Custom, Excise & Service Tax Tribunal
Paresh Bhanaji Nanda vs Commissioner Of Customs (Preventive), ... on 25 May, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal Nos. C/1005, 1006 & 1213/04 (Arising out of Order-in-Original No. CCP/KPM/ADJN/R&I/13/2004 dated 9.9.2004 passed by Commissioner of Customs (Preventive), Mumbai.) For approval and signature: Honble Mr P.G. Chacko, Member (Judicial) Honble Mr. S.K.Gaule, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Paresh Bhanaji Nanda Shambhulal P Bhanushali Appellant (Represented by: None for Sr.No. 1 & Ms Shilpa Balani, Advocate for Sr. No.2) Vs Commissioner of Customs (Preventive), Mumbai Respondent (Represented by: S.S. Katiyar, SDR) CORAM:
Honble Mr P.G. Chacko, Member (Judicial) Honble Mr. S.K.Gaule, Member (Technical) Date of Hearing : 25.05.2010 Date of Decision: 25.05.2010 ORDER NO..
Per: P.G. Chacko
1. There is no representation for the appellant in the first two appeals despite notice, nor any request of his for any adjournment. The appellant in the third appeal is represented by the learned Counsel and the learned SDR appears for the respondent. We have examined the records and heard both sides.
2. The appellant in appeal C/1213/04 is aggrieved by a penalty of Rs 1 lakh imposed on him under Section 112 of the Customs Act. This penalty was imposed on the appellant in connection with confiscation of certain goods of foreign origin. The appellant was the owner of a godown which was given on lease to one Shri Ram Saware Yadav. The aforesaid goods were seized from that godown. The officers of the Directorate of Revenue Intelligence, who effected the seizure and conducted the investigations, found that Shri Shambhulal Bhanushali was aware of the storage of the goods in his godown. On this basis, this appellant was held to be liable for a penalty under Section 112 of the Customs Act. The proposal for such penalty as raised in the show-cause notice was contested by the appellant pleading ignorance of the contraband nature of the goods. In adjudication of the dispute, the Commissioner refused to accept the plea of the appellant that he was not aware of what had been stored in the godown. The learned Commissioner held that Shri Shambhulal Bhanushali knowingly offered the godown for storage of contraband goods and, therefore, he rendered the goods liable to confiscation under Section 111 of the Act. This was the basis of the above penalty imposed on Shri Shambhulal Bhanushali.
3. The learned Counsel has submitted that there is no valid reason for such a penalty on the appellant inasmuch as there is no finding to the effect that the appellant was aware of the contraband nature of the goods being stored in his godown. The learned SDR has reiterated the findings of the Commissioner and has also invited our attention to some of the statements recorded by the investigating agency.
4. The learned Commissioner found that one Shri Paresh Nanda and one Shri Suresh Mange were the main persons in the group dealing with the illegal import/transport/storage/disposal of the contraband goods. He further found that Shri Suresh Mange was the person who mainly dealt with storage/disposal of the goods. The learned Commissioner did not record similar findings against Shri Shambhulal Bhanushali. He only noted that Shri Shambhulal Bhanushali was asked by Shri Suresh Mange to provide space in his godown for storage of certain goods which was received on 27.5.99 and that Shri Shambhulal Bhanushali provided his godown Ambika Storage to Shri Suresh Mange for the said purpose. The learned Commissioner imposed the penalty on the basis of these observations. We find no reason whatsoever to justify this action of the learned Commissioner. For a penalty under Section 112 of the Act, the person sought to be penalized should be shown to have, by his omissions or commission, rendered any goods liable to confiscation under Section 111 of the Act or such person should alternatively be found to have abetted such commissions or omissions. Yet another ground for a penalty under the above provision of law, is that the person sought to be penalized has rendered the goods liable to confiscation under Section 111 of the Act by way of acquiring possession of such goods or otherwise physically dealing with such goods with the knowledge or belief that the goods were liable to confiscation under the Act. None of these ingredients was found against Shri Shambhulal Bhanushali and, therefore, the penalty imposed on him cannot be sustained.
5. Appeal No C/1213/04 stands allowed.
6. Alongwith Shri Shambhulal Bhanushali, Shri Paresh Nanda was also penalized by the Commissioner, a penalty of Rs 5 lakhs having been imposed on him under Section 112 of the Act. Appeal No C/1006/04 of Shri Paresh Nanda is against this decision. A similar penalty of Rs 5 lakhs was imposed on Shri Paresh Nanda by the Commissioner in connection with the confiscation of certain other goods of foreign origin totally valued at over Rs 1.33 crores. These goods were seized by the D.R.I. from other locations and the same were also not claimed by anybody. The learned Commissioner, in a separate order, confiscated these goods under Section 111 (d) and (k) of the Customs Act and also appropriated an amount of Rs 20,54,479/- being the sale proceeds of some of these goods. Further, the learned Commissioner imposed a penalty of Rs 5 lakhs on Shri Paresh Nanda and equal amount of penalty on Shri Suresh Mange under Section 112 of the Act. Shri Paresh Nanda has challenged the penalty imposed on him, in appeal C/1005/04.
7. As we have already pointed out, there is no representation for Shri Paresh Nanda despite notice. He has not requested for adjournment of hearing either. We have examined the records and heard the learned SDR.
8. It appears from the results of the D.R.Is investigations, as also from the findings of the learned Commissioner, that this appellant played a serious role in smuggling the goods in question. The statement given by Shri Suresh Mange under 108 of the Act was heavily incriminating for this appellant. He had stated inter alia that the goods seized by the D.R.I. from the various godowns had been deposited at his instance, that he was aware of the smuggled nature of the goods, that he was arranging storage and delivery of the goods for monetary consideration at the instance of Shri Paresh Nanda, that Shri Paresh Nanda had asked him to hire or purchase a godown in Bhiwandi area for storage of contraband goods, for which he would pay @ Rs 200 per package, that accordingly, he hired a godown at Ambika Stores at Bhiwandi, that he was informed by Shri Paresh Nanda that these goods had come from Nepal without payment of Customs duty, that subsequent operations of off-loading the packages from truck at the godown and delivery of the goods to third parties had all been done as directed by Shri Paresh Nanda. Shri Suresh Mange further stated that Shri Paresh Nanda asked him to look for another godown for storage of contraband goods, that he had, accordingly, managed to get a godown from Shri Shambhulal Bhanushali (godown owner) through one Shri Ram Saware Yadav (godown manager) and that they had undertaken the subsequent operations of offloading packages from truck at the godown as directed by Shri Paresh Nanda. Shri Suresh Mange further disclosed that, when he came to know about interception of a truck carrying contraband goods, he informed Shri Paresh Nanda about the same, whereupon Shri Paresh Nanda paid him Rs 25,000/- and asked him to abscond. He further stated that, when he was short of money, Shri Paresh Nanda paid him another amount of Rs 25,000/-. In his subsequent statement given under Section 108 of the Act, Shri Suresh Mange reiterated the contents of his earlier statement and also confirmed the correctness of those statements. It is also on record that Shri Paresh Nanda moved an application before the Session Court for anticipatory bail, that the Session Court rejected that application and that similar application subsequently filed before the Honble High Court was also rejected. Ultimately, Shri Paresh Nanda was surrendering to the D.R.I. Upon conclusion of D.R.I.s investigations, Shri Paresh Nanda was produced before the Additional Chief Metropolitan Magistrate, and was subsequently remanded to judicial custody. Shri Paresh Nanda has remained under COFEPOSA detention also. Before the Additional Chief Metropolitan Magistrate, the appellant submitted that his earlier statements given to the D.R.I. had been made under pressure and hence not voluntary. The department denied this allegation before the court. The investigations disclosed that the goods under seizure had been smuggled into India through Indo-Nepal border and brought to Purna village in Bhiwandi for disposal in Mumbai city. In other words, the goods were found to have been imported into India clandestinely across Into-Nepal border and no documents or any licence showing licit import or acquisition of the goods was produced by anybody. Some of the goods were found to be misbranded drugs which were prohibited for import under the Drugs and Cosmetics Act, 1940. Some other goods were found to be consumer goods which could be imported against licence only. Hence all the goods were found to have been smuggled into India and hence liable to confiscation under Section 111 of the Customs Act. Nobody came forward to claim the goods at any stage. Even the present appellant, who actively dealt with the goods, has not doubted the contraband nature of the goods. In these appeals, his endeavour is to show that his conduct in relation to the goods did not invite the penal provisions of Section 112 of the Act. We are not impressed with the grounds of this appeal.
9. It is not in dispute that the goods confiscated by the Commissioner were of foreign origin which were either prohibited for import or could be imported only under specific licence. No documentary proof of licit acquisition of the goods was produced by anybody. Therefore, the goods have been rightly confiscated by the Commissioner under the relevant provisions of Section 111 of the Customs Act. We are told that certain perishable goods were disposed of and the sale proceeds appropriated into the Government account. Apparently, despite auction notices, nobody came forward to claim the goods. The liability of the goods for confiscation is, therefore, beyond the pale of doubt.
10. The short question which remains is whether this appellant was liable to be penalized under Section 112 of the Act on the ground that he was actively associated with the smuggled goods. It is evident from his statements that he was associated with the importation, transportation and storage of the goods. Though the appellant has retracted the statements before the Chief Metropolitan Magistrate Court, he has not been able to establish before the adjudicating authority that those statements had been taken from him in coercive circumstances. Moreover, the retraction was too belated to be accepted as valid retraction. After the statements were recorded from the appellant, he had many an opportunity to retract them, as a free person, but he did not do so. Therefore, we are of the view that the reliance placed by the Commissioner on the confessional statements of the appellant and of Shri Suresh Mange cannot be faulted. These statements clearly brought out the close association between the appellant and the contraband goods and, therefore, it is beyond doubt that, by involving himself in the illegal importation, transportation and storage of the goods in India, he rendered the goods liable to confiscation under Section 111 and rendered himself liable to penal action under Section 112 of the Act.
11. Considering the aforesaid facts and circumstances, we do not think that the quantum of penalty imposed on the appellant is excessive or harsh. Both the appeals are, therefore, dismissed.
(Dictated in Court.) (S.K.Gaule) Member (Technical) (P.G. Chacko) Member (Judicial) rk 8