Custom, Excise & Service Tax Tribunal
T. Manivannan vs Commissioner Of Customs, Tuticorin on 22 February, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH, CHENNAI C/00026/2008 [Arising out of Order-in-Original No.64/2007,dated30.11.2007 passed by the Commissioner of Customs, Tuticorin] T. MANIVANNAN APPELLANT Versus COMMISSIONER OF CUSTOMS, TUTICORIN RESPONDENT
Appearance:
For the Appellant Shri B. Satish Sundar, Adv.
For the Respondent Shri B. Balamurugan, AC (AR) CORAM:
Honble Shri D.N. Panda, Judicial Member Reserved on: 22-02-2016 Pronounced on: 11.04.2016 FINAL ORDER NO. 40598 / 2016 Appellant is in second round of litigation before Tribunal consequent upon remand of the matter by Honble High Court of Madras in terms of the judgement dated 31.1.2014 in CMA (MD) No.1156 of 2010 setting aside Final Order No.322 of 2010 of the Tribunal. Honble Court in Para 10 and 11 of the judgement held as under:-
10. Since the appellate authority is a fact finding authority and since the same has not at all considered the alleged retracted confessions alleged to have been given by the appellant, this Court is of the view that the order passed by the appellate authority is not factually and legally sustainable and the same is liable to be set aside and the matter is liable to be remitted to the file of the appellate authority for considering the matter afresh on the basis of the facts mentioned supra. Since the matter is liable to be remitted to the file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, the substantial questions of law settled in the present Civil Miscellaneous Appeal need not be decided.
11. In fine, this Civil Miscellaneous Appeal is allowed without costs and the Final Order No.322 of 2010 passed in Appeal No.C/26/2008 by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai is set aside and Appeal No.C/26/2008 is remitted to the file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai and the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai is strictly directed to consider the factual aspects putforth on either side and also consider recent decisions rendered by the Honble Apex Court and pass suitable orders on merits. Consequently, connected Miscellaneous Petition is dismissed.
2.0 In pursuance to the above directions of the Honble High Court the appeal was heard and proceeding was recorded on 22.2.2016.
3.0 Investigation made allegation against the appellant noticing him to be involved with one Alexander in the attempted export of red sander covered by the impugned order. Summary of allegations was as under:
3.1 Shri John Alexander residing at No 75, Third Street, North Balabagya Nagar, Thatchanallur Road, Tirunelveli was the proprietor of M/s Freedom Impex. During March 2006 he attempted to export red sanders to Malaysia receiving that form one Manivannan. During 1995, 1996 he exported sandalwood of One Shri Santhanameeran of Chennai and exported the same declaring that as export of tiles, wash basin to Singapore in the name of M/s. Gilba Agencies, Tuticorin. In the month of February 1997, the sandalwood sent by Shri Santhanameeran to him from Chennai for export through Tuticorin, was seized by Customs officers for which he suffered penalty of Rs.10,00,000/- and has become defaulter to discharge such penalty.
3.2 While smuggling sandalwood as stated above, Shri Alexander came in contact with Shri Manivannan (Appellant) of Perambur, Chennai through Shri Santhanameeran. Appellant was also involved in smuggling of sandalwood as well as red sanders by that time. Therefore during early 2006, Alexander contacted him to arrange sandalwood or red sanders to export. Manivannan (Appellant) agreed to supply the same for export from Tuticorin port.
3.3 In the last week of January, Manivannan (Appellant) sent 1500 pieces of Red sanders i.e., 500 pieces each in three shapes viz lengthily, small and bent shapes to Alexander in lorry keeping red sanders underneath gypsum boards. That reached the godown of John Alexander at Sugar mill Colony in Tirunelveli. He told Alexander to export such red sander woods to the addressee in Malaysia. For such act, Manivannan agreed to pay Rs 2 Lakhs to Alexander towards consideration. Out of such consideration, advance of Rs 1 lakh was paid to him. Rs.40,000/- was paid in cash and Rs.60,000/- was transferred to his ICICI Bank Account.
3.4 After the arrival of the cargo, cutting out the inner portion of some of the gypsum boards in a rectangular fashion, John Alexander concealed Red Sanders woods came from the appellant, in cavities made in the said gypsum boards and declared the exportable goods as gypsum board. Few such boards were uncut to cover on the top of cavity boards in order to hide the red sander in the cavity made therein. Thereby 1500 numbers of red sanders pieces in 94 packages of gypsum boards were hidden for export.Ten crates of gypsum boards not concealing Red Sanders were meant for inspection of Customs Officers to obtainlet export order.
3.5 The red sanders hidden as above in gypsum board were sent toone M/s Raja Agencies CFS meant for export to Malaysia and Shipping Bill No. 1590098 dated 24.03.2006 was filed by Alexander in that behalf at Tuticorin Custom House on self assessment basis declaring that 104 crates of gypsum boards meant for export to Malaysia by M/s Freedom Impex, Tuticorin. Cargo was examined by Customs at M/s Raja Agencies CFS on 24.03.2006 and let export order was given.But such cargo was intercepted by DRI and they examined the contents thereof thoroughly. Upon such examination, 1500 pieces of Red Sanders were found to have been concealed in 94 packages of Gypsum boards. So also investigation found few Gypsum boards without concealing red sanders and some packing material weighing 6.318 MT were in the cargo.
3.6 Investigation found that above said preparations were made to commit attempt to export the red sanders of aforesaid description by Alexander under the instructions of the Appellant. Such goods are prohibited goods rendering that liable to confiscation under Section 114 (d), 113(e), 113(h) and 114(i) of the Customs Act, 1962. The gypsums board and other packing material having been used as cover in the cargo to conceal the offending goods (Red Sanders) were also liable to confiscation under section 119 of the Customs Act, 1962. For such act of attempt to export prohibited goods penalty proceedings were also liable to be initiated.
4.0 In adjudication, learned Adjudicating Authority found that M/s. Freedom Impex, of Tuticorin was owned by Alexander and he filed Shipping Bill No.1590098 dated 24.03.2006 at Tuticorin port attempting to export red sander declaring that as Gypsum Boards to the consigneeM/s. FG Global Resources, of Malaysia. Examination of the cargo by investigation revealed that Red Sanders were concealed in the cavity made on the gypsum boards.Market value of the offending goods was Rs.49.50 lakhs and other packing materials totally weighing 6.318 MT valued at Rs.0.88 lakhs were in the consignment. All such goods were seized under a mahazar dated 25-03-2006. Such fact remained uncontroverted before the Adjudicating Authority.
4.1 The State Forest Officialswhen examined the offending goods found from the cavity of the gypsum boards, they reported that to be Red Sanders wood pieces. That corroborated with John Alexanders deposition made on 26.3.2006.
4.2 When John Alexander was examined on 26.03.2006under Section 108 of the Customs Act, 1962.He stated that (i) he obtained Import Export Code 3503002171 in August, 2003 to exports turmeric, pepper, rice; (ii) he decided to earn money making exports in an illegal manner; (iii) during 1995, 1996 he concealed and transported sandalwood which is prohibited goods misdeclaring that as tiles, wash basin to Singapore through M/s. Gilpa Agencies, Tuticorin; (iv) InFebruary, 2006 he contacted Shri Manivannan who sent 1500 pieces of red sanders to him for export;(v) during the last week of January he kept the red sanders underneath the gypsum boards in the godown taken on rent by him in Sugar Mill Colony in Tirunelveli and attempted to export that to the buyer in Malaysia as informed to him by appellant,through Tuticorin Port without anybodys knowledge for a monitory benefit of Rs.2 lakhs; (vi) he covered the red sanders wood with newspaper making cavity in the gypsum boards and covered the same by gypsum board without cavity. (vii) he concealed 1500 numbers of red sanderpieces in 94 packages containing gypsum boards and strapped with steel for concealment; (viii) he made ten crates containing gypsum boards without concealing red sanders pieces therein to produce before Customs officers for physical inspection; (ix) he filed the Shipping Bill 1590098 dated 24.3.2006 with Tuticorin Custom House declaring 104 crates of gypsum boards were being exported to the address of the buyer in Malaysia given by Shri Manivannan; (x) the detailed examination conducted by the investigating officers at Raja Agency CFS found 1500 Nos. of red sander in three shapes weighing 1.650 MT were attempted to be exported in the guise of gypsum boards used for concealment and those boards were also seized; (xi) he knew that export of red sanders is an offence under the Customs Act; (xii) he confirmed the photograph shown to him by investigation was of Shri Manivannan of Perambur, Chennai, and admitted the Offence committed by him. All such depositions remained uncontroverted.
4.3 Adjudicating Authority found that John Alexander had a unit called M/s. Gilpa Agencies at Tuticorin. During February, 1997, when he attempted to export sandalwood sent by Shri Santhanameeran from Chennai, that was detected by the Customs and he was penalised by an amount of Rs.10 lakh.
4.4 Adjudication also observed that Shri T. Manivannan (Appellant), who was the Proprietor of M/s. N.K.R. Corporation, in Chennai sent Red Sanders(a prohibited item for export under the EXIM Policy)to John Alexander, for export thereof to the buyer in Malaysia through Tuticorin Port.
4.5 On the above facts, adjudication was completed holding that the act of supplying the prohibited item viz. red sanders by the appellantfor illicit export out of India were liable to confiscation and penalty under Section 114 of the Customs Act, 1962 was imposed on him. Similarly John Alexander of M/s Freedom Impex, Tuticorin was made liable to a penalty under Section 114 of the Customs Act, 1962 for attempting to export the offending goods. Other consequences of law also followed.
5.0 Opening the argument, Shri B. Satish Sundar, Advocate submitted that the misdeclared export was not the design of this appellant. At no point of time he was instrumental to the same.He says that if the date chart depicted below is looked into, that shows the chronology of the case ruling out involvement of this appellant:
SI.NO Dates Events Page No. Ref. in Paper Books 1 24.03.06 Shipping Bill No.1590098 filed byM/s.Freedom Impex through its Proprietor John Alexander for export of goods i.e., 104 crates of Gypsum Boards in Container No.CRXU169704-8 from M/s. Raja Agencies, CFS, Tuticorin.
32-48 2 24.03.06 Examination of the above container undertaken by Officers of the D.R.I, Tuticorin at about 2100 Hours. John Alexander is present. Examination of the cargo reveals that there may be Red Sanders concealed besides the normal cargo. As it was getting late, further examination postponed and mahazar drawn. Proceedings completed at 23.30 hours 30-31 3 25.03.06 Further examination of Cargo undertaken between 15.45 Hours and 22.00 hours in the presence of John Alexander. D.R.I. Officials recovered 500 sets i.e., 1.650 MTS of Red Sanders from the consignment. The goods including the Red Sanders are seized under Mahazar.
49-50 4 25.03.06 Office premises of M/s. Freedom Impex at South Samantham Moorthy Street, Tuticorin search between 1515 and 1539 Hours in the presence of no incriminating materials seized 51-53 5 26.03.06 Statement under section 108 of the Customs Act, 1962 recorded from John Alexander * He details how came into contact with Appellant Mannivannan * How Mannivannan sent a contraband.
* What was the remuneration given by Appellant for the work. He states that the total remuneration was Rs.2 lakhs out of which Manivannan sent Rs.40,000/- through a person who came with the Red Sanders in the Lorry and Manivannan deposited 60,000 into ICICI Bank Account No.613905014790 of his (not verified nor investigatged).
* He had paid Rs.1 lakh earlier (not verified).
* The buyers addressed at Malaysia were sent through KPN Bus Courier (not verified).
* Earlier to the present consignment, a test consignment of smaller lot sent under Shipping Bill No.1581521 dated 02.03.2006. Not verified.
* The buyer is one FG Global resources (no verification).
* He implicates Manivannan stating that he had supplied that he had supplied the contraband and is residing at Perambur High Road having a Government manufacturing factory. He also states that he does not know the contact phone number of Manivannan.
54-61
6. 27.03.06 John Alexander arrested by the officers of D.R.I. at about 0700 Hours.
577. 27.03.06 John Alexander remanded to Judicial custody before Judicial Magistrate, Tuticorin at about 11.50 pm till 07.04.2006.
618. 29.03.06 Discreet Inquiries made by D.R.I Chennai as to whereabouts of Appellant and his business.
629. 29.03.06 Search of premises of M/s.Revathy Garments, Perambur by Officers of D.R.I. Chennai with Nil results.
64-65
10. 29.03.06 Summons issued to Appellant for appearance on 31.03.2006. Statement recorded from the Appellant. He says he has legal business in Red Sanders Exports and Garments. He says he knows one Alex of Tuticorin when he was doing Garment business in the name of Raja International through Tuticorin Port in 2000-2001. He states that he spoke to Alex in January 2006 pertaining to verification of prospective groom for his daughter. He denies the statement of John Alexander dated 26.03.2006 and says that he has nothing to do with the seizure of Red Sanders logs from Freedom Impex with John Alexander.
66-72 11 31.03.06 Search of premises of NKR Corporation, Rajan Apparels and Godown of NKR Corporation. No incriminating materials. Register showing stock of Red Sanders musical instruments parts, powder and chips seen by Officers of D.R.I. The stock in the godown was found to tally with the register.
74-79 12 04.04.06 Second Statement recorded from the Appellant. He denies the version of John Alexander and reiterates his innocence.
81-82 13 26.04.06 John Alexander detained under COFEPOSA 91 14 22.05.06 Representation of wife of John Alexander. She states that he was in custody of D.R.I. from 24.03.06, 8.00 pm till arrest and says that his statement is forced.
92-93 15 19.06.06 Further statement recorded from John Alexander at Central Jail, Madurai. He reiterates statement dated 26.03.06 and identifies one Computer generated printout claim to be the photo of Appellant.
94-96 16 19.06.06 Third statement recorded from the Appellant. It is one of denial.
98-99 17 19.06.06 The Appellant arrested and remanded to judicial custody.
100 1823.06.06 Bail Application of Appellant.
111-113 19 04.07.06 The Appellant detained under COFEPOSA and his detention is challenged by filling Habeas Corpus Petition in High Court, Madurai Bench 114-129 20 25.09.06 High Court disposes of the above petition stating that the detention of the Appellant has since been revoked by the State Government on the basis of the report Advisory Board.
130-132 21 13.09.06 Show Cause Notice issued. Allegations at para 17(iii) proposal at para 17(ii) for penalty.
19-29 22 14.10.06 First reply to the Show Cause Notice. Disputes statements of John Alexander. Denies depositing money in Bank at Chennai for John Alexander account. States that Advisory Board opinion in COFEPOSA is unanimous that there is no material to connect the Appellant to the transaction.
133-135 23 30.10.07 Second reply to the Show Cause Notice.
136-137 24 30.11.07 Order in Original passed.
138-148 25 01.02.08 Appeal filed to this Honble Tribunal.
1-12 26 17.03.10 Tribunal rejects the appeal in Final Order No.322/2010.
27June10 CMA filed before the Honble High Court of Madras at Madurai Bench.
2825.08.10 High Court admitting the appeal grants interim stay on the condition that the Appellant deposits 50% of the penalty amount within 8 weeks.
2901.11.10 Appellant deposit Rs.2.50 lakhs.
3031.01.14 CMA disposed of the High Court remanding the matter to the Tribunal for consideration of facts and latest case laws.
5.1 It was submitted on behalf of the appellant that all along Revenue relied on the statement of the co-accused Shri Alexanderto impute the appellant to charge of supply of red sander to him, who attempted to export the same. But that was not actually so. Appellant had notmisdeclared the Red Sanders asGypsum Boards, since he was not exporter. He hadnever arranged supply thereof to the exporter.When the Tribunal did not consider material evidence as to whether the appellants involvement was corroborated by Revenue by any other evidence other than the statement of co-accused and whether the exculpatory statement of the appellant has credence,appellant approached Honble High Court of Madras in CMD (MD) 116 raising following two questions for answer and such questionsfind place in para 4 of the order of the Honble court passed on 31.01.2014:-
(a) Whether the 1st Respondent Tribunal as a final fact finding body ought to have asked for corroboration on material particulars in the statement of co-accused John Alexander by independent evidence/material so as to rely on the same for suspending the penal liability against the appellant?
(b) Whether the 1st Respondent Tribunal has committed an error or jurisdiction in not even adverting to or evaluating the intrinsic worth of the exculpatory statements of the Appellant, which are on record in juxtaposition to the so called confessional and voluntary statements of the said John Alexander? 5.2 Further submission on behalf of appellant was that the statement of the co-accused was derived under duress,stress and strain during his detention initially by DRI and thereafter under COFEPOSA. That does not lend any credence to frame charge against the appellantbeing recorded during detention. Tribunal in earlier occasion did not find any hard evidence to inculpate the appellant for which the Honble High Court hasdirected it to examine as to what is the corroboration made by Revenue other than the statement of John Alexander and when there wasretraction made by the appellant refuting inculpatory statement of that person,whether there is any other evidence exists to negate suchretraction. On the basis of facts on record,Honble High Court has specifically directed that the matter is to be decided keeping in view the evidentiary value of the statement of the co-accusedand exculpatorystatement of the appellant.
5.3 It was further submitted on behalf of appellant that if a fair reading of statement of John Alexander is made that brings out the innocence of the appellant and because Revenue found the export misdeclared that shall not ipso facto create an evidence against the appellant. Revenue has failed to bring the sourceof procurement of red sander as well as mode of delivery of the goods by the appellant to Alexander. That rules out the alleged supply thereof by appellant to John Alexander. The consideration, if any, paid for the alleged supply was not corroborated by any bank account in absence of detection of such account by Revenue. How the goods moved is not proved by Revenue.That remainedin mystery without any evidence of purchaseof the impugned goods attaching the appellant to such goods, found. Adjudication is therefore baseless to penalise the appellant. The person who were connected with the export were not at all brought to the fold of law. Therefore, statement of co-accused shall not bind the appellant to charge and no penalty under Section 114 (i) of the Customs Act, 1962 is imposable on the appellant.
5.4 It was further submitted on behalf of the appellant that even though this appellant was arrested under COFEPOSA,that did not sustain after the Advisory Committees report finding the appellant innocent and he was released.All such groundsare enough to exonerate the appellant from penalty. Further, when there was no evidence to prosecutethe appellant, Revenue should not implicate the appellant to the charge.
5.5 Appellant relied on its own statement to prove that it was not a party to the offence committed by Shri John Alexander. Shri John Alexander took undue advantage of the situation to implicate the appellantand escapefrom charge.To buttress his claim, appellant relied on the following decisions:
(i) Haroon Haji Abdula Vs State of Maharashtra reported in 1999 (110) E.L.T. 309 (S.C.).
(ii) Vinod Solanki Vs Union of India reported in 2009 (233) E.L.T.157 (S.C.).
(iii) Santosh Pandurang Patil Vs Commissioner of Customs, Tuticorin reported in 2009 (234) E.L.T.455 (Tri.-Chennai).
(iv) Commissioner of Customs (Imports),Chennai-I Vs Sainul Abideen Neelam reported in 2014 (300) E.L.T.342 [Mad.].
(v) Shri Vinod Kumar Jatia Vs Union of India reported in 2014 (303) E.L.T. 532 (Del.).
(vi) Ashwini Kumar Tandon Vs Commissioner of Customs (Preventive) reported in 2014 (305) E.L.T.350 (Bom.).
(vii) A. Tajudeen Vs Union of India reported in 2015 (317) E.L.T.177 (S.C.).
5.6 Inviting attention to dismissal order in CMA No.1920 of 2011 passed by Honble High Court of Madras in the case of Sushil Kumar Kanodia Vs Commissioner of Customs, Chennai reported in 2007 (218) E.L.T.453 (Tri.-Chennai)learned counsel says that Revenue has no case. He placed further reliance on Santosh Pandurang Patil Vs Commissioner of Customs, Tuticorinreported in 2014 (300) E.L.T.342 [Mad.], which was followed by High Court of Madras in Commissioner of Customs (Imports), Chennai-I Vs SainulAbideen Neelam reported in 2014 (300) E.L.T.342 (Mad.)for defence of the appellant.
5.7 Summarily it was submitted by the appellant that law is well settled that mere statement of the co-accused does not become credible evidence against any other accused. This is golden rule of criminal Jurisprudence.That is even extended to Customs proceedings in penalty cases which is quasi-criminal in nature. Therefore, levy of any penalty on the appellant shall be contrary to the basic rule of jurisprudence.
6.0 Learned Departmental Representative on the other hand submitted that appellants close association with Alexander was sufficient proof of supply of red sander to him which was seized by customs. Seizure itself is testimony of involvement of the appellant who sent offending goods to Alexander. Revenue need not prove its case with mathematical precision. Preponderance of probability is in its favour.Circumstances of commitment of offence speak for itself as to the involvement of the appellant in red sander smuggling.
6.1 To support the case Revenue, learned departmental representative relied on the decision in the case of Naresh J. Sukhawani Vs Union Of Indiareported in 1996 (83) E.L.T.258 (S.C.). According to Revenue,had this appellant been innocent, he would not have attached himself consciously to the offencesupplying the offending goods to Alexander nor been in close association with Alexander sending gypsum board supplying to him for hiding the offending goods. He was in constant contact with Shri John Alexander withcommon intent to make ill gain with ill will. He not only made arrangementof supply of the impugned goods to Alexander but also abetted to misdeclare the goods asGypsum Board.Truckwas sent by him for delivery of the said goods at the destination. That has come to record.These are enough evidence to show that this appellant was an abettor to the commitment of offence by Shri John Alexander and perpetuated smuggling. Therefore appropriate penalty was levied in adjudication.
7.0 Heard both sides and perused the record.
7.1 It is an established fact on record that from the consignment loaded into the Container No.CRXU-169704-8 on 24.03.2006 investigation recovered 1500 numbers Red Sanders, hidden in the cavity created in Gypsum Boards packed in 94 packages. Such goods are prohibited goods for export out of India. One John Alexander attempted to export the said goods in the name of one M/s. Freedom Impex from Tuticorin filing Shipping Bill No.1590098, dated 24.03.2006. Investigation found that such offending goods were attempted to be exported deliberately misdeclaring as gypsum board.Recovery of the offending goods remained uncontroverted.
7.2 When John Alexander disclosed the source of receipt of the offending goods in his statement that was not discarded by appellant leading any cogent evidence. He did not name the appellant out of hostility or for the sake of naming him to escape Investigation. Investigation discharged its burden of proof proving the case form the stage of discovery of the red sander sent by the appellant till discovery thereof from the cavity of the gypsum board sent by appellant to Alexander. Accordingly appellants involvement in the smuggling of redsander was alleged.
7.3 Alexander appeared to be man of no means and was not in position to make heavy investment in procurement of the offending goods. Therefore he acted only as a conduit of the appellant to export the same for a consideration of Rs.2.00 lakhs. Except plea of no proof of bank account showing deposit of Rs.60,000/- (part of the consideration) not verified by Customs, appellant failed to controvert the cash payment of Rs.40,000/- made by him to Alexander towards consideration through the carrier of the offending goods.
7.4 Alexander was a smuggler on record of Customs from 1985. He was earlier connected with one Shri Santhanameeran of Chennai to exportsandalwoods. His contact with appellant was established through Shri Santhanameeran for export of the offending goods. Alexander categorically revealed that he was conduit for the appellant for the aforesaid consideration. Address of the importer in Malaysia was given by the appellant to Alexander. Such fact could not be ruled out by appellant in the course of appeal hearing. He also specifically stated before investigation that the Red Sanders were concealed in the Gypsum Boards which was discovered by investigation. The offending goods being prohibited for export and the appellant having sent that along with gypsum board to conceal the same for export, he could not detach himself from the commitment of the offence when conspiracy of illegal export was diffused by investigation.
7.5 Statements of Alexander were recorded before his arrest and even thereafter in the presence of the Jail Superintendent. That authority was an independent witness. His presence during recording of the statement under section 108 of the customs Act, 1962 was not challenged to rule out binding nature thereof. He revealed name of the appellant every time repeatedly and unequivocally. His acquaintance with the appellant came to record confirming his photograph when that was shown to him by the investigation in Jail. He never retracted his depositions given to Customs before the Magistrate when he was produced before the Court for trial. His depositions were therefore believable. Statements of Alexander brought out appellants active involvement without which gypsum board with red sander would not have reached to Alexander. That was not rebutted by appellant leading cogent evidence when allegation were based on evidence brought out by investigation.
7.6 When the appellant was interrogated by the investigation, he categorically brought out his involvement in dealing with Red Sanders from the year 1999 with different persons and made export thereof. He stated to the investigation that having incurred huge loss in his garment business, he found that export of Red Sanders was easy mode to recover the loss. Accordingly he had exported Red Sanders in the name of M/s. N.K.R. Corporation from Chennai Port in the past. He also failed to rule out his intimacy with John Alexander of Tuticorin. Even though he attempted to detach himself in his statement from the attempted export of offending goods, he failed when entire governing facts and attendant circumstances imputed him to charge. He refused to reply on the statement of John Alexander recorded in the Central Prison of Madurai on 19.06.2006 apprehending his guilt. He was also arrested on 19.06.2006 under COFEPOSA for the offence of attempt to export the Red Sanders.
7.7 In the course of hearing of the appeal, innocence of the appellant could not be established except technical plea of no proof of money trail raised, confessional statement of coaccused not usable and exculpatory statement of appellant is credible. No doubt, John Alexander was co-accused and his statement was used against the appellant. But his statement was so credible and believable being recorded before the jail authority, contents thereof were not baseless. Accordingly his truthful statement cannot be brushed aside when nothing was retracted before Magistrate when he was produced for trial. The manner of recording of the evidence from John Alexander was also so fair, that was free form doubt. He was not at all hostile to the appellant. Rather he was friendly since appellant asked him to find alliance for his daughter as was contended by appellant. But to save his skin, appellant behaved like a stranger as if he was unknown to Alexander. Therefore it cannot be said that the appellant was no way concerned with Shri John Alexander as a member of the red sander smuggling racket.
7.8 Appellant did not rule out cash payment of Rs.40,000/- to Alexander through the carrier of the Red Sanders meant for delivery at the premises of Alexander. Law is well settled that evidence gathered under section 108 is credible and cogent and can be used against the author of the statement as well as against others. There is no material to show that belated retraction was made by appellant honestly and truthfully. In his statement dated 31.03.2006, appellant had also disclosed the source of procurement of Red Sanders in the past. Accordingly his dealing with the Red Sanders was nothing new. Various direct and circumstantial evidences as above question conduct of the appellant.Plea of retraction is a mere pretence and not truthful. His complacity is proved when he did not make any retraction before the Magistrate when he was produced under COFEPOSA.
8.0 Cogent, credible and circumstantial evidence as aforesaid having come to record, Customs is not required to prove its case with mathematical precision to a demonstrable degree; for, in all human affairs absolute certainty is a myth, and absolute proof being unattainable, the law, accepts for it, probability as a working substitute in jurisprudence and prosecution is not required to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. Thus legal proof is not necessarily perfect proof often it is nothing more than a prudent mans estimate as to the probabilities of the case. The other cardinal principle having an important bearing on the incidence of burden of proof is that sufficiency and weight of the evidence is to be considered since it is extremely difficult, if not absolutely impossible for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused, it is not obliged to prove them as part of its primary burden.
8.1 Procurement of red sander was not possible on the part of Alexander due to his unsound financial position which came to record. The appellant only made the procurement successful for his ill gain and employed Alexander as his conduit for export thereof. Attempt to export was made with hand in glove. Secrecy and stealth being covering guards of ill designed act, it is normally a hard task for Revenue to unravel every link of the process. However Revenue could successfully place circumstantial corroborative evidence to discard innocence of the appellant who proved his malafide submitting himself to the attempted export of prohibited goods.
8.2 Many facts relating to the ill design remain in the special or peculiar knowledge of the persons concerned with that. Adjudicating Authority did not adjudicate the matter on any sole consideration, but several considerations, governing facts and attendant circumstances were basis of the adjudication. Echoing evidence, series of factors and several circumstances were determinative. Conduct of the appellant was questionable which brought him to charge.
8.3 The standard of proof in a civil case is preponderance of probabilities. In a civil case there is no burden cast on any party similar to the one in a criminal proceeding. Following the ratio laid down in CIT v. Durga Prasad More - 82 ITR 540, 545-47 (SC) it may be said that Science has not yet invented any instrument to test the reliability of the evidence placed before a Court or a Tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities. Human minds may differ as to reliability of a piece of evidence. But in that sphere the decision of the final fact finding Authority is made conclusive by law. The normal rule which governs civil proceedings is that a fact can be said to be established if it is proved by a preponderance of probabilities. A fact is said to be proved when the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case to act upon the supposition that it exists. The belief regarding the existence of a fact may thus be founded on a balance of probabilities. A prudent man faced with conflicting probabilities concerning a fact situation will act on the supposition that the fact exists, if on weighing the various probabilities he finds that the preponderance is in favour of the existence of the particular fact. The court applies this test for finding whether a fact in issue can be said to be proved.
8.4 When fraud surfaces, that unravels all. Revenues stand is fortified from the Apex Court judgment in the case of UOI v. Jain Shudh Vanaspati Ltd. - 1996 (86) E.L.T. 460 (S.C.). So also fraud nullifies every thing as held by Apex Court in CC v. Candid Enterprises - 2001 (130) E.L.T. 404 (S.C.) and in the case of Delhi Development Authority v. Skipper Construction Company (P) Ltd - AIR 1996 (SC) 2005. Escapement of offending goods from notice of Customs from the godown of Alexander was result of fraud committed against Revenue. The frauds committed by the perpetrators of the offence were in close connivance. The Apex Court in the case of S P Chengalavaraya Naidu v. Jagannath - AIR 1994 SC 853 and in the case of Ram Preeti Yadav v. UP Board of High School and Intermediate Education - AIR 2003 SC 4268 has held that no court in this land will allow a person to keep an advantage which he obtained by fraud.
8.5 When the material evidence established fraud against Revenue, white collar crimes committed under absolute secrecy shall not be exonerated from penal consequence of law following Apex Court judgment in the case of K. I. Pavunny v. AC, Cochin - 1997 (90) E.L.T. 241 (S.C.). Various technicalities raised by appellant in the course of appeal hearing did not matter when substance of the matter weighed heavily for determination of the issues involved.
8.6 An act of fraud on Revenue is always viewed seriously. Fraud and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. It has been held by Apex Court in the case of Commissioner of Customs, Kandla v. Essar Oil Ltd. - 2004 (172) E.L.T. 433 (S.C.) that by fraud is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from the ill will towards the other is immaterial. The expression fraud involves two elements, deceit and injury to the deceived. Undue advantage obtained by the deceiver, will almost always call loss or detriment to the deceived. Similarly a fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by anothers loss. It is a cheating intended to get an advantage. (See S.P. Changalvaraya Naidu v. Jagannath [1994 (1) SCC 1].
8.7 Fraud is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false. This aspect of the matter has been considered by Apex Court in Roshan Deen v. Preeti Lal [2002 (1) SCC 100] Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education [2003 (8) SCC 311], Ram Chandra Singhs case and Ashok Leyland Ltd. v. State of T.N. and Another [2004 (3) SCC 1]. Suppression of a material document would also amount to a fraud on the court (see Gowrishankar v. Joshi Amha Shankar Family Trust, [1996 (3) SCC 310] and S.P. Chengalvaraya Naidus case AIR-1994 SC-853. No judgment of a Court can be allowed to stand if it has been obtained by fraud. Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity. Mis-declaration of the goods made in shipping bill was a fraud committed against Revenue.
9.0 Learned counsel relied on para 10 of the judgment in the case of Haroon Haji Abdula Vs. State of Maharashtra 1999 (110) ELT 309 (SC)to submit that evidence of the accomplice should be corroborated. There is no doubt to the proposition that confession of a co-accused should not be sole basis to convict an accused. There should be other corroborative evidence on which the charge can be based. That evidence is referable if that gives some assurance to the establishment of the charge. In the present case, it is not only the statement of Alexander who indicted appellant to the scrutiny of the law but also the goods that came from him was independent evidence showing his involvement. When Alexander was not man of means he was fully dependent on appellant for red sander smuggling. Therefore, it is not the evidence of the accomplice that only imputed the appellant but circumstantial and probative evidence came to record to impeach the conduct of the appellant demonstrating his involvement with his past record of involvement in smuggling.
9.1 Reliance of the appellant on the decision of the Honble Supreme Court in the case of Vinod Solanki Vs. Union of India 2009 (233) ELT 157 (SC)was placed to submit that the evidence recorded from Manivannan forcibly does not stand to speak against the appellant. There is no proof this proposition. Alexander was not at all under any pressure, undue influence or coercion to depose before customs officers. His statements were so clear that indicated his refreshed mind at all times of deposition. No doubt, presumption of innocence is a human right for the appellant but that is not a fundamental right. He being contributory to Alexanders involvement paying him a remuneration to smuggle red sanders, he failed to prove to be an innocent. Rather he was mastermind to send gypsum board for concealing red sanders and attempt to export the same to the consignee in Malaysia who was known to appellant.
9.2 Further reliance of the appellant in the case of Santosh Pandurang Patil Vs. Commissioner of Customs 2009 (234) ELT 455 (Tribunal) was made to submit that penalty cannot be imposed without proving the financial transaction. This submission fails to stand for the reason that the appellant was a main perpetrator of smuggling making Alexander an abettor to such an evil as has been revealed from governing facts and circumstances of the case. Therefore, commitment of offence even without money trail is enough when conscious breach of law is patent.
9.3 Appellant also relied on para 14 of the judgment of the Honble High Court of Madras in the case Commissioner of Customs, Chennai Vs. Sainul Abideen Neelam 2014 (300) ELT 342 (Mad.) to make the proposition that evidence recorded under section 108 of the Customs Act, 1962 may not be necessarily accepted by Customs authorities in absence of further material to substantiate the contents of the statement. Appellant fails to succeed on this proposition for the reason that customs authorities are not the Police officers for which the statement recorded under section 108 of the Customs Act, 1962 is binding on the appellant. The appellant did not cooperate to investigation on few occasions when summon was issued against him, apprehending his guilt. Such an approach of appellant speaks his contumacious conduct trying to escape from the tests of the evidence gathered from Alexander. Therefore, he fails to be benefitted from the judgment. Appellant when failed to rule out that the evidence gathered from Alexander is inadmissible in law, customs authorities discharged their burden of proof to hold that the appellant was the supplier of the red sanders and was liable to face the charge of smuggling.
9.4 Relying on the decision of the Honble High Court of Delhi in the case of Shri Vinod Kumar Jatia Vs. Commissioner of Customs 2014 (303) ELT 532 (Del.), appellant submitted that mere statement of a third party shall not bind the appellant to be victim thereof. Investigation had not casually made investigation of the case. They seriously examined the material facts, situation as well as evidence threadbare that surfaced. They found that the offending goods were arranged and transported by appellant from a different place to reach to the godown of Alexander and the owner of the goods was the appellant. Therefore, it is not merely the statement of Alexander that imputed him to charge but also conscious, active and deliberate involvement of appellant implicated him to the charge.
9.5 Appellant further relied on the decision of the Honble High Court of Bombay in the case of Ashwini Kumar Tandon Vs. Commissioner of Customs 2014 (305) ELT 350 (Bom.) to submit that the confession of the co-accused is not substantive evidence. As has been stated earlier, the confessional statement of the co-accused was not extracted forcibly but was voluntary and that showed light as to origin and destination of offending goods and the other accompanying goods (gypsum board) used as a means to conceal the same in the cavity made therein. Nowhere Alexander made a complaint as to his mental torture or harassment even when he was produced before the Magisterial Court under COFEPOSA. Therefore, his evidence cannot be mutilated for the pleasure of the appellant to claim innocence. He was not an innocent. But an investor of offending goods.
9.6 Appellant further relied on the decision of the Apex Court in the case of A. Tajuden Vs. Union of India 2015 (317) ELT 177 (SC) to submit that mere oral statement of Alexander, not corroborated by any documentary evidence shall not implicate the appellant. It may be stated that the offending goods arrived from a different destination to the premises of Alexander. When the goods so arrived proved origin thereof, involvement of the appellant was traceable to the procurement and dispatch of the offending goods. Oral evidence was not the sole basis to inculpate the appellant,but there were other circumstantial evidence in the case to implicate him.
10.0 Evidence gathered under section 108 of the Customs Act, 1962 is not from an accused or accused person. The words accused or accused person is used only in a generic sense in law. Recording of the proceeding by customs being pre-accusation stage that is not extracted from an accused. Therefore, customs officer is not a police officer as is defined under Evidence Act and Code of Criminal Procedure. Accordingly, appellants plea that the exculpatory statement of the appellant has credence in evidences does not sound well when he had pre-meditated design to commit fraud against Revenue. Even though the customs officer has the power to arrest, he does not act like a police officer as may be appreciable when section 163 of the Code of Criminal Procedure is analyzed. The customs officer cannot be equated with the police officer although he files compliant under special Act. A police officer is recognized under section 73 of the Code of Criminal Procedure to file a complaint on behalf of the State before the Magistrate. But a customs office does not do that. Therefore, the statement recorded from Alexander was examined in the course of discharge of duty by a customs officer. That cannot be presumed to be done by a police officer. There was no force or coercion used by the investigating authority to examine him. Therefore, his statement can be used against appellant when that showed path to investigation to trace the source of the goods.
10.1 Further, a Customs officer not being permitted to file a charge sheet he is not a police officer under section 73 of the Code of Criminal Procedure. Although power of investigation is one of the mandate of the law on the customs officer they do not become police officer within the meaning of section 25 of the Evidence Act. Accordingly, confessional statement made by an author of the deposition to the customs officer would be admissible in evidence in law. When the statement of the appellant could demonstrate his acquaintance with the event of recovery of the red sanders that itself proved his involvement which was not ruled out by him since Alexander became abettor for export of his goods. Commitment of the attempt to export red sanders out of India was the perpetrated design of appellant who provided the address of the importer.
10.2 The statement made by Alexander inculpating the appellant could be used against him as substantive evidence following the ratio laid down by the Honble Supreme Court in the case of Naresh J Sukhawani Vs. Union of India 1996 (83) ELT 258 (SC). The 108 statement resulted in confiscation of the red sanders discovered from the cavity on the gypsum boards was sufficient a proof which could be instrumental to trace the appellant. It is also settled principle of law that even if the confession is retracted the time within which such retraction has been made and the veracity of the retraction play a vital role for believability thereof. Confession binds the author and against whom the deposition has been made.
11.0 The contravention of law and the offence committed in the organized manner aforesaid was under absolute secrecy which was proved from the discovery of the red sander from the cavity made in the gypsum board to hide the same. If the appellant is granted any leniency, that shall be bonus to smuggling. So also unchecked smuggling when upsets the economy, appellant fails to deserve any leniency. All these can be said following the principles of law laid down in the case of KI Pahavunny Vs. Assistant Collector (HQ), CX, Collectorate of Cochin 1997 (90) ELT 241 (SC). The evidence on record having probative value it is the objective evaluation thereof applying relevant test, finding has been reached. There is neither any surmise nor suspicion that can be attributed to investigation. They made their story very successful. No fancible reason has been assigned by them. The issue germane from the root of the matter and has been well tested by the investigation. Reason being soul of the law they have tried to establish the truth of the clandestine deal by a detailed investigation. Man may be prone to speak falsehood but circumstantial evidence will not. Falsity are routed from mans proclivity. Flattering when it is tested on the anvil of the circumstantial evidence, truth trans and scanning evidence going through the reasoning of the learned adjudicating authority it imbibes a feeling that investigation result is not false.
12.0 Evidence gathered by Revenue unambiguously proved that the appellant was contributory to the fraud committed against customs. It is established principle of law that fraud and justice are sworn enemies. The smuggling racket perpetuated smuggling for many years in the past as is revealed from their conduct. Therefore appeal is liable to be dismissed and it is ordered accordingly.
(pronounced in the open court on 11.04.2016) (D.N. PANDA) JUDICIAL MEMBER Ksr/Rex 07-03-2016 DRAFT Remarks I II III Date of dictation 24.02.2016 Draft Order - Date of typing 24.02.2016 Fair Order Typing 07.03.2016 Date of number and date of dispatch 11.04.2016 Pronounced 31 C/00026/2008