Custom, Excise & Service Tax Tribunal
Rajaram Johra vs Commissioner Of Customs (Airport & ... on 17 March, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
C/00249/2009
[Arising out of Order-in-Appeal No.C.Cus.No.240/2009, dated 29.04.2009 passed by the Commissioner of Customs (Appeals), Chennai]
RAJARAM JOHRA
APPELLANT
Versus
COMMISSIONER OF CUSTOMS (AIRPORT & CARGO), CHENNAI
RESPONDENT
Appearance:
For the Appellant Shri Arun Kumar Prasad, Adv.
For the Respondent Shri B.Balamurugan, AC (AR) CORAM:
Honble Shri D.N. Panda, Judicial Member Heard and Reserved on:
17.03.2016 Pronounced on:
29.04.2016 FINAL ORDER NO: 40678 / 2016 Learned counsel Shri Arun Kumar Prasad appearing on behalf of the appellant submits that 2.5 kgs. of Gold were seized on 22.04.1992 from appellant, who was staying in a hotel on that date. Mahazar was recorded on 23.04.1992. Customs alleged that the gold so seized carried foreign markings and the appellant was carrier of the gold belonging to somebody else. Appellants statement was recorded on 23.04.1992 under coercion and undue influence.
1.2 According to appellant, he purchased the impugned gold from Shri Abubacker of Kerala. Abubacker brought the gold through Air Customs at Mumbai paying Customs duty under Bombay Airport Customs Receipt No.000840, dated 20.04.1992 [Ref: copy of receipt at page no.1 of the paper book filed]. But that receipt was not accepted by the Customs in Chennai as proof of the gold so came to India while recovery of the gold was made from the possession of the appellant. No enquiry was made by Customs from Abubacker. When the gold purchased by the appellant came through Bombay Customs that cannot be said to be illicitly imported.
1.3 It was also urged on behalf of appellant that he was gold- smith of Rajasthan and Abubacker contacted him to take the gold from him, for which, he came to Chennai and in exchange of old gold jewellery to Abubacker, the gold seized by Customs was purchased from him. Of course, appellant had no record to show that he was dealer of gold jewellery. So, credit worthiness of the appellant could not came to record since appellants income-tax status could not be placed before investigation.
1.4 Appellants claim was that the Commissioner (Appeals) having allowed redemption of the gold, there should not be imposition of unreasonable redemption fine of Rs.15,00,000/-. Learned Commissioner (Appeals) took market value into consideration to determine redemption fine. That was also faulty because he took the price of gold as on 23.07.2015 instead of the data of possession thereof.
1.5 Appellant submitted that because of the false allegations of the Customs, the appellant faced criminal trial in UOCC NO.11/1996 resulting in conviction by an order dated 07.06.05. Along with the appellant, others who were connected with the gold i.e., Shri Gopichand Agarwal and Shri R.K. Verma were also convicted. MO-1 to MO-3 (which were gold bars and gold biscuits) were not given possession to appellant but were given to Customs. The appellant is innocent. Making false allegation, Customs discarded the duty paid receipt dated 20.04.1992 produced by appellant. No enquiry was done by the Customs on this receipt but was simply ignored on baseless pleas. Appellant prayed that redemption fine being abnormally fixed by Commissioner (Appeals), that should be waived.
2.1 On the other hand, the submission of Revenue is that when gold was seized from appellant that was found to be smuggled gold with foreign markings. Section 123 of the Customs Act, 1962 applies to the present case. Due process of law was followed for seizure of the gold having been found illicitly imported carrying foreign marking therein. Criminal proceeding was also filed against the appellant in the court of the Chief Metropolitan Magistrate. That resulted in his conviction as well as his accomplices. Investigation found that the appellant came from Calcutta impersonating him to be Shri K. Chandra to the airline using the ticket of one K. Chandra. Appellant travelled by the said tickets had oblique motive. When investigation found him in the hotel, he destroyed the air ticket. But Pieces thereof were recovered and statement under section 108 of the Customs at, 1962 was recorded. That revealed that the ticket was in the name of K. Chandra.
2.2 Appellant had concealed the gold. That was recovered form his rectum. This also he confessed in his 108 statement and that remained unrebutted all through till his conviction.
2.3 Appellants confession was that one Shri Sitaram from Calcutta had given him the gold to handover that in Chennai to one R.K. Verma. When such a story came out, investigation recorded statement of R.K. Verma under section 108 of Customs Act, 1962. It was revealed that Verma was from Delhi and he was a carrier of the offending gold for one Gopichand Agarwal and that was meant for one Shri Suresh Verma in Chennai.
2.4 From the aforesaid revelations made by the appellant and also the other accomplices, Customs proceeded against them before Chief Metropolitan Magistrate. The evidences of Customs was so strong that the appellant and others were convicted. The conviction itself is a testimony of illicit import the gold. Therefore, the MO-1 to MO-3 were not returned to them. That was given custody to Customs. Therefore, they had to undergo rigorous imprisonment with penalty.
2.5 Revenue urged that learned Commissioner (Appeals) although made a mention of section 123 of the Customs Act, 1962 in his order, he failed to appreciate the implications thereof. Evidence of smuggling of gold came out in broad daylight due to recovery of the gold from possession of appellant. The gold carried foreign markings and there was no evidence of import thereof as well as for no lawful possession of the same, that was rightly seized and confiscated. Therefore, learned Commissioner (Appeals) should not have exercised power under section 125 of the Customs Act, 1962 to grant redemption without burden of proof discharged by appellant under section 123 of Customs Act, 1996 as to lawful import. Trial court in the criminal proceeding held that the gold was not property of the appellant. Therefore, appellant was not at all entitled to redemption of the gold. Accordingly, Tribunal should order absolute confiscation of the gold as well as confirm penalty without granting any relief to the appellant.
3. Heard both sides and perused the records. Although adjudication was made against present appellant as well as R.K. Verma and Gopichand (Soni) Agarwal, this appellant is only before Tribunal. Accordingly his appeal is only dealt by this order.
4. Investigation searched Room No.58 of Hotel Dasaprakash, Madras-84 on 22.04.1992 and the appellant Rajaram Johra was found along with one R.K. Verma thereat. There were 12 gold bars and 10 gold biscuits with foreign markings weighing 2563 gms valued at Rs.7,35,247.81 concealed in that room. Investigation recovered such gold. Appellant did not disown the same. Rather, he claimed ownership thereof stating that he had received the same form one Abubacker, who was found by investigation to be stranger to him without his identity. Recovery of the offending gold and persons attached to that came to light. R.K. Verma was not only a witness to the search, but also he was found to be a conduit to the smuggling of the gold.
5.1 Rajaram Johra, the appellant on examination revealed that he came from Calcutta boarding Flight No.0544, dated 22.04.1992 on a ticket in the name of one G. Chandra with the above gold for delivery thereof to one R.K. Verma in Madras. However, that ticket was torn into pieces and thrown in the room. Those were recovered by investigation and on enquiry details thereof was ascertained. Appellant travelled by air impersonating him to be G. Chandra which proved evil design of the smuggling racket. Members of that racket were determined to pursue their ill will. There was no evidence of lawful import of the offending gold.
5.2 On 23.04.1992 when Rajaram Johra was further examined under section 108 of Customs Act, 1962, he revealed that he belongs to Rajasthan and came to Calcutta and stayed in Room No.5 of Hotel Samrat, Chouringha, Calcutta before departing to Madras. He left for Madras by Indian Airlines Flight No. IC 544 using ticket in the name of K. Chandra under instruction of one Sitaram with the offending gold. He was directed by Sitaram to stay in Hotel Dasaprakash in Room No.58 upon his arrival in Chennai and to hand over the offending gold to one R.K. Verma, who shall visit him in that room. He also narrated the manner how he concealed the gold to bring to Madras for ultimate delivery to one Gopichand Agarwal by R.K. Verma. He also admitted possession of the offending gold recovered from his room and was quite aware of the foreign markings therein which remained uncontroverted all along before all the forum.
6.1 R.K. Verma, who was the witness to the search and recovery of the offending gold form above said room in hotel Dasprakash was examined by investigation. He revealed that he was staying in Room No.225 of Hotel Mahashakti International, No.371, Mint Street, Madras-79 having come from Delhi travelling by Tamil Nadu Express to collect the gold from Rajaram Johra for ultimate delivery to one Gopichand (Soni) Agarwal. A railway ticket bearing No.39301 showing his travel from New Delhi to Madras with sleeper charge ticket No.D561885 for Rs.34/-was recovered from him. That was unrebutted.
6.2 R.K. Verma in his further statement dated 23.04.1992 under section 108 of the Customs Act, 1962 stated that he came from Delhi upon being asked by Rajaram Johra to meet him in Chennai. He was staying in Room No.225, Hotel Mahashakti International, Madras and contacted Rajaram Johra (appellant) in Hotel Dasaprakash to receive all the 12 gold bars and 10 gold biscuits from him for ultimate delivery to Gopichand (Soni) Agarwal at No.24, Kasi Chetty Street, Madras. He also received a phone call from Calcutta form a person (who was the mastermind behind the smuggling as well as member of the smuggling racket dealing with the offending goods) to contact Rajaram Johra in Hotel Dasprakash at Madras for taking delivery of the offending gold. He admitted that the rail ticket as aforesaid seized by investigation was used for his travel to Madras from New Delhi.
7.1 When investigation came across the name of Gopi Chand (Soni) Agarwal, they rushed to find out his identity and whereabouts. He was found in premises No.24, Kasi Chetty Street, Madras-79. A telephone bill no.561583, dated 07.03.1992, rent bill for the month of April, 1992, dated 17.05.1992 and rental agreement in two sheets, dated 30.12.1991 executed by one Shri Mahendra Kumar and Shri Suresh Chand were recovered from him. He did not controvert that. When he was examined on 23.04.1992, he revealed that he belongs to Rajasthan and arrived Chennai by Tamil Nadu Express on 24.02.1992 and was staying in Room No.24, Kasi Chetty Street, Madras which belongs to his friend Suresh Verma.
7.2 When Rajaram Johra, R.K. Verma as well as Gopichand (Soni) Agarwal were questioned about source of the gold, they failed to explain whether the gold was lawfully imported into India. Therefore, they were arrested for the possession of the illicitly imported gold and were presented before the Magisterial court of law for their trial.
8.1 R.K. Verma and Gopichand Soni retracted their statement through their letters stating that they were under pressure and were forced to write the confessional statement. Such retractions were incredible and fabricated story without any truth. R.K. Verma stated in the retraction that he went to Hotel Dasaprakash, Chennai for his food. But the Customs officers arrested him. Similarly, Gopichand Soni in his letter to the Magistrate stated that search was conducted in his premises and without any proof of his questionable conduct, he was arrested. There was no truth in his retraction for which his story was unbelievable. The retraction letters when forwarded to the Enforcement Directorate, entire story of retraction of R.K. Verma and Gopichand Soni were turned down finding no substance therein and ill-founded. Both of them were found to have been actively and consciously involved in the smuggling along with Rajaram Johra.
8.2 Rajaram Johra by his letter dated 30.06.1992 informed the Assistant Collector (Customs) that he is a goldsmith by profession and he came into contact with one Abubacker from Malappuram, of Kerala. Abubacker visited Dargah in Ajmer every year. He phoned him in the first week of April, 1992 and told him that he shall be arriving from Dubai to Mumbai on a short and urgent trip to place order with him for gold ornaments weighing roughly 2.5 to 5.0 kgs of Rajasthani design. Rajaram told him that since he had urgent work in Calcutta he would meet him (Abubacker) in Madras while Abubacker was on his way to Kerala and would take gold bars as well as gold biscuits from him in exchange of the Rajasthani design gold ornaments. Such fabricated story failed to speak truth when the appellant miserably failed to bring cogent and credible evidence in support of such story. Abubacker was stranger to him. He neither provide any details about him nor proved the fabricated story of exchange of Jewellery against gold bar and gold biscuit.
9. On the aforesaid material facts, when counsel for the appellant only pleaded innocence of the appellant, investigation led cogent and credible evidence before the trial court followed by recovery of contraband gold resulting in conviction of the appellant with his accomplice. While Rajaram Johra was found with the gold in Dasprakash Hotel, other two conduits were abettors for disposal thereof. Magisterial Court found all of them to be smuggler of the contraband gold. They were also proved to be members of smuggling racket under Customs law without any evidence adduced by them as to possession of the gold seized being imported lawfully. Appellant failed to prove his bona fide. Story of Abubacker was a false and a premeditated design to escape scrutiny of Customs. Even the story of exchanging Rajasthani make Jewellery was false without any evidence to that effect. No such jewellery were found with the appellant when the offending goods were found from his possession. His travel from Calcutta to Chennai using the ticket of K. Chandra by the Indian Airlines Flight No.0544 was proved to dispose the smuggled gold. That demonstrated his active, conscious and deliberate involvement in gold smuggling.
10. Successful recovery of the offending gold by investigation from the possession of appellant could neither detach him nor his accomplice form the smuggling. Such goods were without any proof of lawful import thereof. Plea of payment of customs duty in Bombay Airport was false. Abubacker was a bubble and stranger to appellant and no exchange of jewellery with gold bars and gold biscuit was proved in absence of jewellery with appellant. Abubackers name was uttered by appellant to escape scrutiny of law. The accomplices were conduits to take possession of the offending gold form the appellant for disposal thereof on his arrival in Madras. Entire defence exercise was futile and pleas were baseless as well as fake.
11.1 Section 123 of the Customs Act, 1962 mandates that gold is notified goods. Burden of proof of lawful import lies on the person from whose possession such gold is seized in the event Customs believes that the gold was smuggled goods. For convenience of reading, the said section is reproduced below:-
SECTION 123. Burden of proof in certain cases. - (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be -
(a) in a case where such seizure is made from the possession of any person, -
(i) on the person from whose possession the goods were seized; and
(ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person;
(b) in any other case, on the person, if any, who claims to be the owner of the goods so seized.
(2) This section shall apply to gold, and manufactures thereof, watches, and any other class of goods which the Central Government may by notification in the Official Gazette specify. 11.2 The gold as stated above were found to be contraband goods and customs believed that to be smuggled one when that carried foreign marking and no evidence of lawful import thereof was adduced before investigation, adjudicating authority as well as the Trial court. Appellant along with the accomplices miserably failed before the Trial court to succeed and their trial ended in conviction with no return of the gold to them. The MO-1, 2 & 3 in that case which were the offending gold in the present appeal were ordered by the Magistrate to be returned to Customs. When cogent and credible evidence came to the surface demonstrating that the appellant was in possession of the contraband gold with foreign marking thereon and such goods were not lawfully imported, there is no scope at all for him to go out of the purview of section 123 of the Customs Act, 1962. Therefore, all the 12 gold bars and 10 gold biscuits were lawfully seized by Customs and were liable to absolute confiscation.
12. Penalty of confiscation is a penalty in rem, which is enforced against the goods. In such case, it is not necessary for the Customs authorities to prove that any particular person is concerned with their illicit importation or exportation. It is enough, if the Department furnishes, prima facie, proof of the offending goods being smuggled one. The second kind of penalty is one in personam, which is enforced against the person concerned in the smuggling of the goods. In such case, the Department has to prove further that the person proceeded against was concerned in the smuggling.
13. Smuggling is clandestine conveying of goods to avoid legal duties. Secrecy and stealth being its covering guards, it is impossible for the Customs to unravel every link of the process. Many facts relating to this illicit business remain in the special or peculiar knowledge of the person concerned in it. Presumption of innocence is, no doubt, presumptio juris: but every days practice shows that it may be successfully encountered by the recovery of the contraband goods possessed by the smuggler.
14. Department not only brought out direct evidence of possession of smuggled gold by appellant, even several circumstances of a determinative character coupled with the inference arising from the dubious conduct of appellant, as well as, his accomplice could reasonably lead to conclusion, that the goods were smuggled gold and appellant was actively involved in smuggling. Each case presents its own peculiarities and in each such case, conduct of smuggler must be brought to bear upon the facts elicited. It, therefore, follows that so long as the adjudicating authoritys appreciation of the direct and circumstantial evidence before him was not illegal, perverse or devoid of common sense, or contrary to rules of natural justice, there would be no warrant to disturb his findings.
15. Initial onus of proof on the Department can be sufficiently discharged by circumstantial evidence following the ratio laid down by the Apex Court in the case of in Issardas Daulat Rams case, (1962) Supp. (1) SCR 358. In the present case, the circumstantial evidence suggesting the inference that the goods were illicitly imported into India could not be ruled out for no substantial evidence adduced to prove legal import of the offending goods. He got fullest opportunity to rebut against the alleged acquisition of the offending gold. But, he failed. The effect of the material facts being exclusively or especially within the knowledge of the smuggler, Customs proved its case very successfully.
16. It is a proved case of Customs that the appellant travelled using ticket of another person from Calcutta. A prima facie case is proved against him. If his possession was innocent and lacked the requisite incriminating knowledge, then it was for him to explain or establish those facts within his peculiar knowledge, failing which Customs was entitled to take advantage of the presumption of fact arising against him, in discharging its burden of proof. Department is accordingly held to have proved its case.
17. In view of the aforesaid findings and analysis of evidence, it is held that the seized gold were smuggled goods. Absolute confiscation thereof is sine qua non and no redemption thereof is at all permissible on payment of redemption fine. Learned Commissioner (Appeals) committed grave error in granting option to redeem the offending gold under section 125 of the Customs Act, 1962 on payment of redemption fine of Rs.15,00,000/-. His order is patently illegal. Therefore, that order on this count is set aside. When offence of smuggling of gold is established in the present case, there shall be no immunity from penalty. Accordingly, the penalty imposed is confirmed. Thus absolute confiscation of gold ordered and penalty imposed on the appellant by learned Adjudicating Authority sustain and that is maintained.
18. Appeal is accordingly dismissed upholding Order of adjudication.
(Pronounced in open court on 29.04.2016) (D.N. PANDA) JUDICIAL MEMBER Ksr 28.04.2016 DRAFT Remarks I II III Date of dictation 17.03.2016 Draft Order - Date of typing 22.03.2016 Fair Order Typing 28.03.2016 Date of number and date of dispatch 29.04.2016 15 C/00249/2009