TMI Blog1994 (4) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... ition etc. Statement of Proprietor of the factory, Shri Rajeev Sharma was recorded on the same date in which he stated that he was a permanent resident of Ludhiana where he was carrying on the business of fabrication of Hosiery goods before shifting his business to Delhi in June, 1986 and that he had brought 8 Interlock machines and installed them in his factory premises in Delhi for the purpose of converting yarn into fabric. He deposed that he had been introduced to a Sikh gentleman named Monty who told him that he would send yarn of Korean origin covered by valid import doucments to Delhi sometime in January 1987. He further stated that the fabrication charges were fixed at Rs. 5/- per kg. The appellant was busy at Ludhiana in connection with settling the marriage of his sister on 25th January 1987 and when he came to his factory on 2nd February, 1987, he was told by his labourer Shri Ram Pravesh that one Sikh gentleman had come to his factory on 1-2-1987 along with a truck containing Card Board cartons all containing polyester texturised yarn of Korean origin and the said Shri Monty had told Shri Ram Parvesh that he would come on 2-2-1987 with valid import documents covering th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its burden beyond doubt. Even from the point of view of prepondence of probability it is seen that the appellant s statement that he was away from the factory in connection with settling of marriage of his sister has not been contradicted or shown to be wrong. In the circumstances, his submission that in his absence his labourer Ram Pravesh was approached and the owner of the goods left the cartons and told him that he would come and talk to the appellant the next day, remains in the realm of high probability particularly in view of the statement of Ram Pravesh, which corroborates the statement of the appellant in above respect. Hence, in my opinion the appellant was entitled to the benefit of doubt. I, therefore set aside the penalty imposed on him. Since the confiscation of the goods has not been challenged, the impugned order is otherwise confirmed but the appeal is accepted. Sd/- (S.K. Bhatnagar) Vice President In view of the difference of opinion between Hon ble Member (Judicial) and the Vice President, the matter is submitted to the President for reference to a Third Member on the following point :- Whether in the facts and circumstances of this case, the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch he did not know his address. The said Monti had told him that he wanted to get fabricated polyster cloth out of 100% polyster texturised yarn of Korean origin. He told him that dealing in smuggled yarn was an offence, for which Monti had told him that he had imported documents with him with regard to the said yarn and that there will be no problem. He also told him that he contacted him in Delhi at manufacturing premises and also sent the yarn of Korean origin to the factory. He has further stated that Monti visited Delhi sometime in the month of Jan., 1987 and when he asked him to give address or atleast telephone No. at Delhi, he told him that there was no need for that as he himself would contact him in Delhi. The fabrication charges were settled @ Rs. 5/- per k.g. He has further stated that he came to Delhi on 8-1-1987 but he had to leave for Ludhiana on 9-1-1987 in connection with the settlement of engagement of his younger sister. After fixing the marriage of his sister for 25-1-1987, he returned to Delhi on 20-1-1987. However in the meantime, he had been manufacturing/ fabricating Indian Polyster Cloth out of Indian Polyster Yarn after getting orders from the local market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the goods and also told him that Sardarji would come either today or tomorrow and would explain about the goods. Sardarji did not give any doxuments and that Sardarji was very slim and tall. He was wearing Kurta Pajama and red turban and was of fair complexion. His age would be 30 or 32. 9. We have heard Shri M.L. Chugh, ld. Advocate for the appellant and Shri K.N. Gupta, ld. SDR, for the Revenue. 10. Ld. Advocate argued that the Department had not discharged their burden about the goods being smuggled one. He further submitted that the appellant was totally innocent and the Deptt. had also not proved or placed any evidence pertaining to his involvement in smuggling or dealing with the smuggled goods. The statement of the appellant and his employee was a natural one and the Deptt. having relied the same should accept its veracity and its truthfullness. The Deptt. had also failed to apprehend Monty. The owner of the said goods had also failed to send the goods for test in order to ascertain as to the nature of the goods being of foreign origin or not. He submitted that the cartons were bearing the brand made in Korea while the goods kept inside the cartons or gunny bags did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossible that thrown away wrappers of licit import might have been used for packing Indian goods. Therefore, the goods have to be examined by experts and opinion obtained as to its nature and as to whether they are of foreign origin. This has been the opinion expressed in a number of decisions rendered by the Tribunal as in the case of Collector v. Shri Balakrishan as reported in 1987 (29) E.L.T. 65. The ruling rendered in para 6 of the judgment is reproduced hereinbelow : ******* A similar view was also taken in the case of Daroga Singh, Prop. Vijay Stores v. Collector of Customs as reported in 1992 (60) E.L.T. 427. The Tribunal has also distinguished the Supreme Court ruling rendered in the Bhurmal s case. It has been laid down in this ruling that mere foreign origin by itself is not sufficient to show that the goods were of smuggled nature, by distinguishing the Supreme Court ruling in Bhurmal s case, the Bench has held in paras 8 to 10 as follows : ******* 13. In the case of Gudipati Papa Rao v. Collector of Central Excise, Guntur reported in 1987 (27) E.L.T. 524, the Tribunal has also held that the mere fact, that the goods appeared to be of foreign origin would not clo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een held in COFEPOSA Act and he was discharged for lack of evidence. Therefore, taking into consideration the rulings cited before me, I am of the considered opinion that the department had not discharged their burden with regard to the smuggled nature of the goods and also failed to investigate in the matter and apprehend the real person namely Monty to ascertain the truth of the mater. As can be seen from the statement of appellant, Monty had told him that he was having proper documents in respect of the said goods. In the absence of the Deptt. having investigated in this matter fully a serious doubt arises about the whole case and the benefit of such a doubt should be given to the appellant. In the result, following the ratio of the citations placed before me and in the facts and circumstances of the case, I accept the opinion of ld. Vice President and order for accepting the appeal. The appeal papers should be placed before the Original Bench for passing the final order. Sd/- (S.L. Peeran) Dated : 12-4-1994 Member (J) FINAL ORDER In view of the majority opinion the appellant is granted the benefit of doubt and his appeal in respect of only penalty is accepted. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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