TMI Blog2010 (2) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... ,28,765/- was seized. Rs. 83,46,970/- was seized from the residential premises of the appellant Shri Bhangwan R. Daswani and cash amounting to Rs. 81,795/- was seized from M/s. Sulur Agency, Madras. After issue of show cause notice and adjudicating proceedings, vide impugned order the Commissioner confiscated the amount recovered from the appellants under Section 121 of the Customs Act, 1962, read with Notification No. 68/1963 dated 4-5-1963, issued under Section 12 of the Central Excises and Salt Act, 1944, on the ground that the same were the sale proceeds of offending goods. 2. We are concerned with only one appellant in this case namely Shri Bhangwan R. Daswani. Detailed written submissions were filed by the learned advocate and instead of narrating the submissions, we consider it appropriate to reproduce the same as such to ensure clarity :- I.(A) There was no admission of Satish Sanghvi, Prakash Sanghvi and Dillon of TOPL DDIL that any sale proceeds were lying with the appellant. They had never raised any claim against the appellant. (B) No notebook, diary, official/unofficial statement of accounts was recovered evidencing that the currency represented sale procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice and in the order. Thus in the very first document viz. Panchanama there is no admission of any knowledge of duty evasion. (B) The manufacturers never admitted evasion of duty. In their consultant s letter dated 24-11-94 reproduced on pages 20 21 of the order, they explained that the goods consigned to South India and sold for cash were also duty paid goods. III.(A) In Ramchandra s case reported in 1992 (60) E.L.T. 277 it was held that before violation of Section 121 is established, the following ingredients must be satisfied; (i) There must be a sale; (ii) The sale must be of smuggled goods; (iii) The sale must be by a person having knowledge or reason to believe that the goods were smuggled; (iv) The seller and purchaser and the quantity of goods must be established by the department. This judgment was followed in the case of Hukmi Chand - 1994 (74) E.L.T. 56 and K.P. Abdul Majeed reported in 2006 (76) RLT 97. In the instant case the Department failed to pinpoint the identity of the purchasers and the quantity of the goods. The Department further failed to co-relate the seized amount with the quantum of goods. (B) In the case of Lalit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and Rs. 6,000/- per ton on Isoborneol over and above the invoice price thereby increasing his profit margin. He also admitted that he was a commission agent and sale proceeds of the goods belonged to the two companies and being a commission agent his commission would be derived from such sale proceeds. He drew our attention to the fact that Shri Bhagwan R. Daswani used to go to Bombay once in a month to hand over cash and his last visit was on 1-12-1989. Further, he also admitted that cash upto Rs. 10 Lakhs paid to Shri Ravi Menon at Madras. It is the submission of the learned DR that in view of the admission statement of Shri Daswani and also in view of the seizure of huge cash from his residential premises it is clear that seized cash was sale proceeds of Camphor and Isoborneol. Further he also drew our attention to the admission of Shri Daswani that he did not have any other source of income. 4. We have considered the submissions made by both the sides. The seizure of the currency has been effected on the ground that the amount is sale proceeds of Camphor and Isoborneol. Admittedly the total quantity consigned without paympnt of duty and without cover of Central Excise gate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obvious conclusion that emerges is that the total amount available with Shri Daswani could not have been the sale proceeds of only unaccounted goods. Further no sensible person would allow such a huge amount of cash to be retained by a commission agent. The amount seized by the Revenue comes to almost 75% of the sale proceeds of unaccounted goods for the period of 10 months. Therefore, the obvious conclusion that emerges is that whole cash seized from Shri Daswani was not sale proceeds. 5. We had to analyze all these facts because of the situation created by incomplete and improper investigation. The burden of showing that the cash recovered is the sale proceeds of the goods cleared without payment of duty is on the Revenue. Therefore it should have been investigated and properly brought out and shown as to what was the actual quantity of Camphor and Isoborneol the sale proceeds of which were still with Shri Daswani and thereafter the statement should have been recorded from all the parties as to whether the calculation made by the department or investigator was correct. No such effort has been made. The only supporting evidence which the department has brought out is statement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any case our discussion would show that the evidence recovered is not sufficient of the purpose of confiscation under Section 121 of Customs Act, 1962 made applicable to Central Excise matters. The next question that arises that whether any amount could have been confiscated treating the same as sale proceeds. In our opinion, the amount of Rs. 25 Lakhs has to be treated as sale proceeds in view of the fact that Shri Daswani himself admitted that the amount of approximately Rs. 25 Lakhs related to the sale during the period from 1-12-89 to 23-1-1990, during which no cash remittance were made. This admission, in our opinion is sufficient for holding that the amount is sale proceeds of unaccounted and non-duty paid Camphor and Isoborneol. For coming to this conclusion we are supported by all the evidences relating to clandestine removal such as transporter s statements, documents relating to unaccounted transportation, statements of concerned persons corroborating each other and unexplained and unaccounted cash recovered from Shri Daswani and his admission as regards the balance amount, the department does not have any evidence to show that the same was sale proceeds of the curren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received without payment, of duty or have been cleared without payment of duty and sold which have been fulfilled by the Revenue. 10. In view of the detailed discussion above, we hold that Rs. 25 Lakhs out of cash seized from Shri Bhagwan R. Daswani was the sale proceeds of goods cleared without payment of duty and therefore is liable to confiscation. Further we also find that Commissioner has absolutely confiscated the currency. As per the provisions of Section 34, whatever confiscation is adjudged under this act or the rules made thereunder, the officer adjudging it shall give the owner of the goods an option to pay in lieu of confiscation such fine as the officer thinks fit. Therefore, in this case absolute confiscation of the currency is not correct as per law and party has to be allowed to redeem the same on payment of fine. While coming to this conclusion we are conscious to the fact that law provides for confiscation of the sale proceeds since the goods cleared without payment of duty are not available for confiscation. If the goods were to be seized instead of the sales proceeds the officer adjudging the confiscation should give an option to pay fine in lieu of confiscati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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