Custom, Excise & Service Tax Tribunal
Lt Col Ganesan S (Retd) vs Chennai(Air Port &Amp; Cargo) on 6 February, 2020
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT NO. IV
Customs Appeal No. 42206 of 2017
(Arising out of Order-in-Appeal Airport C.Cus.I. No. 168/2017 dated 11.09.2017 passed
by the Commissioner of Customs (Appeals-I), No. 60, Rajaji Salai, Custom House,
Chennai - 600 001)
Lieutenant Colonel Ganesan S. (Retd.), : Appellant
Flat No. 7, Citadel Apartments,
No. 1A, Cenotaph 2nd Lane,
Alwarpet, Chennai - 600 018
VERSUS
The Commissioner of Customs, : Respondent
Custom House, No. 60, Rajaji Salai, Chennai - 600 001 APPEARANCE:
Mr. Hari Radhakrishnan, Advocate for the Appellant Ms. K. Komathi, Authorized Representative (A.R.) for the Respondent CORAM:
HON'BLE MR. C. J. MATHEW, MEMBER (TECHNICAL) HON'BLE MR. P. DINESHA, MEMBER (JUDICIAL) FINAL ORDER NO. 40083 / 2020 DATE OF HEARING: 12.12.2019 DATE OF DECISION: 06.02.2020 Order Per : Hon'ble Mr. P. Dinesha This appeal is filed by the assessee against the Order-in-Appeal Airport C.Cus.I. No. 168/2017 dated 11.09.2017 passed by the Commissioner of Customs (Appeals-I), Chennai, and the only grievance of the appellant is against the levy of penalty under Section 112
(a) of the Customs Act, 1962.2
2. When the matter was taken up for hearing, Mr. Hari Radhakrishnan, Learned Advocate, appeared for the assessee-appellant and Ms. K. Komathi, Learned Joint Commissioner (Authorized Representative), appeared for the Revenue-respondent.
3.1 The submissions of the Learned Advocate for the appellant are summarized as below :
The only allegation against the appellant is that he, along with other co-noticees namely, M/s. Solai Exports & Importers (Represented by its proprietor Mr. V.S. Mathiarasu), Mr. Khaja Mohideen, Mr. Shahul Hameed, Mr. K. Francis and Mr. P. Karunanithi, was involved in the act of smuggling of gold bars;
The Revenue has relied on the statements of co- noticees/co-accused namely, Mr. Francis and Mr. Karunanithi and the affidavit of Mr. Mathiarasu and that the denial by Mr. R.S. Sridhar and Mr. R. Vijayakumar has not at all been considered;
The other evidences like the forensic analysis of mobile phones, etc., do not lead to any wrongdoing by this appellant;
The co-accused namely, Mr. Francis and Mr. Karunanithi have at the first available opportunity, on being produced before the Hon'ble Magistrate, clearly stated that their statements were obtained under coercion;
The statement of IEC holder i.e., Mr. Mathiarasu, does not implicate this appellant and that by itself does not suggest any active role of the appellant in abatement of illegal export;
The call records only indicate the calls made/received, which by itself do not lead to any inference as to the appellant's culpability;3
The Revenue has neither apprehended the so- called mastermind i.e., Mr. Khaja nor have they taken any steps in this regard and nor has the Revenue placed any evidence on record to suggest that the mobile number 8056898851 was belonging to Mr. Khaja;
The Letter issued by the service provider i.e., M/s. Airtel is only a covering letter giving the list of calls made and is not a certificate issued under Section 138C of the Customs Act, 1962 to be relied upon;
In the Order-in-Original, the Adjudicating Authority has traversed beyond the Show Cause Notice by relying upon additional documents which were not at all part of the Show Cause Notice;
The so-called forensic analysis does not lead to any conclusion as to the involvement of the appellant since the appellant's mobile phone was not at all subjected to the forensic analysis, etc. 3.2 Learned Advocate would conclude his submissions by contending that the confiscated gold biscuits were lying in the cold storage of the Air Cargo Complex and none of the employees of the appellant's security agency were anywhere near it; that one Mr. Karunanithi who, according to the DRI, was clandestinely removing the gold biscuits, was not at all on duty on that particular day. He relied on the following decisions :
(i) D.V. Kishore v. C.C. (Seaports-Imports), Chennai [2017 (350) E.L.T. 527 (Mad.)];
(ii) DRI v. Mahendra Kumar Singhal [2016 (333) E.L.T. 250 (Del.)];
(iii) Shafeek P.K. v. C.C., Cochin [2015 (325) E.L.T. 199 (Tri.
- Bang.)];
(iv) Anil Gadodia v. C.C., Mundra [2016 (343) E.L.T. 983 (Tri. - Ahmd.)];
(v) S.M. Agrotech v. C.C., New Delhi [2018 (361) E.L.T. 761 (Tri. - Del.)] 4 4.1 Per contra, Learned Authorized Representative for the Revenue while supporting the findings of the lower authorities, also vehemently contended that the Adjudicating Authority has placed on record the threadbare analysis of the entire modus operandi and the involvement of the noticees/accused and therefore, it is a fit case for confirming the penalty imposed for an anti- national activity.
4.2 She would further submit, from the call records, that there have been calls to and from the appellant's mobile phone from 4:18 a.m. on the eventful day i.e., 10.04.2015 from Mr. Francis, who was apprehended at the Air Cargo Complex and it was this Francis who was in touch with the main accused i.e., Mr. Shahul Hameed and Mr. Khaja Mohideen; that Mr. Karunanithi and Mr. Francis worked for the security agency run by the appellant and it is their statements that the appellant knew about the gold being brought in which was to be illegally exported.
5.1 In rejoinder, Learned Advocate for the appellant would submit that the penalty has been levied solely based on the statements of the co-accused and that those very statements were later on retracted. Moreover, when the appellant's statement was recorded, the appellant has categorically denied as to his involvement in any way by stating that he was not aware of any gold smuggling and that he had not given any instructions in this regard to either Mr. Francis or Mr. Karunanithi.
5.2 He further contended that, according to the DRI, the main persons involved in the smuggling were Mr. Thameen of Singapore, Mr. Khajabhai and Mr. Shahul Hameed, who were never apprehended, who alone perhaps could have spoken about the involvement or otherwise of the appellant; that in the absence of their statements, the levy of penalty is not correct.
56. Heard both sides, perused the documents placed on record and also the decisions submitted during the course of arguments. From the documents filed/placed on record, we do not have the benefit of the statements of Mr. Francis, Mr. Karunanithi, Mr. Shahul Hameed, etc., recorded by the authorities. Further, the so-called retracted statement is also not there on record, but for the mention of coercion before the Hon'ble Magistrate.
7. The seizure at the Air Cargo Complex happened on 10.04.2015 followed by a search operation in the residence of this appellant and thereafter, the Show Cause Notice dated 07.10.2015 came to be issued accusing all the accused including the appellant herein, proposing confiscation under Sections 111 (d), 111 (i) and 111 (l) of the gold bars of foreign origin seized, apart from imposition of penalties under Section 112 and Section 114AA, separately, of the Customs Act, 1962. From the reply furnished by this appellant vide letter dated 02.12.2015, the appellant has inter alia explained that he was not involved in any way in any of the activities of the other accused in smuggling the gold biscuits.
8. The Revenue has fastened the appellant with penalty based on the statements of the co-accused and the call records. This appellant has explained that there are more than 120 employees in his firm and that, as the head of the firm, he used to get calls even during odd hours informing about the security scenario and manpower deployment at the Air Cargo Complex and that he would also make calls in turn, to ascertain further details. From this, it is perhaps routine that the appellant would get or make calls even during odd hours and hence, the calls recorded may not be significant enough to point out that the appellant was actively involved, as an abettor, in the conspiracy unless the recordings are in the form of conversations, which is not the case here. But a close look at the call records which speak otherwise, requires a lot of explanation.
69. Further, evidence in the form of statements of the co-accused namely, Mr. Francis, Mr. Karunanithi and Mr. Shahul Hameed, are not available before us and therefore, in the absence, we are unable to judge as to its contents, veracity and its incriminatory nature. All the accused including the appellant were produced before the Learned Magistrate along with remand application on 13.04.2015 before whom the accused have stated that their statements were obtained by threat and coercion. The relevant portion of the recording of the Learned Magistrate reads as under :
"A1 to A4 - are produced before me at my residence. Grounds of arrest is revealed to the Ad. Ad. have stated that their statements are obtained by threat and coercion..."
Though there is mention about threat and coercion, there is no specific denial as to their involvement since the Learned Magistrate has categorically recorded as to the revealing of the grounds of arrest which would only mean and which is relevant for our limited purposes, is that only the statements were obtained by using threat and coercion.
10. In the Order-in-Original, the Adjudicating Authority has, no doubt, explained very succinctly the modus operandi of the main accused and the involvement to some extent of Mr. Francis and Mr. Karunanithi, from where the role of the appellant kicks in, and as the Adjudicating Authority has extracted, both appear to have stated that the appellant knew about the gold smuggling. Their statements assume relevance since both of them have inter alia stated that they are working in the appellant's service agency which fact has not been denied.
11.1 Now, the appellant's explanation regarding the call records coupled with the extracts of statements of persons apprehended on the early hours of the eventful day lead us to understand that considering the gravity and nature of the offence/activity alleged, the explanation 7 offered in the form of reply is not at all sufficient to conclude as to the innocence of this appellant, as pleaded. This assumes relevance in this case because the accused/appellant is a retired military personnel who has served the nation and has pleaded that he was not even aware of what his own employees were doing, while working for him.
11.2 Further, a close look at the call records inter se the appellant, Mr. Khaja and Mr. Mathiarasu reveals that right from the beginning of March 2015 all these persons were in touch. There has been call records of Mr. Khaja and the appellant on 04.03.2015 for about 93 seconds, again on 09.03.2015 for about 65 seconds with Mr. Khaja, also simultaneously with Mr. Mathiarasu. There have been further calls between the appellant and Mr. Khaja with a duration of 302 seconds on 11.03.2015, again on 10.03.2015 for about 4803 seconds and 32533 seconds at 11:13 a.m. and 12:59 p.m. and further calls again at 16:30 p.m. and 16:35 p.m. for 9812 seconds and 55441 seconds, for which there is no explanation. Considering these calls on record, the appellant cannot wash off his responsibility with a total denial that he did not know Mr. Khaja at all and that there was only a wrong call for about 6 seconds, etc. There has been some calls as well on 10.03.2015 between Mr. Khaja and the appellant, the appellant and Mr. Mathiarasu and again, the appellant and Mr. Khaja, which clearly leads to suspicion for which the appellant could only answer.
12. On an overall analysis, we are of the prima facie view that the Revenue has made out a case by linking the chain of events, phone calls, etc., towards the scheme planned well in advance for executing anti-national activity by defrauding the Revenue, as brought on record very succinctly by the Adjudicating Authority in the form of unchallenged statements and the call records and for these reasons, we do not see any reason to interfere with the impugned order.
813. Accordingly, the appeal stands dismissed.
(Order pronounced in the open court on 06.02.2020) Sd/- Sd/-
(C.J. MATHEW) (P. DINESHA) MEMBER (TECHNICAL) MEMBER (JUDICIAL) Sdd