Delhi High Court
Sudhir Sharma vs The Commissioner Of Customs on 27 February, 2015
Author: S.Ravindra Bhat
Bench: S. Ravindra Bhat, Vipin Sanghi
$~28 to 35
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 15.09.2014
Pronounced on: 27.02.2015
+ CUS.A.A.29/2011, C.M. APPL.11198/2011
SUDHIR SHARMA ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.32/2011, C.M. APPL.13036/2011
R.N. ZUTSHI ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.33/2011, C.M. APPL.13070/2011
AJAY YADAV ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.34/2011, C.M. APPL.14101/2011
YASH PAL ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.35/2011, C.M. APPL.14197/2011
V.K. KHURANA ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.36/2011, C.M. APPL.14199/2011
T.R.K. REDDY ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.37/2011, C.M. APPL.14201/2011
PRADEEP RANA ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
CUS.A.A.29/11 and connected matters Page 1
+ CUS.A.A.38/2011, C.M. APPL.14913/2011
ANIL MADAN ....Appellant
versus
UNION OF INDIA AND ANOTHER ..... Respondents
Through: : Sh. Ashok Bhan, Sr. Advocate with Ms.
Prem Lata Bansal, Sr. Advocate, Sh. Arindam
Mukherjee and Sh. Sumit. K. Batra, Advocates, for
petitioners in Item Nos. 28 to 30.
Sh. Sunil Kumar, Sh. Prem Ranjan Kumar and Sh.
Sumit Purohit, Advocates, in Item Nos. 31, 32 and
35.
Sh. Rahul Kaushik and Ms. Bhuvneshwari Pathak,
Advocates, for CBEC.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE VIPIN SANGHI
MR. JUSTICE S. RAVINDRA BHAT
%
1. These appeals have been preferred against a common order
of the Customs, Excise and Service Tax Appellate Tribunal
(hereafter "CESTAT") dated 25.01.2011. The impugned order had
dealt with a batch of 35 appeals - some of them dealt with the
present appellants. The appellants are hereafter referred to by their
names for the sake of convenience. The appeals had arisen out of
common adjudication order dated 01.10.2007 by the Commissioner
of Customs (hereafter referred to as the "Commissioner").
2. The following questions of law are sought to be urged by the
appellants:
(a) Whether the findings in the impugned order with regard to
CUS.A.A.29/11 and connected matters Page 2
abetment by the appellants are justified in law;
(b) Did the CESTAT fall into an error of law in upholding the
findings based on denial of natural justice, especially the refusal to
grant cross-examination to the appellants;
(c) Whether the findings based upon mobile phone records and
confessional statements of some individuals, notably the
co-noticees, is sustainable in law, in the circumstances of the case,
in the absence of any other corroborative material;
(d) Did the CESTAT err in its findings regarding the method
adopted in arriving at the average weight to assess liability, and the
absence of essential documents like the passenger declarations.
Facts of the case:
3. On 28.08.2000, a foreign national Olga Kozireva tried to illegally import and smuggle into India, a quantity of 81160 yards (74212 meters) of silk textiles without declaring them, as was required of her under Section 77 of the Customs Act, 1962 (hereafter called the "Act"). She had landed at the Indira Gandhi International Airport (IGIA) after travelling on a Kyrgyzstan Airlines flight. This incident led to investigations. Olga Kozireva was detained and subsequently, her statement was recorded under Section 108 of the Customs Act. This led to further investigations during the course of which Abdul Qahar, an Afghan national, several others as well as employees of Kyrgyzstan Airlines were asked to reply to Show Cause Notices (SCNs). The SCNs were issued to one Dil Agha, Mamoor Khan, Sanaf Sana, Naseem, V.K. Khurana and Nazira. Abdul Qahar, the Afghan national, in his statement dated 30.11.2000, confirmed to knowing Olga Kozireva;
CUS.A.A.29/11 and connected matters Page 3 he identified her. He confirmed that she had, on previous occasions, exported goods of Chinese origin to him. He also revealed the mobile telephone numbers of certain individuals.
4. On the basis of statements of several individuals (notably Dil Agha, Olga, Sandeep Bhatia (dated 13-12-2000) Virender Sehrawat (dated 08-01-2001) and Ajay Sharma (dated 23.12.2000), all security representatives of United Airlines India) - including those of the appellants, the investigations by the Department of Revenue Intelligence (DRI) found that between 24.07.1997 and 24.08.2000, Olga Kozireva had travelled in and out of India on 24 occasions. Out of these, on 19 occasions, she was cleared through "Red Channel" and allowed to proceed after spot adjudication and payment of redemption fine and duty. On the other five instances, she walked through the "Green Channel". Besides the statement of Olga Kozireva, those of R.N. Zutshi, one of the appellants, was recorded. This statement of R.N. Zutshi mentioned the role of the other appellants, i.e. Ajay Yadav, Yashpal, V.K. Khurana, T.K.R. Reddy, Pradeep Rana and Anil Madan. In addition, Dil Agha's statement was recorded on 11.07.2001, which also sought to implicate R.N. Zutshi, V.K. Khurana, T.K.R. Reddy and Pradeep Rana.
5. On 23.08.2001, the Commissioner issued SCNs to all individuals, including the present appellants- who were working as officers in various capacities in the Customs Department. The allegations against the appellants inter alia centred around their complicity in the smuggling of huge quantities of silk textiles on 24 occasions. Based upon the quantity sought to be smuggled into CUS.A.A.29/11 and connected matters Page 4 India, on 28.08.2000 by Olga, the Commissioner deduced, on the basis of an averaging exercise, that the unseized extent of silk textiles was to the tune of 4,21,245 metres, which would have weighed 26,485 kgs and that the Customs Duty evaded was to the extent of `1,75,78,322/-. The SCN relied upon the following table, which spelt out such details - the table is extracted below:
"175. The quantity of silk textiles imported computed on the above basis vis a vis the quantity of textiles assessed on relevant dates prior to 28.8.2000, showed that substantial silk textiles escaped assessment resulting in the evasion of customs duty. The details are presented below:
Date Wt. in Mtr. Mtr Unasses Value of Custo Person who Kg of of sed mtr unassess ms evaded duty silk textile of silk ed mtr duty textile assess textiles of silk evade impor ed textiles d ted A B C D E F G H (impu Bx As C-D in Ex 61.2 ted on 17.62 per mtrs Rs.68 % of 5 recor in Rs. F in dates) d Rs.
availa ble 1 17.1 757 13338 2000 11338 771007 51965 OK, NI, SK 2.98 .34 9 2 17.9 258 4545. 0 4546 309125 18918 OK .99 96 5 3 1 / 1264 22271 0 22272 1514474 92685 SK 2.2. .68 8 00 4 27.2 1530 26958 800 26159 1778783 10886 OK, SK .00 .60 16 5 10.4 1220 21496 800 20696 1407353 86130 SA .00 .40 1 6 17.4 135 2378. 250 2129 144752 88588 OK .00 70 CUS.A.A.29/11 and connected matters Page 5 7a 23.4 197 3471. 425 3046 207138 12676 OK .00 14 8 7b 23.4 163 2872. 400 2472 168100 10287 NI .00 06 7 7c 23.4 225 3964. 400 3565 242386 14834 SA .00 50 0 8a 8.5. 520 9162. 3100 6062 412243 25229 OK 00 40 3 8b 8.5. 520 9162. 3100 6062 412243 25229 IKM 00 40 3 9 15.5 1500 26430 800 25630 1742840 10666 SA .00 .00 18 10 22.5 1220 21496 3200 18296 1244155 76142 OK, NI, SA .00 .40 3 11 12.6 2000 35240 4400 30840 2097120 12834 OK, V .00 .00 37 12 1.7. 590 10395 2176 8220 558946 34207 OK 00 .80 5 13 3 / 820 14448 0 14448 982491 60128 OK 4.7. .40 5 00 14 10.7 1220 21496 0 21496 1461755 89459 OK .00 ..40 4 15 17.7 2364 41653 9000 32654 2220450 13589 NI .00 .68 16 16 24.7 1500 26430 800 25630 1742840 10666 ML .00 .00 18 17a 27.7 140 2466. 0 2467 167742 10265 OK .00 80 8 17b 27.7 340 5990. 0 5991 407374 24931 NI .00 80 3 18 31.7 1620 28544 2350 26194 1781219 10901 OK .00 .40 06 19a 1.8. 370 6519. 1100 5419 368519 22553 OK 00 40 4 19b 1.8. 320 5638. 0 5638 383411 23464 NI 00 40 8 20a 4.8. 280 4933. 0 4934 335485 20531 OK 00 60 7 20b 4.8. 378 6660. 620 6040 410744 25137 NI 00 36 6 21 11 / 1400 24668 2000 22668 1541424 94335 OK, NI 12.8 .00 1 .00 22 14.8 1220 21496 3000 18496 1257755 76974 ML CUS.A.A.29/11 and connected matters Page 6 .00 .40 6 23 18.8 500 8810. 2400 6410 435880 26675 NI .00 00 9 24 21.8 1914 33724 2300 31425 2136878 13077 ML .00 .68 69 2648 466 45421 42124 28644 1757832 5 665. 5 640 2 70 Notes: OK -Olga, NI-Nazira, SK-Shakista, SA-Shahlo, IKM-Isamu KM, V-Velichko, ML-Merkulova; Duty for 17.12.98 @ 67.4%:
Weight does not include normal baggage weight with co-passenger(s); Benefit of 'textile'metres assessed in respect of all the group passengers, extended: imputed weight of 1220 k on 10.4.00, 8.5.00 and 14.8.00; impuged weight of 2364 kg instead of reported 1235 kg on 17.7.00 and of 1914 kg instead of reported 1000 kg on 21.8.00; Merkulova Liubov arrived on 14.8.00 hence 14.8.00 weight imputation made in ML's name; all figures/calculations are rounded off."
6. In response, all the appellants resisted the SCNs. It was contended that the reliance placed upon the mobile phone call records was insufficient to render any findings and that it was unsafe to rely upon them, as it would be inconclusive in establishing the allegations. The statement of R.N. Zutshi could not, in the absence of any corroborative evidence or material, lead to a finding of abetment as alleged; that in the absence of passengers' manifest and properly secured documents, no evidence of their involvement had been led and that at best the materials in some of their cases were conjectural and entirely speculative. It was also argued that the involvement in previous incidents alleged against Olga could not be based on sketchy surmises, not premised on any material or corroborative evidence but entirely upon suspicion. Furthermore, it was submitted that the appellants acted CUS.A.A.29/11 and connected matters Page 7 bona fide and were not in the normal line of their duties and functions expected to go into the matter as was alleged.
7. The Commissioner, after considering the appellants' defenses as well as those of the other respondents to the SCNs, by his order in original proceeded to drop the SCN against 19 individuals, out of 35 individuals. That order, however, proceeded to impose penalty under Section 112 of the Customs Act for different amounts - in respect of different periods in respect of each of the appellants. These fines ranged between `75,000/- and `3,00,000/-.
8. Aggrieved, the appellants approached the CESTAT by filing appeals under Section 128 of the Customs Act, being Custom Appeals, C-775/2007 - Sudhir Sharma; C-776/2007 - Ajay Yadav; C-01/2008 - Yashpal; C-04/2008 - T.R.K. Reddy and C-07/2008 - Anil Madan; C-19/2008 - R.N. Zutshi and C-48/2008 - V.K. Khurana. The CESTAT considered the submissions of each of the appellants and after analyzing the evidence considered by the Commissioner, concluded that there was sufficient circumstantial evidence on the record to establish complicity of the appellants in the smuggling incident which resulted in evasion of Customs Duty. The CESTAT held that even though the conversations were not recorded, none of the appellants could explain why they were in fact in contact with Dil Agha on the dates confronted to them in the course of the adjudication proceedings. The CESTAT was also of the opinion that having regard to the standard of proof required in civil proceedings, i.e. preponderance of evidence, the allegations leveled had in fact been established. Its observations in this regard are to be found in paras 19.7 to 19.13. The observations CUS.A.A.29/11 and connected matters Page 8 were in the context of findings with respect to the pleadings to the reversal of the adjudication order as regards 14 customs officials. They apply equally to the case of the appellants.
9. Dealing with the complaint of denial of cross-examination, the CESTAT held as follows:
"XXXXXX XXXXXX XXXXXX 18.9 Though it cannot be denied that the right of cross-examination in any quasi-judicial proceeding is a valuable right given to the noticee as these proceedings may have adverse consequences, at the same time under certain circumstances, this right of cross-examination can be taken away. Hon'ble High Court of Bombay while dealing with the similar issue in the case of Gyan Chand Sant Lal Jain v. UOI reported in 2001 (136) ELT 9 (Bom) and taking into consideration the applicability of concept of principles of natural justice in that regard quoted para 76 of Halsbury's Law of England, Vol. I (4th Edition) which reads thus:-
"Natural justice does not impose on administrative and domestic tribunals a duty to observe all the technical rules of evidence applicable to proceedings before courts of law. Members of tribunals may be entitled to draw on their specialized or local knowledge of the type of, issue before them in order to supplement as well as evaluate evidence to find facts by inquisitorial methods, and inspections and to obtain information from other persons; but it will generally be a denial of justice to fail to disclose to a party specific material relevant to the decision if he is thereby deprived of any opportunity of comment on it."[Emphasis supplied] The Hon'ble High Court observed thus:-
"In other words, it seems to be a fairly CUS.A.A.29/11 and connected matters Page 9 settled position in law that it is not necessary that persons whose statements have been previously recorded must be examined in the presence of the party against whom such previous statements are intended to be used. The rules of natural justice do require that their previous statements must be made available to the party against whom they were intended to be used and such party must be given a fair opportunity to explain the same or comment on them. What would amount to fair opportunity would depend upon the facts and circumstances of each case...."[Emphasis supplied] 18.10 The Apex Court in Surjeet Singh Chhabra v. UOI, reported in 1997 (89) E.L.T. 646 (SC) held that Customs Officials are not police officers and admission made before them though retracted binds the deponent. In view of voluntary statements recorded and such statements not retracted did not warrant cross examination when other circumstantial provided reliable basis corroborating the statements. When nothing surfaced that the witnesses had any enmity with appellants, those were not liable to be discarded nor required to be put to cross-examination. Relying upon the decision of the Apex Court in Surjeet Singh Chhabra case (supra) this Tribunal in Jagdish Shanker Trivedi v. Commissioner of Customs, Kanpur - 2006 (194) ELT 290 (Tri-Del) held that admission made by an assessee binds him and, therefore, failure to give him the opportunity to cross-examine the witnesses was not violative of principles of natural justice. It was specifically held that "principles of natural justice do not require that in matters like this, persons who had given information should be allowed to be cross-examined by the co-noticees on the statements made before the customs authorities. If cross-examination is to be allowed as a matter of right then in all cases of conspiracy and joint dealings between the co-noticees in the commission of the CUS.A.A.29/11 and connected matters Page 10 offences in connection with the contraband goods, they can bring about a situation of failure of natural justice by a joint strategic efforts such co-noticees by each one refusing to be cross-examined by resorting to Article 20(3) of the Constitution and simultaneously claiming cross-examination of the other co-noticees." It is not a matter of right for any assessee to contend that the statements of witnesses should be discarded."
Contention of the appellants
10. It was argued, by Ms. Premlata Bansal and Mr. Ashok Bhan, Senior Advocates, Mr. Balbir Singh and the other learned counsel, that penalty under Section 112 of the Customs Act could not have possibly been imposed against the appellants. It was urged that no attempt was to justify the penalty and that under Section 112 penalty can be levied only if the person is in actual possession of the goods and has knowledge that they are liable to confiscation under Section 111. It was argued that the goods in the present case, having been cleared after payment of redemption fine by the importer, had no co-relation to any of the appellants. The orders of redemption based on spot assessment had attained finality. In the circumstances, the penalty of fine leviable under the Act could not be imposed upon someone who had nothing to do with the importation or exportation of goods.
11. It was argued that there is no record to show that the goods in question were imported in contravention of the Act. Therefore, the question of levying penalty did not arise. Further, for levying penalty under Clause (d) of Section 111, the fact that the possessor CUS.A.A.29/11 and connected matters Page 11 has knowledge of the goods being liable for confiscation under Section 111 has to be proved. In the instant case no such knowledge was proved. Importantly, it was argued that the phraseology in Section 112 - which was ultimately used in the present case- presupposed the existence of the goods. In the present case, the goods had been cleared. Section 112(a) is attracted on showing that all the ingredients of that provision are satisfied. One such ingredient is that the prejudicial act or omission must be such which would render such goods liable to confiscation under Section 111. Thus liability of the impugned goods to confiscation is a pre-requisite to action under Section 112
(a). In such a situation it is incumbent that the impugned goods are not only liable to confiscation, but the persons are also called upon to show cause against the proposal for confiscation. In the absence of this essential requirement the entire proceedings in the present cases were vitiated.
12. The appellants urged that some passengers against whom Customs Duty evasion was confirmed, were not served SCN; consequently the charge of abetment, collusion and conspiracy could not be leveled and proved against them. It was argued that the findings of the Commissioner and the CESTAT that the requirements of Section 153 of the Customs Act, 1962 were met with are erroneous. The appellants relied on the decision reported as Collector of Central Excise vs. Electrolyfic Foils Ltd 1997 (9) ELT-543 (SC).
13. Learned counsel attacked the order of the Commissioner- and the order of CESTAT, stating that they were both based on CUS.A.A.29/11 and connected matters Page 12 presumption of quantities of silk. Counsel submitted that the previous clearances had become final; the derived value, based on average price and average weight, was a method unknown to law, and adopted by the Commissioner; the CESTAT ought not to have affirmed those findings.
14. It was contended that the owner of baggage was under a duty to declare its contents, under Section 77. The lower authorities, submitted counsel, made no attempt to fix this responsibility on the owner and did not even secure authenticated copies of the passenger manifest and the baggage loaded on to the aircraft- even in the case of the luggage alleged to have been smuggled on 28.08.2000. In these circumstances, there could have been no culpability attributed to the appellants. Their roles were not defined and the findings in regard to violation of provisions of the Act, leading to imposition of penalties were wholly unjustified.
15. It was argued next that CESTAT went purely by surmises and conjectures in returning adverse findings against the appellants and imposing penalties upon them. All the learned counsel argued that the absence of any substantive evidence, in the form of passenger manifests in original, documentary proof regarding the complicity of the appellants with Olga and her accomplices' smuggling activities and absence of any seized material, coupled with the finality attained by previous spot assessment orders, meant that the Customs authorities had no evidence to go by. Merely because some appellants were present at the time when some of the previous spot assessments were made could not lead CUS.A.A.29/11 and connected matters Page 13 the adjudicating authority, or CESTAT, to hold that they had been complicit in any wrong doing. The broad brushing nature of allegations seeking to implicate the appellants failed to assign any distinctive role to each of them. In fact, some of them were never implicated in confessional statements, like in the case of Sudhir Sharma. In the case of others, such as Shri R.N. Zutshi, the official had and could have had no role to play, considering that he was in the Protocol and Ceremonial Wing of Customs in the airport. His confessional statement could, in the absence of any corroborative material, not have been used to penalize him.
16. It is argued that what is alleged is the acts of omission, which amount to abetment. To establish the charges, the department had to rely on reliable, cogent legal evidence. No presumption in this respect can be raised on basis of any circumstance even if the same might appear to be suspicious and explanation given for such circumstance is not believed or is not considered satisfactory. The charge of abetment in the form alleged in the SCN is vague. It was argued that the appellants had pointed out in replies to the SCN that the act committed to constitute abetment had to be particularly stated, or else it was impossible to give an effective rebuttal. This was essentially required so as to afford adequate opportunity of defense to be given. No particular/specific act constituting abetment was however, spelt out. Reliance was placed on the judgments of the Supreme Court in State of U.P. Vs Mohd. Sharif, AIR 1982 SC 937, and Sawai Singh Vs State of Rajasthan, AIR 1986, SC 795. It had been observed CUS.A.A.29/11 and connected matters Page 14 that the specific charges are to be framed in clearest terms and with full particularity.
17. Besides, learned counsel submitted that the CESTAT failed to appreciate the fact that whenever an adjudication proposal is put up, the practice is that the goods brought by the passenger are subjected to detailed examination by the Inspector of Customs. These goods are valued and if found to be mis-declared, or not declared as per commercial quantity, the details are incorporated in a printed format meant for adjudication by the competent authority. The Superintendent on duty countersigns the proposals and forwards the same for further adjudication. It is not conceivable for the appellants, who are not party to above proposals to aid or abet the said passenger without implicating the Inspector and Superintendent, who had examined the goods and processed the proposal for adjudication. Thus, the fact that the appellants were not involved in processing the proposal is significant. This escaped the notice of the CESTAT altogether.
18. It was argued that the uncorroborated admission of some charged official - which stood retracted later, could not have been the material used to arrive at adverse findings. In this context, reliance was placed on the judgment reported as Vinod Solanki Vs. U.O.I, JT 2009 (1) SC 1 to the following effect:
"22. It is a trite law that evidences brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidences, which would lend adequate assurance to the court that it may seek to rely thereupon."
CUS.A.A.29/11 and connected matters Page 15 Reliance is also placed on the decision in Pon Adithan v. Deputy Director, Narcotics Control Bureau Madras 1999 (6) SCC 01. It was argued that Shri R.N. Zutshi's statement contains only vague allegations casting adverse reflections upon the conduct of the Appellants, which was not the subject matter of the SCN as distinguished from the specific allegations in Table 14 of the SCN. It was reiterated that the allegations in R.N. Zutshi's statement were neither true nor voluntary and are not corroborated by independent sources on any material point vis-a-vis the Appellants. It was submitted that R.N. Zutshi retracted his statement at the earliest opportunity i.e. on 19.01.2001 but the other appellants were not confronted with R.N. Zutshi to confirm the truth of his statement. Notwithstanding the controversy regarding retraction of R.N. Zutshi, no evidentiary value can be attached to his statement vis-a-vis the charge against the other appellants.
19. Highlighting that the charge against the appellants is abetment/for assisting the passenger in removal of goods without payment of duty, it is argued that goods were removed from the gate and it is the function and duty of the gate officer to ensure that goods removed are duly covered under duty paying documents. All the gate officers denied unauthorized removal of any goods- a fact accepted by the department as the gate officers were not charged in the SCN. There was no allegation that the other appellants, on duty elsewhere- in some cases at the Red Channel counter- had abandoned such duties CUS.A.A.29/11 and connected matters Page 16 and gone to the gate to help in removal of goods without payment of duty. Further, because there was no allegation that although excess quantity was brought before the appellants at the Red Channel counter, but papers for adjudication were put up by suppressing the quantity of textile actually brought in, counsel submitted that the inferences drawn by the adjudicating authority, and affirmed by CESTAT, were unjustified. It was further argued that the principle of preponderance of probability enunciated in the Commissioner's order could not absolve the Customs department of its responsibility to provide the basic material to enable the appellants to base their defense upon. As such, the charge of abetment was unsustainable.
Contentions of the Customs Department
20. Mr. Rahul Kaushik, learned counsel for the Customs Department urged that the concurrent findings of the Commissioner and the CESTAT should not be interfered with. It was submitted that every argument argued on behalf of the appellants concerned with finding of fact. Pointing out that the adjudicating authority, i.e. the Commissioner's order is based upon an intensive and meticulous analysis of the facts, learned counsel highlighted that a painstaking effort linking the various appellants with the smuggling racket which had successfully evaded Customs Duty for nearly two years, had been analysed in respect of each date and in respect of each of the appellants.
CUS.A.A.29/11 and connected matters Page 17
21. With respect to the issue of the reliance placed upon confessional statements, in the absence of other material, learned counsel submitted that there are several decisions highlighting that Revenue, especially, the Customs proceedings do not involve concerns which are to be addressed in criminal proceedings that involved fundamental freedoms and personal liberties. Reliance was placed upon Naresh v. UOI 1996 (83) ELT 258 (SC); K.I. Pavunni v. Asst. Collector 1997 (90) ELT 241 (SC) and KTMS Mohammad v. UOI AIR 1992 SC 1831. It was argued that whilst in criminal proceedings, the law insists upon the prosecution proving its case beyond reasonable doubt - which is the highest threshold of proof, in quasi-judicial proceedings that involve evasion of tax law or evasion of Customs Duty, the lower threshold of proof - preponderance of probabilities - is to be followed by the adjudicating authorities, learned counsel submitted that a retracted confession is not per se inadmissible or irrelevant in customs proceedings and can always be used as a corroborative evidence to record adverse findings.
22. It was next argued that weight metre scale adopted by the Commissioner was rationally explained. Mr. Rahul Kaushik, learned counsel stated that the smuggled goods were not available for examination and that there was lack of material evidence to show correlation between weights of various varieties of silk brought on various dates and the respective weight metre ratio. The Commissioner had to go by the record of concerned airlines which showed excess baggage weight in kilos whereas the AOs showed them in metres. In these circumstances, taking into consideration CUS.A.A.29/11 and connected matters Page 18 manipulation of quantities of silk fabrics, and the suppression and misdeclarations of the passengers involved which were rampant, the Commissioner adopted the most reasonable and logical methodology to arrive at approximation of metre-wise quantity by deducing them from the package weight reported by the airlines. It was submitted that the weight metre ratios were indicated in Table 3 of the notice except in the case of two dates, i.e. 19.06.2000 and 28.08.2000 which appeared to be rational whereas for the quantities reported for all other dates appeared to be eccentric. The Commissioner observed that one kilo of silk fabric reportedly varied between 0.52 metres and 7.28 metres. Such wide variations were excluded and, therefore, the various ratios indicated from the materials available in respect of the quantities of 19.06.2000 and 28.08.2000 were taken into consideration. The Commissioner pertinently had noted as follows:
"402. The above weight-metres ratios need to be understood in the right perspective. Indubitably, except for the dates 19.6.2000 and 28.8.2000 all the remaining ratios, being illogical, are out of place. I therefore focus on the position on these two dates. As regards 28.8.2000, the goods - silk fabrics in six varieties based on gsm [grams per square metre] i.e. 36, 50.1, 45.7, 52.1, 69 and 73.5 gsm are available. The requisite details of these goods i.e. variety-wise total weight in kgs, total metres, average metres per kg and all other relevant information as exhibited by table 2, 3 and 4 are also available. In this context, I find that the proposed weight metre ratio of 17.62 has been computed on the average basis of the above elements of the silk fabrics physically available as on date. On the other side, a perusal of the weight exhibited by the Airlines and the metres assessed in AOs relating to 19.6.2000 brings forth that even on this date voluminous baggage of silk fabrics containing different varieties was CUS.A.A.29/11 and connected matters Page 19 brought in by Olga Kozireva, Isamu KM, Merkulova, Shakista. K. and Vetchinkina T. As against the total weight 2333 kgs as per records of Airlines and as detailed in para 74 of the notice, the total meters assessed in AOs are seen to be 45,600 mtrs which seem consistent, logical and reliable. The average metres per kg i.e. weight metre ratio here works out to 19.54. As detailed in para 74(d) of the notice, in respect of Merkulova and Shakista K, 424 kgs of a variety of silk fabrics were assessed to 7000 mtrs on 19.6.2000 producing average of 16.50 mtrs per kg. It is fairly comparable to a variety of silk fabrics having 16.79 mtrs per kg and 45.7 gsm brought in on 28.8.2000. Similarly, 229 kgs of a variety of silk fabrics relating to Olga Kozireva were assessed to 5000 mtrs. leading to average of 21.83 metres per kg. This average is again rationally comparable to another variety of silk fabrics with 36 gms having average of 21.81 mtrs per kg brought in on 28.8.2000. A conjoint study of the baggage weights on 19.6.2000 and 28.8.2000 as reported by Airlines through manifests or letters and the metres assessed by customs leads me to positive finding that these metres are reliable and rationally co-relatable to the manifested/reported weights of baggage brought in by the relevant passengers. Having regard to the Test Reports of CRCL on all the six varieties of silk fabrics seized on 28.8.2000, market enquiries conducted thereon, availability of the goods and the wider details thereof as summarized in the above said Tables, I find the weight metres ratio of 17.62, which is duly supported by the above varieties of silk fabrics brought on 19.6.2000, as more authentic, reliable and legally maintainable for the purpose of ascertainment of metres per kg for previous clearances."
23. Mr. Kaushik, learned counsel also submitted that the adjudicating Commissioner also dealt with the issue of computation of baggage weight on the basis of vehicle capacity, i.e. the truck or trucks engaged for transportation on five dates when the airlines record manifest showed insignificant baggage weight, but commercial trucks CUS.A.A.29/11 and connected matters Page 20 were used by relevant passenger or their groups. It was submitted that these were based upon objective materials in the form of correlation of statements of transporters and the confessional statements. Likewise, the evaluation of silk textiles had a uniform rate - considering the wide variation in the declarations, i.e. `40 at the last end per metre and `100 per metre. Thus, the weighted average value of `68 per metre was reasonable under the circumstances.
24. It was submitted next that the complaint of violation of natural justice on account of reliance placed upon confessional statements of third parties, who were not cross-examined, cannot be a ground to vitiate the proceedings. It was submitted that the SCN was issued on 21.08.2001. Despite the pendency of proceedings for more than five years, request for cross-examination was made at the fag end of hearing. Learned counsel relied upon the judgment reported as Kanungo & Co. v. Collector of Customs Calcutta 1983 (13) ELT 1486. Similarly, it was submitted that the argument with respect to absence of service of SCN upon several persons such as Olga, Nazira etc. is meritless. Learned counsel relied upon Section 153 and relied upon the findings of the Commissioner that even though personal notice could not be effected on those individuals, the requirement of law with respect of constructive notice had been complied with and that since such individuals left the country fully aware of the possible probable consequences, the appellants cannot take advantage of such technicality.
25. Learned counsel submitted that the statements of R.N. Zutshi and Dil Agha defined the role of most of the appellants, i.e. V.K. CUS.A.A.29/11 and connected matters Page 21 Khurana and T.K.R. Reddy. In the case of Sudhir Sharma and R.N. Zutshi, the statement of Dil Agha dated 11.07.2001 was adverse to them. Likewise, phone record established the link between these two individuals on the one hand and Dil Agha, Mammoor Khan and others involved in the smuggling racket. It was submitted that the same reasoning applied in the case of T.K.R. Reddy, Pradeep Rana and V.K. Khurana. Learned counsel also invited the attention of this Court to the various tables set out in the adjudication order, set out in the SCN and later in the adjudication order which linked the telephone numbers of the appellant with those of the foreign nationals and others, i.e. Olga, Dil Agha, Mammor Khan, Nazira, Shalu etc. Some of the appellants even admitted knowledge of their acquaintanceship with Mamoor Khan or the others who placed calls or received them. However, either their explanations were not forthcoming or were unconvincing. These, submitted learned counsel, were sufficient materials to establish the culpability of the appellants.
Analysis and Conclusions
26. Before analyzing the merits of the rival contentions, it would be convenient to set out the materials which formed the basis of fixing responsibility and imposing penalty upon the appellants. A tabular statement disclosing the foundation of each appellant's liability- whether implicated in the statement of anyone else, phone call details, etc. is set out below:
CUS.A.A.29/11 and connected matters Page 22 Sl. Name Penalt Implicat If calls made Phone No. of y ed with any other Numbers Impos non-Customs Appella ed by whom individual nt involved and if (`lakh so, who
s)
1. Sudhir 4.75 Yes, Yes, to Mamoor 9811240981;
Sharma R.N. Khan (95 calls) 1
Zutshi with Dil Agha 9810175926;
and 7 with 9811022679
Shaloo (Total
103). 6518658
(landline)
2. R. N. 12 Yes, Dil Yes, 98 calls (62 9810136977;
Zutshi Agha Mamoor Khan
and 28 Dil Agha) 63222294
(landline)
3. Ajay 2.5 Yes,
Yadav R.N.
Zutshi
4. V.K. 7.0 R.N.Zuts Yes 49 calls (39 9811028228
Khurana hi with Dil Agha
and 5 with 5815626
Dil Agha Mamoor Khan) (landline)
5. Yashpal 6.0 R.N. Yes, 37 calls (34 9810196092
Zutshi Mamoor Khan, 1
Dil Agha, 2 7259289
Shaloo) (landline)
6. T.K.R. 10.0 R.N.Zuts Yes 123 calls (all 9811102138
Reddy hi with Mamoor
Khan) 5513999
Dil Agha (landline)
7. Pradeep 4.5 Dil Agha Yes, 19 calls- all
Rana with Dil Agha
CUS.A.A.29/11 and connected matters Page 23
8. Anil 2.5 R.N.
Madan Zutshi
27. The customs authorities' apparent routine check of Olga Kozireva's (a Kyrgiz national) baggage, on 28.08.2000 and discovery of her illegal importation and smuggling into India, a quantity of 81160 yards (74212 meters) of silk textiles without the necessary declaration, her detention and subsequent statement under Section 108 of the Customs Act triggered the entire investigations. The investigations were carried out by the Directorate of Revenue Intelligence (DRI) . The conspiracy unearthed showed that an Afghan National, Mamoor Khan, frequented and stayed at Sameer Guest House in Ballimaran, Delhi.
The investigating agency also obtained a photograph of Mamoor Khan from FRRO. One Pawan Kumar, driver of Sehrawat Goods Carrier in his statements dated 17/18.12.2000, and 22.12.2000 identified Mamoor's photograph, to say that he was involved in import and transportation of silk fabrics by Uzbeki ladies from IGI Airport. Pawan Kumar had personal knowledge because he was actively involved in transportation of baggage brought in by Uzbeki ladies. Mamoor Khan's stay at Sameer Guest House in Ballimaran, Delhi was also confirmed by Abdul Qayum, Manager, Sameer Guest House who identified that Mobile No.9811254485 belonged to Mamoor Khan. In his statement he identified the photo of Mamoor Khan. Abdul Qayum disclosed other details regarding involvement of Mamoor Khan. This was confirmed by Ajay Dhiman, Traffic Supervisor, Kyrgyzstan CUS.A.A.29/11 and connected matters Page 24 Airlines in his statements dated 26/27.12.2000, 30.12.2000 and 01.02.2001; he also identified Mobile No.9811135982 as belonging to Mamoor Khan. Mamoor's involvement in illegal import of Chinese silk fabrics was also corroborated by Purshottam Lal Tandon in his statement dated 30-12-2000; he too confirmed that Mobile No.9811135921 belonged to Mamoor. This received further corroboration by Pradeep Singh Dhamija in his voluntary statement dated 03.01.2001. M/s Arun Kumar Dokania, Gopal Prasad Dokania, Nitish Kumar Kedia, Anudeep Singh and Mahender Jain, dealers in the Chinese silk fabrics imported by Uzbeki women also confirmed the involvement of Mamoor Khan in their statements of 05.01.2001. It was, therefore, apparent that Mamoor Khan's involvement in the conspiracy was as a key player, if not its ring leader. However, he could not be caught. Several other witnesses confirmed his involvement in smuggling of silk textiles independently. He was regularly in touch with various officers of Customs, passengers like Olga K., Nazira, Shahlo etc. and buyers of silk textiles, very frequently. Table No.11 (in the Order in original) clearly shows that Tel.No.9811135921 belonging or used by Mamoor Khan was generally found in the vicinity of the IGI Airport on the dates when flights carrying passengers like Olga K., Shahlo, Shahkista arrived at IGI Airport. One Dil Agha was also arrested; his statements were recorded. This led to discovery of a marked increase in frequency of telephonic interactions between the numbers of Mamoor Khan, Dil Agha, the passengers entering with the goods, and those of Customs officers, especially the appellants accused of connivance -around the time when the flights were being cleared. This evidence pointed to a CUS.A.A.29/11 and connected matters Page 25 pattern disclosing Mamoor Khan's pivotal role in this complex and massive network of smuggling operations. He was regularly in contact with other key players in this web of conspiracy. Mamoor Khan's corroboration would have led to conclusive proof; yet the customs authorities concluded that whatever emerged, through statements of various individuals and materials was substantial and crucially- un-rebutted, to conclude that the appellants were in fact accomplices and conspirators in smuggling silk textiles. The materials gathered and statements recorded during investigation led to SCNs to the appellants, the passengers involved, other individuals like Dil Agha, traders, etc. Re. Question Nos (a) and (c)
(a) Whether the findings in the impugned order with regard to abetment by the appellants is justified in law;
(c) Whether the findings based upon mobile phone records and confessional statements of one party are sustainable in law in the circumstances of the case in the absence of any other corroborative material.
28. These questions are inter-related and are taken together. The main argument of the appellants was that the Commissioner and later, CESTAT could not have concluded that they had abetted in the alleged smuggling operations, given that Mamoor Khan was not caught and there was no corroboration on his part. Their supporting argument also appears to be that the absence of the non official abetters (such as Olga, Nazira, Shakista, Dil Agha etc.) in the SCN has prejudiced them, vitiating the findings.
29. Section 112 of the Customs Act, which penalizes, inter alia, abetment, reads as follows:
CUS.A.A.29/11 and connected matters Page 26 "112 Penalty for improper importation of goods, etc.
--Any person,--
(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or
(b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable,--
(i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater;
(ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sought to be evaded on such goods or five thousand rupees, whichever is the greater;
(iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees, whichever is the greater;
(iv) in the case of goods falling both under clauses (i) and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest;
(v) in the case of goods falling both under clauses (ii) CUS.A.A.29/11 and connected matters Page 27 and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest."
The principal contention was that what was seized was only the quantities of goods from Olga on a particular day, i.e 28.08.2000. Those goods were available for assessment, seizure, consfiscation and penalty proceedings. If and only if, the role of the appellants or any of them was available in respect of such consignment only and none else, could the Customs authorities have concluded that they had abetted the activities. However, such was not the position; statements of R.N. Zutshi, Dil Agha, Olga, and several other individuals were relied on in respect of entirely different transactions allegedly amounting to smuggling - on several previous dates. Those quantities of silk were not seized. On the contrary, they were assessed and wherever found to be excess baggage, differential duty was even recovered; in other cases, they were never even seized, since the declarations as to value were accepted. In the circumstances, the conclusion of the appellant's complicity as abettors was unfounded in law.
30. The Court here observes that the SCN and findings of the Adjudicating authority have plainly brought out through various connecting strands of materials the interconnection between those involved in the smuggling and the present appellants. Apart from Mamoor Khan, the role of Dil Agha was highlighted; he figured time and again on various dates when the textiles were brought in. R.N. Zutshi's voluntary statement dated 17.01.2001 identified Dil Agha as CUS.A.A.29/11 and connected matters Page 28 having introduced himself as Mamoor Khan's brother and with effect from the last week of July, 2000 he had been in touch with R.N. Zutshi (as a substitute of Mamoor). R.N. Zutshi confirmed that Mobile No.9811065987 and landline No.3930733 belonged to him (Dil Agha) and that after August, 2000, Dil Agha used No.9811158376. This statement corroborated the statement of Dil Agha recorded on 23.05.2001. Dil Agha's unsigned statement was duly supported by two independent witnesses. It established a close connection between Mamoor Khan and Dil Agha on one hand, and regular passengers (or couriers) such as Olga K, Gulia etc. on the other. Dil Agha's association with Mamoor was also confirmed by Abdul Qayum, Manager of Sameer Guest House, Ballimaran, Delhi in his statement- dated 20.12.2000. Dil Agha's further statements were recorded on 11/12.07.2001, and 25.07.2001 where he gave detailed description of his involvement as well those of others, viz Sadullah, Zanjir Khan and Sanak etc. Importantly, he spoke about involvement of the Customs officers and his money dealings with them. Dil Agha's role was also confirmed by others such as Pawan Kumar (driver of Sehrawat Goods Carrier), Abdul Qayum, Manager, Sameer Guest House, Ajay Dhiman, Traffic Supervisor, Krygyzstan Airlines, Pradeep Singh Dhamija, Gopal Prasad Dokania, Nitish Kumar Kedia and Anudeep Singh in their statements under Section 108 of the Customs Act, 1962 on various dates. Most of these confirmed the mobile and landline telephone numbers of Dil Agha. The evaluation of these materials led to the adjudicating orders' conclusion that Dil Agha was an important player in smuggling silk fabrics through Uzbeki women and that the charges made against him for conniving, abetting and conspiring were CUS.A.A.29/11 and connected matters Page 29 established.
31. The conclusions of the Customs adjudicating Commissioner did not rest on the various statements recorded under Section 108 only. A very crucial element which lent corroboration to those statements were the call detail records. In this regard, the Commissioner significantly held as follows:
"378. Mr. R.N. Zutshi has not stated in his retraction that any physical force was employed or that he was threatened with any physical harm if he refused to do the bidding of his alleged tormentors. Considering his long experience and other relevant circumstances, I hold that this letter regarding retraction is nothing more than an after thought and I hold that the statement tendered by Mr. R.N. Zutshi is voluntary and given by his free consent. The Judgment in the case law of Aher Raja Khima vs. State of Saurashtra reported as AIR 1956 SC 217 [V 43C 45 MAR] cited by him, is therefore, not relevant. .
xxxxx xxxxx
xxxx
5. Print out of telephone calls
390. In making the allegation of illegal clearance and connivance, the DRI has relied extensively on the print outs of telephone calls made by various noticees amongst each other. The details of these telephone calls are contained in Tables No.7,8,9,10 & 11 of the show cause notice. These tables have been constructed on the basis of print outs obtained from various service providers and the evidence used in the show cause notice is that passengers like Olga K. and others, several Customs officers posted at Airpoort and facilitators like Dil Agha, Mamoor Khan were regularly in touch with one another during the relevant period. The question before me is as to what is the value of these details as evidence of existence of conspiracy and co-relation amongst various players in this game.
391. At the outset, I observe that the details contained in CUS.A.A.29/11 and connected matters Page 30 the print outs and consolidated in these 5 tables are not in the nature of transcript of the conversation that might have taken place amongst the concerned parties. It only indicates that telephone calls were made and received during these periods. What actually was said during these telephone calls is not known. Making or receiving of telephone calls by itself is a very harmless activity. However, it acquires certain sinister dimensions if it takes place between known carriers of commercial goods and Air Customs Officers on regular basis, especially if the timing is such that the passenger is arriving by a flight on a particular occasion when the officer concerned also happens to be on duty. If the circumstances surrounding such telephonic exchange are suggestive of possible connivance and the frequency and timing of the calls further enhances such a suspicion, then it does give rise to the possibility of existence of an unholy nexus. In the absence of transcript or details of what happened during these telephone contacts, such calls by themselves do not constitute an evidence which itself is enough to prove the existence of conspiracy. At the most, they can be used to buttress the force of other pieces of evidence that might independently exist. Again, it would make a lot of difference if a particular noticee is said to be only on the receiving end of the calls as against another situation where the calls might have been made by both sides. While a person 'A' may have no control over who calls him at what time can plausibly contend that he cannot be held responsible for anyone making unsolicited calls to his telephone, the situation becomes quite different if 'A' was frequently returning the calls made to him and their conversation often lasted for several minutes....
xxxxx xxxxx
xxxx
394. Significantly, none of the officers named in the above para have been issued show cause notice on the ground that the only evidence against them was in the form of telephonic conversation. Clearly, the investigators subscribe to the philosophy that telephonic conversation CUS.A.A.29/11 and connected matters Page 31 alone in the absence of corroborative evidence is not enough to fasten the liability of abetment and connivance."
Later, it was held as follows:
"419B. While analysing the evidence against the noticees charged with abetment, I have kept in mind the above definition of abetment. Broadly speaking, the illegal consequences that took place are the alleged clearances of commercial clearances of silk fabrics without declaration and payment of duty leading to the violation of provisions of Customs Act, 1962. The intention and knowledge of co- noticees has been inferred on the basis of circumstances of the situation. For example, if a co- noticee has been in touch with people like Mamoor Khan, Dil Agha or the passengers who wascharged with import of huge quantity of commercial baggage on regular basis it might be possible to impute the knowledge and intention of such co-noticees. Similarly, commonality of interest with the passengers has to be seen in the context of allegations of illegal gratification. Generally speaking, huge quantities of commercial goods would be brought in by passengers in an organized manner only if they have a prior commitment or understanding with some people who can help them in clearance of such goods and such a situation undoubtedly falls within the parameters of abetment, collusion and conspiracy. In the context of the present case, it can be manifested in several ways -for example, preparation of adjudication proposal means only for a small fraction of the baggage actually carried by the passenger. Turning a blind eye and huge quantities being carried by the passengers and allowing them to pass through Green Channel, improper inventorization, gratification and valuation of goods brought by them and so on, the acts of omission and commission are illustrative in character, no exhaustive list of such illegal acts or omission can be made. While analyzing the role of co- noticees in abetment, the above parameters have been applied to the overall facts of the given situation."
CUS.A.A.29/11 and connected matters Page 32
32. The absence of goods or the fact that in earlier instances they had been cleared without dispute, or even after payment of differential duty, in the opinion of the Court do not constitute impediments to a SCN and proceedings on the question of abetment of any of the appellants. In all such instances where a conspiracy (that has achieved its objective) is unearthed, the articles - especially in the form of goods would be no longer available. However, that would in no manner absolve the culpability of those involved, especially those who play key roles in the fulfillment of such conspiracies. The fact that differential duties were paid on particular dates and the record of entry of those involved in the smuggling racket, precisely constitute the evidence which both corroborates and establishes the allegations. In this context, the court notices the judgment of the Supreme Court in Lal Singh v State of Gujarat 2001 (3) SCC 221:
"Many facts pertaining to such activities remain in personal knowledge of the person concerned. Hence, in case of conspiracy and particularly such activities, better evidence than acts and statements including that of co-conspirators in pursuance of the conspiracy is hardly available. In such cases, when there is confessional statement it is not necessary for the prosecution to establish each and every link as confessional statement gets corroboration from the link which is proved by the prosecution. In any case, the law requires establishment of such a degree of probability that a prudent man may on its basis, believe in the existence of the facts in issue."
Likewise, in State of Maharashtra v. Bharat Chaganlal Raghani (2001) 9 SCC 1 the Supreme Court held that:
"58. .... There is no denial of the fact that the judicial confessions made are usually retracted. Retracted CUS.A.A.29/11 and connected matters Page 33 confessions are good confessions if held to have been made voluntarily and in accordance with the provisions of law.... Corroboration of the confessional statement is not a rule of law but a rule of prudence. Whether in a given case corroboration is sufficient would depend upon the facts and circumstances of that case..."
In Wariyam Singh v. State of U.P. (1995) 6 SCC 458 and S.N. Dube v. N.B. Bhoir and Ors (2000) 2 SCC 254, the Supreme Court relied upon the confession made by an accused for conviction so long as there was corroboration. The Court held that the allegation of the confession being fabricated was without any basis and the confession could be taken into account while recording the conviction.
33. The Court is conscious that the above decisions were in the context of evidence which was received in regular trials during the course of criminal proceedings. Here, however, the printout details of the calls made between those accused of smuggling, such as Dil Agha, Olga established the allegations of conspiracy and abetment. The statement of transporters, smuggled goods traders, those frequently seeing some of them like the manager of Sameer Guest house, lent further support to the statements of R.N. Zutshi (though retracted later) and Dil Agha. Last but not the least, the previous records maintained in the Airport also confirmed the stories of Olga and Dil Agha about the frequency of visits and that on several occasions differential duty was paid; the corroboration of quantities was likewise founded on scrutiny of the records.
34. It would be worthwhile to also notice the essential findings rendered by the Commissioner, who went into a detailed analysis of CUS.A.A.29/11 and connected matters Page 34 the evidence- which included the statements of R.N. Zutshi, Dil Agha, Olga, etc. He also compared the passenger manifests of the different dates involved, the duty roster of various Customs officers, the declarations made on those dates by those alleged to have participated in the smuggling racket, the notings made by the appellants in respect of the declaration and the phone call records relative to the appellants, Dil Agha, Mamoor Khan, Olga, Nazira, Shaloo, etc. Relevant extracts of the findings- which were both date wise, and in respect of each noticee who participated in the smuggling on the relevant date are as follows. The findings in respect of Sudhir Sharma are as follows:
"445A. Now, I proceed to analyze (sic) the role of Sudhir Sharma in the matter. It has been stated by Zutshi in his statement dated 17th Jan, 2001 that Sudhir Sharma used to negotiate and decide the money to be charged from Mamoor Khan. It has also been brought out in the show cause notice in Table No.7 that Sudhir Sharma exchanged at least 103 calls with various co-noticees out of which 95 calls were with Mamoor Khan from the period 01.10.1999 to 31.3.2000, 1 with Dil Agha and 7 with Shaloo A. between 16.3.2000 to 12.6.2000. It is pertinent to mention here that on 10th April, 2000 which is the date in question, Sudhir Sharma talked to Mamoor Khan 6 times between 10.26 AM and 11.17 AM whereas the flight had arrived at 9.90 AM. The written defence dated 3rd Dec,2004 and additional submissions dated 2 Jan.,2007 have been considered by me in detail. The allegation of abetment and collusion has been denied on different grounds, the main one being that no statement of passenger Shalo. A. had been recorded; that the noticee did not know any person by the name Mamoor Khan or Dil Agha; that the statement of Dil Agha is not corroborated by any independent evidence. He has also questioned the methodology adopted for working quantity CUS.A.A.29/11 and connected matters Page 35 and value of goods and the fact that goods were indeed textiles. At the time of personal hearing held on 21st Jan, 2007, the noticee, interalia, contended that show cause notice had not been served on the main noticee and hence, no proceedings could be initiated against the abettor. He placed reliance on the judgment of Teksons Vs AC Customs, CCE Vs Sita Electronics, CCE Vs. Electrolites Foils. He also contended the argument of pooled baggage on the basis of U.O. Note of D.C. (Vigilance). He has further submitted that adjudication proceedings in the present case were initiated by Mr. Rajender, ACO and not by him.
446. 1 have considered the evidence on record as well as the statement of the noticee. The issue regarding description, quantity and value of the baggage brought in have already been considered and decided by me in paras above. So far as the defence argument of pooled baggage is concerned, the same has been discussed in detail in paras above. The noticee Sudhir Sharma has been explicitly named by R.N. Zutshi in his statement dated 17.1.2000 and the record of his telephonic conversation with Mamoor Khan is detailed in Table No7. However, I find that the noticee officer has not given any explanation of his frequent interaction with people like Mamoor Khan, Dil Agha and Shalo A. It is quite intriguing that one hour after the arrival of flight on the said date, the noticee spoke to Mamoor Khan on 6 occasions. This fact has neither been denied nor rebutted. The noticee has denied knowing Mamoor Khan but has given no explanation or justification of his interaction, especially during the period when the flight was being cleared. Under these circumstances, it cannot be said that the statement of Zutshi and others are not supported by corroborative evidence. The date and timing of the telephone calls matches with what has been stated by Zutshi and corroborates the allegation of connivance, abetment, collusion and conspiracy. I, therefore, hold that the charges leveled against Sudhir Sharma are established and he is liable for penal action under Section 112 of the Customs Act, 1962.
CUS.A.A.29/11 and connected matters Page 36 ********************* ****************
484. The main evidences against Sudhir Sharma are in the form of Zutshi's statement and his numerous telephonic interaction with Mamoor Khan and others which have been brought out in detail in above paras. The defence taken by Sudhir Sharma has already been discussed above and in respect of 22.5,2000, the only additional submission of Sudhir Sharma is that the A.O. on the subject was prepared by Bishan Chand, ACO and not by him.
485. Apart from the plethora of evidences discussed above, I further observe that on 22.5.2000, Sudhir Sharma was very much on duty when the Flight No. K2545 arrived and there are 5 phone calls between Mamoor Khan and Sudhir Sharma's mobile telephone at 8.51 AM,9.31 AM, 10.57 AM, 11.11 AM and 4.24 PM. The general evaluation of evidence coupled with the specific timing of these calls which has not been explained by the noticee leads me to inescapable conclusion that there ¡s enough evidence in the form of R.N. Zutshi's statement corroborated by independent evidence in the form of phone records to hold Sudhir Sharma liable for penal action under Section 112 of the Customs Act, 1962 under charges of abetment, connivance and conspiracy.
********************* ****************
494. The general evidence against Sudhir Sharma is in the form of statement of R.N. Zutshi dated 17th Jan., 2001 and the records of his 103 calls with Mamoor Khan and Dil Agha etc. It has been pointed out in the show cause notice that Sudhir Sharma was on duty at the Airport. The telephone records further show that there were 4 telephone conversations between Sudhir Sharma and Mamoor Khan after the arrival of flight. While the general defence submitted by Sudhir Sharma has already been discussed hereinabove, specifically with regard to 1st July, 2000, it was CUS.A.A.29/11 and connected matters Page 37 submitted by the noticee that the adjudication proposal in respect of Nazira on the said date was put up by Mr. Rajinder, ACO and not by the noticee.
495. 1 have examined the defence of the noticee with due care. It is true that the adjudication proposal with regard to the main noticee Olga K. and abettor Nazira I. was put up by some other officer. However, the noticee has made no effort to explain 4 interactions that took place between him and Mamoor Khan after the arrival of the flight. The details contained in Table No. 11 on page 138 of show cause notice also shows that during the period of interaction, Mamoor Khan's mobile was located at the Airport Terminal No.2. Thus, the allegation that Sudhir Sharma conspired and abetted in clearance of baggage that was not declared finds credence and is proved making him liable for penal action under Section 112 of the Customs Act, 1962..."
The findings in respect of Shri R.N. Zutshi are as follows:
"R.N. Zutshi & V.K.Khurana 521 . R.N . Zutshi and V .K. Khurana are the departmental officers who have been made co-noticees on the allegation of connivance and abetment. The general evidence against them has already been analyzed in detail. On this date specifically, it is seen that Dil Agha spoke with R.N. Zutshi twice on his mobile phone and 6 times from his shop Tel. No. 3930733. It is very intriguing that these interactions took p1ace between 4.47 PM and 7.31 PM whereas the flight arrived at 4.32 PM. It is further seen that immediately after the arrival of flight, Olga K. who was the passenger spoke 4 times within a span of one hour from her mobile to R.N. Zutshi's mobile while RN. Zutshi was very much on duty. This coupled with Zutshi's confessional statement and other detailed records of his frequent interactions with various noticees clearly show that he was very deeply involved in this entire racket and I hold him liable for penal action under Section 112 of the Customs Act, 1962 for aiding and CUS.A.A.29/11 and connected matters Page 38 abetting the clearance of non-bona fide baggage of Olga K. and Nazira I. on 1st August, 2000.
522. V.K. Khurana is another noticee in this regard. I find that in addition to the evidence of his involvement and R.N. Zutshi's confessional statement and details of his frequent telephone interactions with other noticees like Dil Agha, Mamoor Khan etc., V.K. Khurana who was on night duty spoke to Dil Agha on this date also. Further, it is seen that AO. No. 21727 wherein Olga K declared 1,100 mtrs. of silk textiles has been prepared by V.K. Khurana, lnspector. This clearly shows that Olga K. was still at the Airport when V.K. Khurana reported for night duty. It has already been shown that there was a telephonic contact between him and Olga K around that time. Olga K. was a frequent and regular traveler better known as a carrier of commercial baggage and V.K..Khurana was no stranger to this fact. Khurana In AO records the fact that she had not declared any dutiable articles and was diverted to Red Channel, Still, neither did he inventorize her entire baggage nor the total quantity brought was put up for assessment or adjudication. This specific evidence along with other general issues analyzed already leaves me in no doubt about the involvement of V.K. Khurana in abetment and connivance in clearance of baggage of Olga K. Accordingly, I hold him liable for penal action under Section 112 of the Customs Act, 1962.
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462. 1 have carefully considered the entire gamut of evidences against R.N. Zutshi. and his responses thereto. So far as the validity of his statement as evidence is concerned, the same has been discussed very minutely and in great detail hereinabove. It has also been analyzed why the plea of supposed retraction was meaningless and that how such a retraction does not negate the evidentiary value of the statement. Though in case of Zutshi himself, his statement being totally inculpatory might be enough to draw an adverse conclusion against him; there is further CUS.A.A.29/11 and connected matters Page 39 corroborative evidence in the form of his interaction with people like Mamoor Khan, Dil Agha, Olga K. & Shahlo A. Zutshi has not denied this interaction either in his statement or in his written reply or at the time of personal hearing. His only plea is that the contents of conversation are not known. But in the light of his admission coupled with admitted and strong evidence of frequent interaction, non-availability of records of conversation would be a minor thing. All other arguments advanced by Zutshi have also been discussed in detail in the previous paragraphs. Under the circumstances, absolute and deep complicity of R.N. Zutshi in this entire drama is not in doubt. It is indeed very intriguing that even on 15th May, 2000 when the flight landed at 9.51 AM, R.N.Zutshi talked to Mamoor Khan 4 times before the arrival of the flight at 9.50 AM and 3 times after the arrival. A perusal of Table No.11 (page 136 of SCN) would also show that cellphone of Mamoor Khan was in vicinity of International Airport from 9.52 AM to 12:36PM. His entire role therefore, stands out very clearly and his complicity in the entire episode is fully established.
I, therefore, hold that R.N. Zutshi is liable for penal action under Section 112 of the Customs Act, 1962 for his role in abetment, collusion and conspiracy and clearance of irregular baggage.
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500. The evidence against R.N. Zutshi is in the form of his inculpatory confessional statement as well as record of telephonic conversation has already been discussed in the foregoing paragraphs. It is a matter of record that R.N. Zutshi was on duty at the relevant time. It is further seen that R.N. Zutshi had as many as 11 telephonic conversations with Mamoor Khan - 5 times before the arrival of flight and 6 times after the arrival of flight. This aspect has not been explained by Zutshi either in his written defence or during the course of personal hearing but the strong evidence available on record inescapably points towards his complicity in the entire affair. I, therefore, hold that R.N. CUS.A.A.29/11 and connected matters Page 40 Zutshi is liable for penal action under Section 112 of the Customs Act, 1962 for having aided and abetted in irregular clearance of commercial baggage of Olga K. on 10th Ju1y,2000 . "
The findings in respect of Shri. T.R.K. Reddy are as follows:
482. The allegations against TRK Reddy regarding irregular clearance of commercial baggage are primarily based upon the statement of R.N Zutshi and Dil Agha. There is also evidence of extensive interaction between Reddy and Mamoor Khan on telephone. All these details have already been discussed in the above paras while discussing the chain of events that happened on 27th Feb., 2001. The genera1 argument taken in reply of TRK Reddy have also been discussed above. However, regarding 22nd May, 2000, the noticee has taken an additional defence that the manifested weight on this particular date with regard to the noticee was very minimal and that the quantity of textile brought in had been computed by taking into account the kind of vehicle used for transport of goods.
483. 1 have carefully considered the evidence available against the noticee as well as their submissions in defence.
He was admittedly in touch with Mamoor Khan on regular basis and this fact very strongly corroborates what has been stated by R.N. Zutshi in his voluntary statement dated 17th Jan., 2001. Even on 22nd May, 2000 there was a telephone contact between Mamoor Khan and TRK Reddy at 7.59 AM on 5513999 of TR.K Reddy. The flight arrived at 9.22 AM and TRK Reddy who was on duty spoke with Mamoor Khan again on 6 different occasions i.e. 9.14 AM; 09.15 AM, 09.41 AM; 10.54 AM; 4.19 PM and 4.25 PM as listed on page 173 of the show cause notice. The above facts which have been discussed in great detail in foregoing paras clearly establish the complicity of Reddy in clearance of baggage in league with Mamoor Khan and the passengers. So far as his argument that the manifested weight on 22.5.2000 was minimal does not help his defence much and CUS.A.A.29/11 and connected matters Page 41 the acceptability of methodology adopted for working out quantity on those dates when declared quantities were far more than the manifested weight has already been discussed in foregoing paras. Keeping in view the entire circumstances of the case, evidence available and defence pleaded, I hold that the charges of connivance, abetment and conspiracy against TRK Reddy are proved and I hold him liable for penal action under Section 112 of the Customs Act, 1962.
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503. The show cause notice has made the allegation of connivance and abetment against Mamoor Khan and Sanak which need not be discussed again. The show cause notice has also levelled the charges of abetment and connivance against T.R.K. Reddy. The general evidence available against Reddy has already been discussed in foregoing paras. In addition, it is on the record that T.R.K. Reddy was in fact on duty on the date in question and had 8 telephonic conversations with Mamoor Khan from his Cell No. 981102318, once before the arrival of flight and 7 times after the flight was landed. T.R.K. Reddy has not clarified this aspect satisfactorily and it further strengthens the evidence of conspiracy available against him. Under the circumstances, I hold that the allegations of connivance, abetment and conspiracy against T.R.K. Reddy are established for 17.7.2000.
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505. The deep involvement of T.R.K. Reddy on the basis of statement of R.N. Zutshi duly corroborated by independent evidence in the form of record of telephonic conversation has been analyzed in detail. In addition, it is found that on 24.7.2000, T.R.K. Reddy was on duty and he has spoken with Dil Agha once in the morning from his residential telephone and 5 times during the day from his mobile CUS.A.A.29/11 and connected matters Page 42 telephone. Similarly, the evidence in the form of confessional statement of R.N. Zutshi duly corroborated by record of telephonic conversation has already been analyzed. On the relevant date, R.N. Zutshi was also on duty and there were as many as 11 telephonic conversations between Zutshi and Dil Agha on the telephone numbers belonging to Mamoor Khan. I am, therefore, not in any doubt that both the noticees have rendered themselves liable for penal action under Section 112 of the Customs Act, 1962 for conniving and abetting in the clearance of commercial baggage of Merkulova L ."
The findings against Mr. V.K. Khurana are as follows:
"526. The show cause notice has named V K. Khurana as a co-noticee. The evidence against V.K. Khurana is in the form of inulpatory statement of R.N. Zutshi, records of telephonic conversation with Mamoor Khan, Dil Agha, Olga K. etc. at different points of times has already been discussed. On 'this date particularly, there is evidence to show that DilAgha with his mobile phone No, 9811065897 was present at the Airport Terminal No.2 from 4.45 PM to 7.52 PM and spoke with V.K. Khurana who was on duty on 4 different occasions during this period. In addition to strong evidence already on record, the time and nature of these phone calls which have not been explained by V.K. Khurana in his reply clearly leads to the conclusion that the allegation of abetment and connivance is duly proved against V.K. Khurana rendering him liable for penal action under Section 112 of the Act ibid.
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555. The evidence of complicity and collusion against V.K.Khurana is both substantial as well as strong. VK. Khurana has been specifically named by Dil Agha as a Khaas Admi and this role has also been described by R.N. Zutshi in his voluntary statement dated 17.1.2001. The evidentiary value of both these pieces of evidence has been discussed already in great detail. It has been clearly brought CUS.A.A.29/11 and connected matters Page 43 out in the show cause notice that on 28th August, 2000 huge quantities of textile was brought in after taking prior clearance from V.K. Khurana . It is corroborated by the fact that though Olga K. was carrying silk textiles valued at over Rs.50 lakhs involving Customs duty of over Rs.30 lakhs, she did not have any currency to pay duty on it nor there is anything to suggest that she had any arrangement or desire to pay this duty by arranging funds after arriva1. On the other hand, even on this particular date, there is documentary evidence to show interaction between V.K. Khurana on his Mobile No.9811028228 with Dil Agha, passengers Nazira. I. and Olga K. Though V.K. Khurana has disowned the ownership of the mobile number in question, this aspect has already been discussed and decided by me in para 440 above. When all these circumstances and evidences are seen in the totality, there is not even a slightest doubt that Khurana was actively in league with Olga K, Dil Agha and Nazira I. and, they had his prior word and commitment to carry out this scandalous clearance without declartion and payment of duty. In the light of findings above, I hold VK. Khurana liable for penal action under Section 112A of Customs Act, 1962 for his role in abetting and colluding with Olga. K., Nazira I; and Dil Aghá. ."
The findings recorded against Pradeep Rana are as follows:
"531. The allegation of abetment and connivance has been made against Preventive Officer Pradeep Rana, primarily on the basis of statement dated 17.1.2001 of R.N. Zutshi and dated 11.7.2001 tendered by Dil Agha under Section 108 of the Customs Act, 1962 as also his frequent telephonic conversations with Dil Agha. I find that in his statement referred above, Dil Agha had pointedly mentioned the name of Pradeep Rana as an important (khas) conduit of Mamoor Khan along with, Zutshi and Reddy. R.N. Zutshi has accused Pradep Rana of negotiations of money to be charged from Mamoor Khan and carried out its distribution among baggage officers. I have gone through the contents of Table CUS.A.A.29/11 and connected matters Page 44 No.7 of show cause notice and I find that there were 19 telephonic interactions between telephone admittedly belonging to Pradeep Rana and Dil Agha between 7th July, 2000 and 28th August, 2000. The allegation of bribery has been further reiterated by Dil Agha in his statement dated
25.7.2001. The DRI have also brought out on page 56 to 58 certain instances wherein he has prepared the adjudication proposal on different dates indicating lesser quantity of textiles than what was actually manifested and brought in by the passengers. I have examined the written defence dated 19th Sept., 2006 filed on behalf of the noticee. The main argument raised in defence is that in respect of 3 dates when Pradeep Rana is accused of abetment, no goods were seized; that the details in Table No. 11 do not indicate of the conversations took place during the alleged telephone calls; that there is no evidence that goods were silk fabrics; that the quantification had not been carried out correctly; that the reliance on Manifest for working out quantity was not accurate; that the value was not correctly determined. The Advocate of the noticee, A.K. Bhasin appeared for personal hearing on 12th Jan 2007 and in addition to the oral averments also submitted 13 additional points for consideration in writing which are duly considered. The noticee Pradeep Rana requested for further time for making more submissions vide his letter dated 1st Feb., 2007. Even though six months have elapsed, no further submissions have been received on his behalf.
532. Ï now proceed to evaluate the evidence available against the noticee Pradeep Rana in the light of defence offered by him. It is a matter of record that Dil Agha has repeatedly named Pradeep Rana in his incriminating statement. I observe that statement of Dil Agha and R.N. Zutshi by itself might not really be enough to hold Pradeep Rana liable for penal action but as it happens, there is corroborative evidence in the form of frequent telephonic conversations between Pradeep Rana and Dil Agha. Pradeep Rana has not denied these conversations in his statement dated 23rd Jan, 2001 and 18th July, 2001 . He has tried to give justification for these calls which is far from CUS.A.A.29/11 and connected matters Page 45 convincing or acceptable. It is a matter of record that Olga K. and Nazira had arrived on 11/12th August, 2000 with 10 pieces of manifested baggage weighing 1,400 kgs which translated into 24,668 mtrs. However, they only declared 1,000 metres each on arrival and Pradeep Rana prepared the adjudication proposal in respect of Olga K. vide A.O. No. 18407 dated 12th August, 2000. It is a matter of record that Olga K. was a frequent passenger. Once she has reported to his counter, it is obvious that Pradeep Rana should have taken extra care to make sure that she brings out her entire baggage to the table and then it is examined in minute detail. Such a thing obviously did not happen. I have observed elsewhere in this order that this lapse by itself has not been recognized in the show cause notice as amounting to abetment and connivance. However, what distinguishes the action of Pradeep Rana from others is the fact that on these different dates, there were as many as 4 telephone interactions between Tel. No 9811065897of Dil Agha and No. 9811112245 of Pradeep Rana. While the flight No. HY-429, arrived at 3.39 AM, the telephonic contact took place at 1.36 AM, 4.44 AM, 4.46 AM and 8.59 AM while Pradeep Rana was on duty and was handling the adjudication proposal in respect of Olga K. Keeping in view the totality of the circumstances and the timing of calls exchanged between Dil Agha and Pradeep Rena on one hand and Dil Agha and Olga K. on the other hand (at 3.39 AM, 4.42AM, 4.54 AM, 5.42AM, 6.47 AM & 7.10 AM, I observe that this is not a simple case of ineptitute or carelessness but of active connivance and abetment which lead to preparation of such an adjudication proposal. This altogether with the statement of Dil Agha and frequent exchange of telephonic calls with Dil Agua leads to me to unavoidable conclusion that the charge of abetment, conapiracy, and connivance is proved against Pradeep Rana and he is liable for penal action under Section 112 of the Customs Act, 1962."
Likewise, the findings regarding Yashpal were as follows:
"447. The charges of collusion, abetment and conspiracy CUS.A.A.29/11 and connected matters Page 46 against Yashpal is proposed to be established on the basis of following two pieces of evidence:
(a) R .N. Zutshi in his statement dated 17th July 2001 has described that Yashpal used to speak to Protocol Superintendents and Officers regarding smooth clearance of the textiles brought in on behalf of Mamoor Khan.
(b) The computer print outs show that between 1.4.2000 to 25.7.2000, Yashpal spoke to Mamoor Khan 34 times on telephone while once he was found to be in contact with Dil Agha and twice with Shahlo A.
448. The noticee has filed his written reply vide his letter dated NIL received in the Office of the Comnissioner of Customs, New Custom House, New Delhi, on 17th March, 2005 . He made further written submissions at the time of hearing on 4th Jan.,2007. While denying the charges in toto, the main arguments advanced by the noticee were that he could not be said to have abetted irregular clearance in the light of order of Supreme Court in the case of Shriram Vs. UOI; that the statement of R.N. Zutshi on the basis of which the charges were made had been retracted by Zutshi; that Shahlo on the relevant date had no excess baggage as conveyed by Krygystan Airlines vide their letter dated 26th April, 2001 which was imputed to be carrying 1,220 kgs. of baggage; that the methodology adopted for working out the meterage and value of textiles supposedly brought by Shahlo A. was not correct. The noticee was granted personal hearing on 4th Jan., 2007wherein it was contended that:
(i) Offence committed by Customs officers during discharge of their official duties ought to be dealt with in accordance with the provisions of Section 136 of the Customs Act, 1962
(ii) Disembarkation Card had not been made available
(iii) The passenger manifest submitted by the Airlines did not contain details retarding baggage carried by passenger
(iii) That on 10 April, 2000, the noticee was posted on Hand X-Ray Machine (EXL Right Side) as is evident from the copy CUS.A.A.29/11 and connected matters Page 47 of duty Róster produced by him.
449. I have examined the evidence against the noticee as well as the argument advanced by him in defence. I find that Zutshi had categorically named him in his statement dated 17 Jan., 2001 and the issue regarding retraction of the same has already been discussed in paras above. I further find that in his entire defence, the noticee has not given any reasonab1e or plausible explanation regarding frequent telephonic conversation with Mamoor Khán. In his statement recorded on 19.1.2001, he has not challenged the fact that he was in touch with the telephone numbers which were found to be belonging to Mamoor Khan, DilAgha and Shahlo A. He tried to explain this as conversation with an informer which is not a plausible explanation under the circumstances of the case. No suitable defence has come forth either in writing at the time of personal hearing. So far as his argument that his case should be dealt with under Section 136 of the Customs Act, 1962 is concerned, conspiring to clear commercial baggage while causing loss to exchequer by no stretch of imagination could be said to be a part of the Official duties of Customs officers. The provisions of Section 136 are attracted only where the offence is committed during discharge of official duties. This provision of the case laws cited, therefore, has no application in the present case. The other arguments of the noticee have already been dealt with in foregoing paras.
450. In the light of circumstances of the case and evidence as discussed above, I hold that charges of abetment, collusion and conspiracy against Yashpal are established and he is liable for penal action under Section 112 of the Customs Act, 1962.
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463. So far as the evidence against Yashpal is concerned, what is discussed above with regard to 10th April, 2000 holds good for this date also. In addition to the general arguments taken in defence, for this particular date, Yashpal CUS.A.A.29/11 and connected matters Page 48 has taken a plea that he was on duty on Baggage X-ray of Belt No.6 and he has placed reliance on Duty Roster available as RUD No.E42. He further contended that the name of Shahlo A. did not figure in the passenger manifest of Flight No.545 whereas another passenger Nazira I. had cleared 800 mtrs. of textile after adjudication vide A.O. No. 20317. On perusal of manifest dated 15th May, 2000 of Flight No. K2545 from Bishkek to Delhi, I find that the name of Shahlo is mentioned at Sl.No.44, though it is written in a manner that surname has been written first. The plea taken by the noticee is, therefore, not valid.
464. 1 have examined the additional arguments of Yashpal in respect of 15th May, 2000. He has conveniently taken a stand that he was posted on Baggage X-ray Belt but has not been able to cite any reason which could justify his speaking with Mamoor Khan at 9.52 AM and 12.32 PM. As already discussed, Mamoor Khan with his cellphone was present at the International Airport during this time. In the light of various pieces of evidence discussed in paragraph above and after taking into account additional arguments in defence as well as evidence on 15.5.2000, I have no hesitation in holding that the charges of connivance, abetment and conspiracy stand proved against Yashpal and that he is liable for penal action under Section 1 12 of the Customs Act, 1962."
The findings against Ajay Yadav are as follows:
"441. The charge of abetment against Ajay Yadav has been made on the basis of statement tendered by R.N. Zutshi. In his statement dated 17.1.2001, Zutshi has stated that Ajay Yadav was involved in the negotiating and deciding the money to be charged from Mamoor Khan and also in the distribution of the same amongst the baggage officers in different shifts. Further evidence is in the form of A.O. No. 17730 dated 27.2.2000 in which Olga K. was allowed to clear her baggage by adjudicatating 800 mtrs,, though she was carrying baggage weighing 1530 kgs. which works CUS.A.A.29/11 and connected matters Page 49 out to 26,958.60 mtrs. The defence offered by the notice is primarily on the same lines as done by V.K. Khurana and various aspects of the same have been anaylized in the preceding paragraphs. The noticee appeared for personal hearing on 20th Dec., 2006 along with his Advocate R.L. Lamba and in addition to the written submissions, he took the plea that the statement of R.N . Zutshi had been retracted; that the disembarkation card had not been made available; that the passenger manifest as given in the Customs Manual as Customs SI. No.70 did not have the column for description/quantity of baggage. He also requested for cross examination of 20 persons. All these aspects have been commented upon and analyzed elsewhere.
442. On analyzing the evidence available against Ajay Yadav vis-à-vis defence offered by him, I find that the primary evidence is in the form of statement of R.N. Zutshi. I further observe that there is no allegation against Ajay Yadav that he was in touch with any other noticee like Dil Agha, Mamoor Khan, Olga K., Nazira I. etc. on mobile or landline telephone. There is no charge that he spoke to concerned passengers on the their arrival . There is, however, the issue of forwarding the adjudication proposal prepared by VK. Khurana to the shift Dy. Commissioner. Ajay Yadav in his statement dated 16th Feb., 2001 has admitted having handled this adjudication proposal but in his defence, he has stated that the job of examination and determination of quantity/value of baggage was performed by V.K. Khurana and he had only forwarded the adjudication proposal to the shift Dy. Commissioner.
443 It is, thus seen that apart from the statement of Zutshi, there is this AO which points towards complicity of Ajay Yadav in the clearance of non-bonafide baggage. Though the quantification/ measurement of baggage in the first instance is the duty of Baggage Officer, which in this case was V.K. Khurana, it does not absolve the Supdt. of his responsibility. In fact, when a passenger reports to Red Channel counter, he first makes a declaration to the Supdt. who deputes one of the Inspectors working under him to CUS.A.A.29/11 and connected matters Page 50 examine the baggage. In this case, at the time of declaration, the fact that Olga K. was a frequent passenger would have immediately come to the notice of Ajay Yadav. Under these circumstances, it was expected of him to ensure that the baggage of Olga K. was examined in minute detail which obviously was not done. This is a major lapse on his part which gives rise to the presumption of abetment and connivance. No valid or acceptable explanation has comeforth on behalf of Ajay Yadav as to how the baggage of a regular carrier could escape proper examination, inventorisation and adjudication of only 800 mtrs. out of the total of 26,958.60 mtrs. This major lapse/omission coupled with the statement of R.N. Zutshi form sufficient basis for arriving at the conclusion of abetment and collusion on the part of Ajay Yadav and I hold him liable for penal action under Section 112(a) of the Customs Act,1962. "
The findings against the last appellant, Anil Madan, are as follows:
"508..................The show cause notice has also named Anil Madan and Vinod Kumar (Kain) and Kamal Suman, Air Çustoms Officers as a co-noticee for abetment. It has been mentioned in Table No. 13 (page 157 of show cause notice) that Anil Madan was named by RN Zutshi for participating and negotiating the money to be charged from Mamoor Khan during the period July, 2000. Zutshi has also alleged that Anil Madan distributed the shares of baggage officers in April to July, 2000. Further evidence against Anil Madan is in the form of AO No.14262 wherein passenger Merculova was allowed to clear her baggage after adjudication of only 800 mtrs. of textiles, though shé had come in with 14 pieces of baggage weighing 1,500 kgs. which translated into 26,430 mtrs.
509. In his defence, Anil Madan has not denied dealing with this adjudication. I find that he has confirmed in his voluntary statement dated 6.2.2001 that he was on duty on 24.7.2000 an AO No. 14262 which accounted for only 800 metres of baggage brought by Merkulova though she was actually carrying 26430 mtrs. had been put up by BC CUS.A.A.29/11 and connected matters Page 51 Gogna through him. One look at the passport of Merculova would be enough for any Customs officer to conclude that she was a regular and non-bona fìde passenger. There is documentary evidence that she was on this day was carrying 1,500 kgs. of excess baggage but Anil Madan has failed in his duty to ensure proper inventorisation of her baggage. This coupled with the statement of R.N. Zutshi is adequate to conclude that there was an element of connivance in clearance of such heavy baggage and I hold the noticee liable for penal action under Section 112 (a) of the Customs Act, 1962...."
35. In the light of the above discussion, it is apparent that the Commissioner did not go by only the statement of R.N. Zutshi to hold the other appellants guilty; he had a lot of other corroborative materials to support his findings. It is, therefore, held that the Appellants' submissions that the charge of abetment could not have been made against them for past transactions in the absence of the goods, or that many of them were not involved or present at the Airport when the actual lone consignment was seized in August 2000, are meritless. Questions of law (a) and (c) as framed are answered against the appellants and in favour of the revenue.
Re Question (b): Violation of principles of natural justice due to denial of cross examination
36. All the appellants had argued that the Commissioner erred in his findings inasmuch, as, no opportunity was given to them to cross examine any of the witnesses' whose depositions were relied upon. The Commissioner stated that several appellants had sought for cross examination of R.N. Zutshi and of Sh. U.K. Mishra, SIO of DRI. The CUS.A.A.29/11 and connected matters Page 52 Commissioner held that:
"... all the documents on which reliance has been placed in making the allegations against different noticees have been supplied to them. In this case, I find that if the request for cross-examination is acceded to, then the proceedings will have to continue for a long period of time. The SCN was issued as early as in 21.8.2001 and over 6 years have elapsed since the proceedings began. Under the circumstances, prolonging it as a result of numerous requests of cross examination would not only hurt the interest of justice but also the interest of noticees themselves. The decision of the Hon'ble SC in the case of Kanungo and Co. V. Collector of Customs, Calcutta reported as 1983 (13) ELT 1486 (SC) covers the issue under consideration. In the latest case of Jagdish Shankar Trivedi v. CC, Kanpur, the Principal Bench of CESTAT at New Delhi has also relied upon this judgment and ruled that cross examination cannot be claimed as a matter of right under Section 124 of Customs Act. Once the material relied upon against the noticees referred in the SCN have been provided, denial of cross examination is not violative of the principles of natural justice."
In Kanungo (supra) the Supreme Court, through a three judge Bench decision held that:
"The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our-opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to be cross-examined by them on the statements made before the Customs Authorities. Accordingly we hold that there is no force in the third contention of the appellant."
A similar view had been expressed earlier in Issardas Daulat Ram and ors. v. The Union of India & Ors. [1962] Supp. (1) S.C.R. 355. It was CUS.A.A.29/11 and connected matters Page 53 also followed in Collector of Customs, Madras & Ors, vs. D.Bhoormul (1974) 2 SCC 544.
37. Bhoormul (supra) is also authority for the view that the law does not insist upon an impossible threshold of proof to establish allegations in Customs proceedings and that if on probabilities the statutory authorities can establish evasion, the legal standards are adequately met with. Here, each of the appellants were implicated for their complicity not on the basis of solitary evidence only, such as confessional statement of R.N. Zutshi, but also other materials: phone call records during the various past occasions when the passenger couriers had landed; the presence and role of the concerned appellants in helping the clearance of consignments, corroboration through statement of others, etc. The chain of circumstances to prove the allegations they had to answer, therefore, had been explained. The appellants, significantly did not seek cross examination for over 5 years, though they were aware that the statements were to be used during the proceedings that had been put to them in the SCNs. Furthermore, they had also not given any convincing or reasonable explanation for the phone calls received from Mamoor Khan, Dil Agha, Olga, etc. In the circumstances, the findings of the lower authorities that they were not prejudiced, and that principles of natural justice were not violated, cannot be interfered with.
Question No. (d) Did the CESTAT err in its findings regarding the method adopted in arriving at the average weight to assess liability and the absence of essential documents like the passenger declarations
38. All the appellants had objected to the methodology adopted by CUS.A.A.29/11 and connected matters Page 54 the Commissioner to arrive at the weight, for the purpose of calculating penalty. The Commissioner observed that the weight declared for the material varied drastically in the several consignments. He adopted a method of averaging, as is evident from the following discussion:
"400.......................The Show Cause Notice proposes weight metre ratio of 17.62 i.e. 17.62 metres per kg. whereas the noticees have advanced the argument that it was purely based on presumptions and guess work and therefore not fair and reasonable. It may be noted that this dispute has arisen due to the fact that firstly, the goods are not available for examination and secondly there is no material evidence on record to show the correlation between the weight of various qualities of the silk fabrics brought in on different dates and the respective meters per kg. thereof except the record of Airlines showing only the excess baggage weight in Kgs. and AOs showing only the meters and not the Kgs. In view of the foregoing position, although the accurate meters of silk fabrics can in no way be ascertained but we can reach the proximity thereof. Under the circumstances, where manipulations of quantities of silk fabrics, suppressions and misdeclarations, both weight wise and meter-wise, have been alleged to be rampant during the material period, I consider it important to devise the most adaptable and logical methodology to arrive at the approximation of meter-wise quantity deducing the same from the baggage weights reported by Airlines.
401. On study of weight-metre ratios presented by various AOs and encapsulated in Table-3 of the notice, I note that except the two ratios i.e. 19.54 and 17.62 in respect of 19.6.2000 and 28.8.2000, the other ratios are immensely eccentric, irrational and unbelievable. It is inconvincible that one k.g. of any quality of silk fabrics can contain just 0.52 mtrs or 1.42 mtrs or 2.2 mtrs. All such ratios range between absurd 0.52 mtrs to 7.28 mtrs per kg. These ratios thus have to be excluded from consideration. CUS.A.A.29/11 and connected matters Page 55
402. The above weight-metres ratios need to be understood in the right perspective. Indubitably, except for the dates 19.6.2000 and 28.8.2000, all the remaining ratios, being illogical, are out of place. I therefore focus on the position on these two dates. As regards 28.8.2000, the goods
- silk fabrics in six varieties based on gsm [grams per square metre] i.e. 36, 50.1, 45.7, 52.1, 69 and 73.5 gsm are available. The requisite details of these goods i.e. variety-wise total weight in kgs, total metres, average metres per kg and all other relevant information as exhibited by table 2, 3 and 4 are also available. In this context, I find that the proposed weight metre ratio of 17.62 has been computed on the average basis of the above elements of the silk fabrics physically available as on date. On the other side, a perusal of the weight exhibited by the Airlines and the metres assessed in AOs relating to 19.6.2000 brings forth that even on this date voluminous baggage of silk fabrics containing different varieties was brought in by Olga Kozireva, Isamu KM, Merkulova, Shakista. K. and Vetchinkina T. As against the total weight 2333 kgs as per records of Airlines and as detailed in para 74 of the notice, the total meters assessed in AOs are seen to be 45,600 mtrs which seem consistent, logical and reliable. The average metres per kg i.e. weight metre ratio here works out to 19.54. As detailed in para 74(d) of the notice, in respect of Merkulova and Shakista K, 424 kgs of a variety of silk fabrics were assessed to 7000 mtrs on 19.6.2000 producing average of 16.50 mtrs per kg. It is fairly comparable to a variety of silk fabrics having 16.79 mtrs per kg and 45.7 gsm brought in on 28.8.2000. Similarly, 229 kgs of a variety of silk fabrics relating to Olga Kozireva were assessed to 5000 mtrs. leading to average of 21.83 metres per kg. This average is again rationally comparable to another variety of silk fabrics with 36 gsm having average of 21.81 mtrs per kg brought in on 28.8.2000. A conjoint study of the baggage weights on 19.6.2000 and 28.8.2000 as reported by Airlines through manifests or letters and the metres assessed by customs leads me to positive finding that these metres are reliable and rationally co-relatable to the manifested/reported weights of baggage CUS.A.A.29/11 and connected matters Page 56 brought in by the relevant passengers. Having regard to the Test Reports of CRCL on all the six varieties of silk fabrics seized on 28.8.2000, market enquiries conducted thereon, availability of the goods and the wider details thereof as summarized in the above said Tables, I find the weight metres ratio of 17.62, which is duly supported by the above varieties of silk fabrics brought on 19.6.2000, as more authentic, reliable and legally maintainable for the purpose of ascertainment of metres per kg for previous clearances.
403. In view of the reasons stated hereinabove, I come to the conclusion that contentions canvassed by the noticees on weight metre ratio are devoid of substance and thus not sustainable. I accept the proposed ratio of 17.62 as the true representative weight - metre ratio fairly and squarely applicable to the unassessed silk fabrics brought in on 24 occasions during 17.8.97 to 21.8.2000."
As is evident from the above extract, the weights per metre varied in past instances from 16.79 metre per kg; 16.50 mtrs per kg; 19.54 metre per kg, to 21.81 metre per kg and 21.83 metre per kg.
39. This Court also notices that the Commissioner did not rely only on the weight metre ratio, but also considered another criterion: the baggage weight on the basis of vehicle capacity on five dates. For this purpose, he took up the issue date-wise, noticing that on 10.04.2000, 22.05.2000 and 14.08.2000, the baggage weight of group passengers, as reported by Airlines was 'Zero' but an MMV Canter with 3750 kg capacity of a transporter was used on all the three occasions. On several occasions, the group passengers had hired commercial vehicle of lower capacity, i.e. Tata 407 with loading capacity of 2200 kgs when the baggage weight was not that substantial. The passengers had then chosen to go in for higher capacity vehicle each time. It was held that there was no other reason for hiring a commercial vehicle MMV CUS.A.A.29/11 and connected matters Page 57 Canter of 3750 kgs instead of Tata 407 of 2200 kgs except to carry such volume and weight of baggage as could not be carried in lower capacity vehicle but was accommodable in a higher capacity vehicle. The Commissioner proposed a baggage weight of 1220 kgs on each of the three occasions on the basis of the lowest manifested weight when single MMV Canter was used instead of proposing some higher average figure. For two other dates, i.e. 17.7.2000 and 21.8.2000 when the manifested/reported weights were 1235 kgs and 1000 kgs respectively, two trucks - MMV canter of 3750 kgs capacity were used for goods transportation. On 28.8.2000 when the baggage weight was 4211.7 kgs, the internal record of transporter and other evidence on record showed that two MMV canters of 3750 kgs capacity were hired. An inference was drawn from this instance that when the baggage weight was touching 2000 kgs or beyond it, one MMV Canter of 3350 kgs was preferred to Tata 407 of 2200 kgs capacity. On 28.8.2000, to carry 4211.7 kgs, two trucks of 3750 kgs capacity were hired and they reached Airport but could not be used due to seizure. It was, therefore, concluded that on each of the dates, the weight of the baggage was around 4000 kgs when two trucks of 3750 kgs capacity were hired on each occasion. The investigation calculated the baggage weight on the lowest and safest side as 2364 kgs on 17.7.2000 and 1914 kgs on 21.8.2000 and proposed the same for assessment. The weights were proportionately worked out on the basis of the ratio of actual weight and recorded weight as on 28.8.2000 i.e. 1.9144 times the recorded weight. Here the figure of 2364 kgs was computed by multiplying the recorded weight of 1235 kgs by 1.9144 and the figure of 1914 kgs has been worked out by multiplying the recorded weight CUS.A.A.29/11 and connected matters Page 58 of 1000 kgs by 1.9144. This clearly shows application of mind to the material available. The CESTAT too had occasion to consider these findings. Besides stating that the figures were arbitrarily worked out, the appellants were unable to show any intrinsic inaccuracy, given that the past transactions were noticed; wherever the Green Channel was used, the Commissioner endeavored to co-relate the quantities brought in clandestinely with the truck weight relative to that date. The Court does not find any infirmity with this approach warranting interference with a pure finding of fact.
40. Furthermore, the Court notices that the DRI, during investigations, had obtained passenger manifest copies from Krygystan Airlines to determine the quantity of silk fabrics brought in on different dates, by various passengers. Many noticees had questioned this, alleging firstly that Customs Form Serial No.70 in Customs Manual does not indicate any column requiring disclosure of the number of packages or weight of baggage carried by a passenger; secondly that a copy of passenger manifest relied upon by DRI was not made available to the Customs officers at the time of clearance. It was argued that as to what was the quantity or description of goods brought in by a passenger, the manifest relied upon by the DRI could not be inferred. The Commissioner dealt with this aspect in paras 396-397 of his order. Noticing that while the form did not require disclosure, he stated that -
"A passenger manifest is created in several formats and filed with different agencies by the Airlines depending upon what are the requirements indicated by that particular authority. If the Airlines copy of the passenger manifest CUS.A.A.29/11 and connected matters Page 59 does have the details of number of packages and weight of baggage booked by each passenger, it does not become wrong or invalid simply because these details are not required under Customs Form No.70. It is obviously a pre-existing system in the Airlines to record the number and weight of packages booked by individual passenger under the passenger manifest and in fact it can be a very legitimate and conclusive way of ascertaining whether a passenger carried any excess baggage booked on a particular date or not. It does not get invalidated simply because it does not tally with Customs Form No.70."
Dealing with the weight determined by multiplying 1.9144 on certain occasions, the Commissioner noted that on 28.08.2000, the total excess baggage booked in the name of Olga K. was 2,200 Kgs. which on actual weighment was found to be 4,211.70 Kgs. The internal inquiry conducted by the Airlines, found that their staff at Bishkek and other places were hand in glove with passengers in recording lesser excess weight of baggage than actual in return of illegal gratification from passengers and that several officials of Krygystan Airlines in Bishkek were sacked because of their involvement in not recording the weight of excess baggage to benefit the passengers. These facts were confirmed by the statement of Krygystan Airlines Manager, Shri H.S. Dugal recorded on 3.8.2001 that: "We have taken the matter up with H.Q. and as informed earlier to Customs vide our letter dated 27.12.2000, this matter has been investigated and services of staff responsible including that of Mr. Dusheev, Head of Manas Airport, has been suspended." The Commissioner therefore held that there was no infirmity in arriving at the actual weight of excess baggage brought in, based upon the position of 28.8.2000 and its application for part clearances, based upon practical logic. Acknowledging a CUS.A.A.29/11 and connected matters Page 60 margin for accuracy, it was held that since the issue concerned past clearances for which no other documents were available, it was held that it is a reasonable and acceptable methodology and the results thereof cannot be far from truth, though they cannot be absolutely exact. Again, we see no infirmity or question of law with this approach, warranting interference.
41. As far as the question of non-service of notice upon the main culprits is concerned, the Commissioner rendered his findings in Para 418, holding that some of those foreign nationals could not be personally served; yet notice was issued and published in a known manner. The Appellants were, however issued notice; there was clear evidence of their culpability. Therefore, the Customs authorities were entitled to proceed and impose the penalties and make adverse orders.
42. In view of the above findings, this Court holds that the appeals are liable to fail; they are accordingly dismissed, without any order as to costs.
S. RAVINDRA BHAT (JUDGE) VIPIN SANGHI (JUDGE) FEBRUARY 27, 2015 CUS.A.A.29/11 and connected matters Page 61