Customs, Excise and Gold Tribunal - Bangalore
Asha Shivasankar Pillai vs Commissioner Of Customs on 24 January, 2003
Equivalent citations: 2003(161)ELT392(TRI-BANG)
ORDER S.S. Sekhon, Member (T)
1. Appellant No. 1 is Dr. Asha Sivsankara Piliai (hereinafter referred to as Dr. Pillai). Appellant No. 2 is Shri Alex C. Joseph (hereinafter referred to as Alex).
2. The brief facts of the case are -
(a) Dr. Pillai is an MBBS degree holder, practicing as a doctor in the Khorfakhan Hospital, Sharjah from December, 1980 onwards and holder of passport No. H 386250 dt. 26-8-99 returned to India for good availing Transfer of Residence benefit under the Baggage Rules. Dr. Pillai imported one Mercedez Benz 600 SEL car through the port of Cochin by filing Bill of Entry for home consumption No. 6883/21-10-98, paid an amount of Rs. 35,71,180 as Customs duty and got the car registered in her name with registration No. KL-03-D-9810.
(b) The DRI consequent to an intelligence, launched an enquiry, recorded the statement of Dr. Pillai, her husband searched certain alleged premises of Alex the investigations made by them revealed that the said vehicle had been imported into Dubai on 29-9-98 by air vide Gulf Air Flight DF 0508 from London and was cleared vide Customs Bill (for re-export) No. 11-1-2-04098504 dated 30-9-98. As this made it evident that the registration certificate filed by the importer i.e. Dr. Pillai was false and that the said vehicle was not in her possession for the required period of one year, prior to importation thereof, a CMP (No. 18107 of 1999) was filed by the Directorate of Revenue Intelligence before the Hon'ble High Court of Kerala seeking that the importer should be directed to produce the vehicle for seizure. In these proceedings, she, filed a counter-affidavit stating that the vehicle was sent to London on 6-6-98 for repair and that the document submitted by the Directorate of Revenue Intelligence, was the one which covered the re-entry of the vehicle into Dubai after repair in London.
(c) As regards Alex, investigations revealed that the address given by Shri Alex C Joseph with telecommunication authorities was as Building No. IV/181 of Thiruvalla Municipality, Manmade. The said premises was visited by the Senior Intelligence Officer, DRI, Cochin, on 16-9-99 for conducting search in pursuance to 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, owner's manual of foreign cars, photo-copies of four pages of two passports, H-386250 in the name of one Dr Asha Sivasankara Pillai and A-270576 in the name of Mohammed Haneefa Shanavaz, blank letter heads of M/s. 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 Shanavaz), 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 seized under a mahazar. One Mercedez Benz car bearing registration number KL-3 8989 found without any documents was also seized under the said mahazar dated 17-9-99. The said car which was deposited in Thiruvalla Police Station immediately after seizure and was subsequently released by the police as per the direction of Hon'ble High Court of Kerala on furnishing documents to the effect the car belongs to one Smt. Rama Devi Soman, staying with her husband in Du-bai. 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 the premises.
(d) Investigations further revealed that the vehicle impugned in this case, was sold by M/s. V P Cars Ltd., London to one K Soman of Dubai and was shipped vide Airway Bill No. 072-38227703, dated 23-9-98 by Gulf Airways flight on 28-9-98. On arrival at Dubai, the said vehicle was received by the said Soman. It was also revealed that as the said vehicle was damaged during transportation, the said consignee had not paid an amount of 3485 Pound Sterling and had also claimed compensation. It also came to light that the said Alex had asked M/s. V P Cars, London to collect original Registration Certificate vide his fax message dated 30-9-98. Stating these facts an affidavit was filed before the Hon'ble High Court of Kerala. Ernakulam seeking that the importer may be directed to produce the said vehicle and that the Directorate of Revenue Intelligence, be permitted to seize the same.
(e) Dr. Pillai as the importer vide her letter dated 23-6-2000 enclosed the vehicle clearance certificate 28521 for import of the said vehicle vide B/E No. MO/R/1997/19077, dated 5-3-97, Bill of Lading No. DXB/LON/785, dated 27-6-98 of M/s. Golden Line Dubai, UAE for shipping the said vehicle vide container No CAXU 2285610 in vessel KAMAKARA 56EE24 from Dubai to Southampton and a certificate from VP Cars.
(f) Since cars and other vehicles for the transport of passengers fall under the category of restricted items and are permitted to be imported only under a specific licence issued or as per the provisions of the Public Notice issued in this regard, ITC P N 3/97-02, dated 31-3-97 has been issued in this regard by the Govt of India. Contravention of the provisions of said Public Notice would merit Action under Section 111/113 ibid, read with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. As per ITC Public Notice 3/97 - 02, a passenger, who has stayed abroad for a period of at least two years, on his return to India for permanent settlement, is permitted to import one passenger car with engine capacity not exceeding four cylinders and not exceeding 1600 cc, whether the vehicle is new or old. Alternatively, import of one car is also permitted provided the car has been in the use of the importer for more than a year prior to his return to India.
(g) A Show-cause notice was issued, as it appeared that -
(I) The Mercedez Benz car bearing Registration Number KL-03-D-9010, imported into India through Cochin Port vide B/E No. 6883/21-10-98 was liable to confiscation under the provisions of Section 111(d) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992 and Section 111(m) of the Customs Act, 1962 on the following grounds:
(1) the same has been imported in contravention of the provisions of Import Trade Control Public Notice 202(PN)/92-97, dated 30-3-94 and 3(PN) 97-02, dated 31-3-97 inasmuch as it was not owned or possessed by the person in whose name it was imported and who had given her passport to facilitate the said import, for a consideration.
(2) the same has been imported without a valid import licence in violation of the provisions of Section 11 of the Customs Act, 1962 read with FTDR Act.
(II) The person in whose name the said vehicle was imported, Dr. Asha Sivasankara Pillai had in her statement under Section 108 of the Customs Act, 1962 had admitted that she had neither purchased nor imported the vehicle under importation and that she had agreed to have the vehicle sent in her name for a consideration promised by Alex C Joseph and had also given a copy of her passport to facilitate the import of the said vehicle at the behest of Alex of Thiruvalla; that the said vehicle having been imported in contravention of the provisions of ITC PN 03/97-02, dated 31-3-97 and without a valid licence, was liable to confiscation to Government under Section 111(d) and (m) of the Customs Act, 1962.
(III) Shri Alex C Joseph who was engaged in the business of sending cars of foreign origin into India in the name of passengers coming from abroad and who has been involved in may cases registered under the Customs Act, 1962 involving import of cars in the name of non-resident Indians had emerged as the main person behind the illegal import of the said vehicle; that he had induced Dr. Asha Sivasankara Pillai on promise of monetary consideration to give a copy of her passport for the purpose of allowing him to import the vehicle in her name; that Alex C Joseph asking M/s. V P Cars, London to collect the original Registration Certificate of the vehicle vide his fax message dated 30-9-98, his non-response to the summons and the recovery and seizure of the copy of passport of Dr. Asha Sivasankara Pillai from the residence of Alex were pointers to the role of Alex in the import of the vehicle; that Shri Alex C Joseph has imported the vehicle under seizure into India, which has been rendered liable to confiscation under Section 111 of the Customs Act, 1962 in as much as it was imported in the name of Dr. Asha Sivasankara Pillai without a valid import licence in contravention of the above mentioned ITC PN issued under Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992 read with Section 11 of the Customs Act, 1962 and has rendered himself liable to penalty under Section 112(a) and (b) of the Customs Act, 1962.
(IV) The Mercedez Benz S 600 imported in the name of Dr. Asha Sivasankara Pillai was not possessed by her for a period of one year prior to her return to India; that the said vehicle was not purchased by Dr. Asha Sivasankara Pillai nor sent by her from abroad; that she had given her passport and consent to import the vehicle not belonging to her into India in her name for a consideration; that she also signed on papers to enable clearance of the vehicle imported in her name in violation of the above said Public Notice and the provisions of the Customs Act 1962 and had, by her Actions, Actively participated ih the illegal import of the vehicle and was hence liable for penalty under Section 112(a) of the Customs Act, 1962.
3. After hearing the appellants, the Commissioner held as follows :
"26. The show cause notice proposes to confiscate the Mercedez Benz 600 SEL car imported by Dr. Asha Sivasankara Pillai under Section lll(d) and lll(m) of the Customs Act, 1962 on the grounds that the car imported did not belong to the importer and that the importer had only acted as a carrier for a consideration of Rs. 1,00,000/-. The show cause notice also proposes to impose a penalty on the importer under Section 112 of the Customs Act, 1962. The basis on which the show cause notice has been issued is the statement of the importer given on 14-1-99 under Section 108 of the Customs Act, 1962. This statement has been subsequently retracted by the importer vide her letter dated 2-2-99 addressed to the Director General, Directorate of Revenue Intelligence, New Delhi. Based on this retraction the importer has claimed that no action can be taken against her as the show cause notice relies solely on her statement dated 14-1-99.
27. It is seen that the statement of the importer, dated 14-1-99, has not been recorded in the office of the investigating agency, but in the residence of the importer in the presence of her family. Being in one's own residence and in the midst of one's own family would definitely be an advantage and taking a statement forcibly from a person under such a circumstance is not easily possible. Hence the claim made by the importer that the said statement was taken under threat, duress and coercion does not appear to be genuine. Moreover, it is seen that the statement has been retracted only on 2-2-99, after a period of 18 days. Had the statement indeed be taken under duress, in the normal course the importer would have retracted the statement in the very next opportunity available. No justifiable reason has been given by the importer as to why the retraction was made after a period of 18 days. Hence it is clear that the retraction is only an after thought and cannot be accepted.
28. It is also seen that, Shri Gopalapillai Narendranath, husband of Smt. Asha Sivasankara Fillai, had given a statement under Section 108 of the Customs Act, 1962 before the DRI officials on the same day. In his statement he has admitted that the car imported in his wife's name did not belong to her and that the same, had been sent by Alex. He also stated that one person by name Mohan, who was a friend of Alex, had collected his wife's passport from their residence. Shri Gopalapillai Narendranath has also stated that they were using two Honda cars in Sharjah, which were purchased in 1985, and that of the two cars, one was sold by them in 1988 and the other one was completely destroyed in an accident. The statement of Shri Gopalapillai Narendranath is seen to corroborate the statement of the importer.
Moreover it is seen that Shri Gopalapillai Narendranath has not retracted his statement so far. Hence the contents of his statement are fully true and therefore what has been stated by the importer in her statement dated 14-1-99 is absolutely true and hence the retraction made by the importer is only an after thought and cannot be accepted. Hence it is clearly established that the statement given by the importer on 14-1-99 was given voluntarily and all the contents therein are true and correct.
29. As per the documents submitted by the importer, at the time of clearance of the car, the car was registered in the importer's name abroad since 15-3-97. However the investigation has produced documents to show that the car was imported into Dubai by Gulf Airways flight on 28-9-98 vide Airway Bill No. 072-38227703, dated 23-9-98 in the name of one K. Soman of Dubai. The importer has countered the claim made by the investigating agency by stating that subsequent to the purchase of the car in 1997, the car had developed certain problems and the supplier had send the car to the dealer in U.K. for repairs. She has also stated that as there was delay in getting the car back she made a complaint to the dealer in the U.A.E., and hence the car was air lifted from U.K. to Dubai in the name of Shri K. Soman who was Fleet Manager with M/s. Al Insaf Used Cars, Shar-jah. In support of the claim made, she has also produced copies of the following:
(i) Bill of lading DXB/LON/785, dated 27-6-98 of M/s. Golden Line, Dubai showing that the car was shipped on board on 27-6-98 at Dubai for discharge at Southampton, U.K.
(ii) Vehicle clearance certificate 28521 with Bill of Entry MO/R/1997/19077, dated 15-3-97 issued by the Department of Customs, Sharjah pertaining to the subject car.
However, it is pertinent to note that, the importer did not bring out these facts before the investigating agency while giving her statement under Section 108 of the Customs Act, 1962. If what has been stated by her subsequently were true, she would have at least mentioned these facts while giving her statement. Also, as the statement given by the importer has been established to be true and correct, the genuineness of these documents are clearly in doubt and the same cannot be accepted. Moreover the statement of Smt. Asha Siva-sankara Pillai is in her own handwriting.
30. During the search conducted by the DRI officials at the residence located at Building No. IV/181 of Thiruvalla Municipality, a photocopy of the passport belonging to the importer was recovered among other items. Shri Alex has stated that the said premise belongs to his sister and he had shifted his telephone from his office to her house. Thus it is clear that the photocopy of the passport belonging to the importer that was recovered from the residence had been kept there by Shri Alex only. This corroborates the statement given by the importer and Shri Gopalapillai Narendranath that the passport of the importer had been collected by a person named Mohan on behalf of Alex. Thus the nexus between Smt. Asha Sivasankara Pillai and Alex in the import of the car is established.
31. Thus from the statements given by the importer, Smt. Asha Sivasankara Pillai and by her husband, Shri Gopalapillai Narendranath, on 14-1-99 and from the recovery of the photocopy of the passport of the importer from the residence of the sister of Shri Alex, it is very clear that the car, Mercedez Benz S 600, imported in the name of the importer, does not belong to her and has been imported by her on the advice of Shri Alex for a consideration. The importer has contended that the photocopy of her passport, which was recovered from the said residence, was planted there by the DRI officials in the first place. From the case records it is seen that the building was searched in the presence of the Thiruvalla Police officials and independent witnesses, hence the charge made by the importer is unsustainable.
32. Hence it is clear that the Mercedez Benz car S 600 has been imported in violation of ITC P.N.3/1997-2002, inasmuch as the fact that the vehicle does not belong to the importer, rendering the goods 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. From the fact that the car never belonged to the importer it has also been established that the clearance of the car has been effected by submission of false and fabricated documents which tantamount to misdeclaration on the part of the importer. Thus the car is also liable to confiscation under Section lll(m) of the Customs Act, 1962. For importing the vehicle in violation of ITC provisions thereby rendering the car liable to confiscation under Section 112 of the Customs Act, 1962, the importer, Smt. Asha Sivasankara Pillai is also liable for penal action under Section 112(a) of the Act, ibid.
33. Now I shall consider the proposal made in the show cause notice to impose a penalty under Section 112 of the Customs Act, 1962 on Shri Alex. C. Joseph. The importer, in her statement dated 14-1-99, has stated that she had not sent the car from Sharjah in her name to India and that Shri Alex had been contacting her husband thereafter. In his statement dated 14-1-99, Shri Gopalapillai Narendranath, husband of the importer has stated that the car imported in his wife's name was not owned by her and that the same had been sent by Shri Alex in his wife's name for availing T.R. facilities.
34. During a search conducted at the premises located at IV/181 of Thiruvalla Municipality, photocopies of the passports of the importer and of another person by name Mohammed Haneefa Shanavas were recovered. Shri Alex C Joseph has stated in his reply to the show cause notice that the building belonged to his sister and not to him. However he has further stated that on closing down his office he had shifted his telephone to his sister's house, as he did not have a house or an office there. From his own submission it is evident that when he has shifted his telephone to his sister's house, on closing down his office, he naturally would have transferred any documents/materials that were in his erstwhile office to his sister's house. Thus it is evident that the copies of passports recovered from the residence was kept there by Shri Alex C Joseph only. The contention made by him that the same were planted by the DRI officials cannot be accepted at all as the same is not at all possible since it is evident from the records that the search had been conducted in the presence of the Thiruvalla Police Officials and independent witnesses.
35. In the representation made by the Counsel for Shri Alex C Joseph, at the time of hearing, various case laws have been quoted stating that it is unsafe to punish any one solely on the confession of a co-accused and that a retracted confession must be looked upon with greater concern. However, all these case laws are irrelevant to the subject matter as apart from the statements of the importer and her husband showing involvement of Shri Alex in the matter, there is material evidence to corroborate the statements, in the form of a copy of the passport of the importer found in the residence belonging to his sister to which place he had already shifted his telephone. Moreover, the statement of Shri Gopalapillai Narendranath, in which the involvement of Shri Alex has been brought to light, has not been retracted so far.
36. From the above I find that the involvement of Shri Alex C Joseph in the subject import has been proved beyond doubt. For his involvement in the illegal import of the car, in violation of ITC provisions, thereby rendering the car liable to confiscation under Section 111 of the Customs Act, 1962, Shri Alex C Joseph is liable for penalty under Section 112(a) of the Customs Act, 1962."
And thereafter ordered the confiscation of the car imported by Dr. Pillai vide Bill of Entry dated 21-10-98 under Section 111(d) & 111(m) of the Customs Act, 1962. However, he gave the option to the importer to redeem the car in lieu of confiscation on payment of fine of Rs. 7 lakhs and imposed a penalty of Rs. one lakh under Section 112(a) of the Customs Act, 1962.
4. After hearing both sides and considering the material on record, it is found -
(a) The Commissioner appears to have relied upon the statement of Dr. Pillai which was recorded by the Officers at her residence. Therefore he concluded that the statements recorded in one's own residence and in the midst of ones own family would 'definitely be an advantage and taking a statement forcibly from a person in such circumstances is not easily possible'. And thereafter rejected the retraction made after a period of 18 days. He has gone by the statements of the husband of Dr. Pillai and concluded that since the same corroborates, is not retracted, hence statement of Dr. Pillai recorded on 14-1-99 should be the true contention. From the statements of Husband and of Dr. Pillai, it is observed that they have named one Shri Mohan who was the alleged link between Alex and Dr. Pillai. No statement of this Mohan has been brought on record. He is not even been identified. Therefore the statement of Dr. Pillai dated 14-1-99 which has since been retracted is not found to be creating confidence in the mind of the adjudicator that the statement reveals the entire truth stands glaringly uncorroborated. A perusal of the statements, indicates, if at all it implicates, Shri Alex in any manner, is that Dr. Pillai and her husband took the assistance of Shri Alex for clearance of the subject car, which in itself cannot be considered to be a reason to invoke liability for confiscation of the car under Sections 111(d) and 111(m) as arrived at for the visit of a penalty under Section 112(a) of the Customs Act, 1962.
(b) The Commissioner vide para 29 of his finding, has rejected the documents filed by Dr. Pillai, as regards the evidence, of the car, having been sent to Southampton U.K. from Dubai for repairs, on the ground that these documents were not produced before the investigating agency. The Show-cause notice at no stage has disclosed that these documents, which indicate that the car was sent to Southampton for repairs, as claimed by Dr. Pillai during the hearing and in the proceedings before the Kerala High Court, were asked for by the investigators at any stage. These documents have been produced by Dr. Pillai, at the first available opportunity without demure to establish the availability and consequently use of the car, for more than one year before import. These documents have in no manner been otherwise impugned by the Department. They have not been found to be documents not reflecting the true contents thereon. The documents are Bill of Lading issued at Dubai for discharge at Southampton Port, U.K. and also a Vehicle Clearance Certificate vide BE dated 15-3-97 issued by Department of Customs, UAE. These are documents, which as per the Evidence Act, could be admitted to convey the contents therein and they go to establish that the car was imported in Sharjah on 15-3-97 and thereafter it was sent to U.K. for repairs. Therefore the allegation being confirmed that the car could not be in use, before import vide BE 21-10-98 at port of Cochin by Dr. Pillai as required by ITC (PN) cannot be sustained. The ITC (PN) for import of Cars has not been contravened. The department has failed to investigate the documents filed along with the Affidavit of Dr. Pillai in the Kerala High Court proceedings with the thoroughness and seriousness it deserved or they have investigated the same, but have not been able to find any flaw in these documents? No reasons can therefore be, found to reject these documents which go to the root of the controversy raised. Once these documents are accepted, the ITC (PN) stands satisfied and therefore there cannot be a case or cause for concluding liability of confiscation under Section 111(d). In any case no material fact on the BE filed by Dr. Pillai at the Cochin Port have been alleged and or arrived in these proceedings to be a misdeclaration otherwise. Therefore confiscation under Section 111(m) as arrived at cannot be upheld.
(c) The confiscation has been arrived at only on the ground as arrived at in paras 30 & 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 there by 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 Authorization No. issued by the Assistant Commissioner nor it indicates who was the officer who has authorized search of the said premises. The premises were an incomplete one. During the search only one car 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 car 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 call 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 and 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 in spite of the Apex Investigating Agency viz DRI having conducted the investigations. We find no material to visit Alex for a penalty,
(d) Since impugned car is not found liable for confiscation under the provisions of 111(d) and (m), no redemption fine can be upheld and similarly the importer i.e. Dr. Pillai and or Shri Alex who is found to have advised on the said import cannot be found liable for a penalty under Section 112(a) of the Customs Act, 1962.
5. In view of our findings, the orders are set aside and appeals allowed.