Customs, Excise and Gold Tribunal - Bangalore
Mohammed Haneefa Shanavas vs Commissioner Of Customs on 9 July, 2003
Equivalent citations: 2003(162)ELT218(TRI-BANG)
ORDER S.S. Sekhon, Member (T)
1. These two appeals are being disposed off by this common order since they arise out of the same Order (Original) passed by the Commissioner of Customs, Cochin.
2. A car was imported and Bill of Entry along with the purchase invoice dated 25-6-98. Vehicle Registration book issued by UAE authority and copies of Vehicle Export Certificate issued by UAE authorities in the name of Shri Mohammed Haneefa Shanavas (hereinafter referred to as Shanavas), was filed for clearing at Cochin port. The Bill of Lading along with an affidavit signed on a stamp paper in the presence of Notary Public, one Shri O.T. Kesavan Nambiar, was filed and the goods were assessed and ordered to be cleared on payment of duty. On an information, the DRI authorities seized the Car, investigated the case and issued a notice proposing to confiscate the car. The relevant portions of the impugned order recording certain facts relevant as regards the appellants are as follows -
"9. The residence of Shri Mohammed Haneefa Shanavas situated at Mananakku was searched by the Senior Intellignece Officer, DRI, Trivandrum on 16-9-99 but no incriminating documents or evidence were found. State Bank of Travancore NRI branch Attingal, vide their letter dated 16-9-99, enclosed photocopies of documents pertaining to NRE account 1684 of Shanavas. As per those documents, on 12-8-99, the account was opened on which date Rs. 50,000/- was deposited. On 10-9-99 a deposit amounting to Rs. 17,50,000/- by way of TELEX Transfer dated 9-9-99 from City Exchange Bur Dubai was received and cash for the draft for Rs. 16,93,481 /- and cash of Rs. 56,000/- were withdrawn. Enquiries with Indian Overseas Bank, Varkala revealed that Shri Shanavas has been sending money on a regular basis, which is in conformity with his statement.
10. The house building situated at door number IV/181 of Thiruvalla Municipality, Manjadi, which was the address given by Shri Alex C. Joseph with telecommunication authorities and mobile phone standing in his name, was visited by the Senior Intelligence Officer, DRI, Cochin on 16-9-99 for conducting search in pursuance of the search warrant issued by the Deputy Director, DRI, Calicut. The said building was found locked. Hence Circle Inspector of Police Thiruvalla was contacted and in their presence and in the presence of witnesses the lock of the building was broken open and search conducted. Seven sets of keys, mostly of foreign made cars of different models, photocopies of four pages of two passports-H-386250 in the name of one Asha Shiva-sankara Pillai and A 270576 in the name of Mohammed Haneefa Shanavas, blank letter heads of AL ARAF GENERAL TRADING (similar to the exhibit furnished in the writ OP filed with the Hon'ble High Court of Kerala stating to be the invoice of the vehicle under seizure imported in the name of Mohammed Haneefa Shanavas), mileage point statement addressed to Alex C. Joseph, used Indian Airlines ticket, blank letter head book of Alex C. Joseph, one receipt issued by Thiruvalla Municipality and LPG gas connection book in the name of Alex C. Joseph were among the things seized under a mahazar. The said premises were sealed after the search operations in the presence of independent witnesses, as no responsible person was available to take possession of premises."
Statement of Shri Shanavas was recorded after considering the submission made by the two appellants herein, and the failure of the Investigators to record the statements from Shri Alex C. Joseph, and the material on records, the Commissioner came to the following findings as regards the appellant, Shri Shanavas's role and liability -
"51. Thus from the discussions made above and from the evidence on record, I find that enough material is available to conclusively prove that the vehicle imported does not belong to the importer, Shri Mohammed Haneefa Shanavas and that he has allowed his passport to be used for facilitating the illegal import of the car. Thus it has been clearly established that the Toyota 400 car has been imported in contravention of ITC P.N. 3/1997-2002, rendering the same liable to confiscation under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. It has also been established that the clearance of the car had been effected by submissions of false and fabricated documents, inasmuch as the fact that registration documents showing the vehicle to have been registered in the name of Shri Mohammed Haneefa Shanavas (importer) was produced before the Customs authorities for facilitating the clearance of the car, whereas, the importer himself has admitted that the car does not belong to him. For this act of misdeclaration, I find that the vehicle is liable to confiscation under Section 111(m) of the Customs Act, 1962.
52. I also find that for his act of allowing his passport to be used for facilitating the import of the car in contravention of ITC regulations and for making misdeclaration before the Customs authorities, the importer, Shri Mohammed Haneefa Shanavas is also liable for penalty under Section 112(a) of the Customs Act, 1962."
As regards other appellant, Shri Alex C. Joseph, the Commissioner recorded the following findings about his role and liability -
"53. The importer, in his statement dated 10-9-99, has stated that he had imported the car in his name on the advice of Shri Alex C. Joseph. A search conducted at the residence, the address of which was given by Shri Alex C. Joseph to the telecom authorities, resulted in obtaining photocopies of passports of the importer, Shri Mohammed Haneefa Shanavas and yet another importer of a car, Smt. Asha Shivasankara Pillai and several sets of keys pertaining to foreign cars. One such key had a key chain had the chassis number of the car, imported by Shri Mohammed Haneefa Shanavas, written on it. Blank letterheads of M/s. A1 Araf General Trading, similar to the one in which an invoice for the car imported were produced by the importer before the Hon'ble High Court of Kerala, were also recovered. The key with the chassis number of the subject car written on it, when checked with the car under import, showed that the key indeed belonged to the Toyota 400 car imported in the name of Shri Mohammed Haneefa Shanavas. These evidences show that Shri Alex C. Joseph has been clearly involved in the illegal import of cars into India in general and in the subject import in particular. Shri Alex C. Joseph has no doubt stated that, the residence searched by the DRI did not belong to him, but to his sister and that the search was conducted in the presence of witnesses who were coolies and not in the presence of local respectable people. However in the same letter he has stated that on closing down his office, he had shifted his telephone to his sister's house as he neither had a house nor an office in that area. From his very own submission it is very clear that, on closing of his office, he had shifted his telephone to his sister's house, he would naturally have shifted any other documents/materials from his erstwhile office to his sister's house. Thus it has been proved beyond any doubt that the materials recovered from the residence at Door No. IV/181 of Thiruvalla Municipality, do indeed belong to Shri Alex C. Joseph only. These evidences corroborate the facts stated by the importer in his statement dated 14-9-99 and I find that there is enough evidence to establish the role of Shri Alex C. Joseph in the import of the subject car in violation of ITC regulations and by misdeclaration. Thus, for his act of abetting the illegal import of the car, thereby rendering the car liable to confiscation under Sections 111(d) and (m) of the Customs Act, 1962, I find that Shri Alex C. Joseph is liable for penalty under Section 112(a) of the Customs Act, 1962."
and ordered the confiscation of the Toyota 400' car imported under the provisions of Section 111(d) and (m) of the Customs Act, 1962 and gave an option to the importer to redeem the car, in lieu of confiscation, on payment of a fine of Rs. 5 lakhs. He also imposed a penalty of Rs. 1 lakh each on Shri M.H. Shanavas and Shri Alex C. Joseph under Section 112(a) of the Customs Act, 1962. Hence these appeals.
3. After hearing the both sides and considering the material on records, it is found that -
(a) The Commissioner, from Para 51 extracted herein above, has apparently come to a conclusion after extensive discussion and considering the evidence on records that there was material to conclusively prove that the vehicle imported does not belong to the importer and Shri Shanavas has allowed the use of his passport, for facilitating the said import. Therefore, the import was in contravention of ITC P.N. 3/1997-2002 rendering the car liable for confiscation under Section 111(d) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. The Commissioner concluded from the affidavit of Shri Shanavas that the clearance of car was sought on false and fabricated documents, while the Registration and the Export Certificate documents which were produced are documents maintained and issued by an Agency of UAE Government which are not doubted and held to be fabricated or false/ for clearing the car, in the name of Shri Shanavas who admitted that the car did not belong to him, the vehicle was liable for confiscation under Section 111(m) of the Customs Act, 1962.
(b) From the extract of the Public Notice 3/97-02, dated 31-3-97 as recorded by the learned Commissioner and on perusal of the copy of the same reveals that
(i) the ownership of a car, which is permitted to be imported is not relevant to determine the licence free import in the said Public Notice.
(ii) It was necessary as per this Public Notice that the car should have been in the use of the importer for more than a year prior to his return to India.
Therefore, the Commissioner's findings and establishing that Shanavas had not admitted the ownership of the car, even though the Registration documents were in his name, will not cause the denial of the benefit of the Public Notice to Import the subject car without licence or call for confiscation under Section 111(d). The Registration Certificate was in the name of Shanavas and Export Permission Certificate from UAE had been given to Shri Shanavas as per these UAE Government documents. The documents maintained by a Foreign Government Agency could be admitted in law. They are not impugned in any manner. Once a car is Registered for use under the relevant Vehicle Registration Laws, in the name of a particular person, the use of such car by that person, cannot be determined to be not existing. Since the ownership of a Car, is not one of the conditions and the car is Registered, the condition as prescribed in the Public Notice for a period of more than a year from the date of import, there can be no reason to order confiscation of the said car, under the provisions of Section 111(d) of the Customs Act, 1962,
(c) The findings of the Commissioner, that the claim of ownership of the car will amount to a misdeclaration on the Bill of Entry as the affidavit filed along with documents which shows that the car was owned by Shanavas which he has denied. This affidavit has been questioned by Revenue, inasmuch as the jurisdiction of the Notary to Notarise this affidavit is being questioned. Therefore reliance on an allegedly inadmissible affidavit cannot cause a charge of misdeclaration. The affidavit does not exist in law as per the Department case itself. Be that as it may, when the ownership is not relevant to determine clearance of a car without a licence, then a misdeclaration as regards ownership, if made, will not cause liability for confiscation of the car under Section 111(m) of the Customs Act, 1962. Since such a declaration was not required to be made under the provision of the Customs Act and also read with FT (DR) Act, 1992. Therefore the liability for confiscation of the car under Section 111(m) is not called for.
(d) Once it is found that the car is not liable for confiscation under Section 111(d) and (m), there is no cause or case for penalty under Section 112(a) on Shanavas.
(e) As regards the liability of the penalty on Shri Alex C. Joseph, from Para 53 of the order as extracted hereinabove and Paras 10 and 11 of the order which brings out his involvement in the subject import. On a consideration, reveals that the only incriminating nature was the recovery of the key belonging to the subject car in the name of Shanavas as also the photocopies of his passport. This Tribunal in the Final Order Nos. 69 and 70/2003/ dated 24-1-2003 [2003 (161) E.L.T. 392 (Tri.)], in the case of Dr. Asha Sivasankara Pillai, as regards the very same search of this premises, alleged to be belonging to Shri Alex C. Joseph, had come to a conclusion about the recoveries made and had drawn conclusions about the search vide Para 4(c) of the aforesaid Order as under -
"4. xxxx xxxx xxxx
(c) The confiscation has been arrived at only on the ground as arrived at in paras 30 and 31 of the impugned order extracted herein-above merely because photocopies of passport of Dr. Pillai has been recovered from the residence of the sister of Shri Alex. From that, it cannot be concluded that the car imported by Dr. Pillai does not belong to her. As regards the finding that she had imported the car on the advice of Shri Alex, for a consideration, we cannot find that to be reason, even if it is taken to be on, it's face value, to cause confiscation of the car. Advising people who are eligible for a particular import cannot be held to create a liability for confiscation and/or penalty under Customs Act. As regards Dr. Pillai's contention that the photocopy of her passport which was recovered from Shri Alex's sister's residence was planted thereby DRI Officers, from the Mahazar dated 17-9-99 drawn at the alleged residence of the sister of Shri Alex it appears that the Mahazar started on 16-9-99 at about 4.00 PM when the Senior Intelligence Officer, DRI, Cochin and party went to the relevant Police Station seeking police assistance for conducting the search, as the said home was found locked. A "Blacksmith" appears to be called and the doors were opened with his assistance. Mahazar does not record the search Authorisation no. issued by the Assistant Commissioner nor it indicates who was the officer who has authorized search of the said premises. The premises were in incomplete one. During the search on one care of foreign origin not impugned herein, and certain documents including photocopies of the alleged passports of Dr. Pillai were recovered. The Mahazar does not show from where the photocopies were recovered. The Mahazar shows that it started at 4.00 PM on 16-9-99 and was completed by 9.00 AM on 17-9-99. The entire proceedings appeared to have been conducted during the dark of the night. The non-mention of the place of recovery of the passport photocopies would raise doubts in the minds of a common man when recovered during a Night Long operation. What was the unholy hurry to force open the premises and conduct a search? This question remains unanswered. We leave the allegation of Planting of photocopy at that; after observing, the department vide a statement dated 14-1-99 of Dr. Pillai, was aware that the passport of Dr. Pillai was collected by the person called Alex and this passport photocopies could as well be one of the documents submitted along with the clearance of the care to the Customs in Cochin. These photocopies of the passport could therefore be part of the documents which were required/submitted for the clearance of the car at Cochin port. Therefore possession and recovery from Shri Alex's sister's house in doubtful circumstance of the midnight hours cannot for penal consequences on Dr. Pillai when the car is not found to be liable for confiscation. Similarly, the recovery of the same along with papers of gas connection of Shri Alex at the said premises and other documents indicating use or a possession of the premises will not be incriminating in any manner to visit Alex with a penalty. It is pertinent to note here that Alex's statement has not been recorded inspite of the Apex Investigating Agency viz. DRI having conducted the investigations. We find no material to visit Alex for a penalty."
For the same reasons as in Dr. Asha S. Pillai's case, the results of the same search need not be considered. Considering the submissions of the learned DR that blank invoices/letterheads of M/s. A1 Araf General Trading, similar to the one in which an invoice for the car imported was presented in this case. The recovery of keys from said premises of Shri Alex C. Joseph would be indicating incriminating nature and call for a penalty under Section 112(a). I find, Abetment as found by the Commissioner will not hold any consideration since valuation of the car, in this case, as declared on the Bill of Entry and accepted by the Proper Officer, are not being questioned. The question of penalty for abetment, for importing the car merely on finding of a key and photocopies of passport will not cause any adverse inference in view of the findings as regards the search itself and the allegations itself in the notice that Alex had an interest in the car and its import, Shanavas and Alex knew each other, which is not denied by both of them. In view of the findings herein, when the car is not held liable for confiscation under Section 111(d) and (m) of the Customs Act, 1962. Whether Alex C. Joseph had a role to play, in said import or not and abetment, thereof, will be not relevant to visit him for penalty as arrived at under Section 112(a) of the Customs Act, 1962.
4. In view of the findings hereinabove, orders as regards confiscation of the car and imposition of penalty under Section 112(a), as arrived at, are set aside in these two appeals. Accordingly these two appeals are allowed with consequential relief.