Customs, Excise and Gold Tribunal - Tamil Nadu
S.P. Hyder Ali And 5 Ors. vs Commissioner Of Customs on 26 November, 1999
Equivalent citations: 2000(68)ECC664, 2000ECR98(TRI.-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. All these six appeals arise from a common Order-in-Original dated 16.10.97 by which the Commissioner of Customs & Central Excise, Trichy has ordered for absolute confiscation of seized nine silver bars and silver granules of foreign origin totally weighing 200 kgs. valued at Rs. 16,00,000 under Section 111 (d) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development and Regulations) Act, 1992, besides ordering confiscation of packing materials under Section 118/119 of the Customs Act, 1962. There is an order of confiscation of ambassador car bearing registration No. KL 04 B 2020 valued at Rs. 2.5. Lakhs to the Government under Section 115(2) of the Customs Act, 1962. However, under Section 125 of the Act, he has allowed to Sri Ali Hyder @ Hyderali, owner of the said car to redeem the same on payment of fine of Rs. 50,000 in lieu of confiscation. The following penalties under Section 112(b) of the Customs Act has been imposed:
1. Sri Zahir of DubaiRs. 2,00,000
2. Sri M.S. Shajahan Rs. 1,00,000
3. Sri S. Jayakumar Rs. 1,00,000
4. Sri M.H. Sarafuddin Rs. 10,000
5.SriAliHyder Rs. 10,000 Penal proceedings against S/Sri Mohan @ Katcha Mohan of Salem, Abdul Salam, S/o. Mohamed Kann are dropped.
2. The proceedings arose with the information received by the officers of CPU/ Nagarcoil along with police officials of Valliyoor, intercepted an ambassador car bearing registration No. KL 04/B 2020 coming from Trivandrum and proceeding to Madurai at Eruvadi Road junction, Valliyoor on the Nagarcoil-Tirunelveli National Highway, found and recovered seven gunny bags under the front seat of the said car which was occupied by four persons who revealed their names as S/Sri A. Jayakumar, M.S. Shajahan, Abdul Salam and M.H. Sarafuddin all from Trivandrum. The Customs and Police officers found in the abovesaid seven gunny bags six full size silver bricks, three partly cut silver bricks along with silver granules. The silver bars were having the markings as "CCCP" with "sickle and hammer" indicating the Russian origin. The total weight and value of the silver bars and silver granules were 199.750 kgs., 250 gms. and Rs. 16.00 Lakhs respectively. As there were no duty paid documents found with or produced by the abovesaid occupants of the ambassador car, the Customs officers seized the said silver under a mahazar drawn before two independent witnesses and also the police officers present on the spot for further necessary action under Customs Act, 1962. The said ambassador car bearing registration No. KL 04/B 2020 valued at Rs. 2.5 Lakhs was also seized under the same mahazar on the reasonable belief that the said car had been used as a means of transport in the carriage of above-mentioned contraband.
3. The statements of the persons occupying the car were recorded and in these statements modus operandi of the smuggling operation is said to have been disclosed. In the statement of Sri Jayakumar it was brought out that his friend one Sri Zahir of Beema Palli area Trivandrum, had sought his assistance to smuggle through Air-cargo complex, Trivandrum and that two passengers with 200 kgs. of silver would approach him and the said silver to be delivered to a party from Salem waiting at Madurai. Therefore, he had accompanied those two persons in their car with contraband from Trivandrum to Madurai and handed over to Sri Mohan of Salem waiting at Madurai who paid approximately Rs. 14.00 Lakhs to those passengers; that for helping them Sri Zahir had promised to pay Rs. 10,000 in the 1st week of December 1995; that on 15.11.95, Sri Zahir telephoned him and informed that he would send 200 kgs. of silver concealed in the baggage of two persons which would be cleared as unaccompanied baggage from Air cargo complex, Trivendrum; that the two passengers were aware of the concealment but would not declare it to Customs and clear the goods without payment of duty; that one Sri Shajahan would help him to take it from the passengers after clearance and conceal it in the car to be transported to Madurai to hand it over to one Sri Mohan of Salem; that Sri Zahir asked him to accompany the said contraband along with Sri Shajahan and also promised a substantial amount as commission; that accordingly, Sri Shajahan approached him on 16.11.95 and informed that the silver was cleared without payment of duty from Air cargo complex, Trivandrum; that on 21.11.95 car was arranged by Sri Shajahan; that on 21.11.95 Sri Zahir of Dubai also telephoned him to accompany one Abdul Salam and Shajahan who would bring contraband concealed in the car in which he has to accompany them to Madurai for handing over to Mohan of Salem who would wait for them near College House, Madurai; that on reaching Madurai, he should wait near the car and Mohan would approach him; that he was supposed to hand over the contraband and would receive demand draft for Rs. 14.00 Lakhs from him; that as arranged he was waiting near Killipalam bus stop at 20.00 hrs. and the car came at 20.30 hrs. and boarded the car with Sri Shajahan and Abdul Salam in the car and the driver was Sri Sarafuddin; that near Valliyoor at Eruvadi road diversion at about 3.30 hrs. on 22.11.95, the car was intercepted by the Customs & Police officers, who searched and recovered nine silver bars in seven gunny bags kept concealed underneath the front seat of the car before two independent witnesses; that the same was seized by officers and he had no objection for confiscating the said silver to Government; that for the past ten years he was in the business of smuggling of goods of foreign origin and also visited Singapore and Dubai and brought contraband concealed in his baggages; that he was to Singapore during September 1995 and brought goods worth Rs. 1.00 Lakh; that he was helping Sri Zahir and Sri Shajahan etc. for disposing of the non-duty paid silver for the sake of money; that Sri Zahir would pay commission and admitted his offence.
4. In the statement dated 22.11.1995, Sri Shajahan S/o. Mohd. Sadiqu, inter alia, deposed that Sri Zahir was his relative and engaged in the business of export and import in Dubai for the past 12 years; that on 15.11.95 he received a phone call from Sri Zahir that silver bars were being sent concealed in the baggage of two passengers from Dubai to Trivandrum; that said silver were being their unaccompanied baggages and would be cleared without payment of Customs duty through Trivandrum Air-cargo complex; that they would meet him and hand over the same and which would be taken to Madurai along with Sri Jayakumar in a car to sell them to a silver dealer of Salem who would arrive Madurai; that on 16.11.95 two persons met him and handed over the nine silver bars packed in seven gunny bags sent by Sri Zahir and he kept them in his house; that he did not know any details about the said two persons and did not meet them earlier; that he also informed Sri Zahir who in turn asked him to wait for further instructions after arranging the Salem party; that he met Sri Jayakumar on the same day and informed the above-said details to him; that on 21.11.95 as instructed by Sri Zahir over phone, he arranged the car bearing registration No. KL 04, B 2020 belonged to his brother-in-law Sri Hyderali and Sri Sharafuddin was the driver; that the car reached his house at 6.30 P.M. and he asked the driver to have his night meal in a nearby hotel; that when Sri Sarafuddin went for his meal he concealed the seven gunny bags containing the silver bars beneath the front seat of the car; that he also phoned to Sri Jayakumar asked him to wait at Killipalam bus stand at 8.00 P.M.; that he along with another friend Sri Abdul Salam who was just accompanying him from his house at 8.00 P.M. and picked up Sri Jayakumar at 8.30 P.M. from Killipalam bus stand for proceeding to Madurai; that on 22.11.95 in the early hours at 3.30 A.M. the Customs & Police Officers stopped their car at the road junction of Valliyoor and Eruvadi on the National Highway; that they searched in the presence of two independent witnesses and seized the seven gunny bags containing silver bars weighing about 200 kgs.; that when officers asked them for any duty paid receipt or any other document in proof of payment of duty on the silver they replied that they have no such documents; that he knew that Sri Zahir was involved in smuggling through passengers of Beemapalli from Dubai to India; that being his relative and on his assurance of giving a big commission for his service in selling the smuggled silver he agreed to undertake the work; that he had no objection in confiscating the silver under seizure; that the silver under seizure was cleared through Air cargo complex without payment of duty; that this statement was given of his own volition and has been recorded as deposed by him; and that he finally admitted his offence.
The statements of other persons and their reply are as follows (extracted from Order-in-Original).
In his statement dated 22.11.95 Sri Abdul Kalam, S/o. Mohd. Kann inter alia, submitted that he was in Saudi Arabia working as a driver in Municipal office at Al Baha, Saudi Arabia for the last two years; that he came to India on three months leave; that he belonged to Beema Palli and a relative of Shri Shajahan, S/o Mohd. Sadiqu of Beema Palli; that he corroborated the version of others regarding search of the car and seizure of silver by Customs & Police officers at Valliyoor-Eruvadi junction from the car in which he was proceeding to Madurai in the early hours of 22.11.95; that he just accompanied Shri Shajahan to see places and denied his connection whatsover with the case and goods under seizure; that it was unfortunate that he travelled in the car transporting contraband silver and other than this he had no nexus with the silver; and that he may be excused and let off.
5. In his statement dated 22.11.95, Shri. Sarafuddin, inter alia deposed that he was driving car bearing Regn. No. KL 04 B 2020 belonged to Shri Hyder Ali brother-in-law of Shri Shajahan; that he was the driver for the past two years; that owner of the car Shri Hyder Ali was working in Riyadh as a driver and came to his native Beema Palli for leave; that he corroborated the version of others regarding search and seizure of silver from the car; that he did not know whether Shajahan told Hyderali the owner, about the trip to Madurai; and that as he had no connection with the case and he may be excused.
6. In his statement dated 18.12.95, Shri Ali Hyder @ Hyderali owner of the car with Regn. No. KL 04 B 2020 inter alia deposed that the said car was being used by his family and himself; that he also instructed his driver to give the abovesaid car for his relatives and friends whenever they demanded; that Shri Sarafuddin was the driver of the car; that when he was away to Bombay on 21.11.95, he was informed over phone after one week that his car was seized by Customs for smuggling activity and entire things happened without his knowledge; that the silver was kept in the car without the knowledge of his driver when he was away for his meals; that since Shajahan was his brother-in-law driver gave the car to him; that his driver did not know S/Shri Jayakumar and Abdul Salam, who did not tell anything about the concealment of silver in the car to him; that he did not know about the owner of the silver bars and also not the owner of the silver under seizure; that he requested the release of the car.
7. As follow-up action, residential and business premises of Shri B. Mohan @ Katcha Mohan of Shevapet, Salem were searched by the Officers of Customs Preventive Unit, Salem and no contraband or documents were seized.
8. S/Shri Jayakumar, Shajahan, Abdul Salam and M.H. Sarafuddin were arrested on 22.11.95 and remanded injudicial custody on 23.11.95. Later on they were let on conditional bail by Chief Judicial Magistrate, Madurai on furnishing a security bond of Rs. 10,000 each and appear before Judicial Magistrate No. 1 Kuzhithurai on every day evening without fail.
9. The ambassador car bearing Regn. No. KL 04 B 2020 was provisionally released to the owner by Asst. Commr. of Customs and Anti-smuggling, Tuticorin on payment of security deposit of Rs. 50,000 and execution Bond for Rs. 2.5 Lakhs.
10. Based on the above, Show cause notice of even No. dated 14.5.96 was issued from this office, answerable to the undersigned to S/Shri S. Jayakumar, M.S. Shajahan, Abdul Salam, M.H. Sarafuddin, S.R Hyderali and Mohan @ Katcha Mohan as to why the goods under seizure should not be confiscated and why a penalty should not be imposed on them under the relevant provisions of Customs Act, 1962. The Show cause notice was acknowledged by all the noticees. However no reply has been received from Shri Mohan @ Katcha Mohan of Salem. Shri A. Sheik Ahamed, Consultant has filed vakalath on behalf of S/Shri S. Jayakumar, M.S. Shajahan and S.P. Hyderali. Shri M. Vedasingh Advocate has filed vakalath on behalf of S/Shri M.H. Sarafuddin and Abdul Salam.
11. In his reply dated 12.9.96, Shri M.S. Shajahan, inter alia stated that the goods under seizure were duty paid as stated in his retraction sent through Jail Superintendent, Nagarcoil on 10.12.95; that the same may be taken as part of his reply; that his statement dated 22.11.95 was recorded under duress and therefore it should not taken as true; that S/Shri Nazeemudeen and Sulaman from whom he received the silver under seizure were the actual owners; that they have already sent petitions to this office; that the grounds which they have stated to prove the licit nature of the goods may please be considered to decide his case; that no penalty can be imposed on him as the goods were duty paid; that he wanted to cross examine the two mahazar witnesses and requested the release of the silver to him. He also has enclosed copy of his retraction (free translation) dated 10.12.95 sent from Sub-Jail, Nagarcoil in which he stated that he received 200 kgs. duty paid silver from S/Shri Mohd. Ramsan Nazeemudeen and Ahamed Kannu Sulaiman of Beema Palli on 21.11.95 for selling the same; that they have handed over two BRs. bearing No. 0000043 and 0000044 of 21.11.95 alongwith the silver bars; that he took the car belonged to his sister's husband and asked his friend Shri Abdul Salam to accompany him to Madurai for selling the said silver bars; that on their way he met the officer of State Bank at Killipalam bus stop who wanted to go to Tirunelveli and boarded the car; that enroute some police officers stopped the car and questioned; that he explained them that he was going to Madurai for selling duty paid silver bars and showed the Baggage receipts to him; that Police officers brought them to Valliyoor police station where Customs officers came; that he handed over the duty paid receipts to the Customs officers and the details were explained; that Customs officers brought them to their Nagarcoil office and a mahazar was prepared and he was asked to sign; that he was brutally beaten and a statement was also recorded from him; that he was severely warned not to tell anything to Magistrate at the time of remand; that accordingly he did not tell anything at the time of remand and submitted, that the incriminating factors found in his statement dated 22.11.95 will not bind him any way or other persons.
12. In his reply dated 12.9.96, S. Jayakumar inter alia stated that he was not at all on leave for a day from 1.11.95 to 16.11.95 and enclosed a certificate dated 14.2.96 issued from his bank; that no body would be waiting on the road with huge cash at Madurai; that Sri Mohan of Salem was selling silver only on commission basis from which it could be inferred that he would not be in possession of such huge cash before selling silver; that he was attending a Marriage reception on 21.11.95 evening and as such said telephone conversation of him with Zahir could not be a fact; that Zahir of Dubai was a phantom figure created by enquiry officers to satisfy their whims; that regarding the confiscation of goods, he has no objection for contemplated action according to law, as he was not the owner of the goods; that as the charge was not specific and also he has not done any thing wrong, no penalty could be imposed; that there was no independent witnesses for the seizure who signed the mahazar at the Customs office later; that there was no combined force and only Police officers were checking the traffic at the Main Bazaar, Valliyoor on the night at about 00.30 hrs. on 21/22.11.95 when the incident occurred; that after finding the goods in the car Inspector of Police informed the Customs officers over phone and then only Customs officers came there; that though relevant duty paid documents were shown to Customs officers, they effected seizure; that he requested a Personal hearing, cross examination of mahazar witnesses, Inspector of Police and Customs Officers who effected seizure; that he requested the production of General diary of Police Officer, log book of the Customs vehicle and quoted case laws in support of his claim for not imposing penalty on him and enclosed copy of letter issued by his Bank and a Marriage invitation.
13. In his reply dated 11.9.95, Shri S.P. Hyder Ali inter alia submitted that he was the owner of the car and had no knowledge about the transport of contraband goods in the car; that he has not connived with anybody in this case; that the car driver did not know anything until the time the goods were seized at Valliyoor; that the persons who travelled in the car also have not stated in their statements dt. 22.11.95 that either the driver or the owner of the car had any knowledge about the storage or carriage of the goods; that there was no evidence in the show cause notice that goods were being transported with the knowledge of the driver or owner of the car; that he requested a personal hearing before adjudication of the case.
14. Shri Sarafuddin, driver of the car in his reply dated nil, inter alia submitted that in respect of confiscation of the ambassador car bearing Regn. No. KL-04 B 2020, he was merely driver; that no body has given any statement that he had knowledge of smuggling in the said car; that he was not also aware of the goods being transported till it was seized; that nothing incriminating nature was found or seized during the search in his residence; that as the charge was not specific and that he has not committed any offence and also there is no evidence on record against him, proceedings may be dropped; that at the time of seizure there were no witnesses and subsequently they signed later at the Customs office only; that though duty paid documents were shown to Customs officers, even then the goods were seized by them; that regarding the confiscation of the goods under seizure he had no objection for the contemplated action according to law as he was not owner of the goods; that he requested personal hearing and cross-examination of mahazar witnesses and 'officers; and that he requested production of general diary of Police Officer, log book of Customs vehicle at the time of Personal hearing. He has quoted some case laws in support of his claim.
15. In his reply dated nil, Shri Abdul Salam inter alia stated that he had no connection with the case; that he went in the car to see places; that he was neither the owner of the goods nor the car under seizure; that there is no evidence on record to show that he was indulging in smuggling activities; he requested that proceedings against him may be dropped; that he has requested personal hearing and cross-examination of officers, mahazar witnes with request of production of general diary of Police Officer, log book of Customs vehicle. He has also quoted case laws in support of his claim.
16. In their individual representations dated 12.9.96, S/Shri Mohd. Ramsan Nazeemudeen and Ahmed Kannu Sulaiman both of Beema Palli inter alia submitted that they were the owners of 100 kgs. of silver each out of the 200 kgs. of silver under seizure; that the persons who travelled in the car have not claimed ownership of the silver under seizure; that Dept. also has not so far disputed their claim expressed in their petitions dated 4.12.95 and 20.12.95; that they authorised and requested M/s Al Hajjaj Airconditioning Systems Service, Dubai to buy 100 Kgs. of silver each on their behalf that the said 200 kgs. was air freighted by M/s Al Shazara Trading Est., Dubai, a sister, concern of M/s. Al Hajjaj vide on Airway Bill No. 072-32328332 dated 18.11.95 and 072-32328343 dated 18.11.95 (both copy enclosed); that they have also paid dhs 40 towards screening charges (covering two consignments) under Bill No. 164086 dated 18.11.95; that the said consignments of 100 kgs. of silver each was cleared under B.R. No. 43 and 44 dated 21.11.95 through Air cargo complex Trivandrum; that the Customs officers drilled the silver bars to verify whether any gold is concealed in the silver bars as per the existing practice; that tiny holes on the bars and resultant silver dust/granules on account of drilling bear evidence that the said silver bars were in fact subjected to thorough examination by Customs; that they also have contacted on 23.5.96 to intimate them certain additional informations such as identification marks etc. to which the said firm vide their letter dated 10.6.96 sent a letter from which it could be seen that the serial numbers marked on full seized silver bars tally with the numbers found on the silver bars under seizure; that the material particulars like SI. Nos. as appearing on the sized goods and the goods imported by them are same; that they have also lodged petitions on 4.12.95 and 29.12.95 claiming the ownership of the goods under seizure; that as no show cause notice was issued to them within the stipulated period of time would bind the Dept. to release the goods to them as per Section 110(2) of the Act; that they have relied some citations in support of their above claim; that the silver under seizure (as per mahazar) is quite different from the silver received by Shajahan on 15.11.95 (as per his statement); that unaccompanied baggage was normally cleared only after thorough examination by Customs; that no customs officer will dare to allow clearance surreptitiously such heavy quantity of silver because the concerned Airway Bill will definitely describe the contents of silver; that in the present case there was no misdeclaration also no underhand/dishonest dealing at Air cargo complex; that as smuggled silver would bear drilling on each bar whereas in the instant case, all the pieces of silver bear holes which are positive and irrefutable signs indicating Customs examination at Trivandrum Air cargo complex before clearance; that for the reasons stated above, they requested release of the silver under seizure to them and also requested a personal hearing. They also enclosed certain copies of documents including the Baggage receipts.
5. The several submissions made by the counsels on behalf of the appellants have been recorded in paras 17 and 18 of the impugned order. The cross-examination of appellants and Custom officers were also granted, gist of which has been recorded in the order at paragraphs 11 to 21. The appellants had made a fervent appeal to the adjudication officer to permit them to cross-examine the Mahazar witnesses to establish that when the silver were seized the appellants had produced duty paying documents to the officers and the officers had taken the same and refused to record about it in the Mahazar. The authority has not granted the plea to summon the Mahazar witnesses for cross-examining this point and hence one of the grievances before the Tribunal at the time of hearing is violation of principles of natural justice in not granting right of cross-examination of Mahazar witnesses to establish a vital piece of evidence.
6. The main defence taken by the appellants is that the statements were all recorded by the officers themselves and none of the statements is voluntary nor the statements given there were spoken by the occupants of the car. It is their contention that none of the statements corroborate with the various facts on record and they were all recorded at the dead of the night in violation of law. It is their contention that the statement given by the Customs officers and Police officers that the statements were not recorded at that hour but had been recorded subsequently in the afternoon of 22.11.95 is totally incorrect. They have pointed out to several discrepancies in the department's case which totally takes away the department's allegation. It is the appellants' contention that the department's charge was that the seized goods had been cleared through Air Cargo complex without clearance of duty through an unaccompanied baggage. It is their case that if this was the statement given initially by the pre-occupants of the Car, then the department is ought to have examined its veracity. They state that there is no possibility of illicit removal from the Air cargo complex in collusion with the Customs officers or other officers of the Air Cargo complex. There is absolutely no possibility of such an action. It is their case that the seized goods had passed the custom barriers. Customs officers had drilled holes to check about the genuineness of the silver. They had even handed over 250 granules to each which are remnants of boring on the seized silver. It is their case that the seized goods had been brought from abroad by two persons namely Mohd. Ramsan Nazeemudeen and Ahmed Kannu Sulaiman. These two persons were working abroad and had brought the silver alongwith the duly attested documents. It was accompanied by Sales invoice issued by Bin SABT Jewellery, Dubai issued in the name of Al Hajjaj A/C System Services. Al Hajjaj A/C System Services had by their letter dated 10.6.96 to these two appellants had thanked them for their order for purchasing silver and gold bullion from them. They had given a letter to this effect on 10.6.99. Their request for supply to them dated 23.5.96 was also placed on record. The said document had passed through Air Customs, Trivandrum through baggage receipt SBTC 017294 dated 28.11.95. They had produced duty paying challans issued by State Bank of India Exchange Bureau, Trivandrum Airport. Likewise Ahmed Kannu Sulaiman had also produced Air customs baggage receipt SBTC 017204 dated 28.11.95. They had shown from the Air Bill the number of bars and the weight of each bar and are according to them, it tallied with the seized goods. They showed from the Air Way Bill that the telephone numbers of these two persons is 04286921. This telephone number was found in the Air way bills. It was pointed out that Jayakumar could not have given this telephone number in his statement as that of the number of Zahir. This number was introduced by the Customs officers in the statement of Jayakumar. Jayakumar was an employee working as Assistant Head Cashier in State Bank of India, Main Branch, Trivandrum. He was a person of very good status and a law abiding citizen. He has absolutely no involvement in the offence or rime. He was falsely implicated by the officers under torture and threat and statements were prepared on his behalf and signed and taken. He had never indicated his connection with Zahir and about helping Zahir from clearing silver from the unaccompanied baggages from Air-cargo. He had never spoken to Zahir over phone as he never knew the number of Zahir. He was standing at the bus stop as he received a message from his home to rush to his home town. He had also produced evidence for his going to his home town. As there was no bus available he has requested the accompanying car to give him a lift. He had only argued with the officers at the time of interception. As he was innocent, the officers were infuriated against him and they assaulted and tortured him and implicated him. He is being a law abiding citizen and honestly working with the nationalised bank had absolutely no reason to indulge in this activity. The statements of his earlier going to Singapore were all concocted by the Customs officers. They had not produced any corrorboration with regard to his going to Singapore or having brought contraband goods and sold. His passport has not been seized nor entries corroborated by the department. The statement sought to be recorded from him does not corroborate with the statement of the other two occupants.
7. It was pointed out that the statement of Jayakumar indicates that he had given the telephone number of Zahir. It was argued that this telephone number 285921 is the telephone number of not Zahir, but of Al Hajjaj Trading Company who had sold the silver and Shajahan was carrying a visiting card of Al Hajjaj Trading Co. with the telephone number. This telephone number is also found in the Air Bill, therefore Jayakumar could not have given it to Customs officers as that of Zahir and these are all implicated statement by officers after noting the telephone number from the visiting card and connected statements were prepared. But according to his statement he was supposed to have received a telephone call from Zahir and Jayakumar was asked to wait at the bus stop and that a car would come and pick him up. While from the statement of Shajahan, Shajahan got a call from Zahir about the two persons handing over silver in 7 gunny bags and that he had phoned Jayakumar and asked him to wait at Killipalam bus stand at 8 P.M., and that he would pick up Jayakumar at 8.30 P.M. with his friend Abdul Salaam. From these statements it was shown that there was no corroboration and that they were all prepared by the officers on their own at the dead of the night and therefore the statements recorded at that hour were not sustainable in law as they were of not voluntary in nature. They have pointed out that immediately statements were resiled and within the earliest point of time the owners of the 7 silver bars namely Ahmed Kannu Sulaiman and Mohd. Ramsan Nazeemudeen had lodged their claim with the Commissioner with all the documents of licit import and asked them to be examined even before the issue of show cause notice. The claim was lodged on 4.12.95, 29.12.95 and 12.9.96. It was stated that despite this claim being lodged, they have not been examined and their claim adjudicated. Therefore the whole proceedings is not sustainable. It was stated that the owner of the seized goods was bound to have been examined and issued with show cause notice. It was pointed out that the house of Shajahan was searched on 24.11.95 and these two persons came to know about the seizure of the silver bar which were handed over to them by Shajahan and Abdul Salam for the purpose of sale. It was pleaded that the silver was no longer a restricted item and the same was permissible to be imported. The appellants Nazeemudeen and Ahmed Kannu Sulaiman had worked abroad and had brought them in terms of law. They are not required to disclose the source of money for purchasing this item. It was pleaded that Nazeemudeen and Sulaiman have lodged claim of ownership of the seized silver and they were aggrieved parties as their claim not having been examined, were entitled to file the appeal and has established the ownership for return of the seized silver to them. It was argued that the case was made out of vengeance and as the police were checking for LTTE suspects and during that hour the car was stopped and checked. It was pleaded that if the silver was being smuggled, they would have kept it in a secret portion of the car. However, the silver was kept only below the seat for safety purpose. They pointed out that Superintendent Smt. Gladys Lilly in her own statement and cross-examination has clearly admitted that no fresh Mahazar was made for each resiling and recorded statement from Shajahan and statement were recorded from others by Assistant Commissioner in the afternoon of 22.11.95 and she was asked to wait till the arrival of Assistant Commissioner for interrogation of other case. It was pointed out that despite this she has proceeded to interrogate and record the statement on that hour itself. It was panted out that Gladys Lilly, Superintendent has since been suspended for various other allegations of corruption and her statements and cross-examination are not reliable and should not be taken as a gospel truth. It was pointed out that silver seized had been drilled by custom officers and the granules arising from the drilling had also been found. The silver weighed exactly to the weighment indicated in the Airway Bills and letter dated 10.6.96 of Al Hajjaj A/C System Services. A lot of corroborative evidence to show that the seized silver had not been removed from Air cargo without payment of duty but had been brought by the two persons indicated in the statement licitly and paid duty. Even from the alleged prepared statement the two persons who brought the silver were not other than the claimants and the claimants had paid duty and cleared the silver seized from the Airport. The same had been kept both in their houses and later handed over to Abdul Salam and Shajahan for selling on their behalf. It was argued that silver cannot be confiscated under Section 111 as they are not prohibited goods. They are not confiscable goods and hence it was aruged that the same should have released on payment of redemption fine. It was argued that in all cases it is being done by the Customs officers. It was also argued that the penalty has been imposed under Section 111 of the Customs Act. It was pointed out that Section 111 is only enabling provision and nobody can be penalised by imposing fine under this Section and this clearly shows that there are no application of mind while passing the order. It was also argued that the Police diary shows that the seizure was done by the Assistant Commissioner of Customs while the proceedings before the Commissioner it was brought forth that the seizure was done by Ms. Gladys Lilly Superintendent of Central Excise. Therefore, it was very clear that Commissioner's rejection to call for Police diary is totally unjustified and there was a denial of natural justice in not summoning the Police diary as well as the Mahazar witnesses.
8. It was further argued that even the driver as per the statement of Shajahan is innocent and he was not aware of the silver being kept in the car. It was pointed out that the car cannot be confiscated unless it was shown that the car was used intentionally with the knowledge of the driver and owner for the purpose of transporting prohibited illicit goods. It was pointed out that owner of the car was not aware of the car being used as he was in Bombay during that period. The Customs officers have implicated his name in the statement of Shajahan to show that the owner Hyder Ali is the brother-in-law of Shajahan and so the car was used with his knowledge. It was argued that no confiscation of the car could be ordered and penalty should not have been imposed both on the owner of the car as well as on the driver. It was pointed out that no penalty can be imposed on Shajahan as he was transporting licit silver which had been cleared on payment of duty and they had produced the receipts which had been taken by the officers and not recorded the same in the Mahazar statement. They were innocent and no penalty can be imposed.
9. Reliance was placed on the Calcutta High Court judgment rendered in the case of Manindra Chandra Dey v. CEGAT as which laid down the factors which are required to be considered forjudging whether the statements were voluntary in nature or not. One of the factors were that if the statement have been taken under physical torture or under pressure from the officers, then the voluntary nature of the statement is lost. The ju^ment was heavily relied to show that the statements recorded were not voluntary and cannot be relied solely for this purpose in the absence of examination of the truth of other statements. The Customs officers have failed to examine the unaccompanied baggage having been removed without payment of duty. The statements given by claimants and appellants subsequently on producing duty paid documents not having been examined was sufficient to set aside the case.
10. Reliance was placed on the judgment of A.N. Bhat v. CC as where it has been held that the statements had been recorded are in the night or early hours of morning and hence the statements are required to be considered as not involuntary and not to be relied upon, especially when retracted.
11. Reliance was placed on judgment of the Kerala High Court rendered in the case of Mammu and Anr. v. CCE as on the same aspect of the matter.
12. Reliance was made also on the judgment of Shantilal Mehta v. UOI (1982 ELT 1715) wherein it has been held that the seizure is illegal if the same is not returned to the owner.
13. Reliance was also placed on the judgment of Additional Collector of Customs v. Mugal Lines Ltd. as . It was argued that the Commissioner's finding that everyone cannot be accepted as claimant is not a sound proposition in view of the judgment cited by them. It was pointed out that the judgment relied by the Commissioner as is not at all relevant to the facts of the present case. As the claim had been lodged in that case for the first time before the Tribunal while in the present case the claim had been lodged immediately on the seizure of the goods by the persons who had brought and paid duty. The Commissioner's reliance of Sujit Singh v. CCE as reported in 1997 (87) ELT 646(SC) is totally irrelevant to the facts of the present case as the issue was totally different. It was argued that Commissioner's finding that the goods did not have granules but are drilled was totally incorrect with the seized goods which showed it was drilled and granules were present at the time of seizure.
14. Reliance was placed on the judgment of Rambha Jexuellery as wherein it has been held that penalty is not justified when no charge has been made under Section 112 of the Customs Act.
15. Ld. DR took us through the findings of the case and supported the findings given by the Commissioner. He points out that the statements were all voluntary in nature and as statements itself revealed about the goods having been removed from Air complex without payment of duty and as there were no duty paying documents accompanying the goods, therefore the facts and documents at Air Cargo complex was not checked by the Custom officers. This had been explained by Gladys Lilly, Superintendent of Customs & Excise, in her statement. It was pointed out that all the statements revealed the extent of smuggling done. It was also pointed out that Jayakumar had volunteered to go in the car and had full knowledge about the smuggling. Although his house was not searched and passport not seized to show his activity as stated in the statement, yet the statement of Shajahan revealed that Zahir had informed him that Jayakumar will be waiting at the bus stop, therefore Jayakumar's statement was corroborated with the statement of Shajahan. He argued that Commissioner has given sufficient reasons for not giving show cause notice or summoning the claimants namely Ahmed Kannu Sulaiman and Mohd. Ramson Nazeemudeen. He submits that they are unnecessary parties to this litigation. Although Commissioner has given the findings, still their case not having been adjudicated, therefore their appeals cannot be heard as their claims have been rejected by the Commissioner. He submits that non-examination of Mahazar witnesses or non-calling of police diary is justified as they were not required for the case. He submits that appellants have brought a theory of producing duty paid documents only subsequently. He submits that it is a usual defence led by all persons from whom contraband goods are seized and not accompanied by duty paying documents. He submits that the driver and owner were aware of the activity of smuggling as Shajahan in his statement had indicated about the car of his Cousin being used for the purpose, hence penalty is rightly imposed and car rightly confiscated. Hence he sought for confirmation of the order.
16. We have carefully considered the submissions and perused the entire records and the claim of the two persons of the seized silver silver as owners. We have to observe that a faulty or incomplete investigation or an investigation done halfheartedly, without reaching out to complete details may have serious repercussions not only from the Revenue point of view but may also involve innocent victims. Is it sufficient for the investigating officers to be content with the so-called statements given by occupants of a car, on seizure at an hour beyond midnight at 3.30 A.M. and thereafter, can such statements be considered as full, complete and truthful disclosure of all the facts? Does it not require of the investigating team to further verify, check, cross check the statements again and again to arrive at the truth? Undoubtedly, a presumption arises that foreign marked seized contraband goods must be smuggled one. But it is a rebuttable one. The onus is certainly on the person carrying such goods to show that it is a licitly brought one and not smuggled goods. In this case, the appellants strongly denied the goods to be illicit one and have retracted their earlier statements by which they had admitted the same to have been cleared without paying duty from the Air Cargo complex. Law requires that the act of smuggling is required to be proved by the Revenue. When such a heavy onus and burden has been placed on Revenue, it therefore becomes incumbent on the investigating officers to cross check the facts or disclosures made by the occupants of a car, carrying any contraband goods, but not be content with closing the investigation on the recording of the statement furnished at the time of seizure, which is admittedly was made in this case after 3.30 A.M. in the morning. It is on record that the statement were recorded next day and recording went on till 10 RM. in the night and beyond as per the cross-examination of Mrs. Gladys Lilly, Superintendent of Customs. It follows that from the time of seizure at 3.30 hrs. on 22.11.95 the appellants have been in custody of police and Customs official. They continued to be kept awake without rest and according to appellants, however unbelievable it might be, they were tortured and beaten, if not, at least very closely questioned and may be with an element of harassment. The appellant contend that they were in a dazed condition and were kept awake till next night as well and were produced before Magistrate on 23.11.95, when they were remanded to judicial custody. Then there is subsequent retraction statement from jail and disclosing that the seized silver was licitly cleared. It follows that during this period, the statements running into several pages in different languages, which is a free flow, as if one is dictating the events with identical wordings could not have been altogether voluntary. In circumstances like this, law calls for strict proof from Revenue to corroborate the statements with further acceptable cogent and believable evidence. In the present case, no such corroboration has been brought out. The investigation team has not gone further except to raid the house of two persons. The appellant's immediate resilement of statements further claim put forward by two persons namely Ahmed Kannu Sulaiman and Mohd. Ramsan Nazeemudeen, said to be lawful owners of the seized goods who had got cleared this seized silver by paying duty and have filed their claims on 4.12.95, 29.12.95 and 12.9.96 at the earliest point of time claiming to have cleared the same after paying duty under the baggage rules requires consideration. Their evidence and claim has not been checked nor verification of claims examined. They were neither issued with show cause notice nor their claim entertained except for reference by Commissioner in his order and rejecting the same. In terms of Section 124 (a) and 110(2) of Customs Act, the claims of the owners are required to be determined by issue of show cause notice and hearing them before adjudication. Failure to examine their claim, in the light of the appellants' explanation to show cause notice and even prior to issue of show cause notice they had put forth their case by resiling from their recorded statement would be fatal for Revenue's case. The manner in which the investigation team has closed the case and the recorded statements by continuous detention of appellants throughout from 3.30 A.M. of 22.11.95 till they were produced before Magistrate calls for closer scrutiny. The resilements have been done immediately, therefore as per the welliaid down law, the case cannot be concluded merely on the statements, but law calls for corroboration of the statements independently. Hence, we are now required to see the record in detail as to whether the Revenue has corroborated its charges independently and also we have to see as to whether appellants have established their case by credible evidence.
17. The Commissioner has not examined the details of silver noted in Mahazar furnished by the Mahazar witnesses with that of the details on the documents dated 10.6.96 of Al Hajjaj, UAE to the purchaser Shri Ahmed Kannu Sulaiman and Mohd. Ramsan Nazeemudeen who had lodged the claim as owners of the seized silver. On examination of this documents with the details of marking on the seized silver as noted in the Mahazar the numbers and weight tally including the Airway Bill dt. 18.11.95 and its particulars.
18. The Mahazar states that the occupants of the car admitted that they had illicitly recovered the seized silver from the car from Aircargo complex, Trivandrum and that the Customs Preventive party headed by the Superintendent of Customs and Police officials had prior information. It was also recorded in Mahazar that the team had specific information of the same being carried in Ambassador Car No. KL-04 B-2020. A reading of Mahazar discloses that all these information were available before seizure to the team. If this be so, then it is very surprising as to why the team had to post itself at Valliyoor/Eruvadi Diversion point on National High way on 22.11.95 at 3.30 Hours when the goods were said to have been cleared illicitly from Air Cargo Complex, Trivandrum. This version of the investigation is totally unbelievable. If they had such an information, then the team ought to have been posted itself outside the Aircargo office, and apprehended immediately. This would have also resulted in the arrest of so-called Customs officer/officer of Air Cargo complex division said to have colluded with the occupants of the car in taking out the seized goods illegally. There is no credence in the story of Customs investigating team. If any credence is to be given, then it would lead to the conclusion of a serious lapse on the part of the investigating team in not seizing the goods at the time of commission ofioffence at the spot at Air Cargo office itself.
19. The details furnished by the Mahazar witnesses as recorded in the Mahazar were very crucial and important from the Revenue point of view as well as from the appellants point of view. The appellants had a right to cross-examine the Mahazar witnesses to show that the details therein are required tobe contradicted. If Revenue wanted to establish their case of illicit removal from Air Cargo and that the Mahazar witness had been informed prior to seizure about these details, then also the Revenue ought to have produced the Mahazar witnesses for cross-examination. Non-examination of these Mahazar witnesses is fatal to this case. We are quite clear that this has resulted in failure of justice.
20. It was alleged by Revenue that Jayakumar had confessed in his statement recorded on 22.11.95 but on 21.11.95, at about 1730 hours Zahir of Dubai had told him over phone that he had made all arrangements with Shajahan and Abdul Salam to clear the silver from Air cargo, Trivandrum and that he should accompany them to Mr. Mohan of Salem. Mohan will be waiting for him near College house at Madurai etc. and that he should hand over the silver to Mohan and collect Rs. 14 Lakhs by Demand Drafts and it should be encashed and sent to Zahir. All these statements has been resiled by Jayakumar. Mohan's house and shop were raided. A statement of Mohan was also recorded on 25.11.95. Mohan has totally denied of knowing Jayakumar. He has denied dealing with any smuggled silver. He has stated that he sells silver and anklets and he is an I-T assessee. He has also stated that he received phone from Kumar of Trivandrum on 21.11.95 that he has duty paid silver cleared from Customs and he would be selling it on commission. If the statement of Mohan is taken and accepted them it follows that initial statement of Jayakumar is not believable and cannot be relied.
21. Further, Revenue cannot base the case solely on the statement of Jayakumar, Sarafudeen and Abdul Salam, the occuptants of the car. The statements have all been resiled at the earliest point of time. In such circumstances, Revenue has to show corroborative and other circumstantial evidence, which is totally lacking in this case. Instead, the statement, if believed would strengthen the case of appellants themselves, which we would analyse and state as under:
(a) We have already noted that the Mahazar details of seized silver confirm with invoices and particulars recorded in the letter of Al Hajjaj, UAE, giving details of sale of silver to the claimants.
(b) The claimants Abdul Kannu Sulaiman and Mohd. Ramsan Nazeemudeen have furnished details of clearances, Passport details and other details on Air Bill dated 18.11.95. The date of clearance is 21.11.95 and duty paid particulars by Baggage receipt has been produced. Therefore, there is a clear proximity between date of licit clearance of Silver and date of seized silver.
(c) From the recorded statement of Jayakumar, it is stated that he held, a Passport and given its particulars as A 140829 issued by Regional Passport officer, Trichy and being valid upto 2000. It is stated that he was in touch with one Zahir, P.B.No. 1405, Dubai, UAE, Phone: 286921 for the past 2 years. He was helping him in smuggling and sale of silver on commission basis. He was a graduate and working with State Bank of India Main Branch, Trivandrum. It is stated that he is doing business of smuggling of goods from foreign countries for the last 10 years. He had visited Singapore and brought contraband goods concealed in his baggage without payment of Customs duty and sold it in India, he visited Singapore in Sept. 1995 etc.
(d) Jayakumar has resiled from those statements. He has pointed out that the Custom officers have falsely implicated him merely because he argued vehementally with them when they apprehended him in the car. He has explained that he retracted immediately on 4.12.95, when he was brought from custody and produced before Magistrate. He has produced evidence in the form of Certificate dated 14.2.96 from Assistant General Manager, SBI, Trivandrum and stated that he was on duty during 1.11.95 to 16.11.95. This clearly demonstrates that the statement recorded to the effect that he had gone to Singapore during Sept. 95 and brought smuggled goods is totally a concocted story recorded by the Custom officers to suit their whims and fancy, solely to entrap and involve an innocent occupant of the seized car, due to misfortune of his taking a ride, as there were no bus available, on his urgent domestic errand. If the Customs officers were so certain that he was involved in smuggling for 10 long years, while also serving as Assistant Head Cashier at SBI, then a question arises as to why his Passport was not seized, despite its details furnished? Why did not the Customs officers produced the seized passport and confront him to show that he was frequenting to Singapore? The certificate dated 14.2.96 from State Bank of India to show that he was on duty during most of September 95 thereby clearly proving that the statement of Jayakumar of his making trips to Singapore during Sept. 95 is totally unbelievable and uncorroborated.
(e) Further, Jayakumar is supposed to have given telephone number 286921 and Zahir's address P.B. No. 1405. It has been shown that Phone Number tallies with telephone number of Mohd. Ramsan Nazeemudeen and Ahmed Kannu Sulaiman on Airway Bill of Gulf Air. It was explained by Advocates that occupants of the car, Sarafudeen had carried a visiting card of Mohd. Ramsan Nazeemudeen, which had his telephone No. and the Customs officers have built up a story of Jayakumar furnishing this telephone number. This explanation is acceptable, as telephone number on Air Bill tallies with the alleged telephone number of Zahir given by Jayakumar in his statement. Therefore, on a clear appreciation of the pleas of Jayakumar the irrevokable conclusion which arises is that he is totally innocent. Merely because he was found in the car and on the basis of his incidentally knowing the occupant of the car, namely Shajahan, due to Shajahan's frequenting to Bank Office, the Customs officers cannot disbelieve his innocence. Jayakumar has further pointed out that as per the recorded statement, he was to contact Mohan and sell the silver and receive the DD, encash it and send it to Zahir. Mohan on being questioned has totally denied knowing Jayakumar and nothing incriminating was found on search from the shop and house of Mohan. Therefore, this portion of statement that Jayakumar was to deal with the money is not believable. As the recorded statement has been retracted and even as per the said statement there is no credence or corroboration forthcoming from Revenue. Therefore, the subsequent explanations and statement of Jayakumar being an innocent Bank Asstt. Head Cashier, is required to be accepted. Further, he has proved about having performed bank duty during Sept. 95 and no evidence of his going to Singapore is produced by Revenue. The Ld. Commissioner has failed to examine the evidence on record to exonerate Jayakumar. The charges against Jayakumar fails and his appeal is allowed with consequential benefits.
22. As regards the charge on the Driver of the seized car, the driver Shri Sharafudeen, it has been brought out in the statement of the occupant Shajahan that the silver was kept in the car below the front seat when the driver Sarafudeen had gone to take his meals. From the statement of Mr. Shajahan it is seen that he had kept the concealed silver bar below the front seat of the car when the driver had gone to a nearby hotel to take his meal. In order to impose penalty on the driver and owner of the seized car which is used as a taxi, it has to be shown that the driver and the owner had full knowledge of the goods being smuggled in their car. The driver on being examined by the Customs officers denied having knowledge of the Silver being kept. He has stated that he had left the car and gone to take meals to the hotel at 8 P.M. when Shajahan was in the car. He had mentioned that Shajahan had told him to pick up one person which he had done. It has not been shown from both the statements of the driver Sarafudeen and the occupant Shajahan who was carrying the silver with the aid of driver had full knowledge of the silver having been kept in the car and the same was being taken. Even in his statement it is recorded that he came to know about the silver bars in the car only when the car was stopped at 3.30 A.M. by the officials and searched and the silver was seized. He has stated only at that point Shajahan told him of having concealed the silver bar in the car when it been parked near his house and when he had gone for taking the meals in the hotel. Therefore, it is clear from these statements that the driver of the car as well as the owner were not aware of the silver being smuggled in their car. The owner of the car Hyder Ali was also examined and statements recorded on 18.12.95. He has stated that the car was being used by himself and his family and he had instructed the driver to give the car to any relatives or friends when they request for the same and when he is not in home town. He had stated that he had gone to Bombay during the period when the car was seized and he had no knowledge of the Silver bar having been concealed and his car being used for removing the silver. Therefore, from these statements it is very clear that the owner and driver of the car were not aware of the car being used for concealing the silver and removing the same. It is now held that if the owner and driver of the vehicle are not aware of concealment of any illicit goods, then they cannot be charged and the vehicle cannot be seized. This is the view expressed by the Tribunal in the case of Heena Chem and Others v. CC, Lucknow as reported in 1999 (34) RLT 775. On the basis of such findings, the Tribunal has set aside the confiscation order of the truck as well as penalty on the transporter and driver. This judgment is based on the earlier judgment of the Tribunal rendered in the case of Vijayakumar v. CC as and also another order of theTribunal in the case of Best & Toys Manufacturing Co. by final order No. A1061 / 98 NB dated 8.10.98. The Tribunal judgments are all based on earlier settled law on this aspect of the matter. As the evidence is clear about the driver and the owner not having knowledge of concealment of seized silver in the car, therefore, the order passed by the Commissioner ordering for confiscation of the car and granting release on fine and imposition of penalty on the driver and the owner of the car is required to be set aside by following the ratio of the judgment cited.
23. However, we notice from the impugned order that the Commissioner has exonerated Abdul Salam and Mohan by accepting the plea of Abdul Salam that he was only accompanying Shajahan to see places at Madurai. There is no corroboration of any of the aspect of the seizure from the statement of Abdul Salam dated 22.11.95. Abdul Salam had stated that he was working as a driver in Municipal office at Al Baha, Saudi Arabia for the last 2 years and he had come to India on 3 months leave; that he belonged to Beemapalli and a relative of Shajahan. He had stated that he was accompanying Shajahan to see places and denied any connection with the seized goods. This statement has been accepted by the Commissioner and he has been exonerated including B. Mohan.
24. We have to now see as to whether any case has been made out against Shajahan for imposing penalty and as to whether the seized goods were illicit removal from the Air Cargo office. We have already adverted to this aspect and held that the Customs officers have not proved the removal of the seized silver from Air Cargo office illicitly. We have also noted that it is difficult to believe the version of Custom officers on this aspect for the reason that as per the Mahazar report and the allegation in show cause notice, the Custom officers are supposed to have prior information of illicit removal from Air Cargo office. If this was the truth, then there is serious laches on the part of the Custom officers who have allowed the removal and being carried in the seized car for a long distance. The police officers have stopped the car as per the Mahazar statement along with the Custom officials. The appellants have shown from the statement in cross-examination of Ms. Gladys Lilly, Superintendent of Customs Preventive Unit, Nagercoil that she received a phone call at 00.15 hrs. from the Inspector of Police that a vehicle was to pass Valliyoor with contraband silver hidden at the front seat of the Ambassador car. She had stated that she had gone with two Inspectors Shri Ravi and Shri Natarajan and 5 or 6 Sepoys. If this statement of Smt. Gladys Lilly, Supdt. is accepted, then it follows that the statement recorded in the Mahazar and show cause notice that Custom officers had prior information of removal from the Air Cargo office is totally a concocted story, unfortunately made by the Custom officers, which in our opinion, should never have happened. The proceedings before the Custom officers are quasi-judicial and every steps should be taken to gather the correct facts. If the statement of Ms. Glayds Lilly, Supdt. who seized the goods is taken, then it follows that Custom officers had absolutely no knowledge of the car passing Valliyoor at that hour and it was the Police who had the information who stopped the car. Therefore, regretfully we note that there are large number of lapses on the part of the Custom officers in the investigation of the case and building up the case against these appellants.
25. The appellants' case is that the seized goods were licitly imported and at the time of seizure they had produced to the seizing officers all the relevant documents and these officers had taken the same but not recorded about it.They have stated that they are compelled to take copies from the department and produced the same to establish their case .The claimant Ahmed Kannu Sulaiman and Mohd. Ramsan Nazeemudeen had produced all the licit evidences and both the persons are related to Shajahan as per the statements given by them. Shajahan's house was searched and no incriminating things were found. Shajahan has resiled from the initial statement given by him. We have found already that the statement from Jayakumar has not corroborated and there are a lot of contradictions and statements therein are not acceptable for the reasons already recorded. We have to now see as to whether the Revenue case can be accepted on the mere statement of Shajahan. Shajahan in his statement has stated that he had concealed the silver when the driver had gone for taking his meals. He has stated that Zahir of Dubai was his relative. He had telephoned him through public booth on 15.11.95 and informed him about silver bars concealed in the bagage of two passengers travelling from Dubai to Trivandrum will be cleared without payment of duty as unaccompanied baggage to Air Cargo Complex. The said two passengers met him and handed over the silver bars. He has concealed the same and contacted Jayakumar in terms of information given by Zahir and Jayakumar accompanied him in the car. However, the car was seized on the highway by the Police officers and a group of Customs officers and goods were seized. We have already noted that this statement of Shajahan that seized silver was being removed illicitly from the Air Cargo Complex cannot be believed. The Customs officers ought to have taken the details from Shajahan as to who the two persons were who removed the silver from the Air Cargo Complex. They ought to have further investigated the matter and brought to book these two passengers and the Customs officers who helped in removal of the silver from the Air Cargo Complex. As there could not have been such a removal from Air Cargo Complex, therefore the seized silver was not illicitly removal from the Air Cargo complex. If according to Customs the seized silver were illicitly removed from Air Cargo complex, then the seized silver will not have borings which are done by the Customs officers at the time of clearing.The Mahazar report disclosed that the silver had undergone scrutiny by the Custom officers and it was also having borings. The Mahazar also revealed the numbers and other details on the seized silver which tallied with the documents produced by the two owners of the silver who cleared the same on 18.11.95 on payment of duty. Therefore, the case built up on this statement of Shajahan is totally unbelievable and appears to have been concocted by the Customs officers. Mrs. Gladys Lilly has clearly admitted that she had no prior information and it was the Police who informed her about the car likely to pass on the highway. This statement of Gladys Lilly, Superintendent who investigated the matter cannot be incorrect statement or a statement made to help the appellants. If this statement is believed, then the very allegation of the department that the seized silver was illicitly removed from Air Cargo Complex is as held earlier a concocted story which could not be believed. Therefore, it follows that the statement of Shajahan during the period in custody is not a voluntary statement and it lacks credibility and corroboration. Therefore, we have to proceed on other substantial corroborative evidence. There is no corroborative evidence in the case. The Commissioner has not appreciated the evidence or examined the aspect in the right perspective and has based his conclusions merely on the statements without any application of mind. The Commissioner was also totally unjustified in rejecting the claims of the two persons namely Ahmed Kannu Sulaiman and Mohd. Ramsan Nazeemudeen in the impugned order. The claim having been filed at the earliest point of time and reminder were also sent with proof. The same has been rejected without proper reasons. We also notice that under Section 125 of the Customs Act only prohibited goods can be absolutely seized. The Section laids down that all other goods which are not prohibited ones shall be granted redemption on payment of fine. In this case, admittedly Silver is not a notified prohibited goods. Silver can be imported on payment of duty. Therefore, the order of absolute confiscation of silver is required to be set aside. As we have held that the statement recorded from Shajahan is not corroborative and not voluntary, therefore his subsequent explanation that the seized silver was licitly imported on payment of duty under Baggage rules and under Airway Bills under proper documents was required to have been examined. The same has not been examined. There is sufficient corroboration with regard to the weight particulars and the numbers given on the Air Way Bill and letter of Al Hajjaj dated 10.6.96 with the particulars given in the Mahazar. Therefore, we hold that the imposition of Penalty on Shajahan is required to be set aside in view of his having produced sufficient evidence and no proof of his removal of seized silver illicitly from the Air Cargo complex has been brought forth by the Revenue. Hence the absolute confiscation of the Silver is also set aside. The claim of the two persons Ahmed Kannu Sulaiman and Mohd.Ramsan Nazeemudeen has been rejected by the Commissioner without granting any personal hearing. Their claim as owners of the seized goods ought to have been granted in terms of Section 124 of the Act which states that no order confiscating any goods or imposing any penalty on any persons shall be made unless the owner of the goods or such persons is given a notice in writing informing him on the grounds on which it is proposed to fix the case or to impose penalty; (b) has they given an opportunity of making a representation in writing & (c) given a reasonable opportunity of being heard. In the impugned order the Commissioner has noted their claims put forward by them, but no hearing has been given or their claim has been accepted. There is a clear violation of provision of Section 124. Both the claimants had filed their claim at the earliest opportunity with evidence. Shajahan had also in his explanation and subsequent retraction placed the evidence and stated that the seized silver were cleared licitly by these two persons. These two claimants filed their claims even prior to other issue of show cause notice and when the investigation was still continuing. The Department ought to have examined their claim and issued show cause notice also to these claimants. Therefore, there is a clear violation of Section 124. Hence, the confiscation of silver on this ground is also set aside and the matter is remanded to Commissioner to examine the claim of Ahmed Kannu Sulaiman and Mohd. Ramsan Nazeemudeen in terms of the documents and the particulars already noted in the Mahazar and consider their request for release after due hearing of these two appellants and their establishing the claim. To sum up, we order as follows:-
(1) The appeal of Shri Jayakumar is allowed and the charges and penalty against him set aside;
(2) The appeal of Shri S.P. Hyder Ali, owner of the vehicle is allowed and the confiscation etc. thereof is set aside as also the Penalty on him;
(3) The charges & penalty on driver Shri Sharafuddin is set aside;
(4) The charges and penalty on Shri Shajahan is set aside;
(5) The order confiscating absolutely the Silver is set aside and it is remanded for de-novo consideration with above directions, and (6) The imposition of Penalty of Rs. 2,00,000 on Shri Zahir was not considered by us as he is not in appeal before us.
The appeals are allowed on the above terms.