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TMI Blog2001 (4) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... f as the son of Bechan Mishra, Proprietor of M/s Mishra Enterprises, No 34/2, Annadanappa Lane, Bangalore, he produced Invoices bearing Nos. 1629 and 1630 both dated 17-9-1999 and invoice No. 1627 and 1628 both dated 17-9-1999 issued by M/s Rajdhani Cotton, AS Char Street, Bangalore in the name of one Sri Huckumchand, Annadanappa Lane, Bangalore. He produced photocopies of Bills of Entry No. 001024, dated 24-2-1999 and two more bills of entry whose Nos. were not legible, of M/s Prashanth Glass Works Pvt. Ltd., Varanasi, and invoice No 99-2000/005, dated 28-7-1999 of M/s. Prashant Glass Works raised on M/s. Rajdhani Cotton. He also produced copies of invoices Nos. UL/7023/99, dated 2-2-1999 with packing list, UL/7024/99, dated 2-2-1999, UL/7025/99, dated 2-2-1999, UL/7022, dated 2-2-1999 and UL/7028/99, dated 2-2-1999 all of M/s. Unisilk Limited, Rm 1615, 16/17, Star House, 3, Salisbury Road, Kowloon, Hong Kong. On verification of the invoices of Rajdhani Cotton it was found that the Silk Yarn was received in the name of Sri Hukumchand of Annadanappa Lane and not in the name of Sri Anand Mishra or in the name of his father Sri Bechan Mishra or in the name of the Firm i.e. M/s. Mishr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bourer) was used as a sacrificial goat in their smuggling operations. Further, it was seen that 33 bales of silk had paper slips showing only the gross weight and net weight and no other markings or numbers not with any indication as to their origin, the remaining 33 bales had no tags or slips. The weights also did not tally with the packing list. Further Sri Rajat Gupta, when confronted with the fact that the vehicle had not passed through check post and other facts enumerated above and whether the goods can be construed as smuggled silk, refused to answer. This showed his criminal intent. From the above and from the statements of Shri Rajat Gupta and Shri Bechan Mishra, it appeared that the silk yarn under seizure was illicitly brought into the country and the documents furnished by Sri Rajat Gupta of M/s. Rajdhani Cotton and Bechan Mishra of M/s. Mishra Enterprises were clearly a ploy adopted by them to cover their smuggling activities in case they were caught." and since Mulberry Raw Silk Yarn is dutiable and import thereof is restricted being permissible only under an import licence, in absence of which the import is prohibited. Therefore, A-1 & A-2 who claimed to be the own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et weight of the bales recorded in the mahazar with the gross weight indicated in the packing list, which is incorrect. As such this statement shows very minor difference of ranging from 0.01 kg to 0.40 kgs on the positive side and -0.45 to -0.07 on the negative side which gives an impression that the variation is very minimal. To get a correct picture, only the gross weights should be compared. The investigating officers have weighed all the 66 bales individually and recorded the gross weight and net weight of each bale. A comparison of the gross weight so recorded with the gross weight indicated in the packing list shows that in almost all the cases the gross weight of bales are higher than the gross weight recorded in the packing lists and the variation ranges from 0.50 KGs to 1.50 KGs on the higher side. Even admitting that the atmospheric conditions, especially the moisture content affects the weight, variation can not be said to be minimal and in at least some of the cases the weights should tally. Therefore, the Bills of Entry in question do not relate to the import of the impugned goods. Further, it is a well known fact that the imported silk has a great demand in Indian ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his lorry No. MIT 7921 on 28-7-1999 from Varanasi to Bangalore vide invoice No. 11699 and challan No. 5427, dated 28-7-1999 and that no other goods were transported in the said lorry. Shri Rajat Gupta has claimed that 253 bales of silk yarn were transported in lorry No. M.I.T. 7921 and the said lorry passed through Devanahalli check post on 2-8-1999 and that the entry relating to this movement has been recorded in the Sales Tax register at Sl. No. l4, dated 2-8-1999 (which was assigned special register Sl. No. 11782). Verification of this entry in the extract of Sales Tax register furnished by the Sales Tax Authorities shows that it relates to lorry No. CRQ 7115 which has carried cotton valued Rs. 99,62,741/- and the consignee is M/s. Rajdhani Cotton, Bangalore. Obviously, this does not pertain to the transport of silk yarn by lorry No. MIT 7921 as claimed by Shri Rajat gupta and as stated by Shri Ramsunder Yadav of Barnwal Carriers, Varanasi. Further, the invoice No. 99-2000/005, dated 28-7-1999 produced by Shri Rajat Gupta, has the special register Sl. No. 11682 written on the check post seal. Verification of this serial number in the extract of the check post register shows that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arn from Rajat Gupta to Bechan Mishra and that he did not know anything about importation of silk yarn. (c) Shri Bechan Mishra in his statement dated 29-2-2000 has stated that the silk yarn in question was kept in his godown belong to Shri Rajat Gupta of Rajdhani Cotton and that the same were kept in his godown for the purpose of sale only; that he gets a commission of Rs. 5/- per KG of silk yarn that he sold; that he had not made any payments to either Hukumchand or to Rajat Gupta for the said silk yarn; that Shri Hukumchand was only a labourer and his name was only being used by himself and Rajat Gupta to raise invoices and Shri Hukumchand had no other role to play. (d) Shri Rajat Gupta in his statement dated 29-2-2000 has stated that he had sold the silk yarn to Bechan Mishra and that Shri Hukum Chand had no role to play in this transaction; that he is the owner of 66 bales of yarn as he has not yet received the payment for the same. From the above, it can be seen that the statement of Shri Rajat Gupta and the other two persons in this transaction are contradictory. Shri Rajat Gupta has stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de is only an after-thought. (b) In the case of Bhanakalpa Bhai Patel v. Assistant Commissioner reported in 1997 (96) E.L.T. 211 (S.C.), the Hon'ble Supreme Court has held that statement recorded under Section 108 of the Customs Act, when found to be voluntary and not vitiated in any manner, is admissible in evidence. (c) In the case of Hazari Singh v. U.O.I. reported in 1999 (110) E.L.T. 406 (S.C.), the Hon'ble Supreme Court has held that confessional statements of appellant recorded by Customs Officers are admissible in evidence and do not come within the inhibitions of Sections 24 and 25 of the Indian Evidence Act, because Customs Officers are not Police Officers. A similar view has been expressed by the Supreme Court in the case of Shri Rameshchandra Mehta v. State of West Bengal reported in 1999 (110) E.L.T. 324 (S.C.) and Jethmal v. U.O.I. reported in 1999 (110) E.L.T. 379 (S.C.). 44. The noticees have contended that Mulberry Raw silk yarn is not a notified item under Section 123 or Chapter IVA of the Customs Act, 1962 and hence the smuggled character of the goods is to be proved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oving the smuggled nature of silk yarn. In the reply filed on behalf of Shri Rajat Gupta, it is submitted that a list of invoices bearing numbers from 1201 to 1244 has been enclosed along with a copy of Sales Tax Form No. 3 as evidence to show that Shri Rajat Gupta has sold the entire consignment of 253 bales of silk yarn received by him from Varanasi to various customers and also that he had paid Sales Tax correctly on all the transactions which would prove his bona fides. The above documents have not been enclosed to the reply of Shri Rajat Gupta as stated. However, this claim is not going to make any material difference in the face of elaborate findings and discussion above which have established that the goods are smuggled and illicitly brought into India." 3. We have heard both sides, considered the submissions and find - (a) Mulberry Raw Silk Yarn or Silk Yarn mentioned in the impugned notice are not goods covered by Section 123 of the Customs Act, 1962. Therefore, the burden to prove that they were not smuggled goods, does not lie or does not shift to the person from whose possession they were seized i.e. A-2; who is claiming/found to be the ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covering guards. It is impossible for the investigating agency to unravel every link of the process which remain on the special or a particular knowledge of the persons concerned. "The oral evidences adduced by the department would rebut the presumption of innocence in favour of that person and in the result prove him guilty. So in effect, the department would be deemed to have discharged its burden, if it relies on both direct and circumstantial evidence which are sufficient to raise a presumption in its favour, with regard to the existence of the facts." The learned DR has relied on the Supreme Court decision in the case of C.C. Madras v. D. Bhoormul [1983 (13) E.L.T. 1546 (S.C.) = 1985 ECR 2284 S.C.] wherein paras 30 & 31 of the reported decision are almost verbatim, appear to have been extracted as found above, by the learned Adjudicator, without even mentioning this decision. However, the Adjudicator failed to notice, that in the facts of that case, there was not only a declaimer of ownership, but also all knowledge about the contents, (para 36 of the reported decision refers) and other facts and conduct subsequent to the proceedings before the Collector. In the case before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Evidence Act is applied; then by analogy, the fundamental principles of Criminal jurisprudence must equally be invoked. If so, it follows that the onus to prove the case against the appellant is on the Customs Authorities and they failed to discharge that burden in respect of item 1 to 5. The order of confiscation relating to item 1 to 5 is set aside." (Emphasis Supplied) Therefore, in the present case, as in all such cases, of goods not covered by Section 123 of the Customs Act, 1962, the onus is in the department to prove the case as a fundamental principle of Criminal jurisprudence, or basic canons of jurisprudence, the phrase used in D. Bhoormul's case (supra) which the Adjudicator is relying upon. (b) Therefore, keeping in mind the above, and looking at the evidence we find - (i) The appellant A-1 had submitted before the learned Adjudicator, a list of invoices bearing number 1201 to 1244 along with relevant Sales Tax forms for having conducted the business of selling 253 bales of silk yarn received by him from Varanasi, of which the seized 66 bales were a part and were sold to A-2. It was therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters through Bank and deals were accounted and declared to Sales Tax Department at Bangalore. Enquiries with Banks and the Importers at Varanasi would have clinched the issue in favour of the department or otherwise. We cannot accept, this large lacuna to be a loop hole in the investigations, since DRI is the premier intelligence agency for Anti-smuggling operations. They could not have slipped on this, the conclusion we can draw is that, possibly, enquiries with M/s Prashanth Glass Works would have made the claim of A-1 & A-2 unassailable. In any case, there is no denial of the goods not having been supplied by the importers, which was the initial defiance Al & A2. We cannot subscribe to the findings of the Commissioner in para 41 - "....it is clearly established that the goods are not legally imported/acquired and therefore are smuggled...." (ii) We have considered the findings in para 44, regarding entry No. S/No. 11682 written on one of the books by the Sales Tax Check Post clerk. The same finding, conveniently, omits the entry No. 11782, claimed by A1 to be the correct entry made on 2-8-1999 and the plea of clerical mistake. This absence of a finding on plea of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lmost all the cases the gross weight of bales is higher than the gross weight recorded in the packing list and the variation ranges from 0.50 Kgs to 1.50 Kgs on the higher side...." thereafter he concludes that variations due to atmospheric conditions especially moisture content may affect the weight, they cannot be said to be minimal and at least in some cases it should have tallied. Therefore, the B.E. in question does not relate to the goods under seizure. We have pursued the packing slips placed in the paper book and find that the goods supplied are of Grades 2 A & C. The B/No. the Grade and the N.W, G.W. & C.W. in Kgs are given. Therefore, there is an accepted practice of differences in the declared weight and ascertained weights. The trade practice appears to be to charge a weight, in between Gross weight & Net weight. The invoices from Rajdhani Cotton to R. Hukamchand are for 25 bales each vide invoice Nos. 1627 & 1628, dated 17-9-1999 and invoice Nos. 1629 & 1630 both dated 20-9-1999 i.e. 100 bales were transacted out of this quantity only 66 have been seized. These invoices give the bale numbers as per the packing list of the Foreign Supplier, the net weight as given in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted only on 17-9-1999 and 20-9-1999 out of which 66 bales were found in the godown of A-2, unsold on 20-9-1999 when the officers visited these premises. This in itself cannot establish the fact that the same document is being used again and again for illicitly obtained/smuggled goods. This coupled with the immediate clarification of A-1 & A-2's brother, about the goods being covered by the commercial documents in course of normal trade for which payments were made by cheques, etc. to the importer, lead us to conclude that the findings are arrived on an assumption and are presumptive. Especially when the importer has not been questioned, as no evidence of his is on record. We therefore reject these arguments for being reasons to confiscate the goods under seizure. (vi) We have considered the findings of an alleged contradiction in the statements of A-1, A-2 & one Hukamchand, arrived at in para 42 of the order. We find that the statements are not in conflict, it is only the interpretation being given which is causing the trouble. A perusal of the invoices shows that they are addressed to Hukamchand, Anandanappa Lane, Bangalore and bear the signature of receipt, the qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely the difficulty experienced by the Customs Officers with the whole machinery of Government at their disposal in proving that the gold has been smuggled which in itself made a reason for throwing the burden upon the citizens to establish that the gold was not smuggled.....Gold as such has no earmark. It is impossible to identify gold in the possession of a person with the gold mentioned in the Bill of Entry of any importer of gold.... Gold has been imported through countries into this country and it is virtually impossible for a person to establish that any particular quantity of gold in possession was the gold not smuggled in the country at a particular time without resort to smuggling....." In that case, the appeal preferred by the Customs Authorities, however was dismissed on the ground that even if Section 178A was valid as held by the Court previously, its terms were not attracted to the particular case because of non-fulfilment of an essential requisite for its application (see para 13 of CC Madras v. N. Sampath Chetty & Other [1999 (110) E.L.T. 157 (S.C.) = 1983 ECR 2198D S.C.)]. This summary, would be applicable to all such goods, now being freely or almost freely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Adjudicator has recorded that 'no documents showing legal purchase/acquisition were produced. While in the case impugned before us, the documents of import have been produced, they tally, legal Acquisition documents from the importer till the transfer to the godown from where the 66 bales have been seized were produced. But they have not been proved to be bogus or forged. The importers have not been questioned even after the Transport Company Manager having admitted admits to such a Transport from Importers at Varanasi to M/s. Rajdhani at Bangalore; Only on a ground of an error on recording a S.No. on the invoice at the Sale Tax Check Point the documents are being ignored. No enquiries are made from Banks regarding the receipt/ remittance for the goods, nor any efforts made to call for and check the sale invoices of not only the subject goods, but other part of the very same consignment which were brought to the notice of the enquiry officers. We therefore find that the equating the case of seizure of Silver without purchase documents with seizure of Silk Yarn and non-verification of acquisition documents cannot be made. (iv) We agree that reliance on 1999 (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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