Custom, Excise & Service Tax Tribunal
Sanjay Manjibhai Gadhesariya vs Ahmedabad on 1 October, 2019
Customs, Excise & Service Tax Appellate Tribunal,
West Zonal Bench : Ahmedabad
REGIONAL BENCH - COURT NO. 3
Customs Appeal No. 266 of 2011
[Arising out of Order-in-Appeal No OIO-9/COMMR/DRI-SURAT/KETAMINE/2011 passed
by Commissioner of Customs -AHMEDABAD]
M/s Sanjay Manjibhai Gadhesariya .... Appellant
36, Bhojalram Society, Ashwanikumar Road,
Varachha, Surat-Gujarat
VERSUS
C.C. Ahmedabad .... Respondent
Custom House, Near All India Radio Navrangpura, Ahmedabad, Gujarat AND Customs Appeal No. 267 of 2011 [Arising out of Order-in-Appeal No OIO-9/COMMR/DRI-SURAT/KETAMINE/2011 passed by Commissioner of Customs -AHMEDABAD] M/s Kishan Manjibhai Gadhesariya .... Appellant 36, Bhojalram Society, Ashwanikumar Road, Varachha, Surat-Gujarat VERSUS C.C. Ahmedabad .... Respondent Custom House, Near All India Radio Navrangpura, Ahmedabad, Gujarat APPEARANCE :
Sh. R. Subramanya, Advocate for the Appellant Sh. T. K. Sikdar (AR) for the Respondent CORAM: HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) FINAL ORDER NO. A/_11869-11870 /2019 DATE OF HEARING : 13.09.2019 DATE OF DECISION: 01.10.2019 RAMESH NAIR The present appeals have been filed by Shri Sanjay Manjibhai Gadhesariya and Shri Kishan Manjibhai Gadhesariya against impugned Order-in-Original No. 9/COMMR/DRI-Surat/Ketamine/2011 dt. 30.03.2011 passed by Commissioner of Customs., Ahmedabad. The brief facts of the case are that the Appellant were issued show cause notice dt. 02.09.2009. It was contended that the DRI officers on receipt of intelligence that M/s Perfect Chemicals had consigned a parcel
2|Page C/266-267/2011-SM of psychotropic substance to M/s Bhatia Chemicals, Vapi to be unloaded at M/s Choudhary Roadways, Vapi. The officers took possession of said Parcel. Later one Shri Jayeshbhai Chunibhai Vadaliya who had come to take delivery of said parcel was interrogated and he stated that he had come to take delivery of said Parcel on instruction of Shri Sanjaybhai under fictitious name of Anuj Shah. That for taking delivery the Bilty and letter from Bhatia Chemicals for receiving delivery was handed over to him by a unknown person of Shri Sanjaybhai. He also stated that in past also he has taken delivery of consignments from Chaudhary Roadways. That in case of present parcel, he was told to rebook the same parcel in Surat-Ahmedabad Transport Co. GIDC, Vapi and handover invoice of M/s J.B. Enterprise to the transport company.
Residential premises of Shri Sanjaybhai and his office premises were also searched but no incriminating papers were found. The test examination of samples revealed that the goods were "Ketamine Hydrchloride" whose export requires No Objection Certificate from the Narcotics Commissioner. Statement of Shri Nandkishore Rupchand Choudhary, Proprietor of M/s Choudhary Roadways was also recorded who stated that in past six consignments of M/s Perfect Chemicals were transported by them. Earlier consignments were also collected by Shri Jayeshbhai Chunibhai Vadaliya. Statement of Aurangabad Branch incharge of M/s Choudhary Roadways Shri Rameshwar Amarsingh Takale was also recorded wherein he stated that they do not know the Appellant or the whereabouts of Perfect Chemicals. The address of Bhatia Chemicals and J.B. Chemicals were also found to be bogus. The goods from Auarngabad were consigned as describing them as "Benzahydrol Powder"but for onwards transportation were shown as "Sodium Bisulfite" in invoice of J. B . Chemicals. Shri Jayeshbhai in his further statement also stated that all the parcels belong to Appellants. Reliance was placed upon emails correspondence made on account of clearance of such goods in past with the foreign buyers. Also statement of authorised persons of courier companies who in past had consigned the goods were recorded wherein they stated that the export documents was provided by Shri Sanjay to him. Statement of one Shri Nagesh Barsale was also recorded who stated that he had introduced one Shri Rajesh Joshi to Shri Sanjay for supply of Ketamine and who in turn supplied the goods from Aurangabad to Shri Sanjay. Statement of Shri Sanjay was also recorded to the effect that they were indulged in
3|Page C/266-267/2011-SM export of prohibited goods. On the basis of above allegation/ conmtention the show cause notice proposed to confiscate 165 Kgs of Ketamine Hydrochloride Powder exported by Appellant and since the same was not available for confiscation, it was proposed to impose fine in lieu of confiscation. The 25 Kgs of seized Ketamine Hydrochloride valued at Rs. 8,75,000/- from Choudhary Roadways was also proposed to be confiscated under section 113 (d) of the Customs Act. Penalty under section 114 (i) was proposed against both the Appellant for making illicit exports.
1.1 The adjudicating authority vide impugned order dt. 02.09.2009 held that in respect of consignment already exported since the same are not available for confiscation, hence no redemption fine is imposable. He however ordered for confiscation of 25 Kgs of Ketamine HCL u/s 113 (d) of the Act and also imposed penalty of Rs. 50 Lkhs on Shri Sanjaybhai Manjibhai Gadhesariya and of Rs. 5 lakhs on Shri Kishanbhai Manjibhai Gadesariya. Aggrieved the Appellants have filed the present appeals.
2. Ld. Counsel, Shri R. Subramanya, appearing for both the Appellants submits that the impugned order has been wrongly passed. The Appellant has never exported any consignment of impugned goods out of the country. The allegations are based on pure imagination and statements recorded by the officers. The allegation of export of 165 Kgs of goods is baseless and hypothetical as there is no evidence as to when the said quantity was exported, by what name and by what mode and to which country or atleast the dates on such exports were made. The adjudicating authority has not taken into consideration the retraction of statements before the Jailor which was submitted before Chief Judicial magistrate on 04.07.2009. The emails relied upon by the revenue was collected from unknown source which were not provided by the Appellants nor they had any relation with any company. They have no business relation with Shri Jayesh who had gone to the transporter to collect the goods nor had asked him to take delivery. No incriminating documents were found from any of the premises relatable to them. They never claimed ownership of 25 Kgs of Ketamine seized from Chaoudhary Roadways. The person Shri Jayesh who was caught dealing with said consignment was not even issued show cause notice and was
4|Page C/266-267/2011-SM set free. He point out the discrepancy in statement of Shri Jayesh. That in his statement dt. 06.03.2009 he stated that he was given lorry receipt by unknown person but in his statement dt. 11.08.2009, he stated that the lorry receipt was given to him by Shri Sanjay at his office. Shri Jayesh had been misguiding the officers by giving vague statements. He submits that neither Shri Rameshwar Amarsingh Takale, Incharge of Choudhary Roadways at Aurangabad from where the goods were consigned knew any of the Appellant nor Shri Nandkishore Chaoudhary, owner of Choudhary Roadway at Vapi where the goods were to be unloaded knew the Appellants. As per Shri Choudhary only Shri Jayesh collected goods. The lorry receipts of past consignments were whether of impugned goods or other goods was never brought on record. As regard payments received through Western Union he submits that none of the transactions were made by the Appellant and even the department has not shown any documents linking the Appellants to the same. The department has not produced any evidence when did the export of "Ketamine" consignment took place, under what mode of transport, by air/sea/land, under which shipping bill or airway bill and not a single consignment has been checked from overseas buyers of such consignment to prove the bonafide of investigation. Not even a single consignment has been shown to have exported illegally. The adjudicating authority has not shown as to what preparations the Appellant had made illegally export the 25 kgs seized consignment. The said consignment does not belong to them. Neither the investigation show nor the findings speak in support of the allegation, the mode of procurement of Ketamine HCL and payment made to supplier. The transporter and Shri Jayesh were not even made co-noticee. The adjudicating authority agreed that the firms M/s Perfect Chemicals, Aurangabad, M/s Bhatia Chemicals, Vapi and J.B. Enterprise were non existent and bogus firms. The investigation remain limited to movement of consignments between these firms even during the period March' 2008 to Jan' 2009. That as per statements of Appellants the goods were exported through Courier service of M/s Pacific Corporation, Mumbai and Shri Harshadbhai of M/s Swiss International, Mumbai through Purohit Courier but the Courier agencies are governed by export procedure and the goods were subject to inspection, examination and assessment. Therefore even if the goods are mis- declared, during examination such goods would not been permitted to
5|Page C/266-267/2011-SM be exported. The adjudicating authority has contended that the alleged exported consignments were delivered door-to-door in USA, but none of the documents were available as the same were destroyed and therefore the allegations cannot be proved. The order has been passed by relying upon the hearsay based on statements and not on any evidences or any report from the foreign countries where the goods were alleged to have been sent. The adjudicating authority has relied upon emails and computer printouts but the Appellant has denied that the emails belong to them, The appellant never has taken any amount from Vijaybhai of Rajkot who in his statement that he had withdrawn amt from Western Union Bank and handed over to Appellant. That the procedure given under Section 138 C of the Customs Act was not followed for taking printouts as evidence. None of the condition given in Section 138 (2) was followed. There is no certificate from person who had operated and was in incharge of the computer. The entire allegations are based on statements which were taken under duress and later retracted and secondly on various printouts of courier agencies, Western Union Money changers and many other without any corroborative evidences. It is nowhere appearing how the goods were obtained by Appellant, transported, packed in which export consignment it was misdeclared and exported. They were made to sign the statements and on coming to know about the contents of statement they retracted the same from jail. They do not even know the value of goods was arrived at. The penalty is not imposable on them. Even the seized goods were at the transporter premises and not at customs area. No attempt on the part of Appellant has been shown. He relies upon judgments in case of Amrit Bazar patrika 21 Cri. L.J. 98 : 54 Ind. Cases 578, Kashmiri Vs. Collector 1991 (57) ELT 284 (TRI), Sripar Upadhyay 2001 (138) ELT 768, Ranjit Export Pvt. Ltd. 1985 (21) ELT 353 (Mad), Suresh Jhunjhunwala 2005 (183) ELT 60 (CESTAT), Bhanbhai Khalpabhai Patel 1987 (28) ELT 489, K. Baburao & Othrs 1986 (26) ELT
766.
3. Shri T. K. Sikdar, Ld. AR appearing for the revenue submits that from the statement of Shri Jayesh it is absolutely clear that the Appellants were procuring the goods under fictitious firms name and were also clearing the same. He submits that the computer printouts of mail clearly shows that the Appellant were exporting the impugned
6|Page C/266-267/2011-SM goods. The Appellants has accepted the export of impugned goods. had full knowledge of such clearances and the procurement and export of goods is apparent from the statements of courier company's person and the statements of Appellants. He reiterates the findings of the impugned order and supports the same.
4. Heard both the sides and perused the case records. The adjudicating authority has passed the impugned order on the basis of statements given by Shri Jayesh who had gone to take delivery of Ketmaine HCL from the office of M/s Choudhary Roadways, courier companies who had exported the goods, statement of Appellant Shri Sanjay Manjibhai Ghadesariya, the emails printouts of M/s Raghunath agencies and other concerns allegedly floated by Shri Sanjay. Reliance has also been placed upon statement of one Shri Nagesh Barsale who introduced Shri Rajesh Joshi the supplier of impugned goods to Shri Sanjay. The adjudicating authority has imposed penalty on Shri Sanjay Manjibhai on charges of smuggling of goods whereas in case of Appellant Shri Kishanbhai, the penalty was imposed on the ground that he had taken delivery of one of the consignment and during investigation had thrown away some banned substances. Further that he was fully aware of activities of his brother.
5. I find that though the show cause notice and the adjudicating authority has relied upon the statements of Shri Jayesh Vadaliya or the courier companies or the persons who received the money in their account on such sale, but nowhere it is appearing as to when the goods were exported by Appellant. Even after investigation at courier company, there is no findings as what is the mode of export and to which country the exports were made. It is alleged that the Appellant had received 165 Kgs of Ketamine in past. The show cause notice alleges that the goods were sent by Shri Rajesh Joshi to Shri Sanjay and that Shri Rajesh Joshi was introduced to Shri Sanjay by Shri Nagesh Barsale. Shri Rajesh Joshi who has allegedly supplied such goods cannot be even traced by the investigating officers inspite of the fact that Shri Nagesh Barsale was knowing him. The Appellant has agitated the allegation of receipt of impugned goods. It is also a fact that neither the Incharge of Choudhary Roadways at Surat nor Shri Choudhary at Vapi knows Shri Sanjay. In such a case it was necessary
7|Page C/266-267/2011-SM to find the source who had supplied the alleged quantity to the Appellant. Only on the basis of statement of Shri Jayesh it cannot be concluded that he had collected the ketamine consignments from transporter on behalf of Appellant. The supplier of goods has not been found nor there is any evidence that the goods were intended for the Appellant. The Appellant Shri Sanjaybhai Manjibhai has retracted his statement from jail. His retraction cannot be brushed aside on the ground that same was delayed. It is obvious that when a person is in jail, it will take time from him to understand the charges or investigation being made against him and after being aware of the situation to retract the same. The fact remains that the retraction was made during investigation itself and hence the statements cannot be made sole basis to make charges against the Appellant. It is also on record that during investigation, no incriminating documents were found from the office of the Appellants. Further as pointed out by the ld. Counsel there has been contradiction in statements of Shri Jayesh Vadaliya. In his first statement dt. 06.03.2009, he stated that he was given the bilty and letter for further transfer of goods by unknown person. However in second statement dt. 11.08.2009 he stated that he collected the said papers from office of Shri Sanjay. The payment alleged to have been received by Appellant on account of export goods is also based merely upon hearsay. None of the payments could be linked to the Appellant Shri Sanjay. It is only statement of persons that payments were received on account of Sanjay but no other details are forthcoming as to how the same were related to Shri Sanjay. No person would permit any other person to receive payment in his account unless he is sure of any legal transaction. I also find that none of the buyers of the goods has been identified. No consignment alleged to have been exported has been brought on record. It is not appearing when the goods were exported, what mode of transportation was made, no shipping or airway bill linking with alleged exports is on record. There is no evidence as to how the Appellant paid for alleged receipt of Ketamine to the supplier. Shri Jayesh Vadaliya was not made even noticee even though he was the person alleged to be taking delivery of Ketamine and forwarding the same in name of fictitious firms. The movement of goods for export is through courier firms but nowhere the clearance of goods exported were doubted even though the export goods are subjected to testing and examination and especially in case
8|Page C/266-267/2011-SM of drugs. It is also not on record as to when and how the Appellant dealt with the impugned goods in transporting, packing the export consignments. In such case we find that only on the basis of statements, it cannot be concluded that the Appellant had exported 165 Kgs of Ketmaine HCL. As regard 25 kgs of Ketamine seized from Choudhary transport I find that no evidence has been brought on record to show that the Appellant was attempting to export the same. No evidence of Appellant having in contact with any foreign buyer for export of said quantity is on record. No export documents were prepared or no shipping bill airway bill was prepared. In such case it cannot be said that the Appellant was attempting to export the goods. my view is also based upon the judgment in case of Ranjit Export Pvt. Ltd. 1985 (21) ELT 353 (Mad.). Similar view has been taken in orders in case of Kashmiri Vs. Collector 1991 (57) ELT 284 (TRI), Sripar Upadhyay 2001 (138) ELT 768, Suresh Jhunjhunwala 2005 (183) ELT 60 (CESTAT), Bhanbhai Khalpabhai Patel 1987 (28) ELT 489, K. Baburao & Othrs 1986 (26) ELT 766.
6. In view of my above findings I hold that the Appellants cannot be accused of export of 165 Kgs of Ketmaine HCL or of attempt to export 25 Kgs of Ketamine seized from Choudhary Roadways. Resultantly I set aside the impugned order in as much as it relates to imposition of penalty on Shri Sanjay Manjibhai Gadhesariya and Shri Kishan Manjibhai Gadhesariya. The Appeals of both the Appellants are allowed with consequential reliefs.
(Pronounced in the open court on 01.10.2019) (Ramesh Nair) Member (Judicial) Neha