Custom, Excise & Service Tax Tribunal
) Shri Waryam Singh vs Commissioner Of Customs, Patna on 18 April, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
1-10) Appeal Nos.CA-68-71 & 76-81/12
(Arising out of Order-in-Original No.01/CUS/CC/DRI/12 dated 18.01.2012 passed by the Commissioner of Customs, Patna.)
FOR APPROVAL AND SIGNATURE
HONBLE SHRI H.K.THAKUR, MEMBER(TECHNICAL)
1. Whether Press Reporters may be allowed to see
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
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
1) Shri Waryam Singh
2) Shri Parameswar Singh
3) Shri Karnail Singh
4) Shri Santokh Singh
5) Smt. Rajwinder Kaur
6) Shri Balbeer Singh Butter
7) Shri Indrajeet Singh Butter
8) Shri Manoj Kr. Gupta
9) Shri Sohal Singh
10) Shri Dhiraj Kumar Singh
Applicant (s)/Appellant (s)
Vs.
Commissioner of Customs, Patna
Respondent (s)
Appearance:
Shri N.K.Chowdhury, Advocate for the Appellant (s) Shri A.Kumar, AC(AR) for the Revenue CORAM:
Honble Shri H.K.Thakur, Member(Technical) Date of Hearing :- 18.04.2016 Date of Decision :- 29.04.2016 ORDER NO.FO/A/75309-75318/2016 Per Shri H.K.Thakur.
Following Appeals have been filed by the Appellants against Order-in-Original No.01/CUS/CC/DRI/12 dated 18.01.2012, issued on 20.01.2012 by Commissioner of Customs, Patna as Adjudicating authority.
Sl.
No. Appeal No. Name of the Appellant Amount of penalty imposed
1.
C-68/2012 Shri Waryam Singh (Owner of two vehicle No. MH-26H-6071 & MH-26H-6458) Rs.10.00 Lakhs
2. C-69/2012 Shri Parameshwar Singh (Owner of vehicle No. MH-26H-7183) Rs.5.00 Lakhs
3. C-70/2012 Shri Karnail Singh (Khalasi of vehicle No. HR-37AK-2073) Rs.1.00 Lakh
4. C-71/2012 Shri Santokh Singh (Driver of vehicle No. HR-37AK-2073) Rs.5.00 Lakhs
5. C-76/2012 Smt.Rajwinder Kaur (Owner of vehicle No. MP-09KD-8067) Rs.5.00 Lakhs
6. C-77/2012 Shri Balbeer Singh Butter (Owner of vehicle No. MH-26H-5567) Rs.5.00 Lakhs
7. C-78/2012 Shri Indrajeet Singh Butter (Owner of truck No.MH-20AT-3067) Rs.5.00 Lakhs
8. C-79/2012 Shri Manoj Kumar Gupta (Owner of vehicle No. BR-06G-3650) Rs.5.00 Lakhs
9. C-80/2012 Shri Sohal Singh (Driver/owner of vehicle No. MH-26H-7612) Rs.10.00 Lakhs
10. C-81/2012 Shri Dhiraj Kumar Singh (Owner of Mobile No.9939984288) Rs.1.00 Lakh All the vehicles belonging to the above owners were also confiscated under Section 115 of the Customs Act, 1962 and option to redeem was extended to the owners by imposing a redemption fine of around 50% of the seizure value of the vehicles.
2. Shri N.K.Chowdhury (Advocate) appearing on behalf of the Appellants made the following arguments:-
(i) That 13 vehicles were intercepted by the officers of DRI, Lucknow on 01.10.2009, at Sakri-Bahera Road based on specific information. That 11 trucks were found loaded with Betel Nuts and two trucks were found to be loaded with Garlic.
(ii) That documents recovered from the vehicles indicated that the consignment notes were issued by a single transporter M/s.Shiv Balaji Cargo of Kolkata heaving their local office at Madhubani and the consignor was one M/s.Bhawani Trading Co., Meena Bazar Main Road, Madhubani, Bihar. That the goods were consigned to Ranchi.
(iii) That extra registration number plates were also recovered from the vehicles, except one.
(iv) That statements of Shri Mukhtiyar Singh (Driver), Shri Santosh Singh (Driver) and Shri Karnail Singh (Khalasi) were recorded on 02.10.2009 wherein they confirmed to have brought the goods loaded on the intercepted trucks from Nepal.
(v) That the Betel Nuts and Garlic was seized on 02.10.2009 at 2030 hrs. at DRI office, Muzaffarpur. That samples of the seized goods were drawn and sent for ascertaining their foreign origin but no reports were received from such agencies carrying out testing.
(vi) That except the statements of above drivers and khalasi there is no evidence of seized goods being of foreign origin brought from Nepal.
(vii) That there is no evidence that owners had the knowledge of smuggled nature of seized goods. That even the department was not sure of the foreign origin of seized goods and samples were drawn and sent for testing to ascertain foreign origin. That in the absence of knowledge of the owners of the trucks their vehicles cannot be confiscated and no penalties can be imposed upon all the appellants only on the basis of statements of two drivers and one khalasi.
(viii) That the seized goods are not notified under Section 123 of the Customs Act, 1962 and Revenue has not discharged its burden to establish smuggled nature of the goods before seizure.
(ix) That during the pendency of the proceedings vehicles have been sold by the department without taking leave of this Bench when a specific stay was granted on the penalties of the owners as per stay Order No.S-992-1001/KOL/2012 dated 30.08.2012. That enormous time has lapsed from the date of interception (01.10.2009) of the vehicles and the passing of Order-in-Original dated 18.01.2012 and the vehicles must have become almost scrap. It was his case that redemption fines and penalties imposed upon the drivers and owners are excessive. That due to seizure/confiscation of the vehicles all the appellants have literary come to the roads as their source of livelihood is not available. That even the seizure value of vehicles taken do not indicate as to how the value of the goods were arrived at.
(x) Learned Advocate relied upon the following case laws in support of his argument that foreign origin of the seized goods is not established and statements of co-accused cannot be relied upon.:-
(1) Aakash Enterprise [2006 (205) ELT 23 (Bom.)] (2) Ritu Kumar [2006 (202) ELT 754 (Cal.)] (3) Laxmi Narayan Somani [2003 (156) ELT 131 (Tri.-Kolkata)] (4) Dungarmal Mohata [2006 (200) ELT 522 (Cal.)] (5) Dinanath Maurya [2001 (131) ELT 203 (Tri.-Kolkata)] (6) Sunderlal [2004 (165) ELT 250 (Tri.-Kolkata) (7) Dwarika Pd.Agarwal [2012 (275) ELT 0183 (Pat.)] (8) V.Muniyandi [2004 (167) ELT 215 (Tri.-Chennai)] (9) A.N.Shukla [2005 (187) ELT 269 (Tri-Del.)] (10) Amrit Foods [2005 (190) ELT 433 (SC)] (11) Mohatesham Mohd. Ismail [(2007) 8 Supreme Court cases 254] (12) Francis Stanly Alias Stalin [(2006) 13 Supreme Court cases 210] (13) Prakash Kumar Alias Prakash Bhutto & Othrs.
[(2007) 4 Supreme Court cases 266] (14) Rafahat Ali [2002 (150) ELT 458 (Tri.-Kol.) (15) Bombay Bangalore Freight Carriers Pvt.Ltd.
[2004(163)ELT 213(Tri-Del) (16) Manjeet Singh [2001 (127) ELT 153 (Tri-Del.) (17) Gulshan Kumar (18) Munna [2013 (157) ELT 348 (Tri.-Del.) (19) Balvinder Singh [2013 (159) ELT 749 (Tri.-Del.) (20) Commissioner of Customs (Sea), Chennai v. CESTAT, Chennai [2009 (246) ELT 121 (Mad.)] (21) Bhogilal Mehta [2004 (164) ELT 239(Cal.)] (22) Mokhtar Mistry [1994 (71) ELT 380 (Tri.)]
(xi) Learned Advocate made the Bench go through the case laws mentioned at point (11), (12) & (13) respectively of list at (x) above.
3. Shri A.Kumar, AC(AR) appearing on behalf of the Revenue made following arguments while defending the Order-in-Original dated 18.01.2012 passed by the Adjudicating authority.:-
(i) That as per the facts stated in the opening para of the Show Cause Notice dated 24.03.2010 issued to the appellants all the thirteen truck drivers when asked to stop but they tried to run away. That the convoy was intercepted only after giving a chase and all the drivers/khalasis of other vehicles ran away, except two drivers and a khalasi who also tried to run away from the scene but were caught. That the drivers/khalasis who ran away never joined the investigation.
(ii) That the drivers Mukhtiyar Singh, Santokh Singh and Khalasi Karnai Singh vide their statements, all dated 02.10.2009, admitted to have loaded the betel nuts in the trucks at Tharhi Bazar (Nepal) and the covering documents were for Makai as well as Betel Nuts.
(iii) That as per statement dated 02.10.2009 of Shri Mukhtiyar Singh, Driver all the bus drivers of the seized vehicles were introduced to one Shri Babloo Singh whose mobile No. was 9939984288 and that he used to follow instructions over this mobile. Learned AR made the Bench go through para 12 of the Show Cause Notice dated 24.03.2010 to argue that, all the mobile numbers of the drivers and mobile numbers 9939984288, 9546689372, 9661312602 and 9973147095 of other persons involved in these proceedings, exchanged calls during the relevant period which confirm the involvement of the Appellants in the smuggling activities. That Shri Mukhtiyar Singh also confessed to have earlier carried such consignments from Nepal.
(iv) Learned AR made the Bench go through paras 1.28 to 1.31 of the Order-in-Original dated 18.01.2012 to argue that Shri Waryam Singh and other owners did not respond to summons but preferred to file a petition in Patna High Court in 2009. That only on the directions of Economic Offenses Court, Mazaffarpur the owners came forward to give statements. That as per fifth bullet point of para 1.31 of Order-in-Original dated 18.01.2012 Shri Waryam Singh was asked as to why he did not enquire above his truck and file FIR for the period of interception by DRI on 01.10.2009 to third week of December, 2009. That he only replied that he neither enquired nor filed any FIR.
(v) That Waryam Singh confirmed to be knowing Shri Parameshwar Singh, Indrajeet Singh, Bulbir Singh and Sohail Singh, drivers of other trucks seized in the convoy of thirteen vehicles. That he also expressed ignorance about the fake registration number plates and loading of betel nuts by drivers.
(vi) That nobody has come forward to claim ownership of 1,78,438 kgs. of Betel Nuts, valued at Rs.1,78,43,400/-, and 33,455 kgs. of Garlic, valued at Rs.23,41,850/-, seized from the thirteen trucks. That the scale of value of seized goods and no one coming forward to claim ownership suggests the smuggled nature of goods. That the mere size of Garlic also makes it evident whether goods are of Chinese/foreign origin or not.
(vii) Learned AR also made the Bench go through para 4.01 of the Order-in-Original dated 18.01.2012 to argue that evidences available on record in the form of statements and circumstantial evidences indicate that seized goods were of foreign origin and all the appellants were aware of such smuggled nature. That a driver/khalasi of the vehicle will not do illegal activity of this scale without the knowledge of the owners of the vehicles in the existing age of mobiles. That drivers also acted as the agents of the owners and accordingly Adjudicating authoirty correctly confiscated vehicles under Section 115 of the Customs Act, 1962 and Appellants have been correctly visited with penalties under Section 112 of the Customs Act, 1962.
(viii) On the issue of redemption fine and disposal of confiscated vehicles it was confirmed by AR that some of the confiscated vehicles were disposed of after the Adjudication as no stay order was made available to the department within a reasonable period after adjudication of the case.
4. Heard both sides and perused the case records. The first issue involved in the present proceedings is with respect to penalties imposed upon the appellants under Section 112 of the Customs Act, 1962, who are the Drivers/owners/Khalasi of the 13 vehicles seized by the officers of DRI, for carrying goods seized on the reasonable belief to be of smuggled nature from Nepal. It is observed from the case records that officers of DRI had a specific information that Betel Nuts of third country origin and Garlic of Chinese origin will be smuggled into India from Nepal through Lankala area of Indo-Nepal border and will cross through Sakri (Madhubani). During patrolling and keeping vigil in the area the offices intercepted impugned thirteen trucks who were signaled to stop. Instead of stopping all the thirteen trucks turned back and sped away. The officers gave a chase and also took the help of Sakri Police Station. Except Shri Mukhtiyar Singh (Driver of truck bearing registration No.HR-37ak 2084), Shri Santokh Singh (Driver of truck bearing registration No.HR-37AK-2073) and Shri Karnail Singh (Khalasi of truck bearing Registration No.HR-37AK-2073), all other occupants of the other vehicles managed to escape leaving their vehicles abandoned on the roadside. 4.1 Shri Mukhtiyar Singh in his statement dated 02.10.2009 confirmed to be having two bills separately showing 16,200 kgs. of Betel Nuts and 16,120 kgs. of Makai. It was also confessed that Betel Nuts were loaded in his truck at Tharhi Bazar (Nepal) in a godown situated behind hotel of Arjun Master, which is 100-150 meters away from border. It was further confirmed by Shri Mukhtiyar Singh in his statement dated 02.10.2009 that he and other drivers were introduced to one Shri Babloo Singh whose mobile number was 9939984288 and all instructions were received over the mobile and that extra registration number plates recovered from his truck were being used to conceal the identity of truck as and when required. Shri Mukhtiyar Singh also confirmed that on earlier occasions also he has carried Betel Nuts from Nepal and every time two sets of documents were provided, one set where consignments were mentioned as Makai and other set where consignments were mentioned as Betel Nuts. Similar corroborative statements dated 02.10.2009 were given by the other driver Shri Santokh Singh and Khalasi Shri Karnail Singh. 4.2 None of these statements have been retracted by the persons who gave the statements. None of the Appellants sought for cross-examination of the persons who gave implicating statements. Investigations done by DRI, as indicated in para 12 of the Show Cause Notice dated 24.03.2010 also convey that all the appellants were in touch with each other over mobiles before the seizure of the vehicles/goods. 4.3 After weighing all the evidences on record Adjudicating authority has correctly appreciated the facts and made the following observations in para 4.01 of the Order-in-Original dated 18.01.2012:-
It is noticed that on 30.09.2010 thirteen trucks were intercepted by the officers of DRI on specific information, eleven trucks were found loaded with betel nuts of third country origin and two trucks were found loaded with garlic of third country origin. Sri Santokh Singh, Sri Karnail Singh and Sri Mukhtiyar Singh, were apprehended with the consignment and Indian currency amounting to Rs.44,380/- were also recovered from the apprehended persons.
The apprehended persons deposed that they alongwith other drivers had gone to Tharhi Bazar (Nepal) and stayed there in the hotel of Arjun Master. The consignment of betel nuts was loaded on their truck from the godown of Arjun Master, which is situated behind his hotel: that he was involved in this act in lure of money: that extra number plates recovered from their trucks were being used to conceal the identity of the truck as and when required: that the actual owner of the betel nuts and garlic loaded on all the trucks is one Murari Gupta, who is actual resident of Indore and is operating the syndicate of smuggling from Nepal: that Murari Gupta alongwith his associates arranges the betel nuts and garlic both of third country origin and Indian trucks for its transportation.
It is further observed that these betel nut & garlic have been recovered from a place very close to Indo-Nepal Border that too after a long chase and with the help of Sakri Police while there were being transported to main land India on the strength of fake and fabricated documents. It is also pertinent that no one came forward to claim the ownership of the betel nut as well as of garlic at the time of detention or thereafter, apparently out of fear of penal action betel nut and garlic being smuggled into India. The loading of betel nut and its movement during night hours further raises doubt about its licit procurement, possession and transportation. The physical appearance of entire seized lot i.e. bigger size and spherical shape in contrast to Indian betel nut and garlic which is smaller in size and conical in shape also indicates foreign origin of the betel nut. Also, Madhubani District of Bihar is not known for growing, trading and marketing of betel nuts or Garlic. Moreover, District Madhubani is not directly connected with any area known for growing, trading or marketing of Betel nuts or Garlic. It is also seen that whole act of carriage and transportation was a well planned act of smuggling. The fake addresses of consignee, consigner, transport company, fake registration no. of truck fitted at the time of transportation, wrong addresses registration of trucks (which could be ascertained in few cases after lot of hard work and follow up action), unauthorized registration of mobiles etc., all lead to clear proof of illegal transport of goods and show malafide intention on part of the persons involved. The papers produced also contained misdeclaration of goods as maize. Indeed two sets of paper were prepared on declaring the consignment as maize and another as betel nut. The statement of Noticee No.2, 3 and 4 that goods were loaded at Tharhi Bazar, Nepal, also confirms the goods to be of 3rd Country origin and smuggled into India through off route. 4.4 Nobody came forward to claim the ownership of the goods which collectively were valued at more than Rs.2.00 Crore at the time of seizure. Trust of the owners, who did not come forward for a long period upon the drivers for such high value goods and vehicles cannot exist without the knowledge of the owners.
4.5 So far as imposition of penalties upon the owner of the vehicles is concerned it is observed from the case records that none of the owners came forward from the date of interception (01.10.2009) to the third week of December, 2009. No FIR was filed by the owners to the effect that the drivers have not intimated them about their whereabouts. In the present day mobile age it cannot be imagined that owners of vehicles and drivers will not be in touch with each other during a voyage. Instead of joining the investigation or lodging of FIRs Appellants preferred to approach Patna High Court regarding release of their seized goods and only jointed investigation when directed by Economic Offenses Court, Muzaffarpur. In the light of existing factual matrix and circumstances it has to be considered that the vehicle owners also had the knowledge that smuggled goods were being carried in their vehicles. They also did not ask for the cross-examination of the witnesses to justify that their knowledge regarding contraband nature of goods was not existing.
4.6 Learned Advocate appearing on behalf of the Appellants also argued that statements of co-accused persons cannot be relied upon without other corroborations in view of the Apex Courts decision in the case of Mohtesham Mohd. Ismail vs. Spl Director, Enforcement Directorate & Another (supra), Francis Stanly Alias Stalin vs. Intelligence Officer, NCB, Thiruvananthapuram (supra) and Prakash Kumar Alias Prakash Bhutto & Others vs. State of Gujarat (supra). Learned Advocate made the Bench go through para 20 of the case law Mohtesham Mohd. Ismail vs. Spl Director, Enforcement Directorate & Another (supra), which reads as follows:-
20. We may, however, notice that recently in Francis Stanly v. Intelligence Officer, Narcotic Control Bureau, Thiruvananthapuram this Court has emphasized that confession only if found to be voluntary and free from pressure, can be accepted. A confession purported to have been made before an authority would require a closer scrutiny. It is furthermore now well settled that the court must seek corroboration of the purported confession from independent sources. 4.6.1 Learned Advocate of the Appellants failed to notice that in Para-19 of the same case law Apex Court observed it to be a case of retraction of a confession statement. In the present case there are no such retractions. Appellants never asked for cross-examination of witnesses. None of the persons came forward to claim the ownership of seized goods of more than Rs.2.00 Crore in value. The act of running away of Drivers from the place of interception is not disputed by Appellants. It cannot be imagined that the drivers who ran away would not have informed the masters that goods/trucks have been detained by some agency. There is thus a plethora of circumstantial evidences corroborating the relied upon statements of drivers and khalasi. As per Section 115 of the Customs Act, 1962 a driver has to be considered as an agent of the owner and accordingly knowledge of the drivers will have to be considered as the knowledge of the owners of vehicles. Learned Advocate has mis-directed the argument, that in the absence of test report of the samples sent, it cannot be said that the seized goods were of foreign origin and that even the department was not sure of that nature. This argument can be taken by the owner of goods who produces some documents of licit acquisition of seized goods. Adjudicating authority has given a logical findings that Garlic of Chinese origin can be easily identified by its size. It is also a common experience that in Indian markets Garlic of Chinese origin is easily recognized from indigenous Garlic by its size. However, in the case of Appellants awaiting the reports of testing agencies are not relevant when the drivers/khalasi are themselves confessing to the fact that seized goods were brought from Nepal for the lure of money. The said statements and circumstances evidences are sufficient to hold the case against the Appellants.
4.7 In view of the above observations penalties imposed upon the Appellants are upheld and confiscation of vehicles under Section 115 of the Customs Act, 1962 are also upheld.
5. On the issue of quantum of redemption fine imposed upon the vehicles of the owners of the vehicles (owner Appellants),, it is the case of these Appellants that the value of seizure is arbitrary and the quantum of redemption fine, nearly 50% of seized value, is very high. There is substance in the argument of owner Appellants that over the period the seized/confiscated vehicles must have deteriorated and that some of the vehicles have been disposed of without giving any intimation to the owners. It is observed from the table under Para 2 of the Order portion of Order-in-Original dated 18.01.2012 that redemption fine imposed is nearly 50% of the seizure value of vehicles determined on 02.10.2009 which must have further depreciated till the date of adjudication. It is the argument of the Advocate for the owner Appellants that some of the vehicles were auctioned by the department without giving any notice to the Appellants and some were released provisionally. However, Learned Advocate could not specify as to which of the vehicles was sold by auction and which was released provisionally. From the facts existing on records this Bench is of the considered opinion that imposing a redemption fine of nearly 50% of the seizure value of vehicles is excessive. In the interest of justice it will be appropriate to restrict the redemption fine to the extent of 25% of the auction price where vehicles have been disposed of by the Revenue in auction. Same ratio of seizure value vs. auction price of auctioned vehicles can be taken for the purposes of imposing redemption fine on vehicles released provisionally.
6. Appeals filed by the owner Appellants is allowed only to the extent indicated in Para 5 above.
(Pronounced in the open court on 29.04.2016.) SD/ (H.K.THAKUR) MEMBER(TECHNICAL) sm 15 Appeal No.CA-68-71, 76-81/12