Calcutta High Court
Commr. Of Cus. (Preventive) vs Dungarmal Mohata on 4 May, 2006
Equivalent citations: 2006(200)ELT522(CAL)
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
JUDGMENT P.N. Sinha, J.
1. The facts giving rise to the filing of this application under Section 130A of the Customs Act, 1962 by the applicant Commissioner of Customs (Preventive), West Bengal, Calcutta may be summarised as follows:
2. On 13.7.99 the Customs Officers attached to Berhampore Customs Preventive Unit received one telephonic information that a truck loaded with betelnuts had left Siliguri for Calcutta. The officers of Customs ambushed themselves by the side 6f NH-34 at the outskirt of Berhampore town. At about 03.00 hours of 14.7.99 the Customs Officers intercepted one truck near Bhakuri on NH-34 and from the documents available with the driver it was revealed that 125 bags of betel nuts were loaded in the truck from Dhupguri and was consigned to M/s. Venkatessa Supari Bhander, Erode, Tamil Nadu. The driver was in possession of two road challans bearing Nos. B-10/99 and B-11/99 both dated 10.7.99. From the challan No. B-11/99 it was revealed that another truck loaded with 195 bags of betel nuts was also coming along the same route and when the second truck also arrived there, it was intercepted by the Customs Officers and the drivers stated that the trucks were loaded with betel nuts at Dhupguri and both the trucks were consigned for Erode at Tamil Nadu.
3. From the drivers it was learnt that one Sri Surinder Kumar Oswal of Dhupguri was the owner of the goods while the consignor was one Sri Dungarmal Mohata, proprietor of M/s. Shyam Traders of Dhupguri as it was revealed from the road challans.
4. Both the trucks were then brought to the Customs Office where it was found that the truck bearing No. TN-28E/7597 was loaded with 150 bags of betel nuts weighing 10762 Kgs. and the truck bearing No. TN-28D/9019 was loaded with 195 bags of betel nuts weighing 15,600 Kgs. as against 8800 Kgs. and 15600 Kgs. mentioned in the road challans. At the time of unloading, the Customs Officers noted that some of the bags were having inscription "Biratnagar, Nepal, Transit to Calcutta to Nepal".
5. The trucks and bags of betel nuts were seized in presence of independent witnesses. Both the drivers made statements under Section 108 of the Customs Act and they in their statements stated that they loaded the bags of betel nuts from Dhupguri on the basis of challans issued by M/s. Shyam Traders and road challan issued by Sri Venkatessa Road Carrier, Dhupguri, District Jalpaiguri. They also stated that in one of the trucks 25 bags were loaded in excess of the quantity shown in the road challan.
6. The follow up enquiry was conducted by the Superintendent of Customs, Berhampore Customs Preventive Unit in Dhupguri Market and they could identify one person namely, Dungarmal Mohata, proprietor of M/s. Shyam Traders. Sri Mohata stated that his firm M/s. Shyam Traders was engaged in trading activities concerning betel nuts. Sri Mohata also stated that he used to purchase betel nuts from different persons and traders on cash and credit both.
7. Sri Mohata gave the name of Samir Saha, Biswajit Ghosh, Subrata Ghosh, Radha Sutradhar of Falakata area from whom he used to purchase betel nuts. Sri Mohata also disclosed that he also used to purchase betel nuts from other areas like Dinhata, Madarihut, Kazihut and Salbarhut. Sri Mohata promised to produce purchase vouchers of the gunny bags from local markets and goods were repacked first in poly bags and then in gunny bags. Mr. Mohata stated further that due to lack of proper supervision excess goods were loaded into the truck by the loaders and he had no knowledge about the consignee because he consigned the goods on the advice of the consignee. Mr. Mohata denied any knowledge of the inscription on the gunny bags with markings "Biratnagar, Nepal Transit to Calcutta to Nepal" and stated that customs officers themselves made such markings. Sri Mohata stated that the goods were of Indian origin.
8. During further follow up action the Customs Officer made local enquiry at Dhupguri Bazar and identified three persons namely, Sri Bhabesh ghosh, Sri Nepal Ghosh and Sri Gopal Saha who were found to have supplied betel nuts of foreign origin to M/s. Shyam Traders. The names of these persons also feature in the purchase bills which Sri Mohata submitted for scrutiny.
9. Sri Bhabesh Ghosh, Sri Nepal Ghosh and Sri Gopal Saha in their statements dated 20.7.99 revealed that they were retailed sellers of betel nuts at Dhupguri Bazar and they had sold some quantity of betel nuts to M/s. Shyam Traders on few occasions against payment of cash. They further stated that they procured the said betel nuts from hawkers who brought those betel nuts from Nepal where such type of betel nuts are grown in abundance. The particular variety of betel nuts which are on heavy demand in the market are known as 'Rotha Supari' and they disclosed that, these variety of betel nuts are not grown in India.
10. To ascertain the origin and quantity of the betel nuts under seizure samples of the same were shown to some local dealers of betel nuts of Berhampore and one Ashok Kumar Saha, a general merchant of Khagra, Murshidabad on 15.7.99 opined that the quantity of betel nuts shown to him are not produced in Assam or in any place of Dhupguri and these variety of betel nuts are available in Nepal only and are used for manufacture of 'Panmasala' and 'Gutkha' and the betel nuts of Indian origin are not used in the manufacture of 'Panmasala' and 'Gutkha'.
11. Sri Dungarmal Mohata and Sri Surendra Kumar Oswal in a joint petition dated 10.9.99 to the Commissioner of Customs (Preventive) stated that they were proprietors of M/s. Shyam Traders and M/s. Jyoti Trading Co. Ltd. located at Dhupguri and they were engaged in dealing with betel nuts and raw jute and they purchased betel nuts and sold them to different sources. They admitted sending of bags of betel nuts on 10.7.99 in two trucks for Erode in Tamil Nadu which were subsequently seized by Customs Officers at Berhampore.
12. Sri Mohata in another petition dated 10.9.99 to the Commissioner of Customs (Preventive) stated that after seizure of betel nuts an inventory by Berhampore Customs Preventive Unit were prepared and, subsequently he was provided with a copy of statement and going through the statement he found that there were certain things which were never asked to him and something were inserted in order to cover up the shortage occurred at the time of seizure.
13. Summons under Section 108 of the Customs Act was issued upon Surendra Kumar Oswal of Dhupguri but he did not turn up to give any statement.
14. One Babla Pal of Madarihut, Jalpaiguri, one of the suppliers of betel nuts to M/s. Shyam Traders was served with a summons under Section 108 of the Customs Act but, Babla Pal did not turn up to give any statement.
15. Thereafter, show-cause notices were issued upon Dungarmal Mohata of M/s. Shyam Traders and also upon Venkatessa Road Carrier, Dhupguri, M/s. Harakson Maheswari of Dhupguri, B. Muthuswamy, drivers of the truck and Surendra Kumar Oswal, proprietor of M/s. Jyoti Trading Co. as to why the betel nuts would not be confiscated under the provisions of Customs Act and why penalty should not be imposed on the owners under Section 112 and why the vehicles would not be confiscated under Section 115 of the Customs Act. The Commissioner of Customs (Preventive), West Bengal, Calcutta by order dated 21.8.2000 confiscated the betel nuts valued at Rs. 34,36 lakh (approximately) and gave opportunity to the owner of the goods to redeem the same on payment of redemption fine of Rs. 3,50,000/.... The Commissioner of Customs also confiscated the two vehicles and gave opportunity to the owners of the truck to redeem the said trucks on payment of redemption fine of Rs. 28,000/- for each truck.
16. The Commissioner of Customs also imposed personal penalty of Rs. 1 lakh upon Dungarmal Mohata, Rs. 75,000/- on M/s. Shyam Traders, Rs. 50,000/- on M/s. Venkatessa Road Carrier, Rs. 50,000/- on M/s. Jyoti Trading Company, Rs. 50,000/- on Sri B. Muthuswamy, Rs. 50,000/- on Sri N. Chandran and Rs. 50,000/- on Mr. Surendra Oswal.
17. Being aggrieved by the order of the Commissioner of Customs (Preventive), West Bengal, Calcutta the appellants preferred appeal to the learned Tribunal and the learned Tribunal by the order dated 10.9.01 set aside the order of Commissioner of Customs and observed that there was no justification for confiscation of the betel nuts as the revenue failed to discharge the burden placed on it. The Tribunal also set aside the order of confiscation of the vehicles and imposing of personal penalties upon the persons mentioned above.
18. The Revenue thereafter being dissatisfied with the order of the Tribunal has moved this Court under Section 130A of the Customs Act by this application for derision on the questions of law which are mentioned below:
(1) When the trade opinion was explicit regarding foreign origin of the impugned goods/betelnuts and when the vendors who sold the betel nuts to the appellants clearly admitted that the goods are procured from hawkers bringing the said goods from Nepal and the impugned goods were recovered/found in bags some of which were printed with the marks "Biratnagar Nepal", the legal question which arises whether on the basis of aforesaid circumstantial evidence the goods cannot be considered to have been imported from third country in contravention of the provisions of the Customs Act, 1962?
(2) When the evidence is on record that the goods have been brought from Nepal by the hawkers who in turn sold the goods to vendors and further sale was effected by the vendors to the appellants the legal question which arises whether the goods on basis of above circumstantial and positive evidences cannot be said to have been imported illegally in contravention of the Customs Act, 1962.
19. Mr. D.P. Mukherjee, the learned Senior Advocate appearing on behalf of the applicant Revenue submitted that the seized articles being betel nuts were of foreign origin which was of the variety of 'Rotha Supari'. Such variety of betel nuts are not grown or available in India and this variety is grown in Nepal and from Nepal different traders bring such variety of betel nuts into India and in Dhupguri Market. The respondent procured such betel nuts whose origin was in Nepal and despatched the betel nuts in two trucks for Erode at Tamil Nadu from Dhupguri.
20. Mr. Mukherjee contended that it is true that betel nut is a non-notified item in view of Section 123 of the Customs Act. The initial onus was, therefore, on the Customs to establish that the betel nuts which were despatched by the respondent through road challans were of foreign origin and the Customs in the instant case has been able to discharge the initial onus. In the instant matter, the opinion of traders of such business or opinion of betel nut businessmen establishes the fact that seized betel nuts came from Nepal, and such opinion of traders are sufficient and reliable. Statement of businessmen of Dhupguri and Berhampore were recorded under Section 108 of the Customs Act and all such trade experts opined that the seized betel nuts are not grown or produced in India. The statements of the trade experts recorded under Section 108 of the Customs Act can be relied upon in the instant case and such statements establishes the fact that the seized betel nuts where of foreign origin. Accordingly, the Tribunal committed error both in fact and in law by setting aside the order of the Commissioner of Customs (Preventive) and accordingly this Court would interfere into the matter and lay down the position of law in this respect.
21. Mr. Pradip Kumar Das, the learned Advocate appearing for the respondent submitted that betel nuts are grown in the Districts of Jalpaiguri and Cochlear in West Bengal and in the entire North Eastern Indian States in abundance. The seized betel nuts were grown in India and were not of foreign origin. Dhupguri is a famous market for betel nuts and the respondent is a dealer of betel nuts in Dhupguri. Receiving orders from Erode in Tamil Nadu he despatched the bags of betel nuts in two trucks with valid challans. This Court in Commissioner of Customs (Preventive), West Bengal, Calcutta v. Sudhir Saha held that betel nut is not a notified goods under Section 123 of the Customs Act, 1962. The burden of proof in such a case of non-notified item cannot be shifted on the person from whom such goods were seized. As a non-notified item burden is on the department to prove the smuggled nature of goods.
22. Mr. Saha submitted that in that reported case also the officers of Customs seized betel nuts and a point was raised before this Court for consideration as to whether under Section 123 of the Customs Act relating to non-notified goods initial burden can be shifted on the owner or on the person from whom the goods were seized. This Court clearly held against the Customs Authorities and opined that the initial burden of proof that the seized non-notified item was smuggled lies on the Customs Authorities. This Court in the reported case held that the learned Tribunal rightly approached on the point of law and dismissed the reference application filed by the Commissioner of Customs (Preventive), West Bengal. Similarly in this case, the seized items were betel nuts which are non-notified goods and initial onus was on the Customs Authorities to prove or establish smuggled nature of the goods. Opinion of experts in trade cannot form the basis of decision to prove smuggled nature of goods. There is no merit in the application and it should be dismissed.
23. After hearing the learned Advocates of the parties we find from the materials on record that the seized items were 150 bags of betel nuts in one truck bearing No. TN-28E/7597 and 195 bags of betel nuts in another truck bearing No. TN-28D/9019. In view of Section 123 of the Customs Act, 1962 the betel nuts are non-notified items. Accordingly, the initial onus of proving that the seized betel nuts were of foreign origin and smuggled into India by the respondent was on the Customs Authorities. In order to prove its case the Customs Authorities placed reliance on opinion of some traders or businessmen who deal with the business of betel nuts.
24. It appears from the materials on record that the Customs Authorities recorded statements of some traders of Dhupguri namely, Gopal Saha, Madan Ghosh and Bhabesh Ghosh under Section 108 of the Customs Act. The Customs Authorities also recorded statement of Ashok Kumar Saha, a merchant of Khagra, Murshidabad under Section 108 of the Customs Act. These persons as it appears in their statements stated that the seized betel nuts are not grown in Assam or in area of Dhupguri. They in their statements stated that the variety of betel nuts which were seized are grown in Nepal and are brought into India through different ways into Dhupguri market. Now the question of law is whether in this case the opinion of such businessmen or traders i.e. trade opinion can be the basis or foundation for coming to the decision as to smuggled nature of seized goods, and whether the Customs Authorities were able to discharge the initial burden of proof which lies on them to establish that the betel nuts were smuggled into India from Nepal.
25. After considering the entire facts and circumstances, we are of the view that in the instant case the trade opinion cannot form the basis or foundation to establish the fact that, the seized betel nuts were either of smuggled nature or were of foreign origin and smuggled into India particularly in Dhupguri of Jalpaiguri from Nepal. Before the Commissioner of Customs the respondent before us wanted to cross-examine the alleged trade experts namely, Ashok Sana, Bhabesh Ghosh, Nepal Ghosh and Gopal Sana. It appears from the order of the Commissioner of Customs (Preventive) that letters were sent to the said four persons whose statements were recorded under Section 108 of the Customs Act. It is evident that the said letters were not served and were returned back undelivered with postal remark that 'no such person in the given address and hence returned'. It is crystal clear that the said four persons whose statements were allegedly recorded by Customs Officers under Section 108 of the Customs Act did not appear before the Commissioner of Customs (Preventive) to face the cross-examination by the present respondent. On the other hand, the postal remark clearly indicate that there was no such person in the given address and it raises doubt about the genuineness of the alleged statements of traders recorded under Section 108 of the Customs Act. When the very existence of the alleged businessmen or traders of betel nuts are in question no reliance can be placed on the alleged statements of such traders recorded by Customs Officers under Section 108 of the Customs Act. Such statements of alleged traders cannot be regarded as voluntary and reliable statements.
26. Betel nuts are grown in abundance in the Districts of Jalpaiguri, and Coochbehar in West Bengal and in the entire States of Assam, Arunachal Pradesh, Meghalaya, Tripura, Manipur etc. i.e., the betel nuts are grown in abundance throughout the North Eastern States of India including the Districts of Jalpaiguri and Coochbehar of West Bengal, Dhupguri is a famous market and betel nuts are available in abundance in Dhupguri market. The respondent is a trader of betel nuts in Dhupguri and he purchases betel nuts from different suppliers either in cash or on credit and he again sends betel nuts to different customers of India in trucks receiving orders from them. Therefore, in the instant case the trade opinion cannot form the basis or foundation to establish that the seized betel nuts were smuggled into India from Nepal. In the inventory or seizure memo the addresses of the witnesses were not mentioned and it was also not mentioned over how many number of bags there was writing "Biratnagar, Nepal." No reliance can be placed regarding inscription "Biratnagar, *Nepal, Transit to Calcutta to Nepal" which were found on some of the seized bags of betel nuts as was alleged by the Revenue. Considering the entire situation, facts and circumstances we are of the view that possibility of making such inscription by officers of Customs cannot be ruled out as it appears that at the time of inventory such markings were not there on some bags of betel nuts. The trucks were intercepted at 03.00 hours of 14.7.99, whereas the seizure memo was prepared at 11.00 hours of 15.7.99.
27. As a non-notified item the burden was on the Revenue to prove the smuggled nature of the seized good viz., betel nuts and the Revenue has failed to prove or establish that seized betel nuts were of foreign origin and smuggled into India, and consequently, failed to, discharge the burden of proof or onus which was on Customs Authorities.
28. After going through the order of the learned Tribunal we find no illegality in the said order. The learned Tribunal rightly came to the decision that the words "Biratnagar, Nepal, Transit to Calcutta to Nepal" were written subsequently and those writings was not there at the time of inventory and at the time of preparation of seizure memo. Moreover, if the goods were imported from Nepal the writing 'Biratnagar, Nepal' would not have been in Hindi as was found on some of the seized bags. The revenue in the present case failed to establish the smuggled character of the goods and failed to establish that the betel nuts were of foreign origin. The Tribunal rightly came to the decision that statement of trade opinion of local traders cannot prove foreign origin of the goods and in number of cases it was held that in cases involving betel nuts trade opinion cannot be equated with opinion of expert. We have earlier expressed our finding that in the instant matter the trade opinion cannot be relied upon as the four persons whose statements were recorded were not available for cross-examination before the Commissioner of Customs (Preventive), West Bengal. The learned Tribunal rightly held that the revenue has not been able to discharge the burden placed on them.
29. In view of the discussion made above we find no merit in the application itself and there is no ground to interfere with the findings of the learned Tribunal. Considering the entire facts and circumstances, we find that no question of law arises out of the order of the Tribunal. Accordingly, there is no merit in the reference application and the application accordingly fails and is dismissed.
30. However, we make no order as to costs.
Bhaskar Bhattacharya, J.
31. I agree.