed that:
There is no substance in the argument of the appellant that there is no need for an exporter to undervalue the goods since incoming the money is essential for the running of the firm and one would not be inclined to forego the advantages of export incentive, cash assistance etc., by undervaluation; that the question is whether from materials available on record under-invoicing and under-valuation is proved against the appellants and, therefore, the mere plea that an exporter would not have recourse to such under-valuation is neither here and there. This Tribunal further held that it is in the context of these facts and circumstances one would have to construe whether the appellants were actuated by mala fides and mens rea in respect of the goods under seizure. The plethora of circumstances and factual details do not leave any doubt that the appellants had mens rea in attempting to export the goods under seizure in contravention of the provisions of law.
7. Hon'ble Kerala High Court in the case of Asst. Collector of Customs and Ors. v. P.V. Thomas and Ors. , observed that:
The various items of evidence established that the concealment and attempt to export the prohibited item Ganja which is a dangerous drug, coming under Section 2(b) of the Dangerous Drugs Act, 1930, were made only by accused 1 & 2; that even without the presumption under Section 138A of the Customs Act and Section 32 of the Dangerous Drugs Act, the culpable mental state is sufficiently there; that there are ever so many other items of evidence afforded by the testimonies of PWs 4 and 15. Therefore, there is no question of interfering with their conviction for an offence, punishable under Section 13 of the Dangerous Drugs Act as well as Section 135(1) of the Customs Act, for having contravened Section 7 read with Section 20 of the Dangerous Drugs Act.
This Tribunal while examining the Export and ambit of attempt to export in the case of Penguin (MFT) International v. Collector of Customs, Cochin , observed:
The moment the goods are attempted to be exported out of India in contravention of law, the offence becomes complete in terms of Section 113(d) rendering the goods liable to confiscation with consequential penal consequences on the person concerned in terms of Section 114 of the Act.
8. This Tribunal in the case of Sultanalia A. Lallani v. Collector of Customs in Para 20 held as under:
20. We are unable to accept Shri Patel's contention that the material placed before the Adjudicating Authority did not establish the attempted export of silver. Admittedly, the silver was found in the dicky and in the front seat of the car. The car was parked within the distance of two kilometres from the coast. If the driver was not apprehended by the customs officers there would have been movement of the car in the course of attempted export. If the silver was not for the attempted export, there was no need for keeping the silver in the dicky of the car. All the circumstances taken together clearly established that the silver was intended to be exported and the driver was to take the silver in the Ambassador car. Therefore, attempted export was established. Even assuming that the evidence was insufficient to establish attempted export the contravention of Chapter IV-B was not disputed. Therefore, the silver could have been confiscated for the contravention of Chapter IV-B. As has been rightly urged by Shri Senthivel, the appellant had at no stage challenged the confiscation of the silver and, therefore, he cannot be now allowed to take up such a contention. Shri Patel had, however, contended that unless nexus is established between the appellant and the silver no penalty can be imposed on him for contravention of Chapter IV-B.
9. From the above we find that there was an attempt to illegally export the woollen carpets and therefore, the carpets have rightly be held as liable to confiscation and the persons who claimed to be the owners of the carpets have rightly been penalised.
10. Another point that was raised by the Counsel was on ownership. He stated that the Railway Receipt was in the name of Shri Srikrishna that the Railway authorities had admitted Shri Srikrishna as the owner of the goods as the letter was addressed to him. However, on analysis of the evidence available on records, we note that Shri Srikrishna in his statement dt. 12.2.92 stated that he had invested Rs. 25,000. Thus, the investment of Rs. 25,000 will not make Shri Srikrishna, the owner of 133 pcs. of woollen carpets to have been valued at more than Rs. 44 lakhs. On the contrary we find that Shri Srikrishna with the assistance of others manipulated the entire transaction with the clear motive of illeglly carrying the carpets to Nepal. This is evident from the RR which shows the name of the consignor and consignee as Shri Srikrishna. The investigation report of the bills and invoices indicated that the firm was closed for more than four years and that the invoices were not issued by that firm. Shri Srikrishna who named Hafis as a person who invested Rs. 1,25,000 could not furnish the address and other details about the person. Thus, the ownership really did not vest in Shri Srikrishna. However Shri Srikrishna made an attempt to show that he was the owner.
11. On ownership Ld. Counsel also referred to the provisions of Railways Act where he submitted that in terms of Section 74 the property in the consignment covered by the Railway Receipt shall pass on the consignee or the endorsee as the case may be on the delivery of such Railway Receipt to him and he shall have all the rights and liabilities of the consignor. Ld. Counsel also referred to Section 76 stating that this section provided that Railway administration shall deliver the consignment under Railway Receipt on the surrender of such Railway Receipt provided that in case the Railway Receipt is not forthcoming, the consignment may be delivered to the person, entitled in the opinion of the Railway administration to receive the goods, in such manner as may be prescribed. Ld. Counsel arguing these two provisions of the Railway Act, 1989 submitted that in terms of the Railway Receipt, Shri Srikrishna was the owner of the goods and that it was the Railway authorities to decide the issue finally if a dispute about title of the goods arose. He submitted that these orders and provisions of the Railway Act are very clear and therefore, the ownership in the goods vests in Shri Srikrishna. We have examined these provisions. We find that these provisions are built in for transport of goods through the Railway. Railways are carriers and if goods attempted to be smuggled out of the country are transported then the provisions of Railways Act will not be applicable to such goods. The goods in the instant case have been seized under the provisions of the Customs Act and therefore, they will be governed only by Customs Act. If the appellants have any dispute, they can file suits against the Railways in the appropriate forum if they are so advised.
11A. We have also heard and considered the submissions of the Ld DR.
12. Having regard to the above discussions and findings, we hold that the goods are liable to confiscation and have rightly been confiscated. We also hold that Shri Srikrishna has not been able to establish his title to the goods and therefore, no redemption fine has been proposed rightly. Insofar as imposition of penalty is concerned, we note that penalties are liable to be imposed. However, looking to the facts and circumstances of the case, penalty on Shri Krishna is reduced to Rs. 2 lakhs and penalties on the remaining 12 applicants are reduced to Rs. 10,000 each. But for the above modifications, the impugned order is upheld and the appeals are disposed of accordingly.