Customs, Excise and Gold Tribunal - Hyderabad
Kirit Parekh And Anr. vs Cce And C on 25 June, 2001
Equivalent citations: 2001(99)ECR171(TRI.-HYDERABAD)
ORDER S.L. Peeran, Member (J)
1. These two appeals arise from the Order-in-Original No. Cus. 10/96 dated 12.12.1996 passed by the Commissioner, Central Excise, Hyderabad imposing penalty on the appellants under Section 112(b) of the Customs Act, 1962 of Rs. 7.5 lakhs each. Separate penalties have been imposed on other appellants whose appeals are not listed before us. The findings against these two persons recorded in para 18 of the impugned order are extracted below:
18. Now, I take up the proceedings against both S/Shri Kirit and Pankaj who were partners of M/s. Swastik Refinery at the relevant time. The statements dated 29.8.1992 given by both the above Noticees were retracted by them vide their letters both dated 18.9.1992 addressed to the Collector of Customs, Basheerbagh, Hyderabad which were received in the Collectorate on 5.10.1992. Their replies both dated 19.7.1993 are identical and do not say anything special except stating that they were not in any way concerned with the silver smuggling and their statements were taken by coercion and also there is one more panchanama under which their names were not found. I have considered their arguments carefully. The accused were presented before the Hon'ble Special Judge for Economic Offences Court in the afternoon of 29.8.1992 and in such a fashion an opportunity was given to them. But, they did not retract their statements before the Hon'ble Judge. Their explanation of threat of being detained under COFEPOSA was untenable inasmuch 264 as there was every scope for them to be not detained in COFEPOSA had they made clear to the Hon'ble Judge about the recording of the statements by coersion and thereof. Hence, I take their retractions as after thought. Even their spouses gave the telegrams on only 1st September, 1992 even though there is every opportunity for them on 29th, 30th and 31st itself. The telegraph office works on holidays also. Now, coming to the Mahazar said to have been drafted first I do not accept their arguments because it was not signed by any of the departmental officers and it perhaps was prepared by the alleged accused to side track the issue. Shri Tippu gave a clear picture in his statements dated 17.9.1992 and 18.9.1992 about the modus operandi. The statements also clearly state that on earlier occasions also the silver was transported arid melted in the premises of Swastik Refinery. Though their learned Advocate argued that the statement of Shri Vishan Singh was taken under coersion and threat there was no such re-traction from Shri Tippu on record. He did not even submit his reply and did not defend himself even during the course of personal hearing before me. All the time the learned Advocate expressed doubts about the genuineness of the Panchanama. It is significant to note that the panch witnesses deposed during the course of cross-examination that it was signed afterwards inasmuch as though they said that the same was brought to the notice of the authorities after a lapse of two days nothing is available on record nor could they produce any evidence. In view of the above finding, I hold that the statements given by S/Shri Kirit and Pankaj are true and correct and as such it must be held that they were concerned with storing, transporting and dealing of the illegally imported silver bars in question. By the said acts they made themselves liable for penal action under Section 112(b) of the Customs Act, 1962.
2. The allegation against these two appellants are that they are owners of Silver Refinery and that they had received for melting purpose 23 numbers of silver bars of foreign origin. Kirith Parekh who is the Managing Partner of the firm in his statement dated 29.8.1992 before the Assistant Director, DRI stated that these contraband silver bars were received by him at 7.30 AM in two jeeps and delivered for the purpose of melting. He received a call from Tippu's wife requesting him to keep the contraband silver bars for melting purpose. She also stated that these were as per Tippu's instructions. However, he was not prepared to melt the same and requested her to take back the silver bars over telephone No. 523516 and accordingly, 10 silver bars were transported to the residence of Pawan Kumar Sugandh between 8 AM and 11AM on 28.8.1992. But that time the officials reached his refinery and carried out search and seized the silver bars.
3. In his statement the other partner of the firm, Pankaj B. Parekh, stated that he is a sleeping partner and he was not directly dealing with the business and that he was not fully aware of the day to day business. He further stated that on 28.8.1992 at about 7.30 AM two jeeps came and delivered 23 silver bars to the Swastik Refinery and that his Cousin Kirith Parekh is supervising the Refinery. He was incidentally present in the Refinery and his cousin told him to remove the contraband silver bars and transport the same to the residence of Pawan Kumar and in the mean while officials came and seized the goods. It was alleged that these two persons had abetted in the removal of these 23 contraband silver bars and amounts other persons a case has been made out against them as also including on Vishan Singh alias Tippu Soni. Tippu Soni has not appeared for cross examination as requested by the appellants nor has he filed reply to the show cause notice. It appears that he has not filed any appeal before the Tribunal. In his statement before the Investigating Officers on he stated that he came to know about the seizure of contraband silver on the evening itself through his wife at about 7 PM, that he received a phone call from Gwalior on 27.8.1992 in the late night at about 11 PM that his brother-in-law BD Verma expired in Gwalior and hence, he left by the early morning flight to Delhi and from there to Gwalior on 28.8.1992, that though he was from Hyderabad, he was continuously keeping contact over phone with his wife at their residence and knowing the development at Hydrabad and after knowing about the seizure of 23 silver bars at Hyderabad, he was terribly afraid of coming back to Hyderabad, as he thought that he may be arrested by DRI officers and so he did not come to Hyderabad, from Gwalior and he went to Jaipur and from there he went to Bombay and from Bombay he reached Bangalore on 16.9.1992 and he was traced by the officers on 17.9.1992 and was served with summons. The findings of the Commissioner against these persons are extracted above, (para 1)
4. The learned Counsel for the appellants submitted as follows:
(a) The Department has not discharged the burden of proof that the seized silver bars have been brought illicitly and the silver bars bear foreign markings, for the purpose of making out a case against the appellants, under the Customs Act, 1962.
(b) There was no admission made by the appellants that the silver bars were of foreign origin nor were they involved in transport or purchase of silver or smuggling of silver. In fact Kirit Parekh had clearly told the officers that he informed Tippu's wife his unwillingness to melt the silver and to have the silver bars removed. Thirteen silver bars were being removed from Parekh's residence and in the mean time the officials raided their premises. There was no incriminating evidence against the appellants. There is no findings by the Commissioner that the assayer's evidence is against the appellants to prove the foreign origin of the silver bars. The silver bars did not bear any foreign markings.
5. The learned Counsel also relied upon the acquittal given by the Economic Offence Court in the present case. The said judgement of the Economic Offence Court, Hyderabad was given on March 2, 2001 in CC No. 22 of 1997. He took us through the various portions of the judgement of the learned Special Judge and his finding that the Prosecutor i.e. the Department has not discharged the burden of proof that the seized silver bars were of foreign origin and brought to the country illicitly, as per the finding in para 13 of the judgement. The learned Counsel also referred to the findings by the learned Special Judge in the same para at page 19 wherein it is recorded that the official witness stated that the words J.T.M. was itself disclosed that silver bars do not contain the foreign country. The learned Judge also accepted the evidence produced by the accused to show that silver with purity of 999 and weight of 32 to 37 kgs is manufactured at Hydrabad and exported the same to Switzerland that to M/s. Credit Suisser by Airway Bill. The learned Judge after a detailed analysis of the evidence available on record has come to a clear cut finding that the seized silver bars were not of foreign origin and smuggled into the country and the Department has not proved the charge.
6. The learned Counsel submitted that in a similar case the Tribunal have accepted the judgement of the Special Judge of Economic Offences and acquitted the person involved in that case under the same Act. In support of this submission, he relied upon the judgement of the Tribunal in the case of Tulsidas V. Patel v. CC, Bombay which has relied upon a large number of earlier judgements including the judgement of the Madras High Court. He also referred to Final Order No. 2647 & 2648/98 dated 24.12.1998 of this Tribunal wherein the Tribunal has accepted the acquittal order passed by the Special Judge, Economic Crimes at Hyderabad on similar charge on the same evidence. The learned Counsel submits that there is no evidence on record to prove the allegation against the appellants and therefore, seeks for setting aside the charge against the appellants and also imposition of penalty on them.
7. The learned SDR relied upon the extracted para above and contends that the proceedings before the Commissioner and the Tribunal are independent in nature and this Tribunal can independently come to a conclusion by separate findings as the present penal proceedings are different in nature. He submits that Kirit Parekh has clearly admitted in his statement that they were dealing with contraband silver bars and had asked Tippu's wife to take back the same. In his statement he clearly admitted there were foreign markings. He has not resiled or retracted from the statement and the statement cannot be taken lightly and the burden of proof has shifted to the person to show that he was not involved in the offence. This burden that the silver bars are not illicitly brought into the country has not been discharged by them. Therefore, he submits that involvement of the accused in the smuggling activity has been clearly brought forth by the Department. Therefore, imposition of penalty is justified and is required to be confirmed. As regards the judgement cited by the Counsel for the appellants, he submits that they are distinguishable as they are on different facts and circumstances and there are no admission in those cases.
8. On consideration of the submissions we have to see at the first instance as to whether the seized silver bars are of foreign origin and whether it had foreign markings? The statement of the witnesses and the mahazar which has been drawn by the Department does not disclose any foreign marking or country of origin of the silver bars in question except some numbers which were found on the seized silver. The Govt. witnesses who seized the silver bars disclosed before the Special Judge, Economic Offences that the numbers by itself does not lead to any conclusion that the silver bars were of foreign origin. There is no document to show that these silver bars were of foreign origin and the mahazar report does not make any mention of foreign origin of the silver. The assayer who examined the silver bars has also not stated that the seized silver had any foreign markings. There is no finding in this regard by the Commissioner. Even independently considering the assayer's statement, we are of the considered opinion that the assayer has not stated about the foreign origin of the silver bars and the country to which they belong. The learned Special judge has in his findings recorded that silver with purity of 999 and weight of 32 to 38 kg bars is manufactured at Hyderabad and exported. In the present case, the assayer has only stated about the purity of the silver and this itself cannot be a ground to consider that the silver bars are of foreign origin. Kirit Parekh and Pankaj Parekh who are partners of the refinery have clearly disowned the silver sent by Tippu 's wife and returned it. Vishan Singh alias Tippu in his statement has clearly stated that he had gone to Gwalior because of the death of this brother in law. He has stated that he was in touch with his wife, after coming to know of the seizure of the silver bars in question, he was terribly afraid of coming back to Hyderabad and he was traced by the Officers on 17.9.1992 and was served with summons. There is nothing in his statement of foreign origin of the seized silver. Therefore, we do not see any thing from his statement that he purchased silver from any foreign source. Although he has stated that the silver is of foreign origin, he has stated that he has purchased it from Dilip. Investigating Officers have not examined the said Dilip to establish the foreign origin of the silver, by further investigating in the matter to discharge their burden of proof. There is nothing on record to show that the seized silver bore foreign markings as already noted supra. Evidence of the Revenue and the Investigating officers have been scrutinized by the learned Special Judge and a detailed judgement has been rendered with a clear cut finding that the Department has not discharged the burden that the seized silver is of foreign origin. The order of acquittal is in clear terms as can be seen from the findings recorded by the learned Special Judge. The Tribunal has given credence and has been accepting the judgements given by Special Judge on similar evidence and on the same charge as can be seen from the Final Order No. 2647 & 264" 98 dated 24.12.1998 in the case of Chanda Parameswar v. CCE, Hyderabad. The test Regional Bench Bombay, of the Tribunal also in the case of Tulsidas V. Patel v. CC, Mumbai while dealing with an identical matter has held that same evidence examined by the Trial court and the Trial court having exonerated the appellant substantially on evidence, such findings of the Trial court cannot be ignored by the Tribunal. In that case, the Tribunal also relied upon large number of earlier judgements including the judgement of the Madras High Court and have dropped the proceedings. We are of the considered opinion that in the present case there is no evidence to show the complicity of the appellants in furtherance of the act of smuggling and in abetting or helping Tippu in the activity of smuggling of silver. The statement of Kirit Parekh clearly shows that he has refused to accept the silver sent by Tippu's wife and sent back 13 silver bars and in the mean time the officers had visited their premises and effected the seizure. The other appellant has also refused to accept the silver in the Refinery sent for the purpose of melting. Therefore, we are satisfied that the judgement of the learned Special Judge, Economic Offence Court ordering acquittal of the appellants vide his order dated 2nd March 2001 has a bearing in the present case and we accept his findings for the purpose of recording an independent order. Taking into consideration the overall facts and circumstances of the case, we are satisfied that the Revenue has not discharged its burden to show that the silver under seizure was of foreign origin and the appellants were involved in the act of smuggling. For that reason, the imposition of penalty on both the appellants is set aside and their appeals allowed with consequential relief if any as per law.
(Dictated and pronounced in open Court).