Delhi District Court
Customs vs M/S World Digital Sound on 22 August, 2013
IN THE COURT OF SH. SUDESH KUMAR
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE01
PATIALA HOUSE COURTS/NEW DELHI
CC NO. 63/1/06
CUSTOMS VS M/S WORLD DIGITAL SOUND
22.08.2013
ORDER ON CHARGE
The present complaint has been filed by the complainant
department alleging commission of offences punishable u/s 135 (1) (a)
and 135 (1) (b) of the Customs Act, 1962. As per the complaint, one
Intelligence was received to the effect that the accused persons who
were manufacturers/exporters of 'Compact Discs' were indulging in
clandestine removal of goods from the Noida Export Processing Zone
which is Custom notified area with the help of security staff posted at
NEPZ.
On the basis of the intelligence report, a surveillance was
kept at the NEPZ main gate on 09.01.1997. The entire investigations and
search in the matter has been detailed in the complaint.
It has been submitted that on 09.01.1997, one truck bearing
no. DL 1 LC 1097 pertaining to the accused no. 1 company namely M/s
World Digital Sound Limited was stopped at the main gate while going
out.
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One driver namely Suraj Nayak and the other person Avinesh Kumar
who was an employee of M/s World Digital Sound Limited, accused no. 1
were inquired about the goods being carried in the vehicle. The
occupants produced a set of documents on demand which were found to
be totally irrelevant and invalid for clearance of any goods out of the
zone. Thereafter, the vehicle was searched and it was found containing
1,62,400 Compact Discs which were seized alongwith the vehicle. The
goods were removed from NEPZ which is a Customs notified area, in
clandestine manner. A panchnama was drawn. The value of the CDs
was primarily taken as 97,44,000/ which was later on revised to Rs.
8,70,24,000/ on the basis of market survey and exhibition catalogue.
Thereafter, statement of driver namely Suraj Kumar Nayak
and the other occupant namely Avinesh Kumar were recorded u/s 108 of
the Customs Act, 1962. The driver Suraj Nayak stated that he was
directed by the owner of the company, Mridul Nalwaya accused no. 2 to
bring Company's vehicle no. DL 1 LC 1097 loaded with the goods
belonging to the said Company, out of the NEPZ gate for which Avinesh
Kumar was given the documents. He stated that on presentation of the
documents by Avinesh Kumar, the truck was searched and 102 cartons
were found loaded inside the truck containing 162400 pcs. of CDs.
In his statement u/s 108 of the Customs Act, 1962, Avinesh
Kumar stated that he was an employee of M/s World Digital Sound Ltd.,
NEPZ, Noida and the accused Nalwaya had instructed him over phone
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for loading of 102 packed cartons of CDs, which were manufactured in
their unit, in the company's vehicle for which documents were given by
accused no. 3 L.N. Bharadwaj.
The statement of accused no. 2 Mridul Nalwaya was also
recorded u/s 108 of the Customs Act, 1962 wherein he admitted that he
telephonically instructed Avinesh to pack audio CDs and CD roms in 102
cartons. He also discussed with the accused L.N. Bharadwaj about the
Customs clearance etc. about sending the CDs without legal
authorization or knowledge of Customs and NEPZ security. He stated
that the said goods were to be supplied to Mr. Jasbir Gill, proprietor of J.
Electronics, Palika Market, Delhi who is accused no. 6 in the present
case. He stated that he did not have any valid documents to clear the
abovementioned seized CDs. He has resorted to unauthorized removal
due to financial crisis.
In follow up action, a search was conducted at House No.
66, Sector 37, Noida which was used by accused no. 1 as a guest house.
As a result of search, 4080 pcs of CDs duly packed in jewel boxes with
inlay cards and some loose CDs valued at Rs. 2,44,800/ were recovered
besides some documents and a large unquantified stock of inlay
cards/packing material for the CDs. The above said goods were detained
for further investigation under proper panchnama. The total number of
inlay cards (Printed material indicating details/contents of CD) were of
the order of 46,40,000 as per pachnama dated 04.07.1997.
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Thereafter, statement of the watchman namely Indiresh
Singh u/s 108 of the Customs Act, 1962 was recorded. He stated that the
entire work was carried out under the supervision of Managing Director
Mridul Nalwaya, accused no. 2.
On 13.01.1997, statement of accused no. 3 was also
recorded u/s 108 of the Customs Act, 1962 wherein he has stated that he
was aware of the work of Customs clearance from the zone. On
09.01.1995 at 7 PM, he met other accused Nalwaya, Managing Director
who told him that goods loaded in 102 cartons were to be removed from
the vehicle DL 1 LC 1097. He handed over some old DTA papers to
Avinesh Kumar. He stated that Nalwaya called Jasbir Gill on his mobile
telephone. Further statement of accused no. 3 was again recorded on
14.01.1997 wherein he has stated that previously also 3 to 4 times
unauthorized removal of CDs from the Zone was carried out with the
help of duty officer, ASO, Beer Sain on payment of Rs. 40,000/ on four
different occasions under instructions of Nalwaya. He further stated that
he was aware that raw materials were imported as well as purchased
from the markets and brought in the factory without making any entry at
NEPZ main gate.
As per the complaint, on 14.01.1997, premises of accused
no. 1 was searched and certain documents were recovered and seized
which were found relevant for inquiry. A detailed panchnama giving the
detailed inventory of goods was also prepared.
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A detailed statement of accused no. 2 was also recorded
u/s 108 of the Customs Act wherein he has accepted the fact that there
had been a seizure effected on 09.01.1997 of Rs. 1,62,400 CDs and also
admitted that the goods had been removed clandestinely from the factory
at NEPZ, Noida, to evade the taxes and duties. He accepted that M/s
World Music had been receiving goods which were cleared/removal
without payment of Customs duty, the parties who asked for the bill were
issued the bills. The said goods were supplied to M/s Padmini Polymers
Ltd., Okhla, New Delhi, M/s Time Magnetic, Bombay, Venus Audio,
Bombay. He further stated that after May, 1996, goods supplied to
aforesaid parties were of M/s World Digital Sound Ltd. which were
moved clandestinely without payment of duties and rest of the CDs were
sold on cash to M/s J. Electronics, Palika Shopping, Palika Bazar, New
Delhi. He further stated that he has no record as he has destroyed the
same because those were all illegal transactions.
It is further averred that on 04.02.1997, a detailed inventory
of CDs title wise and quantity wise was prepared in the presence of two
independent witnesses and the representative of the unit under proper
panchnama at CWC, NEPZ, Noida where the seized goods were kept for
safe custody. It came to the notice that the seized goods contained
80,000 pcs of CD roms and 82,400 pcs of CD audio valued at Rs. 8.25
crores and Rs. 49.44 lakhs respectively.
In his statement u/s 108 of the Customs Act, accused no. 7
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denied his involvement in unauthorized removal of goods by accused no.
1.
It is further alleged that in follow up action, on 10.01.1997, again search of residence of accused no. 2 at C8, East of Kailash, New Delhi was conducted and certain incriminating documents were resumed. Further, 14,150 CDs value amounting to total Rs. 7,07,500/, Jewel boxes 630 pcs valued at Rs. 3150/ and some printing material used for CDs were also seized from the basement which was in the possession of accused no. 2. It is alleged that during search proceedings, one Mr. Adarsh Suneja, General Manager, Marketing, Padmini Polymers Ltd. visited the house of accused no. 2 and his statement u/s 108 of the Customs Act, 1962 was also recorded. A panchnama was prepared on the spot. Statement of Mrs. Rekha Nalwaya, wife of accused no. 2 was also recorded u/s 108 of the Customs Act, 1962.
In his statement u/s 108 of the Customs Act, 1962, Mr. Adarsh Suneja stated that he was presently employed with Padmini Polymers Ltd., 240, Okhla Industrial Estate, New Delhi as General Manager (Marketing). He stated that Padmini Polymers was in the business of CD's and they placed order on World Music, Nizamuddin through formal purchase orders. He stated that they have received stampers from licensing labels from various countries which were handed over to the replicators for manufacturing of CDs. He further CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 6 of 55 stated that at present, they did not have manufacturing facilities of CDs and hence, stampers were given to the replicators on returnable basis. He further stated that they have placed order on World Music one year ago and then discontinued. They started placing orders on them since past two months. He stated that he was not aware if any central excise or Customs duty or any other duty has been paid by M/s World Music. The majority of their products were exported and balance sold in the domestic market.
As per the complaint in further follow up, a search was conducted at the office premises of accused no. 1 situated at A30, Murali Marg, Nizamuddin East, New Delhi and as a result of search, 2048 CDs, 100 inlay cards, 200 Jewel boxes valued at Rs. 1,03,600/ were recovered and the same were seized u/s 110 of the Customs Act, 1962. A panchnama was also drawn on the spot.
Again a search was conducted at the premises of accused no. 6 at A1, Palika Parking Shopping Complex, Connaught Place belonging to the accused no. 6 and 7840 CDs were recovered. The salesman Dinesh Kumar Sharma produced one invoice no. WM 167 dated 19.09.1996 issued by M/s World Music West View, Santacruz West, Mumbai in favour of the consignee M/s J. Electronics for 10,000/ CDs collectively valued at Rs. 2 Lakhs plus sales tax.
In his statement u/s 107 of the Customs Act, 1962, the salesman Mr. Dinesh Kumar Sharma stated that owner of the shop was CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 7 of 55 Jasbir Singh Gill whose whereabouts were not known. He further stated that he was not aware as to from where the owner purchased the CDs, however, whenever goods came to their shop, there was no challan or bill alongwith them.
In further follow up, a search was conducted at A6/17, Vasant Vihar residence of Surinder Mohan Bhatia and during search, one file containing correspondence relating to accused no. 1 was recovered and taken into possession.
It is submitted that on 10.01.1997 on the basis of statement of Mr. Adarsh Suneja, a search was also conducted at C8, East of Kailash, New Delhi which was premises of accused no. 4 and as a result of search, 26,464 CDs were recovered for which the officials of accused no. 4 could not produce any purchase as well as stock records. Same were packed in card board boxes and locked on the ground floor of the accused no. 4 and sealed by putting a sticker on the door lock over the signatures of the signatories to the panchnama.
The statement of Mr. R.K. Chawla, DGM for accused no. 4 was also recorded.
It is further averred in the complaint that nothing incriminating was recovered from the search of shop no. 258, Palika Shopping Complex, M/s J. Electronics pertaining to accused no. 6.
In further action, again on 15.01.1997, a search was conducted at the residence of accused no. 6, however, nothing CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 8 of 55 incriminating could be found. It has been further mentioned that Mr. Adarsh Suneja tendered his voluntary statement u/s 108 of the Customs Act, 1962 again on 15.01.1997 in addition to his statement dated 10.01.1997 and stated that Padmini Polymers Ltd. was a Public Limited Company and all policy decisions regarding sales, purchase, accounts, finance, export/import were taken by CMD, Vivek Nagpal, accused no. 5. He further stated that there were three suppliers of CDs to Padmini Polymers Ltd. namely Koch Rajan, Mumbai, World Music, Nizamuddin, New Delhi and World Digital Sound Ltd., NEPZ, Noida. He stated that Padmini Polymers Ltd. was getting the stampers from their agreement partners from overseas only. He stated that last year, they got their CDs replicated from World Digital Sound Ltd., NEPZ, Noida. He stated that Nalwaya approached them in October - November, 1996 to replicate their CDs from World Music. He stated that he was not aware of any dealing between World Music and World Digital, however, the person being the same Nalwaya gave them all tax paid bill from World Music, Delhi, of all their CDs. He admitted that on the purchase order of Padmini Polymers Ltd. No. CDUI/240/251 dated 10.12.1996 placed on M/s World Music, there was no mention of taxes. He also admitted that although invoice No. 1129 dated 13.12.1996 mentioned 'all inclusive' but it did not mention whether any taxes had been paid.
It is further reported that on 20.01.1997 Mr. M. Bhatia, General Manager (Acts) of accused no. 4 had tendered his voluntary CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 9 of 55 statement u/s 108 of the Customs Act, 1962, in which, he interalia, stated that he was looking after the accounts in the company and was directly reporting to the CMD of the company, Vivek Nagpal. Mr. M. Bhatia was asked to submit the following documents:
1. Copies of the Shipping Bills of exports.
2. Copies of Bills of Entry of imports.
3. Rights accounts i.e. Name of the party, payment made, amount paid with dates.
4. Stampers' account quantity received and stock in hand.
Despite repeated summons, Mr. M. Bhatia has never come in person nor he had sent the abovesaid documents.
Further, in his statement u/s 108 of the Customs Act, 1962, Mr. Mukul Verdia of World Digital Sound Ltd. stated that he had seen Mr. Adarsh Suneja and Mr. K. Ravi of Padmini Polymers Ltd. with the Managing Director, Mridul Nalwaya in the World Digital Sound Ltd., NEPZ, 34 times between December, 1996 and the first week of January, 1997. He stated that he remembered a few titles of Padmini Polymers Ltd. which were replicated in December, 1996, which were Karishma, Panchtantra, Yellowstar, Treasure Island and his house. During the period of December, 1996 and upto 09.01.1997, majority of the production was for Padmini Polymers Ltd. under the abovementioned titles.
On 11.06.1997, accused no. 6 in his statement u/s 108 of the Customs Act denied that he has ever purchased CD's from Nalwaya CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 10 of 55 on cash basis. He stated that Nalwaya has taken his name because of his enmity with him. He produced a copy of a FIR made in the PS C.R. Park in November, 1996.
As per the complaint, the role of accused no. 4 in the illegal removal of the CDs from NEPZ and purchasing the same has been concluded from the following:
There was contradiction in two statements of Mr. Adarsh Suneja, the General Manager (Marketing) of accused no. 4. In his statement dated 10.01.1997, he stated that Nalwaya was known to Padmini Polymers Ltd. as the Director of World Music whereas in his statement dated 15.01.1997, he stated that last year, they got the stampers replicated from World Digital Sound Ltd., NEPZ, Noida and in OctoberNovember, 1996, they were approached by Mr. Nalwaya to replicate CDs from World Music, Delhi, "Since we were not aware of the dealing between World Music and World Digital and the person was the same."
Secondly; visit of Mr. Adarsh Suneja at the residence of accused no. 2 at the time of search.
Thirdly, the presence of 80,000 CDs of accused no. 4 out of the total 1,62,400 CDs caught at the gate of NEPZ.
Fourthly, recovery of a letter signed by Mr. K. Ravi of accused no. 4 addressed to accused no. 2 dated 30.12.1996, transferring six stampers and three CDs to him on returnable basis. This clearly CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 11 of 55 showed that accused no. 4 had clear knowledge that their CDs were being manufactured by accused no. 1 in the NEPZ and instead of DTA invoices which they were receiving earlier from accused no. 1 some time back, they were receiving fake invoices from an upfront company to camouflage the illegality of the transaction. It seems to have been done to avoid the Central Excise and Customs duties.
Fifthly, avoiding of inquiry by Mr. M. Bhatia and the visits of Mr. Adarsh Suneja and Mr. K. Ravi to the plant of the accused no. 3, 34 times between December 1996 to January 1997.
Further, there was no mention of taxes in the purchase order No. CPUR/240/251 dated 10.12.1996 placed by accused no. 4 on World Music.
On the basis of abovesaid, it has been alleged that accused no. 1, 2 Mr. Suraj Nayak, driver of vehicle DL 1 LC 1097, Avinesh Kumar, an employee and accused no. 3 attempted to remove unauthorizedly the CDs/CD Roms from NEPZ area, and were knowingly concerned in fraudulent evasion or attempt at evasion of Customs duty chargeable on the CDs and thus, have committed offences punishable under Section 135 (1) (a) of the Customs Act, 1962, and accused no. 4, 5, 6, 7 and S/Shri Adarsh Suneja, M/s Padmini Polymers Pvt. Ltd., 90, Takshila Apartments, 57, I.P. Extension, Delhi, K. Ravi, C/o M/s Padmini Polymers Pvt. Ltd., 240, Okhla Industrial Estate, New Delhi, were concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 12 of 55 or purchasing or in any other manner dealing with the CDs/CD Roms, which they knew or has reasons to believe were liable to confiscation and thus, they appear to have committed offences punishable under Section 135 (1) (b) of the Customs Act, 1962.
On perusal of record, it is found that vide order dated 13.07.2007 passed by my Ld. Predecessor, accused no. 1 and accused no. 2 were declared PO. All other five accused have appeared in the Court regularly and facing trial.
In pre charge evidence, the prosecution has examined as many as 12 witnesses.
(i) PW 1 Mr. Nishith Kumar, Retired Superintendent, Central Excise, Jamshedpur complainant in the matter stated that he has filed the complaint Ex. PW 1/A on the basis of sanction Ex. PW 1/B. He also identified his signatures on the same at point A. In his cross examination by Ld. Defence Counsel Mr. Rajesh Batra for accused no. 4 & 5, he admitted that he had not played any role in the investigation of the present case and his role was only confined to filing of present complaint. He stated that he has seen point A on the sanction for prosecution Ex. PW 1/B however he cannot say or tell the name of the official who has signed the same.
(ii) PW 2 Mr. Praveen Jolly, Superintendent, Central Excise stated that in the year 1997, he searched the premises at A30, Murli CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 13 of 55 Marg, Nizammuddin, East, New Delhi alongwith his team in the presence of two independent witnesses. The search resulted in recovery of compact disc, inlay cards, jewel boxes, which were collectively valued at Rs. 1,03,600/.
He stated that during search, some documents were also seized which were relevant for inquiry alongwith recovery of compact disc, inlay cards and jewel boxes. He further stated that the seized goods were seized in 13 cartons and further wrapped with a gunny cloth and were stitched and sealed with the seal of Customs. The panchnama Ex, PW 2/A was prepared and signed by him and accused persons. He identified his signatures on same at point A, signatures of other witnesses at point B and C, signatures of accountant and shopkeeper at point D and E. The witness was further examined after production of case property on 27.06.2013. He admitted in his further examination in chief that the entire case property seized by the Inspectors of New Customs House, New Delhi was produced in the Court, the seals of the packets were in damaged condition and the property was in open condition and mixed together and could not be corelated to separate panchnama. There were certain gunny bags which were also in badly mutilated condition. He stated that the CDs have been produced and same were taken out and they possessed the emblem of 'World Music' and were similar to the samples already displayed although the titles were CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 14 of 55 different. He further stated that on the rear of each CD inter alia the following is also written Manufactured by: World Digital Sound Limited, marketed by World Music appears. He identified all the CDs collectively as Ex. P2.
In his cross examination by Ld. Defence Counsel Mr. Rajesh Batra for accused no. 4 & 5, he deposed that 2048 CDs, 100 assorted inlay cards and 200 jewel boxes were seized. He admitted that he cannot identify 2048 CDs brought in the Court out of the lot. He admitted that there is no mention of any panchnama or other particulars with respect to the seizure of these CDs on the CDs. He stated that it was his best submission that 2048 CDs seized by him may be a part of this lot though he cannot identify or segregate those CDs from the lot. He denied the suggestion that the case property produced in the Court were never seized in the present case. He denied the suggestion that case property belonged to some other case or has been falsely implanted to justify the seizure.
In his cross examination by Ld. Defence Counsel Mr. Rajiv Sachar for accused no. 6 Jasbir Gill, he denied the suggestion that Ex. PW 2/A was false and was a created document.
In his cross examination by Ld. Defence Counsel Mr. Kamal J.S. Maan for accused no. 3 & 7, he stated that he had not given the complete description of the seizure of 2048 CDs in the panchnama except in the panchnama Ex. PW 2/A, there was an annexure A i.e. Ex.
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PW 2/B which only confirmed the number of CDs but could not confirm the description i.e. the title and other details.
(iii) The complainant has examined Mr. Ashish Tiwari, Superintendent, Central Excise Audit, Delhi as PW 3 who deposed that on 10.01.1997, he alongwith the Officers of Customs Preventive conducted a search at the business premises of accused no. 6 Jasbir Singh Gill situated at A1, Palika Bazar Parking, J. Electronics. The search was conducted in the presence of two independent witnesses and as a result of search, 7840 pieces of CDs as detailed in the panchnama Annexure A was recovered. On demand, the salesman Mr. Dinesh had shown him one invoice issued by M/s World Music West View, SantacruzWest, Mumbai in the name of JElectronics, 258, Palika Bazar, New Delhi for a quantity of 10,000 pieces of CDs valued at Rs. 2 Lakhs. He deposed that the CDs were seized under the reasonable belief that the same were cleared from 100% E.O.U. for being sold in domestic tariff area. One challan book marked Saraswati was also resumed being relevant for further inquiry. The CDs were packed in the cardboard boxes and packed in gunny bags and sealed with Custom Seal, with the paper slips having the signatures of Mr. Dinesh and two panch witnesses. He prepared the panchnama Ex. PW 3/A on the spot which was bearing his signatures alongwith the signatures of two witnesses and Mr. Dinesh at point A to D on all the three pages. He CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 16 of 55 stated that the Annexure A to the panchnama was Ex. PW 3/B. His further examination was deferred for production of case property and he was recalled on 27.06.2013 for further examination when the case property was produced.
On the said date, he deposed that the entire case property seized by the Inspectors of New Customs House, New Delhi has been produced in the Court. The seals of the packets are in damaged condition and the property is in open condition also mixed together and cannot be corelated to separate panchnama. He further stated that there are certain gunny bags also which are also in badly mutilated condition. He deposed that the CDs produced and taken out possess the emblem of World Music and are similar to the samples already displayed although the titles are different. He deposed that on the rear of each CD inter alia, it is written Manufactured by: World Digital Sound Limited, marketed by World Music appears. The CDs also bear the address of Delhi and Mumbai. He identified all the CDs collectively as Ex. P2.
In his cross examination by Ld. Defence Counsel Mr. Rajesh Batra for accused no. 4 & 5, he stated that 7840 CDs were seized in his case, however, he cannot identify the said 7840 CDs out of the case property produced in the Court. He admitted that there is no mention of any panchnama or other particulars with respect to the seizure of these CDs on the CDs. He submitted that the 7840 CDs seized by him may be a part of the lot produced in the Court though he CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 17 of 55 cannot identify or segregate those CDs from the lot. He denied that the case property produced in the Court was never seized in the matter. He denied the suggestion that case property belongs to some other case or has been falsely implanted to justify the seizure.
In his cross examination by Ld. Defence Counsel Mr. Rajiv Sachar for accused no. 6, he stated that he reached Palika Bazaar at about 4 PM alongwith other team members of Customs, however, he again stated that he does not remember the exact time. He stated that the salesman Mr. Dinesh Sharma informed him that the shop belonged to accused Jasbir Gill. Mr. Dinesh Sharma had not shown him any document showing that he was working as a salesman under Jasbir Singh Gill. He admitted that it was never verified from the Palika Bazaar Association about the actual owner of the shop. He further admitted that he cannot find the search authorization in the judicial file but it could be in the investigation file maintained in the department.
He denied the suggestion that there was no such authorization issued by the Superior Officers.
He admitted that Mr. Dinesh Sharma had shown him purchase invoice issued for the premises addressed 258, Palika Bazaar. The invoice was raised by M/s World Music. The witness further stated that he was not aware whether the said invoice was verified by the department or not. The original invoice was left behind and a photocopy of the same was resumed. He stated that he cannot find the said CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 18 of 55 photocopy of the invoice filed. He denied the suggestion that the department has deliberately concealed the invoice from the Court to implicate the accused Jasbir Gill in the present case.
In his cross examination by Ld. Defence Counsel Mr. Kamal J.S. Maan for accused no. 3 L.N. Bharadwaj & accused no. 7 Beer Sain, he stated that he had not given the complete description of the seizure of 7840 CDs in the panchnama except in the panchnama Ex. PW 3/B, there is an annexure A which only confirms the number of CDs but cannot confirm the description i.e. the title and other details.
(iv) The complainant has examined Mr. Nanak Chand, Security Officer, NEPZ as PW 4. He deposed that on 09.01.2007, the Custom Officer had conducted a search and recovered CDs vide panchnama which was also signed by him. He also stated that on 10.01.1997, Sh. Suraj Kumar Nayak had tendered his statement which was also countersigned by him at point A on Ex. PW 4/A. He also identified his signatures on the statement of Mr. Avnish Kumar Ex. PW 4/B at point A. He also identified his signatures at point B on the statement of accused Mridul Nalwaya on Ex. PW 4/C. He also identified his signatures on the statement of Mr. Laxmi Narayan Bharadwaj dated 30.01.1997 Ex. PW 4/D. He again stated that on 14.01.1997, Mr. Laxmi Narayan tendered another statement Ex. PW 4/E in his presence. He also identified his signatures at point A and B. He stated that the Unit CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 19 of 55 premises of M/s World Digital Sound at A3/2, SDF, NEPZ was searched in the presence of two witnesses in his presence. He stated that a stock taking of the finished goods was carried out as detailed in panchnama Ex. PW 4/F. The panchnama was also showing the details of the documents and registers which were also seized.
In his cross examination by Ld. Defence Counsel Mr. Rajesh Batra for accused no. 4 & 5, he stated that he had not seen or observed the contents of various CDs recovered. He had no role to play in respect to the valuation of the seized property or in the identification, origin or source of the seized property. He had no knowledge about the same. He again stated that the source was the Unit of M/s World Digital Sound Ltd. He could not remember whether the CDs bore any particular mark so as to relate them to the Unit of M/s World Digital Sound Ltd. He stated that the vehicle as well as the driver belonged to M/s World Digital Sound Ltd. therefore, the source was the Unit of M/s World Digital Sound Ltd. He was not aware of the original source of origin of the seized property. The documents as detailed in the panchnama dated 09.01.1997 were taken into possession which were carried by the driver of the vehicle which he used to explain the legality of the consignment were seized by them.
He admitted that the documents referred to in the panchnama dated 09.01.1997 has not been filed on the judicial file.
The witness was recalled for further cross examination on CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 20 of 55 03.06.2013. The witness produced certain documents and stated that the documents seized vide panchnama dated 14.01.1997 which was already exhibited as Ex. PW4/F are filed and same are follows and same are Ex. PW 4/G to Ex. PW 4/M.
1. Register II A for receipt of inputs including spares, tools imported.
2. Register for furnished goods
3. Despatch challan/return challans register.
4. Letter receipt register.
5. Inward challans file.
6. Stock statement file.
7. Bill of entry file.
The production of documents by the witness was strongly opposed by the Counsel for the accused at this stage on the ground that the same were never produced initially.
In his cross examination by Ld. Defence Counsel Mr. Rajesh Batra for accused no. 4 Padmini Polymers & accused no. 5 Vivek Nagpal, he stated that he does not remember or recall the contents of any of the documents which he has exhibited as they were prepared 16 years back. He admitted that he cannot tell about the relevance of these documents by reading or looking at those documents as he has very weak eye sight and he is unable to read. He admitted that the documents which were recovered were never sealed for secure by way of any cover. He further stated that he cannot tell by looking at the documents whether CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 21 of 55 any document or page is missing from what he recovered or has been added to what was recovered. He further stated that he cannot even say if something has been inserted or deleted from the contents of the documents.
He denied the suggestion that these documents were never recovered and have been procured subsequently.
He further stated that he cannot say whether the said documents were ever paginated or indexed. He could not say whether these documents were relevant or not.
In his cross examination by Ld. Defence Counsel Mr. Rajiv Sachar for accused no. 6 Jasbir Gill, he denied that the panchnama Ex. PW 4/F was a false and fabricated document, prepared later on to implicate the accused persons in a false case.
In his cross examination by Ld. Defence Counsel Mr. Kamal J.S. Maan for accused no. 7 Beer Sain, he stated that the statement of Mr. Lakshmi Narayan Bharadwaj was recorded in parts of three days i.e. 13.01.1997 to 15.01.1997. He stated that he was the gazetted officer at that time, however, he has not conducted any inquiry/investigation in the present case in context of the statement given by Lakshmi Narayan Bharadwaj. He stated that he was not aware whether Mr. Lakshmi Narayan Bharadwaj had given any retraction statement to the abovementioned statements. He stated that he has never asked the Customs Officers about the recovery or discovery of the CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 22 of 55 facts based on the statement of Mr. Laxmi Narayan Bharadwaj and neither he was intimated about the same.
He denied the suggestion that the statements of Lakshmi Narayan Bharadwaj were forcibly obtained during his custody in the Custom Office.
(v) The complainant has examined Mr. A.K. Verma, Preventive Officer in NEPZ, Noida, UP as PW 5. He deposed that on 09.01.1997, in the presence of two witnesses, they intercepted one blue coloured closed body Swaraj Mazda Tempo bearing DL1C1097 which had been stopped by the duty officer at the gate. On query Sh. Avnish Kumar told that there were 102 cartons carrying CDs in the vehicle. They also produced some documents. Thereafter, all 102 cartons were destuffed. The goods as detailed in the panchnama i.e. 1,62,400 pieces of CDs were contained in 102 cartons. Each carton contained 8 small carton box and each small carton box contained 200 pieces of CD's i.e. in one carton total number of CDs 1600 pieces. The total value of the CDs was estimated as Rs. 97,44,000/. As the aforesaid goods were attempted to be removed illegally and unauthorizedly, they were seized u/s 110 of the Customs Act, 1962. The vehicle was also seized.
One owner book/registration book was also seized vide panchnama Ex. PW 5/A which was signed by Nanak Chand at point A and Sanjay Kumar at point B. The witness signed the same at point C, CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 23 of 55 Mr. Satender Pal, panch signed at point D, Mr. Suraj Kumar Naik signed at point E and other officials Sh. M.S. Yadav and Mr. R.P. Verma, ASO signed at points F & G. In his cross examination by Ld. Defence Counsel Mr. Rajesh Batra for accused no. 4 Padmini Polymers & accused no. 5 Vivek Nagpal, he stated that he does not recollect whether he had resumed or seized the documents mentioned at page no. 1 of the Ex. PW 5/A. He does not remember whether he had examined/perused the said papers.
He denied that the said papers indicated that the seized goods were meant for domestic traffic area (DTA) as per applicable rules. However, he voluntary deposed that in case, it was so, there was no question of affecting seizure. He denied that since the documents gave positive proof of the legality of the goods, they were deliberately not seized and not taken on record and have been concealed from the Court.
He admitted that they had opened the cartons on the said date, however, he does not remember whether the individual CD which he had seized were containing any writing or title to suggest what were its contents. He stated that at the time of recovery and seizure, the CDs were recorded, however, he could not say whether all the CDs were recorded. He stated that he does not recollect the number of recorded CDs nor does he remember the number of blank CDs. He had estimated the value of the seized CDs which was according to the market value CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 24 of 55 during the relevant period.
He admitted that before assessing the value, the CDs were never played or perused. He admitted that he could not have been known as to what were contents of CDs whether they were Hindi songs, movies, software etc. He could not remember how he has valued the seized CDs without knowing the contents of the CDs.
He denied that entire case is false. He denied that the CDs recovered were not violating any Law, rule or regulation.
The witness was not cross examined by other accused/Ld. Defence Counsels.
(vi) The complainant has examined Mr. R.P. Verma as PW 6. He stated that on 09.01.1997, he had witnessed the interception of vehicle no. DL 1 C 1097 at the gate of NEPZ and recovery and seizure of 1,62,400 CDs as detailed in the panchnama Ex. PW 5/A which interalia signed by him at point G. He further deposed that on 14.01.1997, he had also witnessed the search of premises of M/s World Digital Sound Ltd., A3/2 SDF, NEPZ in the presence of L.N. Bharadwaj, Assistant Manager of the company by the officers of Customs in accordance with law. The stock taking of the finished goods were carried out as detailed in panchnama Ex. PW 4/F. He further deposed that besides the goods as detailed at page no. 1 of Ex. PW 4/F, documents and register as detailed at page CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 25 of 55 no. 2 of Ex. PW 4/F were also found and resumed by the Customs Officer in his presence vide panchnama Ex. PW 4/F. Ld. SPP for complainant submitted that Ex. PW 4/F was not available on record and he sought some time for production of same on record.
In his further examination on 05.06.2013, he stated that the documents i.e. application u/s 110 (1) (A) and (B) of the Customs Act, 1962 alongwith photocopy of panchnama duly attested by Sh. Gautam Manan, the then Ld. MM, ordersheet and inventory u/s 110 (1B) prepared by Sh. Gautam Manan, the then Ld. MM dated 22.08.2008 has been received from the department. The proceedings conducted by Ld. MM is Ex. PW 6/A and the panchnama dated 09.01.1997 pertaining to the recovery and seizure of 1,62,400 pieces of CDs which was recovered from tempo Swaraj Mazda bearing registration no. DL 1C 1097 is Ex. PW 6/B (the original panchnama of the same is already Ex. PW 5/A). The witness identifies his signatures at point A on Ex. PW 6/A. The documents which were seized vide panchnama Ex PW 4/F in which, he was one of member of raiding team with respect to the premises of World Digital Sound A3/2, SBF, NEPZ already exhibited Ex. PW 4/G to Ex. PW 4/M. In his further examination on 27.06.2013, he stated that he could identify the case property which was recovered and seized from the vehicle DL 1 C 1097 (Swaraj Mazda tempo).
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In his cross examination by Ld. Defence Counsel Mr. Rajesh Batra for accused no. 4 Padmini Polymers & accused no. 5 Vivek Nagpal, he denied that the department has deliberately concealed the documents recovered vide panchnama Ex. PW 5/A. He admitted that at the time of the seizure the contents of the CDs (software etc.) were not perused/verified. He stated that he was not aware whether the verification of the contents of the recovered case property was done any time subsequently. He denied that he being a member of the raiding party was supporting the case in favour of the department. He denied that the case is false and the recovered case property was supported by fully legalized documents. He stated that he was not aware of the goods which are meant for domestic traffic area or for export as the same is not the part of his role in the investigation. He stated that the only part played by him in the process of investigation is to witness Ex. PW 5/A. In his cross examination by Ld. Defence Counsel Mr. Kamal J.S. Maan for accused no. 3 L.N. Bharadwaj & accused no. 7 Beer Sain, he denied that he or accused L.N. Bharadwaj visited the premises bearing no. A3/2, SDF, NEPZ on 14.01.1997. He denied that the signatures of accused L.N. Bharadwaj were forcibly taken by them on various documents prepared by them in their office without disclosing the contents and consequences. He denied that the panchnama Ex. PW 4/F was false and fabricated case.
In his cross examination by Ld. Defence Counsel Mr. CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 27 of 55 Rajiv Sachar for accused no. 6 Jasbir Gill, he denied that the case property has been tampered.
(vii) The complainant has examined Mr. C.S. Rajput, Superintendent Customs as PW 7 who proved on record statement of accused Beer Sain u/s 108 of Customs Act as Ex. PW 7/A. He also identified his signatures on same at point A and that of accused at point B. In his cross examination by Counsel Mr. Rajiv Sachar for accused no. 6 Jasbir Gill, he denied that statement of Mr. Beer Sain was recorded under coercion and pressure and it was not a voluntarily statement.
In his cross examination by Counsel Mr. Kamal J.S. Maan for accused no. 7 Beer Sain, he stated that he had not conducted any investigation or inquiry on the statement recorded by him. He stated that in the present case, his statement was not recorded. He further stated that after the date of recording of statement, he had not joined the investigation in the present case. He could not remember if there were any written directions from the superiors to write down the statement of Mr. Beer Sain.
After going through the record, the witness submittted that no such document was placed on record.
He denied the suggestion that Beer Sain had not given any CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 28 of 55 voluntary statement and the same was forcibly taken by them. He denied that nothing happened in the manner as deposed in his examination in chief. He denied that he was deposing falsely at the behest of his department.
(viii) PW 8 Mr. Dineshwar Singh, Superintendent Central Excise deposed that on 10.01.1997, statement of Mr. Indresh Singh S/o Mr. Shyam Bihari Singh, chowkidar and worker of World Digital Sound at premises no. 66, Sector 37, Noida had appeared before him and tendered his voluntarily statement u/s 108 of Customs Act which was Ex. PW 8/A collectively . The witness had identified his signatures at point A and that of Mr. Indresh Singh at point B. He deposed that the abovesaid premises was also searched by the team of the officers of Central Excise, Noida and NSEZ, Noida. The proceedings of the search were recorded under panchnama dated 10.01.1997 which was prepared by Mr. A.P. Singh, the then Inspector Preventive. The said proceedings were conducted in the presence of panchas. After the search, the CDs in packed condition and loose condition and Inlay cards and some documents as detailed in Annexure I & II were recovered and same were seized u/s 110 of Customs Act and seized goods were sealed under the seal of NSEZ. He identified the signatures of Mr. A.P. Singh on the aforesaid panchnama at point A and his signatures at point B and signatures of the panchas at point C and D and signatures of officer of CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 29 of 55 NSEZ at point E and signatures of Mr. Indresh Singh at point F. In his cross examination by Ld. Defence Counsel Mr. Kamal J.S. Maan for accused no. 7 Beer Sain, he denied that he was deposing falsely at the behest of the department. He denied that the documents which were exhibited by him or bear his signatures were false and fabricated documents prepared at the instance of Superior officers.
The witness was not cross examined by other accused.
(ix) PW 9 Mr. M.S. Yadav who was posted as Inspector at NEPZ, Noida in January 1997 submitted that on 09.01.1997, the security staff posted at the gate of NEPZ stopped one vehicle bearing no. DL 1C 1097. One driver and one another person were found in the vehicle who told them that they were carrying the goods of M/s World Digital Private Limited. On demand, they showed some papers which were also checked. It was found that the papers were not pertaining to the said goods. They found 102 cartoons containing 1,62,400 CDs (assorted) as the driver was not having the papers of the goods, therefore the same was seized vide panchnama Ex. PW 5/A which was prepared by Mr. A.K. Verma.
On 04.02.1997, two panch witnesses were called at CWC NEPZ to witness the drawl of samples from the aforesaid goods. A representative of World Digital was also present. The witness had taken 40 CDs of different titles from the said goods as samples as mentioned CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 30 of 55 in Annexure A of the panchnama dated 04.02.1997. The said panchnama including annexure A was proved as Ex. PW 9/A bearing signatures of witness at point A, signatures of two panch witnesses at point B and C and signatures of representative of World Digital at point D. On 22.08.2008, the above case property was produced before Sh. Gautam Manan, the then Ld. MM and inventory u/s 110 of the Customs was prepared on that day. During inventory, the samples were drawn by the Ld. MM, New Delhi. Thereafter, one packet duly sealed with the seal of Ld. MM was produced. There was writing on the packet with black marker as digits '25 pieces' and number '10'. It does not bear any other detail. On opening the same, 20 CDs with Inlay Cards are taken out on which the description made as Golden Lovesongs manufactured by World Digital Sound Limited, marketed by World Music appears. The witness had identified all the 20 CDs as Ex. P1.
In his cross examination by Ld. Defence Counsel Mr. Rajesh Batra for accused no. 4 Padmini Polymers & accused no. 5 Vivek Nagpal, he stated that the property which was seized was contained in 102 cartoons. He stated that the proceedings before the Court were done in his presence. He stated that all the 102 cartons were opened however sampling was done from two cartoons. The documents which were seized from the driver of the vehicle were taken into custody and produced on judicial file, however, he again said that the same are not on the court file but the same may be on the internal file of the department.
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He had seen the contents of the documents. He furtehr stated that he cannot say as to what were the contents of the said documents. He further stated that he cannot say as to which member of the team took the decision of terming the documents as irrelevant. He stated that it could be the senior most officer of the team. Thereafter, he again voluntary stated that there is procedure to take out the goods from NEPZ area/gate. The goods were enrolled/registered in the office and after getting clearance from the Officers the goods were allowed to be removed from NEPZ and these certain entries were not found on these papers at that time. He stated that he could not say if any records from proper officer were taken into possession or made evidence in the present matter. He further stated that the permission from the proper officer were not on the papers carried by the driver but the witness further could not say if the permission actually existed or not. He further stated that since no document was produced by World Digital in respect to the permission, he presumed there was no permission.
He admitted that the goods can be taken out of NEPZ as per clearance under the domestic traffic area DTA for which, permission is to be obtained from the proper officer. The witness however could not say why the documents which were recovered from the driver have not been placed on the judicial file since in the meantime he was posted out of the NEPZ department. He further stated that he could not say if the evidence was collected with respect to World Digital and the policy by CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 32 of 55 which, it was governed.
He denied that the documents which were recovered from the driver have been deliberately concealed. He further denied that no record from the proper officer was seized with respect to general permission granted from him deliberately in order to make out a false case in that period.
He stated that he cannot say why the sampling was not done. He stated that he cannot say anything with respect to the case property seized vide panchnama dated 10.01.1997 from the premises of M/s Padmini Polymers. He denied that he was deposing falsely.
In his cross examination by Ld. Defence Counsel Mr. Kamal J.S. Maan for accused no. 3 L.N. Bharadwaj & accused no. 7 Beer Sain, he stated that he has not directly investigated the matter but he had assisted senior officers. He admitted that during that period, he had never put his signatures on any document as witness or the maker of any document except panchnama Ex. PW 5/A & Ex. PW 9/A. After going through the file, the witness stated that the statement of the driver of the vehicle was recorded by other officer and he was not part of that statement. He further stated that he cannot say that time that the driver and the other person sitting in the vehicle had put their signatures on the seized material or not but they put their signatures on the panchnama dated 09.01.1997 which was prepared by Mr. A.K. Verma. The witness however stated that he could not say whether Mr. CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 33 of 55 A.K. Verna was the Surveillance Officer at that time or not, however, he was Preventive Officer and the duty of the Preventive Officer includes surveillance and prevent the illegal act. He further stated that they were on the routine checking on that day and the team was led by Mr. Nanak Chand, the Security Officer.
He further stated that the panchnama dated 04.02.1997 Ex. PW 9/A in which he had drawn 40 samples CDs having the different titles. The 40 samples were drawn because the whole consignment carried 40 types/titles of CDs.
He denied the suggestion that the accused persons were forced to put their signatures prepared by them without disclosing their contents and consequences.
In his cross examination by Ld. Defence Counsel Mr. Rajiv Sachar for accused no. 6 Jasbir Gill, he admitted that no inventory of CDs was prepared as per seizure Ex. PW 5/A dated 09.01.1997. He denied the suggestion that the genuine documents were torn by the department. The wintess could not remember the value of the CD. He denied that nothing happened in the manner as he stated.
(x) PW 10 Statement of Mr. S.K. Mittal, Retired Deputy Commissioner Customs proved on record the statement dated 10.01.1997 of accused Mridul Nalwaya as Ex. PW 10/A bearing signatures of accused at point A and signatures of witness at point B on CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 34 of 55 all pages. He further stated that Sh. Adarash Suneja, employee of M/s Padmini Polymers also tendered before him his two voluntarily statements dated 10.01.1997 and 15.01.1997 marked as Mark PW 10/A & Mark PW 10/B respectively. He further stated that Mr. Munish Bhatia, employee of M/s Padmini Polymers also tendered his voluntarily statement marked as Mark PW 10/C. Mr. Mukul Vardia, employee of M/s World Digital also tendered his voluntarily statement marked as Mark PW 10/D duly attested by the complainant. Objection was raised by Counsels for accused as only photocopies of documents were placed on record.
In his cross examination by Ld. Defence Counsel Mr. Rajesh Batra for accused no. 4 Padmini Polymers & accused no. 5 Vivek Nagpal, he stated that he cannot comment as to whether from the statements of Mr. Adarsh Suneja and Mr. Mukul Vardia, any inference was possible for their involvement in the case as accused.
He denied that the statement of these witnesses were recorded under threat of they being made an accused in this matter. He denied that statements were not voluntary or under duress.
In his cross examination by Ld. Defence Counsel Mr. Kamal J.S. Maan for accused no. 3 L.N. Bharadwaj & accused no. 7 Beer Sain, he denied that the statement Ex. PW 10/A was not voluntarily given or same was given under their dictation. He denied that to fortify their case they have manipulated the documents as well as recorded statement Ex. PW 10/A. CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 35 of 55 In his cross examination by Ld. Defence Counsel Mr. Rajiv Sachar for accused no. 6 Jasbir Gill, he stated that he could not remember as to whether any statement of accused no. 6 Jasbir Gill was recorded or not.
He denied that in the statement, he has mentioned that Jasbir Singh Gill has been falsely implicated in the present case by the Customs Department.
(xi) PW 11 Mr. Anil kumar Khanna, Superintendent Customs, New Customs House stated that on directions, he made inquiries u/s 108 of the Customs Act, 1962. He recorded the statement of accused Jasbir Gill which was marked as Mark PW 11/A bearing signatures of accused at point A and the signatures of witness at point B on all pages which was also duly attested by the complainant Mr. Nishith Kumar. He also identified the accused Jasbir Gill present in the Court.
In his cross examination by Ld. Defence Counsel Mr. Rajiv Sachar for accused no. 6 Jasbir Gill, he stated that he could not remember whether any summons were issued to accused for recording of his statement.
He further stated that all questions and answers mentioned in the statement of Jasbir Gill at page no. 2, 3 & 4 were in the handwriting of accused Jasbir Singh Gill. He voluntary stated that the questions were put by him which he had written and the answers were CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 36 of 55 given by accused. He stated that since it was voluntary statement, therefore, the same was written by accused Jasbir Singh Gill voluntarily. He stated that he does not remember whether on 11.06.1997, he had seen the earlier statement dated 31.03.1997 of accused Jasbir Gill. He voluntary stated that the same may be forming the part of departmental file. He denied that no statement of accused was recorded on 31.03.1997, however, he could not remember as to who has recorded the statement of accused Jasbir Gill on 31.03.1997.
(xii) PW 12 Mr. S.P. Singh, Inspector Customs, New Customs House proved the statement of Mr. Surender Bhatia tendered u/s 107 of the Customs Act as Mark PW 12/A bearing his signatures at point B. No other witness was examined in PE despite opportunity for the same being given. Hence PE was closed and the matter was fixed for arguments.
I have heard arguments on behalf of all parties on the point of settlement of charge.
Ld. SPP for complainant has submitted that charge can be framed even on grave suspicion. It shall be framed when there are grounds to proceed. If two views are possible, at the stage of framing of charges, the court has to take the view in favour of the prosecution. When there is needle of suspicion, the charge has to be framed.
Ld. SPP for complainant has relied upon the following CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 37 of 55 Judgements:
(i) R.S. Nayak Vs. A.R. AntulayAIR 1986 SC 2045
(ii) Prem Prakash Chaudhary Vs State/Directorate of Revenue Intelligence
(iii) Sunil Pandey Vs Customs, Crl. Revision Petition No. 482/2003 passed by the Hon'ble Delhi High Court.
(iv) Paramjit Singh Vs Commissioner of Customs & Ors.
2002 (2) JCC 916 (P&H)
(v) Assistant Collector of Customs, Central Excise Collectorate, New Delhi Vs Kedar Nath Gupta & Anr. Criminal Revision Petition No. 287 of 1983 passed by the Hon'ble High Court of Delhi
(vi) Mathura Dass & Ors. Vs StateDCLR 2003 (1) Delhi 694.
In written synopsis, the prosecution further stated that all the PWs have duly supported the case of the prosecution. He stated that recovery and seizure in the matter is not in dispute. The accused persons were required to produce legal and valid documents for DTA sale of any goods from NEPZ. The documents are not available even today in the judicial file.
As already recorded, vide order dated 13.07.2007 passed by my Ld. Predecessor, accused no. 1 & accused no. 2, both were declared proclaimed offenders.
Counsel for accused no. 3 has argued that the
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prosecution has failed to produce on record any evidence to assign any role to the accused no. 3. No active participation of the accused no. 3 has been assigned. He has further submitted that the statement U/sec. 108 Customs Act is totally uncorroborated and hence there is no evidence coming up against the accused no. 3.
Counsel for accused no. 4 & 5 argued that the whole process in the present case carried out by the prosecution was invalid. He has relied upon the Judgment passed by the Hon'ble Supreme Court in Central Excise & Customs Vs Suresh Synthetics 2007 (216) ELT, 662 Supreme Court wherein it was held that duty to be paid by a 100 % export oriented unit for clearance in the Domestic Tariff Area is the duty of excise and not Customs duty and hence even the show cause notice issued by the Customs department was defective in law. Counsel for accused no. 4 & 5 again contended that the present case falls under the Excise Act and not under the Customs Act. He has relied upon Provisions of Section 76 A and 76 F (Chapter 10 A) of the Customs Act.
He vehemently argued that the whole process adapted by the complainant department was invalid. He contended that the documents which were produced on record by the prosecution as Ex. PW 4/A, PW 4/B, PW 8/A, PW 8/B, PW 10/B and PW 10/C are not admissible in evidence as the person who had made the said statements has not been examined and hence even the documents produced as such can not be read in evidence. He has also relied upon provisions of CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 39 of 55 Section 138 B of the Customs Act in this regard. He submitted that the said documents were not legally proved by the prosecution. He further submitted that all the witnesses examined by the prosecution have failed to corelate the case property with the panchanama and even the case property produced in the court was totally mutilated and damaged.
He argued vehemently that the case property in the matter was the only material evidence, however, the case property produced on record was totally mutilated, damaged and could not be co related to any of the panchnama produced by the prosecution on record. He further argued that the goods for the purposes of the present case were not the CDs and the Inlay Cards but the software contained in the CDs that it was the softwares which were to be valued for the purposes of the present case.
He also referred to the statement of PW 5 Mr. A. K. Verma who in his cross examination has admitted that before assessing the value, the CDs were neither perused or played. He admitted that he can not tell as to what were the contents of the CDs as to whether they were Hindi songs, Movies, Software etc. He stated that he does not remember how he had valued the seized CDs when he does not knew the contents of the CDs. Counsel for accused further argued that even PW 6 Mr. R. P. Verma also admitted that at the time of seizure the contents of the CDs (software etc.) were not perused or verified. The witness was not aware whether the verification of the contents of the recovered case property CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 40 of 55 was done any time subsequently or not. He further argued that the case property produced by the prosecution has to be intact till the time it is disposed of. They can not rescue under the Court order for the damaged case property produced in the Court.
He contended that even the court order dated 22.08.2008 on the application u/s 110 (1) (a) & (1) (b) of Customs Act passed by Sh. Gautam Manan, Ld. MM only pertains to the search conducted on 09.01.1997 at the NEPZ, Noida, main gate regarding the recovery of 1,62,400 compact discs and to the search conducted at House No. 66, Sector 37, Noida which was used by accused no. 1 as a guest house from where 4080 pcs of CDs were recovered. He has also referred to the application u/s 110 Customs Act filed by the department on 12.11.1997. The recoveries and panchnamas mentioned in the application were pertaining only to the accused no. 1 & 2. He argued categorically that the said panchnamas do not pertain to accused no. 4 & 5.
Counsel for accused no. 4 & 5 has also referred to para no. DD of the complaint. He stated that even as per the averment made in the complaint which was referring to the recovery effected from the premises of accused no. 4 & 5 at 240, Okhla Industrial Estate, New Delhi. It has been mentioned that the goods were only detained and not seized. He also referred to the statement of main accused Mridul Nalwaya wherein he has mentioned that as regards the supply of CDs to Padmini Polymers the same was done in DTA after payment of duties.
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He had also exported CDs on their behalf to their customers. Counsel for the accused no. 4 & 5 has submitted that even the statement of the accused Mridul Nalwaya completely exonerates the accused no. 4 & 5 as all the duties were paid.
He further argued that in regard to the apprehensions raised by the prosecution in the complaint, no letter as such alleged in the complaint recovered from Mr. K. Ravi has been produced on record. None of the witnesses have deposed that Mr. K. Ravi or Mr. M. Bhatia have ever avoided inquiry or that the company has not produced the documents. He further stated that no invoice as alleged issued by accused no. 4 has been brought on record to substantiate the allegations. Nothing has been brought up on record to prove any relationship between accused no. 4 & 5. The accused no. 5 was never summoned to join inquiry.
Counsel for accused no. 6 argued that the only case against accused no. 6 is that on 13.01.1997, a search was conducted at M/s J. Electronics, 258, Palika Shopping Complex which allegedly belonged to accused no. 6 Jasbir Singh Gill. He submitted that nothing incriminating was recovered from the said shop. Even the only witness which the prosecution has examined against the accused Jasbir Gill is Mr. Anil Kumar Khanna who had recorded the statement of accused no. 6 on 11.06.1997 wherein also nothing incriminating has come up in his statement. The case of the prosecution against the accused no. 6 is that CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 42 of 55 he was neither present nor arrested on 19.01.1997 at NEPZ where from the alleged CDs were recovered. He further argued that the complete case property has not been produced before the court and even the part property which was produced was in open condition and tampered with.
Counsel for accused no. 7 argued that accused no. 7 Beer Sain was working as Assistant Security Officer in NEPZ on the alleged incident. In his written synopsis, Ld. Defence Counsel has mentioned that the alleged incident took place on 09.01.1997 and the present case was filed in the year 2006. The prosecution has taken almost 9 years to file a complaint and 7 years thereafter to record evidence u/s 244 of Cr. PC.
He stated that there was no evidence on record against accused no. 7 except for statement of the co accused Mridul Nalwaya u/s 108 of the Customs Act, 1962. He further argued that without corroboration by independent evidence, the statement of the co accused cannot establish a prima facie case against him. Nothing incriminating has come up against the accused no. 7 from the testimonies of witnesses who were examined. He further argued that in his statement u/s 108 of the Customs Act, 1962, the accused has categorically stated that he was not on duty at the time of the alleged seizure of the CD on 09.01.1997, however, the prosecution has not produced any document to establish the contrary.
He further stated that the case property produced in the CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 43 of 55 Court do not match with the panchnama. The witnesses in their examination admitted that they cannot match the case property with their respective panchnamas. The case property was produced in unsealed condition and was only a heap of CDs. He has also relied upon the Judgement passed by the Hon'ble High Court of Delhi in case of Ripen Kumar Vs Department of Commerce in Crl. W. No. 363 of 2000 decided on 12.10.2000. He stated that the statements u/s 108 of the Customs Act, 1962 cannot be relied upon when there is no other corroboration from any material put on record by the prosecution u/s 244 Cr. PC.
Having perused the record and heard the arguments at length, I have come to the following observations.
The prosecution has examined as many as 12 witnesses. PW 1 Mr. Nishith Kumar is the complainant who was working as Superintendent of Customs at NEPZ, Noida at the time of incident. He deposed in examination in chief that he has filed the present complaint Ex. PW 1/A in discharge of his official duties. He proved the Sanction and authorization as Ex. PW 1/B and also identified the signatures of Commissioner of Customs at point A, however, in his cross examination itself, he stated that he has seen point A on Ex. PW 1/A and he cannot tell the name of the official who had signed the same. The witness has failed to identify the signatures of Commissioner of Customs who has signed the Sanction. The Commissioner of Customs himself has not CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 44 of 55 stepped into the witness box to prove the Sanction. The testimony of PW 1 complainant wherein he has failed to tell the name of the official who has signed the Sanction clearly establish that the Sanction produced on record is invalid.
The PW 2 Mr. Praveen Jolly, Superintendent, Central Excise has deposed in regard to the search conducted at A30, Murli Marg, Nizamuddin East, New Delhi. He proved the panchnama Ex. PW 2/A, however, as per the record, the two independent witnesses to the alleged search has not been examined by the prosecution. Even the case property which was produced on record in the Court was in damaged condition. The said witness in his examination in chief admitted that the case property produced was damaged, in open condition and mixed together. He stated that the same cannot be corelated to separate panchnama. In his cross examination, he admitted that he cannot identify said 102 CDs in the Court out of the lot. He admitted that there is no mention of any panchnama or other particulars with respect to seizure of the CDs. He submitted that 2048 CDs seized by him may be a part of the lot, however, he cannot identify or segregate those CDs from the lot. He even admitted that he has not given the complete description of the seizure of 2048 CDs in the panchnama except in the panchnama Ex. PW 2/A, there is an Annexure A i.e. Ex. PW 2/B which only confirms the number of CDs but cannot confirm the description i.e. The title and other details.
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From the testimony of PW 2, a strong doubt is created on the recovery and description of the case property produced in the Court. Even the two independent panch witnesses have not been examined.
PW 3 Mr. Ashish Tiwari, Inspector, New Customs has deposed in regard to panchnama Ex. PW 3/A in regard to the search of the business premises of accused no. 6 at A1, Palika Parking Shopping Complex, J. Electronics. He also admitted in examination in chief that the seals of the packets produced as case property were in damaged condition and the property is in open condition and mixed together. He also admitted that the case property cannot be corelated to separate panchnama. The gunny bags which were produced were in badly mutilated condition.
In his cross examination, he admitted that he cannot identify 7840 CDs out of the case property produced in the Court. He admitted that there was no mention of any panchnama or any particulars with respect to the seizure of these CDs on the CDs. He again stated that the 7840 CDs seized by him may be a part of this lot though he cannot identify or segregate those CDs from the lot. He also admitted that it was never verified from the Palika Association about the exact owner of the shop. He admitted that the search authorization letter was also not on record. He could not tell whether the invoice produced by the salesman Dinesh Sharma was verified by the department or not. The photocopy of the invoice is also not found on record. He also admitted CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 46 of 55 that he has not given the complete description of 7840 CDs in the panchnama except in panchnama Ex. PW 3/B. There is an Annexure A which only confirms the number of CDs but could not confirm the description i.e. the title and other details.
It is also clear from the record that neither the salesman Mr. Dinesh Kumar of J Electronics A1, Palika Parking Shopping Complex, Connaught Place nor the two independent witnesses has been examined by the prosecution despite opportunity for the same being given to support the panchnama Ex. PW 3/A. From the abovesaid testimony of PW 3, a strong doubt is created upon the recovery, genuineness and description of the case property itself. It seems that no concern has been shown by the department neither any verifications made in regard to the actual owner of the shop. Nothing incriminating hence comes out against accused no.
6. The testimony of PW 4 Mr. Nanak Chand who was Security officer at NEPZ pertains to the search conducted at NEPZ Noida from the truck bearing no. DL 1 L 1097 and from the office of M/s World Digital Sound at A3/2, SDF, NEPZ.
His deposition pertains to the statements of Avinesh Kumar Ex. PW 4/B, statement of accused no. 2 Mridul Nalwaya dated 10.01.1997 Ex. 4/C, statement of accused no. 3 L.N. Bharadwaj Ex. PW 4/D and Ex. PW 4/E and Ex. PW 4/G. He also deposed in regard to the CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 47 of 55 search conducted on 14.01.1997 at the M/s World Digital Sound at A3/2, SDF, NEPZ. In his cross examination, however, he stated that he could not remember or recall the contents of any document which he has produced or exhibited. He stated that he could not tell about the relevance of the documents by reading or looking at those documents as he has a very weak eye sight and he was unable to read. He however admitted that the documents which were recovered were never sealed for securing by way of a cover. He could not say by looking at the documents whether any document or page was missing from what he has recovered or has been added from what he has recovered. He could not say if something has been inserted or deleted from the contents of the documents. He could not say whether the said documents were ever paginated or indexed. He could not say whether these documents were relevant or not.
In his cross examination by Counsel for accused no. 7, he stated that he has not conducted any inquiry/investigation in the present case in the context of the statement of Laxmi Narayan Bharadwaj and he was not aware whether L.N. Bharadwaj had given any retraction statement. He stated that he has not asked the Custom officers about the recovery or discovery of the facts on the statement of L.N. Bharadwaj. The statement of PW 4 hence has also not supported the case of the prosecution. He was not aware of the documents which were allegedly seized, were relevant or not. He admitted that he was not CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 48 of 55 aware about the contents of the documents which he has produced. His testimony hence cast doubt on the recording of statement of accused no. 1, 3 and also on the search conducted at A3/2, SDF, NEPZ 14.01.1997.
The PW 5 A.K. Verma has deposed in regard to the search of the truck pertaining to accused no. 1 conducted on 09.01.1997. He has also proved the panchnama Ex. PW 5/A. In his cross examination, he admitted that the time of recovery and seizure, the CDs were recorded, however, he could not say whether all CDs were recorded or not. He could not recollect the number of recorded CDs or that of the blank CDs. He admitted that before assessing the value, the CDs were not played or perused. He could not remember how he got the value of seized goods without knowing the contents of the CDs. He stated that he does not recollect as to whether he has perused/examined or seized the documents mentioned in Ex. PW 5/A. Hence, from the cross examination of the said PW, a serious doubt is created on the authenticity of his testimony as he himself is not aware as to how the evaluation of the goods were carried out and which documents were so found and seized.
PW 6 Mr. R.P. Verma has also deposed in regard to the search conducted on 09.01.1997 in regard to the recovery and seizure of 1,62,400 pieces of CDs which was recovered from tempo Swaraj Mazda bearing registration no. DL 1C 1097. He also deposed in regard to the CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 49 of 55 search of the premises of M/s World Digital Sound Ltd. at A3/2, SDF, NEPZ.
In his cross examination, he stated that he has no knowledge whether the verification of the contents of the recovered case property was done or not. He admitted that he was not aware of the goods which were meant for domestic tariff area or for export as the same was not the part of his role in the investigation.
PW 7 Mr. C.S. Rajput deposed regarding the statement u/s 108 of the Customs Act, 1962 of the accused no. 7 Beer Sain Ex. PW 7/A. In his cross examination, he stated that he has not conducted any inquiry/investigation on the statement recorded by him. After the date of recording of statement, he has not joined investigation in the present case.
The testimony of this witness only pertains to the recording of statement of accused no. 7.
PW 8 Mr. Dineshwar Singh recorded the statement of one Mr. Indiresh Singh, chowkidar and worker of accused no. 1 Company u/s 108 of the Customs Act, 1962 which has been proved as Ex. PW 8/A. He has also deposed regarding the search of premises no. 66, Sector 37, Noida i.e. premises of accused no. 1 vide panchnama dated 10.01.1997 vide which some CDs in packed condition, in loose condition and some inlay cards alongwith some documents were seized. Perusal of record CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 50 of 55 shows that the said witness also pertains to the recovery from guest house of accused no. 1 only.
PW 9 Mr. M.S. Yadav is a witness regarding the panchnama Ex. PW 5/A, which incidentally also pertains to the goods of accused no. 1. In his cross examination, he stated that goods were required to be enrolled in the office after getting clearance from the officers for their removal from NEPZ. However, he stated that he was not aware whether any records from proper officer were taken into possession or made evidence in the matter. He also admitted that no inventory of CD's was prepared as per seizure Ex. PW 5/A dated 09.01.1997. In the abovesaid discussion, a strong doubt has already been created over the authenticity of testimony of PW 5 and consequently on Ex. PW 5/A. The panchnama regarding the taking of samples from the goods seized vide Ex. PW 5/A is Ex. PW 9/A and it also pertains to the goods qua accused no. 1. The inventory Ex. PW 6/A, as mentioned above also pertains to the accused no. 1 and 2.
In cross examination, PW 9 has interalia deposed that he could not say anything with respect to the case property seized vide panchnama dated 10.01.1997 from the premises of M/s Padmini Polymers (accused no. 4) .
Further, PW 10 Mr. S.K. Mittal, as discussed above has recorded the statement of accused no. 2 and he also recorded the statements of one Mr. Adarsh Suneja, employee of accused no. 4 which CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 51 of 55 have been proved as Mark PW 10/A and Mark PW 10/B. The statements i.e. Mark PW 10/A and Mark PW 10/B show that these statements are not self incriminating and also do not incriminate accused no. 4 & 5 in any manner. Further, the facts mentioned in the complaint regarding seizure of 26464 CDs from the premises of accused no. 4 at the instance of Mr. Adarsh Suneja on 10.01.1997 is not supported by any corresponding panchnama or any of the case property as produced in the Court. The statements Mark PW 10/C (employee of accused no. 4) and Mark PW 10/D of Mr. Munish Bhatia and Mr. Mukul Vardia (employee of accused no. 1) could not be proved on record as only photocopies of these statements were placed on record. The production of photocopies of statements Mark PW 10/A, Mark PW 10/B, Mark PW 10/C and Mark PW 10/D were objected to by the Defence Counsels. As the said witnesses never appeared in the witness box their statements cannot be taken into consideration even at this stage. Further, the statement of Mr. Munish Bhatia Mark PW 10/C also shows that it is not self incriminating in nature and nothing has been deposed against accused no. 4 & 5.
PW 11 Mr. Anil Kumar Khanna recorded the statement of accused no. 6 which is Ex. PW 11/A. The said statement is also absolutely not self incriminating.
PW 12 Mr. S.P. Singh only recorded the statement of one Mr. Surinder Bhatia which is Ex. PW 12/A. The said statement is also not self incriminating.
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It is pertinent to note that Ex. PW 6/A i.e. the record of application u/s 110 (1) (A) of Customs Act, 1962 and the corresponding panchnama dated 09.01.1997 only pertain to the recovery and seizure of 1,62,400 pcs of CDs and it pertains only to accused no. 1 & 2, who are already declared PO in this case. The contention raised by Ld. Counsel for accused no. 4 & 5 is found to be correct. The recoveries and panchnamas as referred in the application u/s 110 Customs Act filed by the department on 12.11.1997 only pertain to the accused no. 1 & 2.
Further, the contentions raised by the Ld. Counsel for accused no. 3 that the prosecution has failed to produce on record any evidence to assign any role to the accused no. 3 is found to be correct.
The contention raised by accused no. 4 & 5 that none of the prosecution witness has been able to corelate the case property with the panchnama is also correct. The case property produced in the Court was totally in mutilated and damaged condition. Nothing has been brought on record to show as to how the case property was valued for the purposes of present case. As argued by Ld. Counsel for accused no. 4 & 5, it is found correct that the goods recovered from premises of accused no. 4 & 5 i.e. 240, Okhla Industrial Estate, Delhi were only detained and not sealed. Further, even the accused no. 2 Mridul Nalwaya in his statement has exonerated accused no. 4 & 5.
Furthermore, as argued by Ld. Counsel for accused no. 6, nothing incriminating was recovered from the shop of accused no. 6 CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 53 of 55 which is mentioned in the complaint itself. Even in the statement of accused, nothing incriminating has come up against him. The testimony of PW 3 also supports him.
Accused no. 7 also in his statement u/s 108 of the Customs Act, 1962 stated that he was not on duty at the time of seizure of the CDs on 09.01.1997. The prosecution however has failed to produce any evidence or document to establish the contrary. Nothing incriminating has come up on record against accused no. 7 from the testimony of witnesses who are examined. I find force in the argument of Ld. Counsel for accused no. 7 that in absence of a corroboration to the statement u/s 108 of the Customs Act, 1962 when the case property produced was also mutilated, no case was made out against accused no. 7.
From the testimony of witnesses examined, it is evident that the material recovery has been effected from the premises of accused no. 1 & 2 who are already declared PO. The case property produced in the Court was also in mutilated condition. The same could not be co related to the various panchnamas placed on record. The prosecution witnesses PW 2, PW 3 & PW 5 have categorically deposed that the seals of the packets are damaged, property is in open condition and mixed together and cannot be corelated to separate panchnama. The bags containing the CDs were also in badly mutilated condition. In their cross examination, they have admitted that they cannot identify or segregate those CDs from the lot which they have seized. Most of the CC NO. 63/1/06 CUSTOMS VS M/S WORLD DIGITAL SOUND 54 of 55 witnesses as examined are only in formal in nature. Apart from the accused, none of the witnesses whose statements were recorded u/s 108 of the Customs Act, 1962 has been examined.
The prosecution has failed to examine any expert also to prove the contents i.e. the software etc. stored in the CDs. Nothing has been brought on record to show that the alleged recovered goods were liable to any customs duty and were clandestinely removed. Therefore, the prosecution has failed to bring on record any material against accused no. 3 to 7, which, if unrebutted, could result in conviction. Besides as already observed, the prosecution has failed to prove a valid sanction for prosecution u/s 137 of the Customs Act.
At this stage, the Court is required to confine its attention to only the material collected during the investigation which can be legally translated into evidence and not upon further evidence that the prosecution may adduce in the trial, which would commence only after charges are framed, I come to the conclusion that there is no evidence before the Court which is capable of being converted into legal evidence later on during the subsequent proceedings after framing the charge.
From the abovesaid, it is clear that the prosecution has failed to produce any material on record showing even grave suspicion against accused no. 3 to 7 for settlement of charge and hence, the accused no. 3 to 7 stand discharged in the present case.
(SUDESH KUMAR)
ACMM01/NEW DELHI/22.08.2013
CC NO. 63/1/06
CUSTOMS VS M/S WORLD DIGITAL SOUND 55 of 55