Customs, Excise and Gold Tribunal - Bangalore
Smt. Prabha D. Kannan And Shri Dinesh ... vs The Commissioner Of Customs on 13 December, 2005
Equivalent citations: 2006(106)ECC576, 2006ECR576(TRI.-BANGALORE), 2006(196)ELT342(TRI-BANG)
JUDGMENT T.K. Jayaraman, Member (T)
1. These appeals have been filed against OIO No. 34/2004 dated 29.11.2004 passed by the Commissioner of Customs & Central Excise, Hyderabad-II Commissionerate.
2. The brief facts of the case are as follows:
The first appellant Smt. Prabha D. Kannan was Assistant Manager (In-flight Services). On 18.06.2002, she arrived from Mumbai to Hyderabad by Flight No. IC-617, which later got converted into International Flight No. IC-961 to Sharjah via Bangalore. She declared one Nokia 3310 Cell Phone, one Rolex Watch, Gold Jewellary weighing 50 gms. and Indian currency of Rs. 500/- in her Crew Baggage Declaration before Customs. After the flight taxied off, CISF personnel found a green hard top suitcase suspected to be containing currency, with the first appellant's nametag attached to it, left unclaimed. The flight was called back and the first appellant was off loaded. She identified and claimed the suitcase. She also stated that she had forgotten to take the suitcase, in a hurry. The suitcase contained 2 bags one black coloured rexin bag with marks 'New Attack International' and another small bag together containing Indian currency of Rs. 22 lakhs and foreign currency equivalent to Rs. 5,022/-. The black coloured handbag was found to be containing Rs. 7,978/-. The currencies were seized as they were brought within the Customs area and were being attempted to be exported in violation of Foreign Exchange Management Act and Rules framed thereunder. In her statement recorded on 18.06.2002 under Section 108 of the Customs Act, she confirmed the ownership of the suitcase and the seized currency. She deposed that she received the currency from one Shri Ramesh of M/s. Sarvodaya and Mayur Jewellers, Mumbai as loan required by her husband who is having a hotel business in Dubai. She admitted to the non-declaration of the currency. Investigations were carried out by the departmental officers. The second appellant is Shri Dinesh Kannan, husband of the first appellant. Statements were taken from Shri Dinesh Kannan, Shri Ramesh Prakash Madrecha, Shri Lalith Prakash Chunilal Jain, Shri N.J. Ali and Shri Mukthi Muralidharan. The above persons were in someway or other connected with the currency seized. The investigations resulted in the issue of Show Cause Notice dated 13.12.2002 proposing confiscation of the seized currency, packages under the relevant provisions of the Customs Act, 1962. There was also proposal to impose penalty under Section 114 (i) of the Customs Act. On conclusion of the adjudication proceedings, the Commissioner passed the impugned order. He has confiscated the currencies under Section 113(d) and (i) of the Customs Act, 1962 absolutely. He has imposed a penalty of Rs. 5 lakhs on the first appellant and Rs. 3 lakhs on the second appellant under Section 114(i) of the Customs Act, 1962. The appellants strongly challenge the impugned order. Hence, they have come before this Tribunal for relief.
3. Shri B.V. Kumar, the learned Advocate appeared for the appellants and Shri Ganesh Havanur, the learned SDR for the Revenue.
4. The learned Advocate urged the following points:
(i) According to the Show Cause Notice, an unclaimed suitcase was lying at the CISF security area. The statement of the first appellant was recorded by T. Srinivas, Assistant Commandant, CISF. A copy of the same was requested but was not supplied though a specific request was made in writing before the Commissioner of Customs, Hyderabad. Copy of the Station Diary and the Register maintained by the CISF at the X-ray machine in which they record the details of examination of suspect baggage was requested, but the same were not been given. During cross-examination, Shri T. Srinivas confirmed the recording of the statement of the first appellant and also maintenance of the above documents. Non-supply of the above documents is a clear violation of Principles of Natural Justice.
(ii) The Show Cause Notice has not mentioned the facts correctly. The first appellant, along with two members, left Mumbai flight IC-617 at 1630 hrs. after they were picked up at 1500 hrs. along with other crew members Ms. Chhaya Koshi and Ms. Priya Borker. They reached Hyderabad Airport at 1730 hrs. After Customs clearance at Hyderabad Airport at the departure hall, Chaya Koshi informed Prabha D. Kannan that the Security officer wanted to check the suitcase belonging to her. The same was opened in the presence of everybody and since nothing incriminating was found, she was allowed to proceed to the aircraft IC-961. She boarded the aircraft at 1800 hrs. When the aircraft was taxying off, the Captain announced that they are returning to the Bay for Customs and Security reasons. When the door was opened, T. Srinivas introduced himself as a CISF officer and wanted to check her suitcase. She brought her suitcase and when she wanted to open and show he told her to come to the departure hall. After she was brought to the departure hall, she was kept in a cabin along with a lady constable Anita Ghosh and she was asked to claim some other bag. Though she denied the ownership, she was persuaded to claim some other bag under threat and persuasion. Her statement was recorded by Shri T. Srinivas, the CISF commandant, which has not been placed on record.
(iii) The learned Advocate relied on the following case-laws to urge that non-supply of the documents requested for is a clear violation of Principles of Natural Justice.
(a) ASAPCS (India) Pvt. Ltd. v. Collector - 1984 (18) ELT 3(T)
(b) Ambalal v. UOI -
(c) Naina v. Collector of Customs - 1975 RLT 1361
(d) P.G.O. Processors Private Ltd. v. CCE - 2000 (41) RLT 741 (Raj.)
(e) Jayantilal A. Shah and Anr. v. CCE, Mumbai - 1999 (34) RLT 466(T)
(f) Anilama Associates v. CCE, New Delhi - 2000 (39) RLT 848(T)
(g) State of Uttar Pradesh v. Shatrughan Lal - AIR 1988(SC) 3038
(iv) The documents would have proved that the bag produced by the first appellant for security check did not contain the seized currency at the time of check in her bag.
(v) The department has not placed any evidence on record to show that:
(a) Dinesh Kannan collected/raised an amount of Rs. 22,07,978/- and gave the same to his wife Ms. Prabha Kannan.
(b) Prabha D. Kannan had the said currency when she boarded flight IC 617, at Mumbai, and the said currency of Rs. 22,07,978/- was brought by her from Mumbai to Hyderabad by flight IC 617.
(c) Alternately, no evidence has been placed on record to show that the said currency was handed over to Ms. Prabha Kannan by any one at Hyderabad Airport or she went out of Hyderabad Airport Area, to take delivery of the said currency from anyone.
(d) Any thing suspicious was found in her baggage when the same was screened by Security (CISF), at Mumbai Airport.
(e) There is no evidence to show that an unclaimed baggage lying in the Security (CISF) Area belonged to Ms. Prabha Kannan, save the leather tag allegedly found on the said unclaimed bag with her visiting card.
(f) The visiting card, which allegedly contained the name of Prabha Kannan, with her old designation, Asst. Manager (in-flight Services), by itself is not conclusive evidence to show that the contents of the said suitcase belongs to her, since the said tag is outside the suitcase and anyone can put such a visiting card in it. Further, such a card is only hearsay evidence and not substantive evidence.
(vi) Since the suitcase was unclaimed, and lying in the Security Area and also was not in the possession of the first appellant, when she was off-loaded from flight IC 961, after it left Bay No. 2 and about to take off and in view of the retraction of the statements by both the appellants on 04.07.2002 before the Hon'ble Judge, Economic Offences Court, it was urged that the appellants have nothing to do with the currency and they are not liable for penalty under Section 114(i). For the same reason, FEMA Act and Regulations are not attracted. Further, she has not violated Section 77 of the Customs Act inasmuch as she made a correct declaration regarding the contents of her baggage in the Crew Baggage Declaration Form.
(vii) A careful reading of Section 113(d) ibid, would show that in order to invoke the provisions of 113(d), it is necessary to show that:
(a) There was an attempt to export any goods.
(b) Or such goods were brought within the limits of any Customs area for the purpose of being exported, and
(c) The attempt to export or bringing within the limits of any Customs area was contrary to any prohibition under the Customs Act, 1962 or any other Law for the time being in force.
(viii) From a harmonious interpretation of the definitions given in Sections 2(18), 2(19), 2(20) and 113(d) of the Customs Act, 1962 and the judicial decisions cited above, it emerges that to constitute an offence of "attempt to export" it is required to be shown firstly, that the prohibited goods were brought within the Customs area and secondly, for the purpose of exportation, by the person charged with the offence. The act of exportation or even an attempt to export is not complete unless the person concerned makes a conscious attempt to take the goods beyond the Customs frontiers of India. In the instant case, no evidence has been placed on record to show that Prabha D. Kannan has been responsible to bring the impugned currency to the Customs area, herself. Barring her own statement and the statement of co-accused, viz. Dinesh Kannan, which have been retracted, there is no independent evidence to show that:
(a) Dinesh Kannan gave the said currency to her,
(b) That she brought the impugned currency from her residence to Mumbai Airport.
(c) That she brought the said currency from Mumbai Airport to Hyderabad.
(d) That someone handed over the said currency to her at Hyderabad Airport.
(e) That she went out of the Airport at Hyderabad and took the said currency from someone and brought the same with her to the Airport.
(f) She physically brought the said currency and left the same at the Security Area (CISF), which was later found to be unclaimed.
(ix) The Apex Court, in the case of State of Maharashtra v. Mohd. Yakub - 1983 (13) ELT 1637(SC), has clearly brought out the distinction between 'preparation' and 'attempt' to commit a crime. In this case, no attempt was made by the first appellant to take the goods beyond the Customs frontiers nor an intervention was made by the Revenue to frustrate her attempt to take the impugned goods out of India. It is not even Revenue's case that she brought the said currency to the Customs Area herself and attempted to export and such an attempt was frustrated by the Customs Officers. On the contrary, it is on record that, the said suitcase was lying unclaimed in the Security Area (CISF) and that the Aircraft IC 961, with the crew including the first appellant, taxied off to the runaway and was about to takeoff. It was with the help of Control Tower that the Aircraft was requested to come back to Bay No. 1 for offloading the first appellant. The test to prove an attempt laid down in the case of Mohd. Yakub has not been proved.
(x) The following decisions were also relied on:
(a) Kashmiri v. Collector of Customs -
(b) Ranjit Export Pvt. Ltd. v. CC, Madras -
(c) Dooars Transport Pvt. Ltd. v. CC(Prev.) -
(d) Ajay Gurudasmal Arora v. CC(Prev.), Mum. - 2002 (147) ELT 943(T).
(xi) The appellants have no objection for confiscation of the currency as they are in no way concerned with it. As they have not done or omit to do any act, which would render the goods liable for confiscation under Section 113(d) or (i) or abetted the doing of omission of such an act, they are not liable for penalty under Section 114(i) of the Customs Act, 1962.
5. The learned SDR pointed out that there is a clear link between the currency seized and the first appellant. Her visiting card was found in the tag in the suitcase seized. She herself has owned the suitcase and the currency. She has given a statement under Section 108 as to how she came in possession of the currency. In these circumstances, he urged the bench to uphold the OIO.
6. We have gone through the records of the case carefully. The findings of the adjudicating authority mainly depend on the statements of the appellants made before the Customs Officers. As to the source of the currency seized, there is much inconsistency between the statement of the first appellant and the second appellant. For example, the first appellant stated that she received the currency from one Shri Ramesh of M/s. Sarvodaya and Mayur Jewellers, Mumbai as loan required by her husband who is having a hotel business in Dubai. According to the second appellant Shri Dinesh Kannan, the seized currency was procured by him from various persons named in his statement and his own unspent foreign currency converted into Indian currency. Of this, except Rs. 4 lakhs received from Moya Credit Society, other amounts were unaccounted and received in cash. After converting them into Rs. 500/- and Rs. 1000/- denominations, he wrapped them in carbon paper to avoid detection. He instructed his wife to carry the same to hand over to his nephew Shri Muralidharan. It is on record that these statements have been retracted when the appellants were produced before the Special Judge. If both the appellants had planned to export the currency illegally, and had made preparations, why did the first appellant abandon the suitcase in the Security Area? This point has not at all been made clear in the investigation. In fact, this is a glaring omission and a gaping hole in the investigations carried out by Revenue. The first appellant appears to have given a statement before Shri T. Srinivas, Assistant Commandant, CISF. The Commandant has also confirmed the maintenance of certain records such as Station Diary, Register at the X-Ray Machine, etc. It is the contention of the appellants that if these documents had been supplied, they would have established that the suitcase produced by the appellant No. 1 for security check did not contain the seized currency at the time of check in her bag. In order to bring out the truth in this episode, these documents are very relevant and they would have been of immense help to the Customs in establishing the truth. In our view, Revenue should have made efforts to procure these documents and to supply the same to the appellants for their proper defence. Their request should not have been brushed aside on the ground that they were not relied on. It is on record that in this case, the suitcase containing the currency was found unclaimed in the Security Area by the CISF. In this circumstance, the records maintained by the CISF and the statement recorded before the Assistant Commandant are, beyond doubt, very relevant documents. The non-supply of these documents amounts to denial of the Principles of Natural Justice. The learned Advocate, before the Adjudicating Authority, made the submission that the first appellant was asked to claim some other bag, which did not belong to her. Mr. Srinivasan told her to tender her statement in writing and then she would be released. Accordingly, she gave a statement detailing these facts. Mr. Srinivasan took her to the Customs and there she was asked to give another statement claiming the ownership of the Indian currency of Rs. 22 lakhs. CISF Head constable, Ms. Anita Ghosh, opened her Delsey bag, and did not find an Indian currency and drew a Punchnama. They found visiting card of her husband's nephew Mr. Muralidharan. After the Punchnama was drawn by the CISF, the Customs official asked her to own the currency and write a statement as dictated by them. They assured her that if the statement were given as required by them, she would be released. She refused to give a statement claiming the ownership of the currency. She was detained for the whole night. In these circumstances, a statement was recorded by threat and coercion at 4 a.m. This statement was altered by another statement as dictated by them around 6.30 a.m. After that, one boy and an elderly person were asked to sign the punchnama as witness in the morning though the punchnama was drawn during night. She was taken to Customs Headquarters around 1200 hrs. and made to sit in the Jeep upto 1400 hrs. One Shri Ravi Kumar Reddy, Superintendent of Customs, forced her to sign some papers without allowing her to read them. Thereafter, she was taken to the Court and was ordered to be remanded for 14 days. As soon as she was released on bail, she submitted her retraction letter. Her husband received two threatening calls on 18th and 19th of June, 2002 asking him to claim Rs. 22 lakhs alleged to be carried by his wife. The caller threatened him that if he does not own up the amount, his wife, himself and their children would be arrested permanently. When her house was searched on 19.06.2002, the DRI officers informed her husband that if he gives a confessional statement, she would be released immediately. Therefore, her husband gave confessional statement as dictated by the officers of DRI. Her husband was brought to Hyderabad on 20.06.2002 and on 21.06.2002. He was detained for 14 days in judicial custody and released on bail on 3.7.2002. Her husband retracted the statement from jail through the jail Superintendent on 04.07.2002.
7. In view of the above, we cannot come to definite conclusions based only on the statements of the appellants in the absence of corroborative evidences. If the appellants really owned the currencies, it is not very clear under what circumstances, she had to abandon it. No one would believe that she had forgotten to carry a suitcase containing Rs. 22 lakhs in a hurry. Moreover, when there is Security Check, after the baggage passes through the X-ray machine, the Security normally puts a seal for having checked. It is not clear whether such a seal was affixed in the impugned suitcase. That is why, it is all the more necessary to have examined the records maintained by the CISF. There is also no evidence that the first appellant brought the suitcase with the currency from Mumbai. There is also no evidence that some person handed over the currency or the suitcase to her in Hyderabad. Moreover, the suitcase containing the currency, was not seized from the first appellant. Neither was it in the Aircraft. Since the suitcase was lying unclaimed in the Security Area, it cannot be said that the first appellant exported it or made an attempt to export the same. The Tribunal, in the case of Sripad Upadhyay v. CC, Chennai - 2001 (138) ELT 768(Tri.- Chennai), has held that when goods are not presented to proper officer for clearance, they do not become 'export goods' and are not liable for confiscation. In the above case, the Cargo covered by Shipping Bills was carted from the manufacturer's place to CFS Station, Sanco in Chennai on 16.04.1998. On 17.04.1998, a letter was sent to the Customs to withdraw the consignment as the number of pieces in each carton will not tally with the packing list and this happened due to oversight. Revenue proceeded against the appellant and penal action was taken. The Tribunal held that in terms of Section 51 of the Customs Act, the order permitting clearance is provided and till it is obtained, export remains in the realm of preparation. The Hon'ble Supreme Court, has clearly brought out the difference between 'attempt' and 'preparation' in the case of State of Maharashtra v. Modh. Yakub (cited supra) by the learned Counsel. It has been held that attempt begins where preparation ends. A person commits the offence of 'attempt' to commit a particular offence when - (i) he intends to commit that particular offence and (2) he, having made preparations and with the intention to commit the offence, does an act towards its commission. In the above mentioned case, due to intervention of the officers, the contraband silver could not be loaded into the ship. In those circumstances, the Apex Court held:
If most of the steps necessary for export by sea had been taken by the accused and the only step that remained to be done was to load it on a sea-craft for moving out of the territorial waters of India, but due to the intervention of the officers, could not be consummated leads to the conclusion that the accused had deliberately attempted to export silver by sea in contravention of law. Therefore, the accused was liable to conviction and sentence under Section 135(a) of the Customs Act, 1962 read with Section 5 of the Imports and Exports (Control) Act, 1947. [paras 15 & 16].
8. In the present case, we find that the currency was not recovered from the first appellant or from the Aircraft. It was only lying unclaimed. Therefore, no attempt has been made to export the said currency. It is also not the case of the Revenue that due to their intervention, the export was thwarted. The appellants have no objection for confiscation of the currency.
9. Summing up, we find:
(i) The investigation into this episode is not very thorough;
(ii) The reason for abandoning the currency has not been brought out;
(iii) There is no evidence to establish that the appellants made an attempt to export the currency;
(iv) The statements do not appear to have been given voluntarily;
(v) The currency was neither seized from the possession of the appellants nor from the aircraft;
(vi) The test to prove an 'attempt' to illegally export as laid down in the case of Mohd. Yacub has not been proved.
10. In view of the above, we hold that the penalties imposed under Section 114(i) are not sustainable. We set aside the same and allow the appeals.