Customs, Excise and Gold Tribunal - Calcutta
Muchipara Consumers' Co-Operative ... vs Commissioner Of Customs on 20 January, 2003
Equivalent citations: 2003(88)ECC199, 2003(160)ELT372(TRI-KOLKATA)
JUDGMENT S.S. Sekhon, Member (T)
1. Based on an intelligence that Silk Yarn imported into India clandestinely without payment of Customs Duty had been stored/secreted at the premises of M/s. Patel Angadia Co. (P) Ltd., No. 60, Jumma Masjid Road, Bangalore/ the Officers of Directorate of Revenue Intelligence visited the said premises on 18.9.1999 and found* 27 bales of Raw Silk Yarn of foreign origin. The enquiries revealed that these bales of Raw Silk Yarn of foreign origin were transported by M/s. Patel Angadia Co. on behalf of M/s. Muchipara Consumers Co-operative Stores, 16, Sashi Bushan Dey Street, Kolkata and the documents i.e. Cash Memo of M/s. NCCF of India Ltd., Kolkata, having purchased these bales from Krishnagar Customs Division; Challan Nos. 13 and 14 both dated 8.9.1999 of M/s. Muchipara Consumers' Co-operative Stores Ltd. to self, Bangalore in respect of L.R. Nos 163/10 and 164/7 and Challans of NCCF of India Ltd. for the sale of these goods to M/s. Muchipara Consumers' Co-operative Stores Ltd.; and Slip Nos. 163 and 164 all dated 8.9.99 of M/s. Patel Angadia Co. (P) Ltd., Calcutta issued to M/s. Muchipara Co-operative Stores Ltd.; Consignment Note of June Angadia, Patel & Co. bearing Nos. 264 and 266 both dated 8.9.99; Manifest/Lorry Challan of Patel Angadia Co. dated 8.9.99 and Challan Nos. 1, 2, 3 for Lorry No. KA 01 5825 and Challan Nos. 1, 2, 3, 4 for Lorry No. KA 05 A 2471 dated 7.9.1999 were produced by the transporter, which were taken charge of. Enquiries were, thereafter, made and a show cause notice issued to M/s. Muchipara Co-operative Stores Ltd. The Additional Commissioner after considering the replies of the present appellants, ordered the confiscation of the goods in question. However, he appropriated the sale proceeds of Rs. 10,90,406.00 (Rupees ten lakh ninety thousand four hundred and six) under Section 111(d) of the Customs Act, 1962 and thus the said proceeds stand appropriated to the Government of India. He also imposed a personal penalty of Rs. 2.00 lakh (Rupees two lakh) on M/s. Muchipara Consumers Co-operative Stores under Section 112(a) and that of Rs. 2.00 lakh (Rupees two lakh) on M/s. Patel Angadia & Co. also under Section 112(a) of the Act ibid.
2. In appeal filed by the said Stores, the Commissioner (Appeals) ordered that since the goods were not notified under Chapter : IV-A or Section 123, they have to be released on redemption fine, after considering the sensitive nature of the goods and upholding the liability for confiscation thereof. He ordered as follows:
"(i) The goods under seizure be assessed to duty at contemporaneous assessment;
(ii) The goods shall be redeemed on payment of fine of Rs. 1,00,000 (Rupees one lakh only);
(iii) Penalty is reduced from Rs. 2 lakhs to Rs. 1 lakh under Section 112 of the Customs Act. The order of the lower authority is modified to the above extent and disposed of accordingly."
3. The present appeal is filed by the above-captioned appellant company. From the Order-in-Appeal it is found that the Commissioner has come to his decision based on the following findings:
"The department has clearly established illegal importation of goods under seizure, are not those which were bought from the NCCF Customs godown. As per Challan No. 1/8175 dated 7.9.99, it is seen that the goods are to be transported through vehicle No. KA-05-A-2471 and the other Lorry No. KA-01-5825. The vehicle KA-01-2471 said to be carrying the goods passed through old Madras Road Commercial Tax Check Post on 12.9.99, and as per the letter dated 14.3.2000 of the Commercial Tax Officer, this vehicle was moving from Bangalore to Calcutta. It was also reported that Lorry No. K-01-5825 which had passed through the Check Post on 12.9.99 was carrying handloom sarees and not silk yarn. The transport documents were not relevant to the documents under seizure. It is also observed that Challan No. 14 dated 8.9.99 issued by M/s. Muchipara Consumers' Co-operative Stores in favour of self Bangalore in respect of 466 of raw silk yarn meant for transport through Patel Angadia & Co. (P) Ltd., Calcutta has not been signed and does not bear the seal of the said Co-operative Stores. The consignment note Nos. 163 and 164 for the consignment of 633 kgs. and 466 kgs. produced by the transporter are also not signed. The transporters also produced copies of manifest/lorry challan. The manifest/lorry challan was dated 7.9.99 whereas the consignment notes as well as the challan produced by the Muchipara Co-operative Stores are all dated 8.9.99. Therefore, how the goods entered for transport on 8.9.99 could have actually been transported on 7.9.99. To claim that the movement of the said lorry through the concerned Check Post was not entered in the special register. The documents produced by the appellants are not relevant. Since the raw silk yarn is not notified under Section 1 and specified under Section 123 of the Customs Act, 1962, the burden of proof that the goods have been smuggled into the country is on the Department and the Department has not discharged the onus. When the appellant produced the documents for their legal acquisition, the onus is entirely on the Department to prove that the goods had been imported illegally."
4. After hearing both sides and considering the materials on record, it is found--
(a) the lower authorities have been led to an incorrect conclusion as regards the factual position on the delivery challan Nos. 163-164 and challan Nos. 13 and 14 both dated 8.9.99 of Muchipara Consumers' Co-operative Stores, by coming to a finding that the Delivery Notes and Challans are not signed. However, from the photocopy of the Challans in the paper-book, it is absolutely clear that Challan No. 13 dated 8.9.99 to 'Self Bangalore' on the Letter Head of Muchipara Consumers' Co-operative Stores, Calcutta, is having the signature for or on behalf of the Co-operative Stores and the goods have obviously not been sold, since the goods on this challan were intercepted while in transit to Bangalore. While the Delivery Notes of Patel Angadia Co. for transportation from Calcutta to Bangalore, do not bear the signatures, it is found that the Lorry Receipts from Calcutta to Bangalore do bear the signatures which are the documents subject to 'Bangalore jurisdiction' admissible in law as proof of transport from Patel Angadia Co., Calcutta-9 to Patel Angadia Co., Bangalore. Thus the Order of the lower authorities is based on a factual inaccuracy in their findings that the challans of the Co-operative Stores for transporting the goods Self-Bangalore/ are not signed. Thereafter, much has been made out of the challans being made on 7.9.99, whereas the consignment notes as well as the challans of Muchipara Consumers Co-operative Stores are dated 8.9.99 and, therefore, it has been held that the goods could not be transported on manifest/lorry challan dated 7.9.99. It has also been found that the lorry has not travelled as the concerned Check Post records did not have the number of the said lorry at Bangalore. However, the perusal of the transport documents show that there is a stamp on the Balasore Check Post in Orissa having been crossed, which have been ignored by the lower authorities.
(b) No enquiries have similarly been made from the driver of the concerned two trucks, which are the subject matters of these enquiries, to rule out the possibility of the transport of the goods from Calcutta to Bangalore.
(c) In view of the above factual inaccuracy in the observations of the lower authorities and the lacuna in the investigations, the Orders cannot be sustained.
(d) Raw Silk Yarn is not notified under Chapter IV-A or under Section 123 of the Customs Act, 1962. The onus of proving the foreign origin of the yarn under seizure and as to where it violated the Indian Customs Barrier has to be established by the Department. The same has not even been adverted, with the help of any material on record except the Mazhar of detailed inventory on contents of the bales may indicate the goods to be of foreign origin. This Mazhar would only be as known to the Seizing Officer i.e. the Intelligence officer of DRI and/or of the witnesses, and not a material to indicate the foreign origin of the goods by independent corroboration thereof.
(e) When the foreign origin of the case is not satisfactorily explained and the goods are not notified under Section 123, the onus of proving their smuggled and non-duty paid nature is to be established by the Revenue, which they have failed in this case. Therefore, the confiscation as arrived at in this case is not called for under the provisions of Section 111 (d). The Order of Confiscation and consequently, the Redemption Fine is, therefore, required to be set aside.
(f) When the goods are not found to be liable for confiscation as ordered by the lower authorities, the question of ordering them to be assessed on payment of duty as per contemporaneous assessable value, is not called for.
(g) When no goods are found to be liable for confiscation, the question of imposition of penalty under Section 112 as ordered by the owner authorities on M/s. Muchipara Consumers' Co-operative Stores, cannot be sustained. The same is required to be set aside.
5. In view of our findings arrived at the impugned Order is set aside and the appeal allowed with consequential benefit to the appellant company.