Custom, Excise & Service Tax Tribunal
Shri Dev Shankar Sharma & Others vs Cce, Kanpur on 16 May, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
COURT No.-II
Custom Appeal No.C/464-466/2008 -Cus[DB]
[Arising out of Order-in-Original No. 01/Comm./Cus/Adj./2008 dated 29.02.2008 passed by Commissioner of Central Excise, Kanpur]
Shri Dev Shankar Sharma & Others Appellant
Vs.
CCE, Kanpur Respondent
Present for the Appellant : Shri K. Kant, Advocate
Present for the Respondent : Shri Sanjay Jain, DR
Coram: Honble Mr.D.N.Panda, Judicial Member
Honble Mr.Manmohan Singh, Technical Member
Date of Hearing: 20.11.2013
Pronounced on: 16.05.2014
FINAL ORDER NO. 52144-52146 dated 16/05/2014
PER: D.N.PANDA
All the three appellants came in appeal against order of adjudication dated 29.02.2008 challenging the following consequences arose out of that:
(1) 24 gold biscuits of foreign markings totally weighing 2799.360 gms, valued Rs. 12,03,724.00 were absolutely confiscated under Section 111(d) of the Customs Act, 1962. Upon confiscation, the property thereof was ordered to be vested with the Central Govt. under Section-126.
(2) Penalty of Rs. 1,00,000/-(Rupees One Lakh Only) was imposed on Shri Dev Shankar Sharma, R/o Village & Post Office, Ganoda, Distt-Banswara (Rajasthan) under Section 112(b) (i) of the Customs Act, 1962.
(3) Penalty of Rs. 1,00,000/-(Rupees One Lakh Only) was imposed on Shri Dilip Bhai Ludwani, Prop. of M/s Honest Bullion, Indore under section 112(b) (i) of the Customs Act, 1962.
(4) Penalty of Rs. 1,00,000/-(Rupees One Lakh Only) was imposed on Shri Keshav Kumar Nachani, Prop. of M/s M.P. Bullion, Indore under section 117 of the Customs Act, 1962.
1.2 Police personnel of P.S. Fatehpur Sikri, Agra intercepted one Shri Dev Shanker Shama at chauma check post on 21.04.2001 at 11.00 AM during their routine checking of Buses coming from Jaipur and found that above said passenger was possessing 24 Gold Biscuits of foreign origin. Custody of Sri Sharma and gold was taken by Customs Authority on 22.04.2001 drawing Panchanama on the said date by them. His interrogation brought out that he had concealed 24 gold biscuits of foreign origin in anklet tied with cello tape inside his trousers. No document i.e. Bill/Invoice/Challan etc. was produced by him either before the Police or before the Customs Authority to prove lawful import and possession thereof. On one side of the gold biscuits the words ARGOR HERAESSA SWITZERLAND 10 TOLAS MEELTER ASSAYER 999.000 was engraved.
1.3. Shri Dev Shankar Sharma in his statements recorded on 22.04.2001, 23.04.2004, and 25.04.2001 under Section 108 of Customs Act, 1962 categorically sated that he is an employee of the firm M/s Honest Bullion, Chhota Sarrafa, Indore owned by Shri Dilip Bhai Ludwani and that firm was engaged in the business of trading in gold biscuits. The said firm had also a branch in the same name & style at Jaipur. The gold biscuits of foreign origin recovered as above from his possession were given to him by his employer Shri Dilip Bhai Ludwani, Prop. of M/s Honest Bullion on 21.04.2001 at Jaipur with direction to deliver the same to M/s Padam Chand D-Nahar, Subhash Chowk, Ratan Lal Se Bafena Ke Samne, Jalgaon (Maharashtra). No supporting Bill/Voucher/Challan etc. were given to him in respect of the above gold. All his statements were consistently maintained by him on different dates at different stages. He had also stated that on the directions of Shri Dilip Bhai Ludwani, on many occasions, he carried the gold biscuits of foreign origin without any supporting documents.
1.4. During investigation proceedings, Shri Dilip Bhai Ludwani (Prop. of M/s Honest Bullion, Indore) in his statement recorded on 11.05.2001 under Section 108 of Customs Act, 1962, deposed that he is acquainted with Shri Dev Shankar Sharma for the last two years and he is employed in the firm M/s M.P. Bullion, his sister concern. He also looks after the work of M/s Honest Bullion as and when required. Shri Ludwani, however denied having any involvement with the gold biscuits recovered from Shri Dev Shankar Sharma and stated that he was not available in Jaipur on 21.04.2001 for which there is no question of giving any directions by him to Shri Dev Shankar Sharma. He however, stated that these gold biscuits belonged to his sister concern firm Ms/ M.P. Bullion whose owner is Shri Keshav Kumar Nachani, (a relative of him). Shri Ludwani further stated that being frightened Shri Dev Shankar might have told the officers that the recovered gold biscuits belonged to M/s Honest Bullion.
1.5. Shri Keshav Kumar Nachani Prop. of M/s M.P. Bullion, Indore Claimed ownership of the said 24 gold biscuits of foreign origin and in his statement dated 11.05.2001, he stated under Section 108 of Customs Act, 1962 that the seized gold biscuits were covered by Sale Bill No. 1334, dated 21.04.2001 issued by his firm in favour of M.s Marudhar Jewellers, Jalgaon. Such version of Shri Keshav Kumar Nachani, Prop. of M/s M.P. Bullion did not get appreciation by investigation due to confessional statements of Shri Dev Shankar Sharma recorded on 22.04.2001 and 25.04.2001 stating no bills or invoices were given to him by Shri Dilip Ludwani.
1.6. The documents produced before ld. Adjudicating Authority did not provide any correlation thereof with the seized gold biscuits. A copy of the letter dated 05.05.2001 (date over written), signed by Shri Dev Shankar Sharma addressed to the ld. Adjudicating Authority pleading no recovery of the gold from him and such gold biscuits belong to Shri Keshav Kumar Nachani, the owner M/s M.P. Bullion was found by learned Authority to be after thought and false.
1.7. A copy of medical certificate dated 30.04.2001 (date over written) issued by Dr. L. D. Chowdhary, BAMS certifying that Shri. Dilip Ludwani was under his treatment from 16.04.01 to 29.04.2001 and he was advised rest was proved to be false. Since the telephone number of Indore shown therein was of 07 digits (2342244) while in Challan No. 1334 the telephone number was of six digits (432135) relating to corresponding period, that proved that Shri Ludwani was not under medical advice on 21.04.2001.
2.1. On the basis of the evidence of aforesaid nature before ld. Adjudicating Authority, he held that the foreign marked gold biscuits recovered from Shri Dev Shankar Sharma were smuggled gold and were liable to confiscation under Section 111 of Customs Act, 1962.
2.2. Shri Dilip Bhai Ludwani, Prop. of M/s Honest Bullion, Indore was held guilty of abetting the smuggling by Shri Dev Shankar Sharma (his employee). Version of Ludwani was found to be false, in credible and fabricated.
2.3. As regards Shri Keshav Kumar Nachani, Prop. of M/s M.P. Bullion Indore, ld. Adjudicating Authority held that he had come into the picture only to save his relative, Shri Dilip Bhai Ludwani, Prop. of M/s Honest Bullion, Indore claiming the ownership of the seized gold biscuits designing false documents to show that the gold were not smuggled. He was penalized under Section 117 of the Customs Act, 1962.
ARGUMENT ON BEHALF OF APPELLANT 3.1. Ld. Counsel Shri Krishna Kant appearing on behalf of all the three appellants challenged the adjudication order on the ground that when seizure of gold was first made by Police on 21.04.2001 and there after that was handed over to Customs Authority on 22.04.2001, the burden of proof lies on the Customs Authorities under the provisions of section 123 of Customs Act 1962 to show that the gold were smuggled. Honble Supreme Court in the case of Gyan Chand & Ors vs. State of Punjab 1983 (13) ELT 1365 (S.C.) held that the burden lies on the Customs to prove that the gold were of smuggled in nature. Such ruling is consistently following by Tribunal in several cases. It was also held that marking of the foreign origin on the gold biscuits does not by itself render that to be smuggled goods. Therefore Adjudication suffers from legal infirmity.
3.2. It was also submitted on behalf of the appellant Shri Dev Shankar Sharma that he was in police custody on 21.04.2001 and later on handed over to Customs on 22.04.2001. He was in custody of that authority till 25.04.2001 at Agra. Therefore statement recorded from him during that period was involuntary being given under pressure for which that does not support the case of Revenue. He did not state that the gold were smuggled goods. Because he was going to Jalgaon he took the gold from Shri Dilip Bhai Ludwani (brother-in-law of Keshav Kumar Nachani) to hand over the same to M/s. Marudhar Jewellers of that place.
3.3. Accordingly to all the appellants, Department did not bring out any evidence to show that the gold were smuggled. Similarly, Revenue failed to show who smuggled the same and through which Airport, sea port or Customs Stations the seized gold came to India. That was neither seized at International border nor any of the appellants had gone abroad around aforesaid time of seizure of the gold to bring the same. Therefore mere appearance of foreign marking on the seized gold does not lead to the conclusion that the same were smuggled.
3.4. It was also submitted by appellant that Export Policy 1997 - 2002 permitted import of gold. Therefore that was not prohibited goods and in terms of Notification No.80/1997-Cus dated 21.10.1997 import thereof was exempted from payment of Customs duty. Gold import was also allowed to MMTC and other approved agencies. MMTC imported the impugned gold in terms of the Bill of Entry at page 88 of the paperbook in appeal folder. That shows that the gold covered by that Bill of Entry was of Switzerland origin. Seized gold has also Switzerland origin making. MMTC sold the imported good to M/s. M.P. Bullion and in turn M/s. M.P. Bullion sold the gold to large number of Customers including M/s. Marudhar Jewellers. This proves that the seized gold were imported lawfully.
3.5. Appellant further submitted that on 23.04.2001 i.e., the day following the seizure of the gold by Customs, Shri Ashok Kumar claimed ownership of the gold on behalf of Shri Keshav Kumar Nachani, (Proprietor of M/s. M.P. Bullion). He stated under section 108 that the gold seized belonged to M/s.M.P. Bullion and Shri Dev Shankar was employee of M/s.M.P. Bullion. He also stated that the gold were covered by bill. According to him Dev Shankar Sharma was carrying bill No.1334 dated 21.04.2001 in the name of Marudhar Jewellers of Jelgaon. A FAX copy of the bill was presented to Customs Authority by him. All documents relating to import of gold by MMTC and sale thereof to M/s. M.P. Bullion was produced by Shri Ashok Kumar. According to Shri Ashok Kumar, the original bill may have been torn by Police. Entire gold having suffered duty, there is no question of holding the seized gold to be smuggled gold.
3.6. It was further submitted by ld. Counsel that Shri Dilip Bhai Ludwani in his statement dated 11.05.2001 confirmed the statement of Shri Ashok Kumar and also Shri Keshav Kumar Nachani. He agreed that M/s.M.P. Bullion does not employ any person directly but uses the person employed by M/s. Honest Bullion being sister concern thereof. Dev Shankar was working for M/s.M.P. Bullion and on necessities he was working with M/s. Honest Bullion. He confirmed that the gold belongs to M/s. M.P. Bullion and not to M/s. Honest Bullion.
3.7. Appellant further submitted that the impugned gold was purchased with relevant evidence appearing in the purchase book from 20th April 2001 to 21st April 2001. The marking ARGOR Herassa Switzerland on the gold matched with the Bill No. 1334 dated 21.04.2001 issued by M/s. M.P. Bullion and also the bill issued by M/s. MMTC. The documentary evidence, being superior to oral evidence no adverse inference should be drawn when purchase of gold from MMTC was proved. But without conducting any enquiry with M/s. MMTC, the authorities took a stand in favour of Revenue to bring the appellants to penal consequence of law and also to confiscate the gold. When M/s.Dev Shankar Sharma never told that the gold were smuggled, there is no scope to hold the same to be so, without any evidence of smuggling brought to record.
3.8. It was prayed by appellant that not only the adjudication may be set aside but the gold should be returned and penalties waived following the principles laid down in following Judgments:
(1) CCE, Chennai Vs. A.K. Hamsa Mohindeen reported in 2012 (276) ELT 503 (Mad.) (2) Gian Chand And Others Vs. State of Punjab reported in 1983 (13) ELT 1365 (S.C.) (3) AIR 1967 Mad. 39 (V54 C 13) Hussain Bhai and others v. Commissioner of Income Tax (Mad.) (4) Rajiv Shastri Vs. CC, Ahmedabad reported in 2009(238) ELT 163 (Tri.- Ahmd.) (5) Assistant Collector Vs. Mukbhujusein Pirjada reported in 1970 CRI L.J. (1305).
ARGUMENT ON BEHALF OF REVENUE 4.1. Per Contra, Revenue submits that appellants are in second round of litigation since in the first round litigation, in appeal Nos. C/536-538/2008, disposed on 26.11.2002 there was order of remand for lack of opportunity granted. Tribunal while remanding the matter did not speak on merit. Therefore, ld. Adjudicating authority by the impugned order has examined every evidence threadbare and passed appropriate order with the consequence set out at the outset.
4.2. The seizure of gold made by Customs was in accordance with law and that is unchallengeable when those were found to be of foreign origin with foreign mark therein and no proof of import of such gold was adduced by appellant at the time of seizure. Accordingly, the burden lies on the appellant to prove that the gold were not smuggled goods when onus of proof was discharged by Revenue.
4.3. Revenue submitted that Shri Dev Shankar Sharma stated on 23.04.2001 as under:-
(i) He is an employee of M/S Honest Bullion, owned by Shri Dilip Bhai Ludwani Chhota Sarrafa, Indore. That concern has a branch in the same name and style situated at Jaipur, opposite MMTC Bank at Agra Road.
(ii) He gets salary of Rs. 3000.00 per month from his employer, Shri Dilip Bhai Ludwani and Shri Ludwani gives him advance money per trip for carrying the Gold Biscuits.
(iii) He never worked as a carrier of gold biscuits for any other firm/ person except for Shri Dilip Bhai Ludwani of M/s Honest Bullion.
(iv) 24 Gold Biscuits of foreign origin were handed over to him by his employer Shri Dilip Bhai Ludwani at Jaipur on 21.04.2001 and he started travelling from jaipur to Agrta at 5PM.
(v) On the directions of Shri Dilip Bhai Ludwani he travelled by Bus from Jaipur to Agra on 21.04.2001 at 5 PM and to further travel therefrom to Jalgaon by Karnataka Express with the above 24 gold biscuits concealed under his trousers. However, at Agra he was intercepted by the Police and during search, 24 gold biscuits of foreign origin were recovered from his possession. These 24 gold biscuits belonged to M/s Honest Bullion, situated at opposite MMTC, Agra Road, Jaipur.
(vi) Above Gold Biscuits were carried by him without any bills or supporting documents and Shri Dilip Bhai Ludwani had not given any sale bill or any voucher to him in respect of the gold seized.
(vii) The Gold Biscuits as above were found by the Police officers on 21.04.2001 from his possession and those were seized by the Customs Officers in his presence as well as two independent witnesses on 22.04.2001. That gold belonged to M/s Honest Bullion, Jaipur and Shri Dilip Bhai Ludwani is owner of that firm. Shri Ludwani had given him the said 24 gold biscuits of foreign origin for delivery to M/s Padam Chand D Nahar, Subhash Chowk, Ratanlal C- Bafana Ke Samne, Jalgaon.
(viii) The residential address of Shri Dilip Bhai Ludwani is in Sudama Nagar, Indore and at Baba Harish Chandra Mani Bazar Gali, Nestle school, III Floor, Jaipur. Shri Ludwani remains at Jaipur from Monday to Saturday and at Indore on Saturday & Sunday.
(ix) Shri Keshav Kumar Bhagwandas Nachani alias Hari Bhai Nachani resides at 614-Usha Nagar, Narendra Tewari Marg, Indore and he is the owner of the firm M/S M.P. Bullion, Chhota Sarrafa, Indore.
4.4. According to Revenue, Statement of Shri Dev Shankar Sharma shows that Shri Dilip Bhai Ludwani had a shop called M/s. Honest Bullion in Indore and he was employee of Shri Dilip Bhai Ludwani on a salary of Rs.3000/-. He was carrier of gold on several occasions for Shri Ludwani. On no occasion he worked for any other person except working for Shri Dilip Bhai Ludwani of M/s. Honest Bullion to carry gold. Shri Ludwani handed over him the seized gold on 21.04.2001 at Jaipur instructing him to travel therefrom to Jalgaon. Such gold with foreign marking were without any bill or invoice proving to be of foreign origin. The offending gold were meant to be delivered to one M/s. Padam Chand D-Nahar, Subhash Chowk at Jalgaon but not to M/s.Marudhar Jewellers at Jalgaon. Shri Dev Shankar Sharma brought out that Shri Ashok who claimed gold on behalf of Shri Keshav Kumar Nachani was stranger to him. He was arrested and was released on bail.
4.5. Revenue also submits that in spite of the proved fact that gold was given by Shri Ludwani to Shri Dev Shankar Sharma, Shri Ludwani denied the same to be belonging to him for no reason. He knowingly shifted his burden to his brother-in-law Shri Keshav Kumar Nachani (Proprietor of M/s. M.P. Bullion of Indore) to escape liability under law. Shri Nachani made a false story that he purchased the gold from M/s. MMTC, Jaipur which was without any substance and evidence and unbelievable. Such MMTC plea was not before learned adjudicating authority. Therefore such plea has no consequence to the appellant 4.6. Revenue further submits that the story of delivery of the gold at Jalgaon to Marudhar was also false and plea of destruction of the bill No.1334 dated 24.01.2001 by Police and customs Authority was equally false. Shri Dev Shankar Sharma brought out truth. Fabricated statements came from Ludwani and Nachani. The story of gold purchase from M/s. MMTC was without evidence and substance. Description and number described on the gold biscuits did not match with the description in the invoice of MMTC. Appellants failed to discharge burden of proof of possession of the smuggled gold. Accordingly ld. Adjudicating authority rightly passed the order with the consequence aforesaid confiscating the gold and imposing penalty. That may not be interfered.
5. Heard both sides and perused the record.
6. It is admitted fact that the appellant Dev Shankar was coming with 24 gold biscuits of foreign origin from Jaipur by bus and he was and intercepted by Police at the Choma Police Chowki at 11.00 P.M. on 21.04.2001. On the next day i.e. 22.04.2001 the Customs authority came to Police Station and took his custody alongwith gold. There was no seizure of the gold by Police on 21.04.2001 under CRPC. For the first time the seizure of the gold was done under Panchnama by Customs on 22.04.2001 in accordance with the provisions contained in Customs Act, 1962.
7. Shri Dev Shankar Sharma stated before the Customs authority consistently that he was an employee of M/s. Honest Bullion owned by Shri Dilip Ludwani who had his business establishment in Indore as well as Jaipur. At no pont of time that statement was contradicted by him. But Shri Ludwani and Shri Keshav Kumar Nachani created fiction to misguide the investigation claiming ownership of the seized goods by Shri Nachani bringing out the plea of purchase of the gold from MMTC for the first time before Tribunal and also creating doubt pleading that of bill No. 1334 dated 21.04.2001 was issued by Sri Nachani who has also a branch in Jaipur, while no such bill was found from Sri Dev Shankar Sharma at the time of seizure of the gold. Neither plea of gold from MMTC was raised before learned Adjudicating Authority nor any evidence to that effect adduced before him.
8. Shri Dev Shankar Sharma categorically admitted that he had not carried gold for anybody except Shri Dilip Ludwani in past. Such fact also remained uncontroverted. Payment of the salary to him by Shri Dilip Ludwani remained uncontroverted. The medical certificate plea taken by Shri Ludwani failed to be established. Handing over of the seized gold on 21.04.2001 to Shri Dev Shankar Sharma by Sri Ludwani was established. Such seized gold was intended by Shri Dilip Ludwani to be delivered to Shri Padam Chand of Jalgaon. But Shri Nachani entering into controversy claimed the gold as belonging to him without any evidence and basis while Shri Dev Shankar Sharma consistently stated that the gold belongs to Shri Dilip Bhai Ludwani. He pleaded that gold was meant for delivery to one M/s.Marudhar Jwellers at Jalgaon while Shri Dev Shankar Sharma at all the time stated that the gold was meant for delivery to Padam Chand. Entire plea of Nachani was false and fabricated.
9. The gold seized upon examination by approved valuer proved to be of foreign origin with the purity written on the gold biscuits and all such biscuits valued in aggregate at Rs.12,03,724/-. Shri Dev Shankar Sharma categorically stated that no bills/invoices or documents in respect of the gold were given by Shri Dilip Ludwani to him. That also was not controverted by him at any point of time. This discards the plea of the bill number 1334 dated 21.04.2001 issued by M/s. M.P. Bullion owned by Shri Nachani. His evidence being consistently maintained and voluntary that can not be discarded for no good reason shown. It may he stated that Sri Dev Shankar Sharma had not given statement before police. That was given before a customs officer under section 108 of customs Act 1962 which is good evidence as law is settled.
10. Even the evidence of Shri Ashok Kumar introducing himself to be relative of Shri Keshav Kumar Nachani claiming the gold on behalf of the latter was found to be false when there was no bill bearing No.1334 dated 21.04.2001 was carried by Dev Shankar at the time of seizure of gold by Customs Authority. Shri Sharma denied specifically about the said bill. There was no co-relation of the MMTC documents which was pleaded to be the purchase invoices placed by Shri Nachani for the first time on appeal record. Even on perusal of those documents no way proves case of appellants.
11. When the fact was proved showing that the gold was given by Shri Dilip Ludwani, the claim of Shri Nachani is ruled out. He entered appearance only to raise doubt about the ownership of the seized good for no basis or reason but probable to same his brother in law Shri Ludwani mis-guiding investigation. He failed to establish his ownership over the gold. Therefore no substantive evidence came to record to appreciate his claim. Therefore the gold did not belong to Shri Nachani at all according to the version of Shri Dev Shankar. Relationship of Shri Sharma and Dilip Ludwani as master and employee could not be ruled out. Thus when Sri Nachani was not owner of the seized gold and Sri Dilip Ludwani disowns ownership thereof, that became property of Govt. of India which cannot be claimed by anybody. Nachani also failed to bring any evidence to show claim of seized gold by M/s Marudhar Jewellers of Jalgaon if that concern was buyer of that gold. All there facts prove that Sri Nachani was not owner of the gold.
12. In the course of hearing except creating doubts there was no substantive evidence adduced to prove that the gold seized was not of foreign origin nor it was proved that Shri Dilip Ludwani had imported those gold in accordance with Customs law. Shri Nachani failed to be owner of the gold since that was never been given by him to Shri Dev Shankar Sharma who was not required to deliver the same to M/s. Marudhar Jewellers. Revenue proved its case with cogent and credible evidence discharging its onus of proof bringing out that the gold biscuits seized were without any evidence of lawful import thereof. Shri Dilip Ludwani and Shri Nachani were not owner of the seized good as is held above. Similarly when Revenue tested the gold by approved valuer, the purity as well as the foreign origin of the gold was established.
13. Customs authority seized the gold from Shri Dev Shankar Sharma only for the first time on 22.04.2001 under Customs Act 1961 without being a second seizure from the custody of police. There was no free import of gold allowed at the material time. Appellants fail on all courts. Facts on record prove that Police had never seized the gold under CRPC. Therefore, it is not possible to entertain any of the appeals without any merit therein. Appellants also fails to gain benefit of the ratio laid down in the case of Gian Chand and others V. State of Punjab 1983 (13) ELT 1365 (S.C.). In that case the gold was seized by police under CRPC and when no case could be made by police against 3 accused in that case the seized gold was given by police to Customs. But present case is altogether different not being a seizure by police at all. When Shri Dilip Ludwani and Shri Nachani failed to be owner of the seized gold there is no necessity to deal with other citations made by the appellants added to this foreign origin of the gold was established from the face thereof. Consequently, all the three appeals are dismissed.
[Dictated & Pronounced in the open Court16/05/2014].
(MANMOHAN SINGH) (D.N.PANDA)
TECHNICAL MEMBER JUDICIAL MEMBER
Anita
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C/464-466/2008