Customs, Excise and Gold Tribunal - Mumbai
Dinesh Ishwarlal Patel vs Collector Of Customs on 16 October, 1987
Equivalent citations: 1988(34)ELT382(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. This appeal arises out of and is directed against order bearing No. S/14-4-105/82 PINT, dated 13-10-1982 passed by the Addl. Collector of Customs, Bombay.
2. The subject of challenge in this appeal is confined to the penalty of Rs. 2,000/- imposed on the appellant.
3. The brief facts necessary for the disposal of this appeal are :
On 5-2-1982 on information the Customs Preventive staff intercepted one Shri Tejraj Chhanganji Jain who was found carrying a packet containing smuggled wrist watches. After questioning him the room occupied by the present appellant was searched. No incriminating article was found. On further interrogation of Shri P.C. Jain and on coming to know that he had kept certain Wrist watches in the premises of the appellant, the appellant's premises was again searched. 105 wrist watches of foreign origin were seized. In the course of the investigation the statement of the appellant was recorded. Among other things the appellant stated that Shri P.C. Jain had come to his residence and had left two paper wrapped packets. He also stated that Shri P.C. Jain used to visit his residence in connection with the work which the appellant was doing namely attaching saree falls and embroidery work. It was also stated by him that about a month before seizure Shri P.C. Jain had requested him to allow goods to be kept at his place and had offered to pay Rs. 100/-per month. He had accepted that offer as his earning was meagre. He further stated that he had not physically seen the wrist watches which Shri P.C. Jain was keeping in his house. It was in his statement that P.C. Jain himself used to climb a ladder and keep the things in a loft.
4. After the completion of the investigation and after issue of show cause notice the Addl. Collector of Customs who held the enquiry, after affording personal hearing, ordered absolute confiscation of the seized wrist watches and imposed a penalty of Rs. 5,000/- on P.C. Jain and a penalty of Rs. 2,000/- on the appellant.
5. During the hearing of this appeal, the appellant stated that he is innocent. He did not know the contents of the packages which Shri P.C. Jain was keeping in his house. He was unaware till the Customs Officers opened the packages in his presence that the packages contained wrist watches of foreign origin. He further submitted that even in the statement, P.C. Jain had not stated that he had informed the appellant that the wrist watches he was keeping in the appellant's house were of foreign origin. He further submitted that he knew Hindi and Gujarati but the Customs Officers who questioned him knew only Marathi and therefore he had torn of two or three statements earlier recorded and he does not know what statement of his was recorded by the Customs Officer he had only put his signature. He, therefore, prayed that the penalty on him may be set aside.
6. Shri Senthivel appearing for the Collector submitted that the appellant's statement though recorded in English was read over in Gujarati and the appellant had signed the statement. The further submission of Shri Senthivel was that the appellant was receiving consideration of Rs. 150/- per month, for keeping wrist watches. It is very unlikely that the appellant would not have known the foreign origin of the wrist watches. If they were not of foreign origin, Shri P.C. Jain would not have paid Rs. 150/- per month. He, therefore, urged that the appeal may be rejected.
7. I have carefully considered the submissions made by the appellant and Shri Senthivel and perused the records. The findings of the Addl. Collector insofar as it relates to the appellants read :
"Dinesh Ishwar Lai Patel is also knowingly concerned with the smuggled watches under seizure, because he had allowed Tejraj to keep the wrist watches in his own house for a consideration of Rs. 150/- per month. Though he had known Tejraj only for 3 months he had already known him enough and that he was engaged in selling foreign watches in Shuklaji Street. On the day the watches were seized he had as usual allowed Tejraj to go to the loft, and he had also seen him going away with a paper packet in his hand. Although in his statement he had denied any commercial interest in the smuggling business of Tejraj, he is nevertheless knowingly concerned and has been aiding and abetting Tejraj. I hold that Shri Dinesh Patel is also liable for penal action."
8. In his order, the Addl. Collector does not refer to any evidence for his conclusion that the appellant Dinesh Patel was knowingly concerned with the smuggled watches. He also does not refer to any evidence, -In support of his conclusion that the appellant had been aiding and abetting Tejraj. Tejraj's statement was recorded and he did not implicate the applicant in his smuggling activity or in the disposal of smuggled watches. He did not even state that the appellant knew as to the watches he was keeping in the appellant's house were of foreign origin or smuggled goods. The appellant's statement is self-exculpatory. He had categorically stated that he had at no time seen the watches which Tejraj Jain was keeping in his house. There is no contrary evidence. The Addl. Collector did not state that that part of the appellant's statement was not believable. In fact the Addl. Collector did not consider the evidence either of the appellant or of T.R. Jain or any other person. His conclusion is based only on the ground that the appellant was receiving Rs. 150/- per month for allowing T.R. Jain to keep the watches in his house. If there is evidence to establish that the appellant was aware of the watches being smuggled goods and had allowed Shri T.R. Jain to keep the watches in his residence then certainly a penalty could have been imposed on the appellant Under Section 112(b) of the Customs Act. Merely stating that the appellant is concerned with the watches would not be sufficient to impose penalty on the appellant Under Section 112(b) of the Customs Act. In order to impose penalty Under Section 112(b), it is necessary to establish that the appellant knew or had reason to believe that the watches found in his residence are smuggled goods. Mere possession of the watches without the knowledge or reason to believe that they are liable to confiscation Under Section 111 would not be sufficient to impose penalty. In the whole of his order, the Addl. Collector did not assign a single reason to hold that the appellant knew or had the reason to believe that the watches Shri Jain was keeping in his house were liable to confiscation.
9. According to the appellant he had received only Rs. 150/- in one month. Even if we are to consider that the consideration offered by Shri T.R. Jain to the appellant for keeping the watches is somewhat high it could only raise a suspicion in the mind of appellant. The keeping of the watches by itself would not impute knowledge of the smuggled nature of the watches. In the circumstances, the Addl. Collector was not correct and justified in imposing penalty on the appellant. I, therefore, set aside the penalty.
10. In the result, this appeal is allowed. The penalty on the appellant is set aside. The penalty if paid shall be returned to the appellant.