Customs, Excise and Gold Tribunal - Mumbai
Nazir-Ur-Rahman And Riaz-Ur-Rahman vs Commissioner Of Customs, Chhatrapati ... on 14 June, 2004
Equivalent citations: 2004(174)ELT493(TRI-MUMBAI)
ORDER Moheb Ali M., Member (T)
1. Briefly the facts are that the appellants alighted at Santacruz, Airport, Mumbai from a domestic flight coming from Chennai on 28-03-2002. They had seven piece of checked in baggage. On certain intelligence that smuggled goods from Chennai were being brought to Mumbai for sale, the Officers examined the baggage of the appellants. Such an examination revealed that the two appellants were carrying Chattons and cup chains of foreign origin valued at Rs. 41,02,850/- CIF. The appellants were asked to explain as to how they came to possess the goods in question. Riaz-Ur-Rahman one of the appellants in his statement dated 28.03.2002 stated that one Shri Ramji of Madras has asked him to deliver the said goods to one Shri Rajesh in Mumbai; that he does not know the addresses of either of them; that he requisitioned the services of Nazir-Ur-Rehman, the second appellants, to carry out the task and that he agreed to deliver the goods to Rajesh in Mumbai for a consideration. He pleaded that he was only a carrier along with the Riaz and was not the owner of the goods. However, it appears that the appellants took upon themselves to establish that the goods are legally imported into the country later on he alleged, owner Shri Ramji never came into the picture at any time.
2. The Commissioner who adjudicated the case confiscated the goods and imposed penalties on the two appellants. Hence these appeals.
3. There is no gain saying the fact that the goods in question, Chatton and Cup chains, are not notified under Section 123 of the Customs Act. Further the import policy as then existed allows the import of these goods without licence. The appellants agree that the goods are of foreign origin but were brought into the country sometime back by three passengers and cleared them on payment of duty fine and penalty. The rival contentions have been examined in the light of the above facts.
4. Heard both sides:
5. The learned advocate strongly pleaded that in the case of non- notified goods, the burden to prove that the goods seized are smuggled is on the dept. We have carefully considered the plea. We observe that in CC Madras v. D. Bhoormal the Supreme Court held that the dept need not discharge the burden Under Section 323 with mathematical precision. What is required is to establish such a degrade probability that a prudent man may on this basis believes in the existence of the facts in issue. The Court also holds that the dept. need not adduce direct evidence of illicit importation. It further ruled that if a full opportunity is given to the accused to establish that the goods were acquired in the normal course of business and that there was no violation of the rules of natural justice, it could not be said that the dept was throwing the burden of proving on the accused, what the dept has to establish. The court observed that the dept was simply giving an opportunity to the accused to rebut the first and the foremost presumption that arises out of the tell-tale circumstances in which the goods are found.
6. In the case of Kanungo & Co. v. CC Calcutta (AIR 1972 SC 2136) it was urged before the Supreme Court that the burden on the customs authorities had not been discharged and that there was no evidence that the goods in question had not been brought into India lawfully. It was further urged that the burden was wrongly placed on the appellant and that there was no evidence that the goods has been imported in contravention of law. Repelling these contention the apex court held that although the burden was on the customs authorities they had discharged the burden by nullifying in particulars the story put forward by the appellant.
7. In the case before us the goods are not notified Under Section 123 of the customs act. The import of the said goods is freely allowed. These facts have to be kept in mind while deciding the issues whether or not goods are smuggled. The two appellants were carrying the seized goods from Chennai to Mumbai. It is their contention that they were merely acting as carrier for a consideration. Sri Riaz-ur- Rahman in his statement dated - 28/3/2002 states that one Ramji in Chennai has handed over the goods to him with instructions to hand over the goods to one Rajesh in Mumbai. He does not know the whereabouts of either Ramji or Rajesh.
8. Here is a case, of a person carrying goods, given to him by a person whose address and other details he does not know. To boot he does not know the address and other particulars of person to whom he has to deliver the goods. Sri Ramji of Chennai, the owner of the goods in question, never came forward to claim the goods or to tender any proof that the goods were legally imported into the country. It is one Sri Prakash K. Singarani, advocate vide his letter dated -26/4/2002 who submitted three baggage receipts of different dates in 2001 and 2002 issued at Chennai Airport in the names of Ismail Ishmat Ali, Abdul Batcha S Sadhick Ali and Shaikh Mohammed indicating the clearance of "Crystal assorted" and "Bead Rolls" and claimed that the goods under seizure are the ones covered under the receipts. The scrutiny of the three baggage receipts submitted by the advocate revealed that the description of the articles given in the baggage's receipt does not tally with the goods under seizure. Nor does the value of the seized goods tally with the ones shown in the receipts. The baggage receipts are in the name of three unknown persons two of whom could not present themselves before the dept despite the summons issued to them. Only Sri Sadhick Ali in his statement dated - 13/9/2002 stated that the 44 nos. of Bead Rolls were brought by him. Me paid duly, fine and penalty on 11/2/2002. He seemed to have sold the said goods to some unknown broker outside Chennai Airport immediately after exit.
9. Further summons issued to the two appellants went unanswered. Under these circumstances the Commissioner held the goods in question were liable to confiscation Under Section 111(d) of the customs act.
10. The advocate's contention that in respect of non notified goods, the dept. cannot ask any question relating to the acquisition of the goods of the person from whom goods arc seized on a reasonable belief that the goods are smuggled into India is not unacceptable. In fact in D. Bhoormal's case part of the goods seized were non-notified. In spite of that the Hon'ble Supreme Court held that the persons concerned could be asked to explain as to how they came to possess the goods. The apex court upheld the order of confiscations of non-notified goods when the persons concerned were not able to satisfactorily explain the possession of the goods. Once the dcpt established that the contention of the appellants in regard to acquisition of the goods was false the burden or the onus shifted to the persons from whose possession the goods were seized to establish how they came to posses the goods. In the present case they failed to do so. Following the ratio of the decision of the Hon'ble Supreme Court in the cases cited Supra, we uphold the finding that the Dept. discharged the burden cast on it.
11. In regard to the contention that the goods are freely importable and therefore Section l1l(d) under the Customs act does not apply, we observe that under the import policy in force goods can be imported into the country only by a person who possesses an Import Export Code Number allotted by the licensing authority. In the present case no evidence has been tendered by the appellants to show that the goods were imported by such IE Code holders. Even goods, which are freely importable, can be imported only by those persons who possess IE Code given by the Licensing authorities under the Exim policy. The Department's contention is that the goods are non-duty paid and therefore liable to confiscation under customs act. We do not see any infirmity in the order of the Commissioner in this regard.
12. On the issue of valuation, we observe that the goods have been valued after seizure in the presence of the appellants. No objections were raised at the time of seizure. The question of valuation cannot be raised at the a later stage without any basis.
13. In regard to penalty imposed on the appellants, we observe that no evidence has been brought out by the dept to establish that the two appellants committed any one of the acts enumerated Under Section 112(b) of the customs act knowingly. Mensrea is a necessary ingredient for imposing a penalty. While the goods are liable to confiscation no penalties can be imposed on the appellants Under Section 112(b) as no evidence was adduced by the dept to show that the appellants were knowingly transporting smuggled goods.
14. Having regard to the circumstances as discussed above the following order is passed.
(a) Confiscation of the goods is upheld.
(b) Penalties on the appellants are sate side.
15. The appeals are thus partly allowed.
(Operative part pronounced in court)