Delhi District Court
Customs vs . B. T. Agencies And Others on 10 July, 2020
IN THE COURT OF SH. PAWAN SINGH RAJAWAT
CHIEF METROPOLITAN MAGISTRATE, NEW DELHI
PATIALA HOUSE COURTS: NEW DELHI
CC No. 18877/2016
Customs Vs. B. T. Agencies and Others
Name of Complainant : Customs (Preventive) Through
Sh. Surender Singh, Inspector
Name of accused : (1) M/s B T Agencies Pvt. Ltd
3/8, Asaf Ali Road
Delhi
(2) Surender Singh Bindra
S/o Late Rustam Singh
R/o E-4, Greater Kailash_I
New Delhi
(3) Pradeep Kumar Jain
S/o Shri Surender Kumar Jain
R/o A-115, Shakarpur Extn.
Delhi (Expired during trial and
proceedings abated)
(4) Ashok Kumar Sharma
S/o Shri Prakash Sharma
R/o 99, LIG Flats
Page 1 of 28
Pul Prahaladpur
New Delhi
(5) Sh. Asad Moin Khan
R/o A-7, Nigar Cottage
Khajouri Road
Jogabahi Extn.
New Delhi
Offence complained of : U/s 135(1) (a) and 135 (1) (b)
Customs Act, 1962
Plea of the accused : Pleaded not guilty.
Final order : Acquitted
Date of Institution : 28.09.1998
Date of Argument : 09.07.2020
Date of judgment : 10.07.2020
JUDGMENT
Brief statement of the reasons for the decision:-
The complainant through Sh. Surender Singh, Inspector, filed the present complaint in discharge of official duties against company M/s B T Agencies Pvt. Ltd and others. As per complaint, it has been alleged that on the basis of intelligence, a raid was conducted on 13.02.1998 at the office premises of B. T. Agencies Pvt. Ltd. New Delhi and also at the residence of accused no.2 Surender Page 2 of 28 Singh Bindra at Greater Kailash, Part-2, New Delhi in which scotch, whiskey, wine, beer, liquor etc were recovered for which accused no.2 couldn't produce any documents for lawful possession. It is further mentioned that during the search of the office of accused no.1 company, the officers of the department detected a secret store/godown wherein they also found whiskey, wine, beer, liquor, gin apart from food stuff, toiletries, soft drink, spray etc of foreign origin for which accused no.4 who is the Manager of accused no.1 Company could not produce any document. However, it came to the notice that these foreign items were imported vide Green Bill of entry no. 313369 to 313384 dated 11.02.1998 for supplying the same to diplomats of Russia, Afghanistan, Sudan, Cuba Egypt etc. It is further mentioned that during investigation, statements of the accused persons were recorded under section 108 Customs Act and on the basis of the recovery and statement of the accused persons coupled with the documentary evidence, it was found that the accused persons were knowingly involved in fraudulent evasion of Rs.13,25,234/- being duty free imports which was to be used personal use of diplomats and hence accused persons are liable to be prosecuted under section 135(1) (a) and (b) of Customs Act. The prosecution sanction was granted u/s 137(1) of Customs Act and original sanction and authorization is filed with the complaint.
2. The pre-summoning evidence was dispensed with as complainant was a government servant and filed complaint in discharge of official duties in terms of section 200 Cr.P.C. Accordingly vide order dated 07.10.1998 accused persons were summoned.
3. Since it is a compliant case and is to tried as warrant trial case filed otherwise than on police report, the complainant led pre-charge evidence and examined seven witnesses. After hearing arguments vide order dated 03.06.2003, Ld. Predecessor has discharged all the accused persons. However, in the revision Page 3 of 28 petition, Ld Sessions Court has set aside the order dated 03.06.2003 and found that there is sufficient material on record to frame charges against all the accused persons under section 135 (1) (a) and u/s 135(1)(b) of Customs Act. Accordingly, charge against all the accused persons was framed on 08.09.2006. Thereafter the post charge evidence was led. In total eight witnesses have been examined in pre- charge and post charge evidence.
4. PW-1 Surinder Singh: PW1 deposed that complaint Ex.PW1/A is filed by him in discharge of official duties on the basis of sanction and authorization accorded by Commissioner of Customs (Jalandhar) which is Ex.PW1/B. He identified the signature of sanctioning officer Ms. Vijay Zutshi. He stated he had no personal knowledge and filed complaint on the basis of official record. In pre- charge as well as in post charge evidence, he was not cross examined.
5. PW-2 K.K. Dasmana: PW-2 deposed that in Feb 1998, he was posted as Superintendent (P) Customs Delhi and was competent to make inquiry u/s 108 of Customs Act. He deposed that on 14.02.1998, accused no. 2 tendered his statement before him vide Ex. PW-2/A. He deposed that on 23.02.1998, Krishan Mohan, Ashok Kumar tendered his statement which is Ex. PW-2/B and Ex.PW2/C. He also stated another statement of Ashok Kumar dated 14.02.1998 before S. K. Sachdeva is Ex. PW-2/D. He further deposed that on 13.02.1998, the statement of S. S. Bindra (accused no.2) was recorded before S. K. Sachdeva vide Ex. PW-2/E. During cross examination he denied the suggestion that he had never seen S K Sachdeva. He admitted statement of Ashok Kumar was no recorded in his presence but stated that same is endorsed by S K Sachdeva who was his colleague. He denied that S S Bindra was produced after beatings and his statement were not voluntary. In post charge evidence, he stated all the member of the search party offered their search before starting the search. He denied that Page 4 of 28 S S Bindra was forcibly taken to their office, beaten and forced to make involuntary statement. He denied accused have been implicated falsely.
6. PW-3 Pawan Talwar: PW-3 deposed that on 15.02.1998, he was posted as Superintendent in Customs (preventive) and on that day, the goods were seized on the basis of orders of the senior officers as mentioned in detention memo dtd 13.02.1998. He stated that goods were seized by D. C. Goel, Inspector (Customs) and panchnama and annexure were prepared by him. He further deposed that on 15.02.1998, T. S. Rawat appeared before him and tendered his statement which is Ex. PW-3/A. He claimed he is competent to make enquiries u/s 108 Customs Act. During cross examination he stated he is preventive officer. He denied that statement of T S Rawat was recorded under duress. During post charge evidence, he admitted he was not involved in the investigation and had only recorded statement of T S Rawat u/s 108 Customs Act. He denied that statement Ex. PW3/A was written under his pressure or behest.
7. PW-4 A. P. Singh: PW-4 deposed that he was posted as Superintendent (Customs) and was competent to record statement under section 108 of Customs Act. He deposed that on 13.02.1998, he had recorded the statement of Manjeet Singh which is Ex. PW-4/A and on 24.02.1998, he has recorded another statement of Manjeet Singh which is Ex. PW-4/B. He further deposed that on 13.02.1998, he has recorded the statement of Pradeep Kumar Jain (accused no.3) which is Ex. PW-4/C and on 14.02.1998, recorded his second statement which is Ex. PW-4/D. He deposed that on 09.03.1998, he recorded the statement of Ashok Kumar Jain (accused no.4) which is Ex. PW-4/E. During cross examination he stated Manjeet Singh came on his own and summons were served upon him in the premises. He claimed provision of section 108 customs act were explained to Manjeet Singh. During post charge evidence, he failed to state whether any summons issued for recording statements u/s 108 customs Act but admitted that such statement cannot Page 5 of 28 be recorded unless summons u/s 108 customs act are issued. He admitted no statement of any embassy officials or diplomats were recorded. He denied that he is deposing falsely.
8. PW-4A D. C. Goyal: Eventhough A P Singh was already examined as PW4, but apparently due to typing error testimony of D C Goyal was also numbered as PW4. Hence his testimony will be read as PW4A. He stated that on 06.02.1998, he along with other officials visited the premises of B. T. Agencies Pvt. Ltd., 2nd Floor, Asaf Ali Road, New Delhi and seized goods in the presence of two witnesses vide detention memo 13.02.98. He also stated that before seizure he informed the witnesses that officers have found duty free goods of foreign origin whiskey, wine, beer, liquor, gin apart from food stuff, toiletries, soft drink, spray etc. which were lying at the said premises and were got cleared my M/s. B. T. Agencies under bill of entry who was having custom bonded licence No. 10/89. He deposed that he detained the goods as the Manager of the said agency Ashok Kumar could not gave any satisfactory reply as to why the said goods were lying in the office premises eventhough same were cleared from the bonded warehouse situated at the basement of the premises on 11.02.98 at 11 am vide green bill of entry and accordingly same were detained. He deposed that the time of such proceedings, one Tajvir Singh Rawat, Assistant of M/s. B. T. Agencies was also present there at the spot who tallied the goods with the Annexure A of detention memo except goods valued at Rs.12,950/-. Detailed in Annexure B to the panchnama. He also stated panchnama dated 15.02.98 was prepared by him for seizure vide Ex. PW-4/A of detention memo dt 13.02.98. He stated goods of Green Bill of Entry No. 313369 to 313384 were seized on the suspicion that same are intended for diversion for same in open market. He also stated goods after checking were sealed in the packets under customs seal and paper slip was signed by witnesses including Tajveer Singh Rawat. His further pre-charge evidence was deferred on 07.02.03 for want of case property but Page 6 of 28 surprisingly he was not recalled in pre-charge evidence. During post charge evidence he admitted he had not joined the raid at the premised of accused no. 1 on 13.02.98 and he prepared seizure memo dated 15.02.98 of goods detained on 13.02.98. He admitted when he visited the office, he had not seen any secret compartment. He denied that no seizure memo was prepared by him and he is deposing falsely.
9. PW-6 B. K. Kaushik: He deposed that on 13.02.98 he was posted as as Inspector Preventive (Customs) at Delhi and on the same day, he along with other officials visited the premises of B. T. Agencies Pvt. Ltd., 2nd Floor, Asaf Ali Road, New Delhi for search and seizure after due authorization. He stated when search was in progress accused S. S. Bindra came at the spot. He stated during search they detected a secret store/godown behind the open wooden Almirah stacked with Stationary and when stationary was removed, it was found that shelves were removable and behind the shelves a sliding panel which on opening led to a room of 2m mtrs by 5 mtrs and the door was secured with lock and key. He stated they found a huge stock of cartons of foreign origin whiskey, wine, beer, liquor, gin apart from food stuff, cosmetics etc. worth Rs.7,51,404/-were recovered. He further deposed that Ashok Kumar, Manager couldn't produce any lawful possession, acquisition, storage and import of the foreign whisky, wine, beer gin, foodstuffs, cosmetics etc and, all the goods were seized by him vide Ex. PW-6/A which was also signed by Ashok Kumar and S S Bindra apart from other witnesses. During trial the identity of case property is not disputed and therefore, formal production of the same was dispensed with. The annexure of panchnama is Ex. PW6/B. During cross examination he stated there was space behind the wooden almirah for concealment. He denied the suggestion that there was no such space and goods were simply lying behind the almirah. During post charge evidence, he failed to state whether signature of accused S S Bindra were taken on any document. He stated the secret compartment was in right side of entry Page 7 of 28 door and goods were lying on the back side of office stationary in steel compartment. He denied that his testimony recorded on 27/03/2003 is false. He denied accused committed no offence as goods were legally imported.
10. PW-7 S. S. Yadav: PW-7 deposed that on 13.02.1998, he went to the residential premises of S. S. Bindra (accused no.2) for conducting search proceedings and upon search, foreign origin whiskey, wine, beer, liquor and cognec were found recovered to the tune of Rs.1,68,750/-. He further deposed that accused S S Bindra or any other person could not gave any satisfactory reply or produce any document for lawful import/possession and therefore, same was seized vide seizure memo Ex. PW-7/A. During cross examination he admitted that goods were recovered from the room in front of open area and same were not concealed. He admitted he had not taken signature of S K Sachdeva and Neeru Grover who accompanied him on the panchnama. He denied that value of goods was not disclosed by S S Bindra and he on his own approximate the value of seized goods. He denied that accused S S Bindra disclosed that goods belong to Cuba Embassy. During post charge evidence he admitted statement of accused S S Bindra was not recorded in his presence. He stated witness of search at residence of accused met them in the nearby residential premises. He denied search was conducted at 6:30 am and at that time no witness was found. He denied S S Bindra produced legal documents which were taken by PW7 but not mentioned in the records. He denied witnesses to the panchnama are not independent witnesses and they were stock witnesses.
11. PW-8 Tek Chand: PW-8 was examined in post charge evidence. He deposed that he was a businessman and running a confectionary item shop at 3/7 Asaf Ali Road. He deposed that on 15.02.1998, some officers came at the premises of M/s. B. T. Agencies Pvt. Ltd., and asked him to join panchnama proceedings. He deposed that the panchnama was prepared by the officers which Page 8 of 28 is already Ex. PW-4/A. During cross examination he stated he had not seen the goods seized in the panchnama. He stated when he reached everything was already prepared and he was only asked to sign some papers. He stated he was not explained the papers and he just signed. He also stated he was not aware about the contents of documents and had not witnessed any proceedings. He also stated he stayed there for just two-three minutes and had not seen anything. He stated he had not concealed anything and deposed truly before the Court.
12. Statement of accused persons were recorded u/s 313 cr.p.c. wherein they denied all allegations against them. However no defence evidence was led by the accused persons. I have heard the arguments on behalf of both the parties and gone through the record of the case.
13. I have also gone through the relevant provisions of Customs Act, 1962 apart from various other laws including the Foreign Trade (Development & Regulation) Act, 1992 and Foreign Privileged Persons (Regulation of Customs Privileges Rules 1957 and considered the written arguments filed by both parties.
Relevant provision of Customs Act are reproduced below for reference:-
108. Power to summon persons to give evidence and produce documents.--
3[(1) Any Gazetted Officer of customs 4*** shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act.] (2) A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of Page 9 of 28 all documents or things of a certain description in the possession or under the control of the person summoned.
(3) All persons so summoned shall be bound to attend either in person or by an authorised agent, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents and other things as may be required:
Provided that the exemption under section 132 of the Code of Civil Procedure, 1908 (5 of 1908), shall be applicable to any requisition for attendance under this section.
(4) Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 (45 of 1860).
135. Evasion of duty or prohibitions.--3[(1) Without prejudice to any action that may be taken under this Act, if any person--
(a) is in relation to any goods in any way knowingly concerned in misdeclaration of value or in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any prohibition for the time being imposed under this Act or any other law for the time being in force with respect to such goods; or
(b) acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111 or Section 113, as the case may be; or
(c) attempts to export any goods which he knows or has reason to believe are liable to confiscation under Section 113; or Page 10 of 28
(d) fraudulently avails of or attempts to avail of drawback or any exemption from duty provided under this Act in connection with export of goods, he shall be punishable,--
(i) in the case of an offence relating to,--
(A) any goods the market price of which exceeds one crore of rupees; or (B) the evasion or attempted evasion of duty exceeding 4[fifty lakh] of rupees; or (C) such categories of prohibited goods as the Central Government may, by notification in the Official Gazette, specify; or (D) fraudulently availing of or attempting to avail of drawback or any exemption from duty referred to in clause (d), if the amount of drawback or exemption from duty exceeds 1[fifty lakh] of rupees, with imprisonment for a term which may extend to seven years and with fine:
Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than one year;
(ii) in any other case, with imprisonment for a term which may extend to three years, or with fine, or with both.] 2[(2) If any person convicted of an offence under this section or under sub-
section (1) of section 136 is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to seven years and with fine:
Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court such imprisonment shall not be for less than 3[one year].
(3) For the purposes of sub-sections (1) and (2), the following shall not be considered as special and adequate reasons for awarding a sentence of imprisonment for a term of less than 3[one year], namely:--Page 11 of 28
(i) the fact that the accused has been convicted for the first time for an offence under this Act;
(ii) the fact that in any proceeding under this Act, other than a prosecution, the accused has been ordered to pay a penalty or the goods which are the subject matter of such proceedings have been ordered to be confiscated or any other action has been taken against him for the same act which constitutes the offence;
(iii) the fact that the accused was not the principal offender and was acting merely as a carrier of goods or otherwise was a secondary party to the commission of the offence;
(iv) the age of the accused.]
140. Offences by companies.--(1) If the person committing an offence under this Chapter is a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to such punishment provided in this Chapter if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Chapter has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.Page 12 of 28
Explanation.--For the purposes of this section,--
(a) ―company‖ means a body corporate and includes a firm or other association of individuals;
and
(b) ―director‖, in relation to a firm, means a partner in the firm.
Foreign Privileged Persons (Regulation of Customs Privileges Rules 1957 Rule 4. Permission for the Sale or Disposal of the Goods (1) No privileged person shall, without obtaining the prior concurrence of the Central Board of Excise and Customs, sell, or otherwise dispose of, to any privileged person or to any, non-privileged person, any goods in respect of which exemption from customs duty was given at the time of their importation or clearance from bond, within three years from the date on which they are imported.
Rule 5. Recovery of Goods Sold or Disposed of to Non-Privileged Persons (1) Where goods, other than motor vehicle, are cleared free of customs duty by a privileged person and they are sold or otherwise disposed of by him (other than re-exported) to a non-privileged person within three years from the date of their importation, customs duty shall be recovered from such privileged person by the [Commissioner of Customs] nearest to the headquarters of the privileged person concerned. [The duty to be recovered shall be assessed in consultation with the Commissioner of Customs nearest to the headquarter of the privileged person in India] [(1B) The custom duty on any vehicle sold or otherwise disposed of under clause (c) of sub-rule (2) of rule 4A shall be paid to the Commissioner of Customs nearest to the headquarters in India of the privileged person Page 13 of 28 concerned, the duty to be recovered for such motor vehicle, except in case of accidented or totally damaged vehicle, shall be assessed on the depreciated value arrived after providing for depreciation at the scales specified by the Central Board of Excise and Customs in case of import of second hand motor vehicles, and the rate of duty on such vehicle and the exchange rate for conversion of foreign currency into Indian currency shall be taken as applicable on the date of approval of such sale or otherwise disposal by the said Board under clause (c) of sub-rule (2) of rule 4A :
Provided that the facility of duty-free sale of vehicles, after four years of import, shall be allowed on reciprocal basis to privileged persons of those countries, which are allowing similar facility of duty-free sale of vehicles to Indian privileged persons posted in those countries, and for this purpose applications made to the Ministry of External Affairs before the applicants leave India shall be entertained.] Provided further that the facility of duty free sale of vehicles, after four years of import, shall be allowed to all privileged persons belonging to the United Nations or any other International Organisation irrespective of the fact as to whether the United Nations or such other International Organization is allowing similar facility of duty free sale of vehicles to Indian privileged persons posted in the United Nations or such other International Organization, as the case may be.
[(1C) In the case of any accidented or totally damaged vehicle referred to, in clause (d) in sub-rule (2) of rule 4A, the Customs duty shall be calculated taking the sale price as cum-duty price and rate of duty shall be taken as that applicable to such motor vehicle, if it had not been so accidented or damaged at the time of such sale.] Page 14 of 28 [(1D) in case a vehicle has been stolen, customs duty shall be calculated taking the amount of insurance claim as cum duty price and rate of duty shall be taken as that applicable to such motor vehicle.] (2) The privileged person concerned shall furnish such relevant information and documents relating to the goods as the officer who is to recover duty under sub-rule (1) may require and shall also arrange to produce the goods desired to be sold or sold before that officer or any customs officer for inspection so as to enable that officer to make a correct appraisement of the value of the goods for the purpose of assessing them to duty.
(3) As soon as the amount of duty leviable has been paid, all the other authorities who received copies of the certificate together with the undertaking if any, in respect of the goods, shall be informed of this fact by the Collector who makes the recovery.
Rule 6. Sale or Disposal of Goods to Privileged Person (1) Where goods which were cleared free of customs duty by a privileged person are sold or otherwise disposed of by him in favour of any other privileged person within a period of three years from the date of their importation, it shall be the duty of the privileged person selling or disposing of such goods to obtain from the privileged person buying or taking them, an exemption certificate in duplicate, as required by sub-rules (1) and (2) of rule 3, and in the case of a motor vehicle, also an undertaking in duplicate as required by sub-rule (4) of that rule and to forward copies thereof to the persons referred to in sub-rule (3) of that rule and in every such case, a report shall be sent to the Central Board of Excise and Customs by the privileged person selling or disposing of the goods as well as by the privileged person buying or taking them.
Page 15 of 28(2) The provisions of this rule shall apply to the goods sold or disposed of under sub-rule (1) as often as they are sold or otherwise disposed of by a privileged person to another privileged person :
Provided that this rule shall cease to apply to such goods other than motor vehicles after the expiry of three years from the date of their importation.
7. Powers of [Commissioners] -
A [Commissioner of Customs] may adopt such procedure as he thinks necessary for the purpose of giving effect to these rules.
14. Ld. SPP for complainant had argued that the prosecution witnesses fully supported the case of the prosecution and relied upon judgement of Kanhiya Lal Vs. Union of India - AIR 2008 (SC) 1044 and submitted that the statements u/s 108 of Customs Act were not retracted, when the accused persons had been produced before the Ld. ACMM, New Delhi and if a statement is not retracted at the first available opportunity that rather reinforces its voluntary character. He also drawn attention to the observations/law laid down by the Hon'ble Supreme Court in the case of D. Bhoormal- 1974 SCR (3) 833.
15. He argued that the import of liquor is restricted under Section 3 of Foreign Trade Development and Regulations Act, 1992 and Rules framed there under read with Export Import Policy, 1997-2002, except with a valid import licence. These rules are deemed to have been issued under Section 11 of the Customs Act, 1962. He relied upon the case of Mohammad Omer Vs. Collector of Customs
- (1970) 2 SCC 728 = 1971 SCJ 682 = (1971) 2 SCR 35 and argued that expression in Section 111(d) includes restrictions and means every prohibition and in terms if Section 3 of Foreign Trade Development and Regulations Act, 1992 and EXIM Policy, it is clear that import of liquor is restricted subject to certain exceptions and therefore the import of liquor in this case is certainly in Page 16 of 28 violation of the restriction imposed as the same were diverted to the open market and as such, goods had rightly been confiscated under Section 111(d) of the Act.
16. He also argued that the contention of the accused persons that since the impugned goods were validly imported on green Bill of Entry for diplomatic persons without payment of duty, it could not be said that those goods had been imported contrary to any provisions of law or in violation of prohibitions imposed by Customs Act, 1962, is wrong and relied upon the law laid down by Hon'ble Supreme Court in Om Prakash Bhatia Vs. Commissioner of Customs -2003 (155) ELT 423 SC; Inter Globe Vs. Union of India & others decided by a Division Bench of Hon'ble Delhi High Court and Dr. V.J.A. Flynn Vs. S.S. Chauhan and Anr. - 1996 Crl. L.J. 3080
17. He also pointed out that Section 111(o) customs Act provides confiscation of dutiable goods or prohibited goods removed or attempted to be removed from the Customs area or warehouse without the permission of the proper officer or contrary to the terms of permission and since in the present case, dutiable goods had been removed contrary to the terms of permission i.e. the goods were permitted to be cleared for onward delivery to the privileged persons and not for the purpose of sale in open market, therefore same were rightly confiscated under Section 111(d) of the Act.
18. He also argued that the contention of the accused persons that since in the instant case, according to the department and averment made in the complaint, the goods were imported and cleared for home consumption of the diplomats as per the rules, the provisions of Section 111() were not attracted and Rule 5 of Foreign Privileged Persons Rules, 1957 can only be invoked when the goods are received by such persons and subsequently sold before the expiry of three years.
Page 17 of 2819. He also cited various case law on the point of reliance upon the testimony of official /police witnesses, Quantity not the deciding factor, absence of public witnesses, admissibility of statement u/s 108 Customs Act, discrepancies and testimony of hostile witness which only stated the settled position of law and has not specific relevance to the present case.
20. On the other hand, Ld Counsel for accused persons also filed detailed written arguments. He argued that accused company was in lawful custody of the goods in question and they are only the keeper of the imported goods in the licenced bonded warehouse. He also argued that proceeding u/ 111 custom Act are not maintainable against the accused persons and such proceedings can only be initiated against the importer. He also argued that the bond officer who is the custodian of warehouse had not complained or deposed against the accused about either the existence of any secret chamber or mismatch of the inventory in the warehouse. He argued that being expensive liquor, such items were kept separately in safe custody as there is chance of damage to the bottles which was within the bonded warehouse
21. He also pointed out the CEGAT vide its order dated 30.10.2000 had observed that goods of Rs.4,05,080/- were not validly detained as they were cleared only on 11.02.98 and warehouse had 48 hrs to supply the same and in the light of notification dated 22.07.1999, the present prosecution should not have been launched as the total CIF value is less than Rs. 10 lakhs. He also submitted that all accused retracted their statements at the first available opportunity as it was taken under duress and coercion. He also pointed out that no independent witness supported the case of complainant department and detention memo not signed by any witness and search proceeding dated 15.02.98 are mere eyewash.
Page 18 of 2822. He argued that good stated to be recovered from residence of accused no.2 were meant to be supplied to Cuban Embassy but could not be supplied as competent diplomat was not available in the embassy and left for Nepal and Chairman of accused company had constructive possession and Cuban Embassy had submitted letter in this regard. Similarly Afganistan and Russian Embassy had also gave written explanation in not picking the delivery of goods. Ld Counsel also pointed out that detention order dated 13.02.98 and panchnama dt. 15.02.98 mentions that all the stock has been duly accounted in the warehouse and PW B K Kaushik had mentioned in the last line of Panchnama that 'stock of bonded store was verified and found tallied' and therefore question of illegal import does not arise.
23. He argued that complainant had failed to prove allegation of diversion of items in the open market as no such prospective or past buyer was examined by the complainant department. The case is build on assumptions and surmises by the official of complainant department with ill will upon the accused persons. He also submitted that statements u/s 108 of customs Act were taken under duress and coercion and same were not voluntary and hence loss their evidentiary value. Moreover, no statement of accused no. 5 was ever recorded. He pointed out that sanction is invalid as it provided after invoking section 111(d), (j) & (o) of customs Act and such provisions are not attracted against the accused persons as they were not the importers of the goods. He also argued section 111 (j) not applicable as goods were lawfully imported and section 111 (o) also not attracted as their was no violation of import conditions.
24. The moot question before this court is to see whether the accused persons had violated the provisions of customs Act as well as any of the Rules made thereunder in handling the goods imported under Green Bill of Entry for consumption by the Privileged persons being the licenced Bonded Warehouse.
Page 19 of 28The complainant required to prove that there was a secret chamber in the warehouse of accused No.1 under the custody of accused Surender Singh Bindra and accused Ashok Kumar Sharma is the Manager of the warehouse. Complainant is further required to prove that accused Asad Moin Khan was the salesman acting for accused company and accused Surender Singh Bindra. As per complaint, the goods imported under green bill of entry were diverted for domestic sale in open market through accused No. 3 and 5 and only transport permit used to be signed by the concerned diplomats without there being actual delivery and all these happened at the directions of accused no. 2 and accused no.4To prove the same complainant heavily relied upon statements recorded u/s 108 of customs Act apart from other documents including the Panchnamas prepared pursuant to the alleged raid. Since accused Pradeep Kumar Jain had expired during pendency of present complaint, his role is not being discussed in the succeeding paragraphs.
25. Bonded Warehouse is a warehouse authorized by Customs authorities for storage of goods on which payment of duties is deferred until the goods are removed. When goods enter a bonded warehouse, both the importer and the warehouse proprietor incur financial and legal liability under a bond. Section 68 of Customs Act provides that Any warehoused goods may be cleared from the warehouse] for home consumption, if--
(a) a bill of entry for home consumption in respect of such goods has been presented in the prescribed form;
(b) the import duty, interest, fine and penalties payable in respect of such goods have been paid;
and]
(c) an order for clearance of such goods for home consumption has been made by the proper officer.
Provided that the order referred to in clause (c) may also be made electronically through the customs automated system on the basis of risk evaluation through appropriate selection criteria:
Provided further that] the owner of any warehoused goods may, at any time before an order for clearance of goods for home consumption has Page 20 of 28 been made in respect of such goods, relinquish his title to the goods upon payment of 6*** penalties that may be payable in respect of the goods and upon such relinquishment, he shall not be liable to pay duty thereon:] [Provided also that] the owner of any such warehoused goods shall not be allowed to relinquish his title to such goods regarding which an offence appears to have been committed under this Act or any other law for the time being in force.]
26. It is not in dispute that M/s B T Agencies was operating licenced bonded warehouse at 3/8 Aruna Asaf Ali Marg, Delhi in terms of section 58 of customs Act for storage without payment of duty on first importer thereof of consumption articles and the licence was valid on the date of raid and accused Surender Singh Bindra is the Managing Director of the accused company.
27. Whether the statements u/s 108 Customs Act are sufficient enough to prove the charges: The complainant department has claimed that all the statement of accused persons recorded u/s 108 Customs Act were voluntary and therefore admissible piece of evidence and must be used against the accused persons. To support this Ld. SPP for complainant relied upon the judgement in the matter of Kanhiya Lal Vs. Union of India - AIR 2008 (SC) 1044 and submitted that the statements u/s 108 of Customs Act were not retracted, when the accused persons had been produced before the Ld. ACMM, New Delhi and if a statement is not retracted at the first available opportunity that rather reinforces its voluntary character. He also drawn attention to the observations/law laid down by the Hon'ble Supreme Court in the case of D. Bhoormal- 1974 SCR (3) 833. On the other hand Ld. Counsel for accused persons argued that the said statements were not voluntary and taken under duress and coercion. He also argued that same were retracted and cited the statement of accused persons recorded u/s 313 cr.pc.
Page 21 of 2828. The statement u/S 108 of Custom Act is to be taken into consideration with usual exceptions and precautions as contained in Section 24 to 27 of the Indian Evidence Act coupled with the attending circumstances in which it has been made to ascertain as to whether the same is voluntary, not made under any inducement, force or coercion and it must not to be believed perse . In any case, it is the responsibility of the complainant to establish that such a statement u/S 108 of Customs Act was made voluntarily, and it becomes all the more important when retraction is there.
29. In the matter of Vinod Solanki Vs. U.O.I, JT 2009 (1) SC 1, it has been held:
22. It is a trite to say that evidences brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidences, which would lend adequate assurance to the court that it may seek to rely thereupon. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention but we must also notice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded.
30. In K. I. Pavunny Vs. Assistant Collector (HQ), Central Excise Collectorate, Cochin, (1997) 3 SCC 721, relied upon by Ld SPP for complainant, in an appeal against conviction under Customs Act, 1962 and the Gold (Control) Act, 1968, the legal issue before the Apex Court was - "whether the confessional statement of the appellant made to the Customs Officers under Section 108 of the Customs Act, 1962 (for short "the Act"), though retracted at a later stage, is admissible in evidence and could form the basis for conviction and whether retracted confessional statement requires corroboration on material particulars from independent evidence?" Relevant paragraphs of the judgment are:
17. It would thus be clear that the object of the Act empowering Customs Officers to record the evidence under Section 108 is to collect information of the contravention of the provisions of the Act or concealment of the contraband or Page 22 of 28 avoidance of the duty of excise so as to enable them to collect the evidence of the proof of contravention of the provisions of the Act so as to initiate proceedings for further action of confiscation of the contraband or imposition of the penalty under the Act etc. By virtue of authority of law, the officer exercising the powers under the Act is an authority within the meaning of Section 24 of the Evidence Act.
20...................................... It is true that in a trial and proprio vigore in a criminal trial, courts are required to marshal the evidence. It is the duty of the prosecution to prove the case beyond reasonable doubt. The evidence may consist of direct evidence, confession or circumstantial evidence. In a criminal trial punishable under the provisions of the IPC it is now wellsettled legal position that confession can form the sole basis for conviction. If it is retracted, it must first be tested whether confession is voluntary and truthful inculpating the accused in the commission of the crime. Confession is one of the species of admission dealt with under Sections 24 to 30 of the Evidence Act and Section 164 of the Code. It is an admission against the maker of it, unless its admissibility is excluded by some of those provisions. If a confession is proved by unimpeachable evidence and if it is of voluntary nature, it when retracted, is entitled to high degree of value as its maker is likely to face the consequences of confession by a statement affecting his life, liberty or property. Burden is on the accused to prove that the statement was obtained by threat, duress or promise like any other person as was held in Bhagwan Singh v. State of Punjab (I) [AIR 1952 SC 214 : 1952 SCR 812] (AIR para 30).
..................................................... If the court believes that the confession was voluntary and believes it to be true, then there is no legal bar on the court for ordering conviction. However, the rule of prudence and practice does require that the court seeks corroboration of the retracted confession from other evidence. The confession must be one inculpating the accused in the crime. It is not necessary that each fact or circumstance contained in the confession is separately or independently corroborated. It is enough if it receives general corroboration. The burden is not as high as in the case of an approver or an accomplice in which case corroboration is required on material particulars of the prosecution case. Each case would, therefore, require to be examined in the light of the facts and circumstances in which the confession came to be made and whether or not it was voluntary and true.
31. The other aspect which is to be looked into as to whether the confessional statement recorded under Section 108 of Custom Act, can be read against the co- accused or not. In this context Section 10 of Indian Evidence Act also becomes Page 23 of 28 relevant and the statement is to be measured, assessed and appreciated with the relevant provisions as aforesaid to come to any conclusion about its admissibility and credibility. In State of Maharashtra Vs. Akhtar Hussain Rehman Moson 1991(55) E.L.T. 327 (Bom.), it has been held as under :
"Turning to the evidence on record, it has been strenuously urged by the ld. Prosecutor that the statements of the accused which are inculpatory statements and amount to confession of the guilt should have been accepted by the ld. Magistrate as providing sufficient evidence to hold the offence proved. These statements were retracted by the accused. Even though a statement recorded under Section 108 of Customs Act is admissible in evidence and would be relevant , yet it is a salutary rule that unless some amount of corroboration is available to it from some other independent evidence, it would not be safe to rely on it particularly when it is retracted by the person making."
32. The above discussion shows that statement u/s 108 customs Act alone wouldn't be sufficient to convict any person under customs Act unless there is some corroboration. The corroboration must be in the nature of evidence adduced by the complainant which shows that the averments in the statements stands corroborated by independent evidences.
33. In the present case, the complainant alleged diversion of liquor meant for diplomats in the open market and same stated to be stashed in secret chamber in the warehouse. However, the complainant made no efforts to trace even one of the purchaser of such imported liquor meant for diplomats. Despite citing number of independent witnesses to the panchnama which includes Sideshwar Jha, Sujeet Kumar Bhatia, Kishan Chand, Sharvan Kumar Puran Chand and Tek Chand, complainant could only examine only one such witness i.e PW8 Tek Chand during past 22 years of the trial who has not supported the case of the complainant. At no point the complainant made any efforts to even record statement of any of the diplomats about the allegations of diversions and for Page 24 of 28 reasons best known not prosecuted any of such diplomats as allegedly they were hand in glove with the accused persons.
34. No photographs of recovery and seizure of items from the residence as well from the alleged secret chamber in the office of accused No. 1 are placed on record and even no site plan is drawn which could have shown the location of such secret chamber as alleged in the complaint. Mere statements u/s 108 customs Act has not proved the existence of such secret chamber. The plea of accused persons that the liquor being expensive was stored safely in such space seems plausible.
35. The plea of Ld. Counsel that the adjudicatory authority has deleted the penalty vis a vis liquor amounted to Rs.4.05 lacs and therefore, the prosecution should not have been filed is misplaced as admittedly the complaint was filed on 28.09.1998 and the order of CEGAT is dated 30.10.2000. Hence, the complaint was validly filed on 28.09.1998.
36. The claim of the complainant department that goods valued at Rs.1.68 lacs was found in the residence of accused No. 2 without any documents cannot be accepted at its face value as it is the consistent stand of accused No. 2 that said items were to be delivered to Cuban Embassy but due to unavailability of concerned diplomat who was away to Nepal, such items were safely kept in a garage room at his residence under proper transit permit and being MD of the accused No. 1 were in constructive possession. The complainant had not made any efforts to corroborate or demolish the version of accused no. 2 by examining said Cuban diplomat. In the absence of such corroboration the reasoning given by accused no. 2 seems probable.
Page 25 of 2837. The accused persons have placed on record various communication issued by respective embassies wherein the version of the accused No. 1 was retreated. The complainant had neither disputed the genuineness of such communication nor its contents thereof. However, the argument of Ld. SPP that unless accused enters into witness box and proved those communication no reliance could be placed on such communications is humbly rejected as the letter dated 19.02.1998 of Embassy of Russian Federation, Letter dated 23.03.1998 of Embassy of Afghanistan, B/L dated 11.02.1998 of Embassy of Afghanistan, and Embassy of Russia categorically shows that items mentioned in the panchnama are more or less matching with the B/L filed on record. It is settled position of Law that Court can take judicial notice of any documents which has come on record eventhough may not be tendered in evidence to arrive at truth of the matter.
38. The Complainant is required to bring its case within the violations as mentioned in section 111 of Customs Act. More particularly it has to prove the contravention of section 111 (j) and/or section 111(o) of Customs Act which provides consfication of improperly imported goods. The Complainant must show that dutiable or prohibited goods were removed from Bonded warehouse of accused no. 1 without the permission of proper officer or the import of exempted goods as in the present case imported liquor being exempted under Foreign Privileged Persons (Regulation of Customs Privileges Rules 1957. However as per panchnama Ex. PW6/A, the stock at the bonded store was found to be tallied and there was no discrepancies noted. The complainant has not brought any evidence to show that there was siphoning of items imported under green bill of entry. On the contrary, the panchnama Ex. PW6/A proved that their was no mismatch in the stock available at the bonded store. The complainant has not made any efforts to trace the origin of items seized through the bar code and other details available on such items to show that such items were part of items imported under the green bill of entry for privileged persons. The complainant Page 26 of 28 itself is not sure what case it wanted to prove against the accused persons as it is alleged that accused were diverting the items meant for diplomats and as per panchnama Ex.PW6/A it is mentioned that such items were illegally imported by accused no. 1 i.e such items were smuggled in India. However, no evidence is brought on record to prove such allegations.
39. The only independent witness examined by complainant is PW8. However, his testimony goes against the case of the complainant department. As per complaint PW8 Tek Chand is witness to the preparation of panchnama Ex.PW4/A prepared by Sh. D C Goyal. But in his testimony he stated he had not seen the goods seized in the panchnama. He also stated when he reached everything was already prepared and he was only asked to sign some papers. He stated he was not explained the papers and he just signed. He also stated he was not aware about the contents of documents and had not witnessed any proceedings. He also stated he stayed there for just two-three minutes and had not seen anything. He stated he had not concealed anything and deposed truly before the Court. This deposition shows that the question mark is put on the veracity of proceedings as despite citing him as witness of the preparation of panchnama which implies he was present throughout the proceedings, he claimed that he had not seen anything. Despite such testimony, he was not cross examined/re-examined by the Ld. SPP for complainant.
40. The complainant in order or bring its case within Section 135(1) (a) and
(b) Customs Act must have proved that accused persons knowingly indulged in any fraudulent evasion or attempt at evasion of any duty chargeable in the Act or were found in possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which they knows or has reason to believe are liable to confiscation under Section 111 or Section 113 of the Act. However, in Page 27 of 28 view of the above discussion evidence on record, I am satisfied that complainant department has failed in proving the allegations against the accused persons beyond reasonable doubt as they neither able to show that accused persons were involved in diversion of validly imported goods under green bill of entry nor been able to prove the allegations of illegal import.
41. Accordingly, Accused persons namely M/s B T Agencies Pvt. Ltd, Surender Singh Bindra, Ashok Kumar and Asad Moin Khan stands acquitted of the charges u/s 135(1) (a) and u/s 135 (1) (b) of Customs Act, 1962. Proceedinsg against accused Pradeep Kumar Jain already abated. Bail Bonds cancelled, surety discharged. Case property be released to rightful claimant.
Announced thru
Video Conferencing PAWAN Digitally signed by
PAWAN SINGH
SINGH RAJAWAT
At New Delhi On 10.07.2020 Date: 2020.07.10
RAJAWAT 23:49:50 +05'30'
(Pawan Singh Rajawat)
CMM/ND/Patiala House Courts
New Delhi/10.07.2020
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