Custom, Excise & Service Tax Tribunal
M/S. Laxmi Narayan Udyog (P) Ltd vs Commissioner, Customs (Prev.), W.B., ... on 9 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal Nos.C/53, 56, 58, 61, 59, 60, 57, 54/2008
(Arising out of Order-in-Original No.26/Cus/CC(P)/WB/2007 dated 30.11.2007 passed by the Commissioner of Customs (Prev.), Kolkata)
FOR APPROVAL AND SIGNATURE
Honble Shri H.K.Thakur, Member (Technical)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
1. M/s. Laxmi Narayan Udyog (P) Ltd.
2. Shri Laxman Ghosh
3. Shri Rintu Kundu
4. Shri Biswanath Ghosh
5. Shri Amal Mali
6. Shri Barun Kundu
7. Shri Prem Ballav Ghosh
8. Shri Ranjit Kumar Kundu
Applicant (s)/Appellant (s)
Vs.
Commissioner, Customs (Prev.), W.B., Kolkata
Respondent (s)
Appearance:
Sk. A.Chakraborty, Advocate appeared for the Appellant (s) Sri S.K.Naskar,AC(AR) for the Respondent (s) CORAM:
Honble Shri H.K.Thakur, Member (Technical) Date of Hearing:- 09.09.2016 Date of Pronouncement :- 23.09.2016 ORDER NO.FO/A/76061-76068/16 Per Shri H.K.Thakur
1. These appeals have been filed by the appellants against Order-in-Original No. 26/Cus/CC(P)/WB/2007 dated 30.11.2007 passed by the Commissioner of Customs (Prev.), West Bengal, Kolkata as Adjudicating Authority. Under this OIO dated 30.11.2007 Adjudicating Authority has absolutely confiscated 279 empty bags under Section 118(b) and confiscated 1866 of sugar, valued at Rs.25,21,860/- under Section 113 (C ), (d) and (f) of the Customs Act, 1962 read with Section 11 of the Customs Act, 1962 and Foreign Trade (Regulation) Rules, 1983. Confiscated sugar was allowed redemption by imposing a redemption fine of Rs.20 lakh which is to be appropriated by encashment of bank guarantee furnished by appellant M/s. Laxmi Narayan Udyog Pvt. Ltd., Kolkata (Main Appellant). Penalties of Rs.5.00 lakh have been imposed upon appellant M/s. Laxmi Narayan Udyog Pvt. Ltd. and Rs.2.00 lakh each upon appellants Shri Indrajit Jash (Director of M/s Laxmi Narayan Udyog Pvt. Ltd.) and Shri Ranjit Kumar Kundu under Section 114 of the Customs Act 1962.
2. Shr Arijit Chakraborty (Advocate) appearing on behalf of the appellant argued that on 03.07.2006 an information was received by the department from BSF that huge quantities of sugar are stored in the house of one Amal Mali for illegal export to Bangladesh. That as per the Revenue the information was supported by voluntary statement of Shri Yunus Mondal, an apprehend person in a BSF seizure as per S/Case No.40/Exp/CIIBSF/Hili/06-07 dt. 03.07.2006. No such statement has been relied upon by the department. That on that basis officers searched certain premises and seized sugar/empty sugar bags as detailed in paragraph-2 of the OIO dated 30.11.2007. It is the case of the Learned Advocate that no documentary evidence exists on record to indicate that quantity of sugar seized and lying in godowns was intended for illegal export to Bangladesh. That it was meant for licitly exporting the same for which main appellant was making efforts to obtain necessary permissions from the appropriate authorities from April, 2001 itself which is much before the date of seizure. That restriction on sale/export of sugar came into operation only by a letter dated 10/5/2006 issued by Ministry of Consumer Affairs Food and Public Distribution. Learned Advocate made the bench go through paragraphs on internal page-13 of the OIO dated 30.11.2007. That the entire case of the Revenue is based on presumption, assumption and surmises which has been held to be unacceptable as per following case laws:-
(i) In the case of Oudh Sugar Milks Ltd.-vs.-UOI 1987 E.L. 1. JI72(SC).
(ii) State of Kerala-vs.-M.M.Mathew 1978 (42) STC 348 (SC).
(iii) A.K.Saba-vs.- Commissioner 2001(136)ELT 303 (Tri.-Kol)
(iv) 1991 (35) ECR 276 (Tri.-ERB) 1999(49) ELT 452 (T).
2.1. It is also the case of the main appellant that the seized sugar was never meant for illegal export and no illegal attempt to export can be attributed on the part of the main appellant. That main appellant was corresponding with the departments in April, 2006 to get permissions for export restriction for which were introduced in 2006 itself. Learned Advocate made the bench go through paragraph-13 of the OIO dt. 30.11.2007 and relied upon the following case laws:
(i) Baba Khan vs.- Collector of Customs (prev.)[1993(64) E.L.T. 352 (Tribunal).
(ii) Ram Krishna Dutta-vs.-Commissioner of Customs, (Prev) Kolkata[2007(220) E.L.T.253(Tri.-Kolkata).
(iii) State of Mahatrashtra-vs.-Mohd. Yukub and Ors. [1983(13) E.L.T.1637(S.C.)].
(iv) Anil Kumar Saha-vs.-Commissioner of Customs (Prev.), West Bengal[2003(161) E.L.T.1021(Tri.-Kolkata)].
2.2. Appellants also relied upon Final Order No.A-375/Kol/2009 dt. 15.07.2009, in the case of Commissioner of Customs(Prev.), W.B.-vs.-Shri Bipad Bhanjan Sarkar (Appeal No.381/08), passed by this bench were under similar facts 1000 quintals of sugar was not considered to be smuggled.
3. Shri S.K.Naskar AC(AR) appearing on behalf of the Revenue argued that Shri Yunus Mondal in his voluntary statement in another Case No. 40/Exp/CIIBSF/Hili/06-07 has admitted intention to clandestine export the sugar seized in that case which was also procured from Shri Amal Mali. That Shri Indrajit Jash, Director of the main appellant in his statements dt. 01.08.2006 and 29.08.2006 has admitted that sugar was stored in the godowns for export to Bangladesh and that appellant was also aware that permission from Directorate of Sugar, New Delhi was required as communicated by AC, Malda Division vide C.No.VIII(10)6/Sugar/MLD-AU/Cus/06/392 dated 27.04.2006. Learned AR made the bench go through paragraph-6 of OIO dt. 30.11.2007 and strongly defended the adjudicating authoritys OIO dt. 30.11.2007.
4. Heard both sides and perused the case records. It is the case of the Revenue that 1866 quintals of sugar seized from six godowns as per paragraph-2 of the OIO dated 30.11.2007, were meant for illegal export to Bangladesh. It is observed that paragraph-2 of the OIO dt. 30.11.2007 refers to the statement of one Shri Yunus Mondal who was apprehended by BSF in another case of attempted illegal export to Bangladesh. That consignment was also procured from Shri Amal Mali. However, on a specific query from the bench about the alleged statement of Shri Yunus Mondal, Learned AR submitted that there is no such statement on the record of this case. In the absence of such evidence the whole case of Revenue is based on presumptions, assumptions and conjectures. The evidences mentioned in paragraph-2 of the OIO dated 30.11.2007 are thus only hearsay evidences and such hearsay evidence alone cannot be accepted as reliable evidence for deciding the issue against the appellants. That is the law laid down by the courts in case laws relied upon by appellant as listed in paragraph-2 above.
4.1. This bench in the case of Commissioner of Customs(Prev.), W.B.-vs.-Shri Bipad Bhanjan Sarkar (Supra) held as follows while upholding OIA No.Prev./Cus-145/2008 dated 05.09.2008 where confiscation of 1000 quintals of sugar stored in a godown was set aside:-
5. I find that in the impugned order Commissioner (Appeals) held that no evidence whatsoever has been adduced to show that the confiscated sugar was being attempted for illegal export. The sugar was merely stored in godown and storing is not synonymous with attempts to illegal export to Bangladesh. In view of these facts and as there is no evidence on record that the sugar is being smuggled to Bangladesh, I find no infirmity in the impugned order and the appeal is dismissed.
5. It is further observed that nothing is available in the case records whether Shri Yunus Mondal conveyed in his statement whether Shri Amal Mali is also keeping other stocks of sugar for illegal export to Bangladesh. There is also no reliance on the statements of six house owners who mentioned that Ranjit Kumar Kundu told them that sugar is meant for export. There is no denial by the main appellant that seized sugar was meant for export. It is appellants case the sugar was meant for legal export for which main appellant was following procedures with the appropriate authorities. There is thus no conflict between godown owners statements and the stand of the main appellant. Statements dated 03.07.2006, 01.08.2006 and 14.08.2006 of Shri Ranjit Kumar Kundu, as recorded in paragraph-5 of the OIO dt.30.11.2007, also do not convey that seized sugar was meant for illegal export to Bangladesh. Statements dt. 01.08.2006 and 29.08.2006 of Shri Indrajit Jash, Director of the main appellant, as recorded in paragraph-6 of the OIO dt. 30.11.2006 are also inculpatory. Rather existence of a demand draft dt. 28.04.2006 of Rs.38,53,290.00 in the name of M/s. Balrampur Chini Mills Ltd. also indicate that before the date of seizure main appellant was in the possession of legally procured sugar. It is observed from the findings of Adjudicating Authority that only as per a letter dt. 10.05.2006 from Ministry of Consumer Affairs, Food and Public Distribution, sale of sugar for domestic or export/purposes was restricted under Sugar(Control) Order 1966. There is no evidence on record that sugar was procured after 10.05.2006. After provisional release of seized goods to the main appellant also the sugar has been disposed off by the appellant as per an order dt. 18.09.2006 passed by Calcutta High Court in W.P.No.20555(W) of 2006 filed by the main appellant. There is no documentary evidence in the form of even a statement to convey the sugar seized from the godowns was meant for clandestine export to Bangladesh. On the contrary main appellant had documentary evidence to confirm that sugar has been acquired licitly and efforts were being taken to seek export permission from the appropriate authority as the restrictions were imposed only with effect from 10.05.2006.
5.1. On the issue of attempt and preparation this bench in the case of Babban Khan vs.- Collector of Customs(Preventive)(Supra) held as follows in paragraph-7:-
7. In this case, even if all the allegations are taken as true, at best it can be said that this is only a preparation to commit the offence. The explanation of the appellant is that he had kept these goods in the godown for being exported to Nepal only when the India-Nepal Treaty is revived. It is now an admitted fact that the goods were lying in the godown for a period of six months. If actually the appellant wanted to export the goods, it cannot be said that he would have kept it for a long period of six months and he never got an opportunity to export the same during this period of six months. In this background, the explanation given by the appellant that he had been waiting for the revival of the Treaty and for that purpose kept the goods, in the godown cannot be disbelieved. The probabilities of the case are in favour of this explanation furnished by the appellant. Even otherwise, the goods were lying in the godown under lock and thus there was no movement of the same towards Nepal. Therefore, it cannot be said that the stage of attempt to export the goods had reached in this case. Even if the case of the department is accepted, at best it amounts to a preparation. That being so, the confiscation of the goods in question and imposition of penalty cannot be justified. But the learned J.D.R. Shri B.B. Sarkar contended that there are other claimants of the goods as would be evident from the application made by them and the same cannot be returned to the appellant. But under Section 125 of the Customs Act, if any goods are seized the same has to be returned to the owner, or where such owner is not known, the person from whose custody such goods have been seized. Admittedly, the goods were seized from the custody of the appellant. Therefore, even if the owners had not claimed the goods, when the goods are not confiscable in law, the same are to be returned to the appellant from whose possession the same are seized. The reason is that the owner of the godown had stated that the appellant had taken it for storing. The confiscation of the goods is set aside and the department is ordered to return the goods to the appellant forthwith. The penalty of Rs. 5,000/- is also set aside. 5.2. On the issue of attempt and preparation Honble Apex Court in the case of State of Mahatrashtra vs.- Mohd. Yakub and Others (Supra) held as follows in paragraphs 13 and 31:-
13.Well then, what is an attempt? Kenny is his? Outlines of Criminal law defined attempt to commit a crime as the last proximate act which a person does towards the commission of an offence, the consummation of the offence being hindered by circumstances beyond his control. This definition is too narrow. What constitutes an attempt is a mixed question of law and fact, depending largely on the circumstances of the particular case. Attempt defies a precise and exact definition. Broadly speaking, all crimes which consist of the commission of affirmative acts are preceded by some covert or overt conduct which may be divided into three stages. The first stage exists when the culprit first entertains the ides or intention to commit an offence. In the second stage, he makes preparations to commit it. the third stage is reached when the culprit takes deliberate overt steps to commit the offence. Such overt act or step in order to be `criminal need not be the penultimate act towards the commission of the offence. It is sufficient if such an act or acts were deliberately done, and manifest a clear intention to commit the offence aimed, being reasonably proximate to the consummation of the offence. As pointed out in Abhayanand Mishra v. State of Bihar, (1962) 2 SCR 241, there is a distinction between `preparation and `attempt. Attempt beings where preparation ends. In sum, a person commits the offence of attempt to commit a particular offence when (i) he intends to commit that particular offence; and (ii) he, having made preparations and with the intention to commit the offence, does an act towards its commission; such an act need not be the penultimate act towards the commission of that offence but must be an act during the course of committing that offence.
31.Let me now state the result of the search and? research : In order to constitute an attempt first, there must be an intention to commit a particular offence, second, some act must have been done which would necessarily have to be done towards the commission of the offence, and, third, such act must be proximate, to the intended result. The measure of proximity is not in relation to time and action but in relation to intention. In other words, the act must reveal, with reasonable certainty, in conjunction with other facts and circumstances and not necessarily in isolation an intention, as distinguished from a mere desire or object, to commit the particular offence, though the act by itself may be merely suggestive or indicative of such intention, but that it must be, that is, it must be indicative or suggestive of the intention. For instance, in the instant case, had the truck been stopped and searched at the very commencement of the journey or even at Shirsat Naka, the discovery of silver ingots in the truck might at the worst lead to the inference that the accused had prepared or were preparing for the commission of the offence. It could be said that the accused were transporting or attempting to transport the silver somewhere but it would not necessarily suggest or indicate that the intention was to export silver. The fact that the truck was driven up to a lonely creek from where the silver could be transferred into a sea-raring vessel was suggestive or indicative, though not conclusive, that the accused wanted to export the silver. It might have been open to the accused to plead that the silver was not to be exported but only to be transported in the course of intercoastal trade. But, the circumstance that all this was done in a clandestine fashion, at dead of night, revealed, with reasonable certainty, the intention of the accused that the silver was to be exported. In view of the above ratio laid down by the Apex Court even intention to export and preparation alone are not sufficient to constitute an attempt and has to be associated with a positive penultimate commission/act, depending upon the circumstantial evidences available in each case.
5.3. In the present proceedings before the bench also there is no evidence suggesting illegal export of seized sugar, much less any evidence indicating attempt to illegal export on the part of the appellants. In the case of Ram Krishna Dutta vs.- Commissioner of Customs, (Prev.), Kolkata (Supra) even when sugar was moving in a truck it was held by this bench that there is no attempt to export sugar illegally when documents of legal acquisition are made available. Any violation of a procedural requirement under Sugar (Control) Order 1966 that too for the period after 10.05.2006, for local movement/ control of sugar, cannot be made as the basis for confiscation of the sugar under Section 113 of the Customs Act, 1962. These provisions are applicable only when any prohibited goods are brought inside a customs area for export and not to local movement of goods in India, outside customs area or goods stored in a godown. Sugar is also not a notified/specified category of goods under the Customs Act, 1962 which cannot be brought near the international border.
6. In view of the above there is no merit in the confiscation of sugar and imposition of penalties upon the appellants which are required to be set aside.
7. So far as confiscation of seized 279 empty gunny bags is concerned it is observed that such confiscation has been ordered under Section 118(b) of the Customs Act, 1962 which is reproduced below:
118. Confiscation of packages and their contents.
(b) Where any goods are brought in a package within the limits of a customs area for the purpose of exportation and are liable to confiscation, the package and any other goods contained therein shall also be liable to confiscation. 7.1. As per the above provisions goods, if brought in packed form into a customs area then such packages are liable to confiscation. In the present proceedings neither the seized goods are contained in packages nor brought into customs area for export. There is also no evidence to indicate that exported goods, if any, were once contained in the empty gunny bags seized by the department. In view of the above provision of Section 118(b) of the Customs Act, 1962 are not applicable to the empty gunny bags confiscated by the Adjudicating Authority. Such confiscation of empty gunny bags is bad in law and is set aside.
8. In view of the above observations and settled proposition of law appeals filed by the appellants are allowed by setting aside Order-in-Original dated 30.11.2007 with consequential relief, if any.
(Pronounced in the open court on 23.09.2016.) S/d.
(H.K.Thakur) MEMBER(TECHNICAL)
SS
1 Appeal Nos.C/53, 56, 58, 61, 59, 60, 57, 54/2008