Customs, Excise and Gold Tribunal - Tamil Nadu
Jain Enterprises And Raichand vs Collector Of Customs on 2 April, 1986
Equivalent citations: 1988(15)ECR50(TRI.-CHENNAI), 1986(25)ELT811(TRI-CHENNAI)
ORDER S. Kalyanam, Member (J)
1. Since the above appeals arise out of a common order of the Additional Collector of Customs, Madras, dated 28-2-1985 and relate to a single transaction and mutually connected, they are taken up together and disposed of by this order.
2. The appeals are directed against the order of the Additional Collector of Customs, Madras, referred to supra, absolutely confiscating 96,000 Nos. of YKK brand zip fasteners of foreign origin, valued at Rs. 96,000/- c.i.f. under Section 111(d) of the Customs Act, 1962, hereinafter referred to as the 'Act', read with Section 3(2) of the Imports and Exports (Control) Act, 1947, besides imposition of a penalty of Rs. 50,000/- on Jethmal, proprietor of M/s. Jain Enterprises and Rs. 15,000/- on appellant Raichand under Section 112 of the Act.
3. On 27-1-1984 the Customs authorities on the basis of prior intelligence searched the residential premises of Jethmal, proprietor of M/s. Jain Enterprises, appellant herein, at No. 12, Thandavaraya Pillai Street, Madras-1. The search resulted in the recovery of 8 wooden cases covered with gunny bags which on opening and examination were found to contain 96,000 Nos. of 8" YKK brand zip fasteners of foreign origin. Jethmal was not present at that time but his brother Raichand, one of the appellants herein, was present. Since Raichand could not satisfactorily account for the licit origin or legal acquisition of the zips in question, they were seized under mahazar as per law attested by witnesses. Appellant Raichand gave a statement before the authorities on 27-1-1984 stating that his brother Jethmal is the owner of M/s. Jain Enterprises, the appellant herein and that he (Raichand) is employed under his brother and the goods under seizure were purchased out of the money given to him (Raichand) by his brother. Raichand further admitted that the goods under seizure were delivered at his instance by a broker from Burma Bazaar on 24-1-1984 at about 8 P.M. and the goods under seizure were of foreign origin and not covered by any bills. Raichand also admitted that the goods were meant for being despatched to Calcutta for purpose of sale. It is in these circumstances, after further investigation, proceedings were instituted against the appellants which ultimately culminated in the impugned order now appealed against.
4. Shri P.C. Rajappa, the learned advocate appearing for appellant Jain Enterprises submitted that the goods under seizure at the relevant time were not notified under Section 123 of the Act and so the burden is on the Department to prove and establish that the goods are of foreign origin and that they were smuggled into the country. The Department it was contended, has not discharged the initial burden cast on it under law and so the impugned order was assailed as not legally tenable. It was further urged that the inculpatory statement recorded from the appellant's brother Raichand (the other appellant herein), does not implicate Jain Enterprises and further the inculpatory statement of Raichand was resiled from on 30-1-1984 and in such a situation, it was contended that the goods cannot be confiscated nor penalty levied without any corroboration of the earlier retracted confessional statement of Raichand. The learned counsel also contended that the appellant by letter dated 30-1-1984 informed the authorities that the goods under seizure were purchased by the appellant from Veerchand Surajmal and Co., under cash bill No. 1642 dated 10-1-1984 and Veerchand Surajmal & Co. themselves have purchased the goods from M/s. Murray & Co., under bill No. 1487 dated 17-6-1983. Since the goods under seizure are covered by valid purchase vouchers, it was urged that they are not liable for confiscation. The learned counsel also assailed the finding in the impugned order that the purchase bill of the appellant dated 10-1-84 does not refer to any size of the zip and urged that mere omission to mention the size of zips in the purchase bill of the appellant would not militate against him, much less prove that the vendors had not purchased the same from M/s. Murray & Co., under a valid bill dated 17-6-83. The learned counsel also assailed the reasoning in the impugned order contending that the goods under seizure could not in law be confiscated as contraband goods when the Department did not choose to examine the broker from whom appellant Raichand claimed to have purchased the goods as per his statement dated 27-1-84. The learned counsel further questioned the validity of the show cause notice contending that non-mention of the Sub-section (a) or (b) of Section 112 in the show cause notice has resulted in prejudice to the appellant vitilating the impugned order.
5. Shri Thyagarajan, the learned counsel for appellant Raichand, generally adopted the submissions made on behalf of appellant M/s. Jain Enterprises regarding the genuineness of the purchase bills, absence of corroboration for the retracted statement of Raichand etc. The learned counsel further submitted about the arrest of appellant Raiphand on 27-1-84 and his release on the evening of 28-1-1984 and contended that 29-1-1984 being a Sunday, retraction on 30-1-1984 by appellant Raichand of his earlier inculpatory statement dated 27-1-1984 cannot be said to be belated.
6. The learned Senior Departmental Representative repelling the submissions of the appellants contended that the statement of appellant Raichand dated 27-1-1984 is true and voluntary and reliable. The retraction on 30-1-1984 by appellant Raichand was assailed as belated and unacceptable. He further urged that the bills on which reliance was placed by appellant Jain Enterprises are not relatable to the goods under seizure at all andl so the claim of appellant Jain Enterprises to the goods under seizure is not supported by any valid title in law. The learned S.D.R, urged that while the bill issued by M/s. Murray & Co. referred to 'YKK zip fasteners 8" ', the bill issued by Veerchand Surajmal & Co. in favour of the appellant Jain Enterprises referred to 'Y.K.K. zip chains Japan' and zip chains are different from zip fasteners. Regarding the foreign origin of the goods under seizure, the learned S.D.R. contended that this issue cannot be controverted since the very purchase bill on which appellant Jain Enterprises places reliance refers to 'Y.K.K. zip chains Japan'. The foreign nature of the goods, coupled with the statement of appellant Raichand, it was contended, would establish that the goods under seizure are contraband. The learned S.D.R. submitted that recovery of Y.K.K. zips, non-production of any documents by Raichand for licit acquisition of the same at the time of seizure and other attendant circumstances would constitute adequate cbrroboration in law to the retracted statement of appellant Raichand.... In regard to the imposition of a penalty of Rs. 50,000/- on Jethmal, proprietor of Jain Enterprises, under Section 112 of the Act under the impugned order, the learned S.D.R. submitted that there is not much evidence against Jain Enterprises warranting the same.
7. We have carefully considered the submissions made before us. It is not disputed that the goods under seizure at the relevant time were not items notified under Section 123 of the Act. However, it is a settled proposition of law that notwithstanding the inapplicability of Section 123 of the Act and the presumption arising thereunder, the Department can always seek support from the presumptions arising under Section 114 and 106 of the Evidence Act and the principles embodied therein as held by Supreme Court in AIR 1980 SC 593 in the case of 'State of Maharashtra v. Natwarlal Damodardas Soni'. In the instant case at the time of seizure of the goods in question, appellant Raichand, who is none other than the brother of Jethmal, proprietor of Jain Enterprises, was present in the residence and could not offer any satisfactory explanation about the licit origin or lawful acquisition of the goods under seizure. If really the goods had been acquired or purchased under valid purchase bills, as contended by appellant Jain Enterprises, it does hot stand to reason as to why appellant Raichand, who is not only the brother of Jethmal but also an employee under him, could not explain the purchase under the relevant bill. Evidence on record clearly reveals that appellant Raichand also is closely connected with the business of appellant Jain Enterprises as an employee therein. Apart from it, it would be seen that immediately on seizure appellant Raichand has come forward with a statement which is inculpatory in nature and confessional in character with reference to the acquisition of goods under seizure. We carefully perused the statement of appellant Raichand dated 27-1-1984. It contains a wealth of information which by no strentch of imagination could be characterised as the figment of the imagination of the authorities who recorded the same. We are satisfied and convinced that the statement of appellant Raichand is true and voluntary. Admittedly this statement was resiled from by Raichand only on 30-1-1984. No satisfactory explanation has been either pleaded or given for this belated retraction. If an inculpatory statement is not immediately retracted, it is open to a quasi-judicial authority to go into the reasons for later retraction and find out as to whether the reasons are plausible or tenable. The plea that appellant Raichand was arrested on 27-1-1984 and released only on 28-1-1984 is too puerile to merit acceptance. If really the statement in question has been given by appellant Raichand in a state of fear, it does not stand to reason as to why he should mention about the purchase of the goods under seizure from a broker of Burma Bazaar and further about the plan for despatch of the same to Calcutta for sale. Likewise, if the statement in question is not true and voluntary, it does not stand to reason as to why a complaint was not made by Raichand at the time when he was produced before the Judicial Magistrate for remand. We therefore, do not find any substance in the retraction which, in our opinion, has been desperately resorted to by appellant Raichand in a bid to extricate himself from the clutches of law and to salvage the goods to his brother.
8. Though the goods under seizure are not notified items under Section 123 of the Act at the relevant time, the foreign brand name "YKK" on the goods, non-production of any valid voucher for the licit acquisition of the same by Raichand at the time of seizure, inculpatory statement of Raichand about the purchase of the contraband goods and other attendant circumstances would shift the burden initially cast on the Department to the appellant. We therefore hold that the Department has i 'discharged the onus cast on it under law and the burden getting shifted on to the appellant in the circumstances indicated above has not been discharged by the appellants.
9. The purchase bills relied upon by-the appellant Jain Enterprises do not prove and establish that they relate to the goods under seizure. As rightly pointed out by the learned S.D.R. the bill issued by Murray & Co. dated 17-6-1983 describes the goods as 'YKK zip fasteners 8" ' whereas the bill of Veerchand Surajmal & Co. dated 10-1-1984 under which appellant Jain Enterprises has purchased the goods describes the same as 'YKK zip chains Japan'. It is common knowledge that zip chains are different from zip fasteners and therefore the bills relied upon by the appellant are not relatable to the goods under seizure. Apart from it, the mere production of bills by the appellant. would not ipso facto mean that the goods purchased under the bill are the identical goods under seizure, particularly in the context of an incriminating statement by no less a person than the very brother of the appellant himself. We therefore hold that appellant Jain Enterprises has not established a valid claim or title to the goods under seizure on the basis of valid purchase receipt.
10. The plea of the appellant that non-examination of the broker of Burma Bazaar by the Department during investigation would vitiate the impugned order is utterly devoid of substance. It is the case of appellant Raichand that he purchased the goods under seizure through a broker from Burma Bazaar and if such a purchase is genuine, it is for appellant Raichand to prove and establish the same. We, therefore, find that the goods under seizure are of foreign origin and are proved to be contraband goods on the evidence available on record. We further find that appellant Jain Enterprises has not by any acceptable legal evidence established title to the goods. We therefore hold that the goods which were seized from the possession of appellant Raichand are proved to be contraband goods by the various circumstances set out above and are liable for confiscation. We accordingly uphold the order of confiscation of the goods under the impugned order. Appellant Raichand is also proved to be concerned with the contraband goods under seizure and so the penalty imposed on him is clearly sustainable in law and is confirmed. So far as the penalty imposed on appellant Jain Enterprises is concerned, we find that there is no adequate evidence to prove and establish that Jain Enterprises were in any way concerned or connected with the contraband goods under seizure. A mere claim to the ownership of the goods under seizure by Jain Enterprises at a later point of time would not ipso facto make them guilty of a charge under Section 112(a) or (b) of the Act. We should confess that the learned S.D.R. fairly conceded that there is no adequate evidence on record to bring home a charge against appellant Jain Enterprises. Accordingly we give appellant Jain Enterprises the benefit of doubt in the facts and circumstances of the case and exonerate Jethmal, proprietor of Jain Enterprises, of the charge and set aside the penalty imposed on him under the impugned order. Except for. the modification indicated in regard to the penalty imposed on Jethmal under the impugned order, the appeals are otherwise dismissed.