TMI Blog2013 (11) TMI 1229X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. The appellant was aware of the origin and destination of goods demonstrating his intimacy with the racketeers by telephone contacts before and after arrival of the smuggled goods in India which come to record from Table 10 and 11 of show cause notice. Positive act of the appellant making conscious breach of law brought him to penal consequence of law. Perfect proof with mathematical precision in this imperfect world seldom exists. Appellant did not deny conscious dealing of the offending goods by him. In substance, offending goods found its destination at the place of business of the appellant. Accordingly when the appellant failed to go out of the scope of Section 112 (b) of the Act, penalty was bound to be suffered. It is only the quantum thereof needs determination on the gravity of the matter since value of goods dealt by the appellant was not quantified by learned Adjudicating Authority. Considering that the appellant was involved in dealing with the smuggled goods came to in India on 22 occasions as per column ‘A’ of Table -14, in the fitness of the circumstances of the case, levy of penalty of ₹ 10,000/- for each such occasion may not be improper. Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming to India during last three years prior to 28.08.2000 and was bringing Chinese silk to India for sale. Her pass port also revealed that she had made short trips to India and stayed in different hotels in Paharganj, New Delhi, where the buyers of the smuggled china silk used to contact her for purchase of such goods. Such fact was noticed by Hon ble High Court of Delhi in the case of Olga Kozireva V. UOI while deciding her bail petition on 18.5.2001 as reported in 2001 Cri LJ 3701 : 2002 (63)DRJ 183 : 2002 (80) ECC 451. On such basis, investigation proceeded to inquire into the matter further to trace the racket and ascertain Revenue loss of the past. She was also arrested on 29th August u/s 104 of the Customs Act, 1962 and produced in the Court of the ACMM, Patiala House Court and remanded to judicial custody. 4. Extensive enquiry made by investigation revealed that a racket of some Afghans appearing in Column F of Table 14 of the adjudication order at Page 176 thereof (reproduced hereunder), a team of passengers depicted in Column E of that Table coming from CIS country, few customs officers as depicted in Column F of the said Table as well as some traders appearing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,752/- 88,588/- Olga K Mamoor Khan, TRK Reddy, V S Teotia, Parveen Teotia, JA Khan VK Khurana, Ajay Yadav Nitish Kedia, Anup Singh, Khem Singh, Arun Dokania, Gopa Dokania, Sanjiv Jain, Mahender Jain, Anudeep Singh 23-4-2000 HY 433 3046 2472 3565 2,07,138/- 1,68,100/- 2,42,386/- 1,26,768/- 1,02,877/- 1,48,340/- Olga K, Nazira I and Shalo A Mamoor Khan, Sanak Nitish Kedia, Anup Singh, Khem Singh, Arun Dokania, Gopal Dokania, Sanjiv Jain, Mahender Jain, Anudeep Singh 8-5-2000 K2 545 6062 6062 4,12,243/- 4,12,243/- 2,52,293/- 2,52,292/- Olga K and Isamu KM Mamoor Khan, Sanak Shahlo, Nazira I Nitish Kedia, Anup Singh, Khem Singh, Arun Dokania, Gopal Dokania, Sanjiv Jain, Mahender Jain, Anudeep Singh 15-5-00 K2 545 25630 17,42,840/- 10,66,618/- Shahlo A Mamoor Khan, Sanak, Nazira I,RN Zutshi, Yashpal, Vinod Kumar (Kain), VS Teotia, RK Docoliya, AK Varshney, DS Nandal Nitish Kedia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder relates to the appellant Sri Gopal Dokania in Customs Appeal No C/13 of 2008. COMMON MATERIAL FACTS AND EVIDENCE 8. Apart from the aforesaid facts on record, certain material facts and evidence which are common to all the cases of trader appellants are: (A) That the quantity of silk textiles mentioned in column B of Table 14 above were consumer goods imported in commercial quantity on different dates as mention in column A of the said Table. Those were restricted item falling under Customs Tariff Heading 5007.20 requiring import licence as per ITC (HS) Classification 1997-2002 for import. Import of those goods into India without any import licence was not permitted. But were imported on the dates mentioned in column A of that Table in violation of prohibitions/restrictions imposed thereon under para 5.6 of the Export Import Policy 1997-2002 read with section 3(2) and (3) and 11(1) of the Foreign Trade (Development and Regulation) Act, 1992 as well as Rule 14 of the Foreign Trade (Regulation) Rules, 1993. Accordingly said silk textiles were liable to confiscation under section 111(d) of the Customs Act, 1962. (B) Illegally imported quantities of Chinese silk into In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Abdul Qahar showed that he was one of the conduits and delivering the contraband silk textiles brought by Ms. Olga K and her group to the appellant traders, which made them aware of the illegal imports made by Ms. Olga K and her party. (E) Statement of Dil Agha recorded on 23.05.2001 (Ref: Para 159 at page 107 of SCN) showed that he was acquainted with Mamoor Khan and his associates and influenced by him to join in his team for a remuneration to bring the illicitly imported goods by Ms. Olga and her party from Airport to Samir guest house. He stated that Sadullah and Zanjeer Khan assisted Mamor Khan for his mission. He was given a mobile phone to coordinate and brought out the material fact of delivery of the smuggled gods to the trader appellants. By his further statement dated 11.07.2001 he stated that Mamoor Khan introduced him to various shop keepers of Chandni Chowk to whom the illicitly imported China Silk were supplied. He named the traders who were: Arun, Gopal, Bunty (Nitish Kedia), Sanjeev Jain and Mahender Jain, Jasbir Textiles and Khem Singh. He along with Wali used to supply the offending goods to the said traders and wali knew all the shop keepers well and also h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Agha but stated that he did not deal with him. So also he denied to disclose the identity of two mobile numbers contacted by him (Ref: Para 57 of SCN at Page 28-29 of SCN). (K) Sri Mahender Jain in his statements dated 09th Jan, 2001, 91.01.2001 and 1st Frb, 2001 admitted the fact of knowing Mamoor Khan and their deal in China Silk but denied dealing with them. He brought out nexus of telephonic contacts from his residence and shop telephones to the mobile numbers of the smuggling racket without disclosing identity thereof. He stated use of his shop s address by his nephew Sanjeev Jain and Sndeep Jain. He also disclosed dealing of China Silk by Mamoor Khan. (L) Sri Arun Dokania in his statement dated 05.01.2001 identified Mamoor Khan but denied to have dealt with China Silk with him. He failed to explain reason of frequent contacts by telephone with the mobile of Mamoor Khan. (M) Telephonic contacts records as appeared in the Table No. 10 of the impugned order at page 123 and show cause notice at page 131 thereof threw light that the appellant traders were regularly in touch with Mamoor Khan and Dil Agha on their Mobile Phones. The number of calls exchanged indeed were very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il Agha dated 16-07-2001 u/s 164 Cr.P.C. iii) Statement of Walliullah dated 19-05-01, u/s 164 Cr. P.C. before M.M. iv) Statement of Abdul Qahar dated 30-11-2000. 9.2 It was further submitted by ld. Counsel that reading of the statements of above persons show that none of them directly named the appellant for which the statements made by the person who were charged in the case cannot be taken as corroboration. Statements can be corroborated from independent facts and statements. In any event, statements of above persons are not reliable till veracity and genuineness thereof is tested by cross examination since all the above persons have given contradictory versions. 9.3 Abdul Qahar had retracted his statement. Even otherwise, his statement is full of contradictions. Many persons named by him could not be found. Some persons named by Dil Agha could not be traced and it shows that his statements are not trustworthy. Why the persons who used to allegedly deliver the cloth to shopkeepers, are not made witness, is also not clear. Why these persons were not confronted with the shopkeepers is also not made clear. 9.4 Whole statement of Walliullah and his role is suspicious and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot asked even a single question as to whether or not he knew that the textile allegedly brought by Mrs. Olga etc. was either smuggled into India or was brought into India in contravention of any other law. The essential ingredient of necessary knowledge of smuggled nature of the goods or the essential mens rea on the part of the appellant is clearly missing on the face of it. As a result, the appellant cannot be said to be liable for any offence under the Customs Act and the impugned order is absolutely unwarranted and shows total non-application of mind on the part of the Adjudicating authority while passing that order. 9.9 The Hon ble Supreme Court in the case of Gian Chand Vs. State of Punjab reported as AIR 1962 SC 496 has held that under the Customs Law two matters had to be established before a person could be held guilty of that offence. Firstly, that the goods were imported into the country either without payment of duty or in contravention of any restriction or prohibition imposed by the statute and secondly, that the accused knowing that the goods were of that character did any act of omission or commission. This decision had stood the test of time and has been followed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished fact that Abdul Quyam who was Manager of Samir Guest House stated in the statement recorded from him that the goods brought by the party of Ms. Olga were sold to nearby traders (reference para 160 of O-I-O). Mamoor Khan introduced Dil Agha to many shop-keepers of Chandini Chowk who were buyers of Chinese Silk illicitly imported. Dil Agha in his statement specifically named Gopal Dokania to be the remembered buyer of the goods. It is also fact on record from para 161 (e) of O-I-O that Walli Ullha used to supply the goods to the traders appellants and all the traders were in close contact with the conduits to buy the goods on payment of cash with utter disregard to law and not insisting evidence showing payment of customs duty on such goods. 10.5 It was further submission of Revenue that before and after the offending goods arrived in India calls were exchanged (Ref: Table 10 and 11 of show cause notice) between the conduits who were supplier of the goods and the trader appellants. When the smuggled goods came to India ultimate disposal thereof was made by the appellant traders proving that they had conscious knowledge about the origin of the goods, value thereof as well as n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to light. Investigation at page 120 of the show cause notice brought out that Abdul Qahar in his statement connected the smuggled goods brought by Ms. Olga and her party with the smuggler as well as conduits of smuggling and the shop-keepers. Inextricable link was Mamoor Khan in the entire ill design (Ref: Para 167 of show cause notice). Also in Para 168 of show cause notice investigation brought out that the offending goods delivered by Mamoor Khan were illicitly imported into India by Ms. Olga as per prior orders of the shopkeepers so that the smuggled goods shall disappear soon after arrival in India. Since those were non duty paid goods. Statement of Abdul Qahar remained un-assailed by the appellant. Submission of the appellant that he had not dealt with the smuggled goods became unbelievable. Appellants familiarity with Abdul Quhar, Mamoor Khan and Dil Agha was well established and he was not stranger to the acquisition and disposal of the smuggled good. Telephone contacts appearing at Table No.10 11 of the show cause notice proved malafide intention of the appellant having concern and intrest in the smuggled goods being in touch with racketeers to make ill gain. He could n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly shall fulfill his object. There was nothing presumption nor suspicion against the appellant by learned Adjudicating Authority to deal him under law. The appellant had thorough knowledge of the identity of the persons with whom he dealt and contacted him as per Table 10 and 11 of the Adjudication order. He was quite aware of the smuggling character of the goods supplied to him by Mamoor Khan. 12.7 It is not necessary that investigation should ask the appellant leading question to defeat object of the investigation meant to bring the offender to the fold of law. What that was relevant for the investigation were put to discover truth and make the case of investigation successful. Appellants plea that other traders were not brought to the charge under law has no basis in view of the law laid down by Hon ble High Court of Delhi in the case of Rajiv Kumar Sharma V. CCe, Adjudication- 2012 (276) ELT 321 (DEL) holding that negative equality cannot be pleaded as a defence to any action which is in accord with law and justified. It was also held in that judgment that when the reason why telephonic conversation took place remained unexplained that does establish and corroborate a clos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 258 (SC) that the statement of a person in the status of co-accused obtained u/s 108 of the Customs Act, 1962 forms material evidence. When Department has appraised the appellant of the results of investigation as also the evidence on record which militates against the appellant, burden of proof shifted to the appellant from investigation which does not get discharged if the appellant is not able to meet the inference arising therefrom following the ratio laid down in the case of Kanungo Company V. CC- 1983 (13) ELT 1486 (SC). Similarly investigation was not required to prove its case with mathematical precision or accuracy and need not be required to prove every link in the chain as has been held in the case of CC. V. Bhoormull -AIR 1974 Sc 859. Accordingly failure of the appellant to come out with clean hands implicated him to charges rightly leveled against him in adjudication. 12.11 Penalty against the appellant was imposed under section 112(b) of the Act. If any person acquires possession of or in any way is concerned in carrying, removing, depositing, harboring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which he knows or has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment also more or less common, I am recording a common order, though separate findings would be given in respect of each appellant. 14. Before the coming to the issues involved in these appeals, it would be worthwhile having a brief look at the facts of this case. 14.1 The appellants in this case are the textile dealers having shops in Delhi. All these appeals arise out of the order-in-original No8/GS/CC/ NCH/2007 dtd.01.10.07, passed by the Commissioner of Customs (Adjudication) New Delhi, by which the Commissioner, besides the imposition of penalties of these seven appellants under section 112(b) of Custom Act, 1962, has confirmed duty demands totalling Rs.1,75,78,322/- against some foreign passengers and has imposed of penalties of different amount on the passengers and other persons involved in this case. 14.2 There are four categories of persons involved in this case. 14.2.1 The first category of persons involved in this case are the Uzbek Nationals namely MS Olga Kozirava, MS Shahlo, MS Isamu, MS Nazira and MS Merkulova, M/s. Shakusta, MS Valichko and MS Mitrushova, who during the period from Dec 98 to 21stJan 2000 are alleged to have smuggled into India without pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired smuggled fabrics from MS Olga for delivery to various dealers. 14.2.5 The fourth category of persons are the seven appellants in this case, who are the dealers, dealing in textiles from their shops located in Delhi. Sh. Sanjeev Jain is a relative of Mahender Jain who has a shop at 5513, Moti Katra, Nai Sadak, Delhi. Anudeep Singh is the Proprietor of M/s. Jasbir Textiles, having shop in Chandni Chowk. Sh. Gopal Dokania is Proprietor of M/s. Anjali Feb., having shop at Nai Sadak, Chandni Chowk, Delhi, and Sh. Arun Dokania is a relative of Sh. Gopal Dokania. Sh. Arun is proprietor of M/s. Amar Emporium in Chandni Chowk Area. Sh. Nitesh Kumar Kedia (known as Bunty) has a shop M/s. Durga Creation in Chandni Chowk. All these dealers are alleged to have purchased smuggled textiles from Sh. Mamoor Khan/ Sh.Dil Agha and Sh. Abdul Qahar knowing that the goods purchased by them were of smuggled origin and accordingly the Commissioner has imposed penalty of Rs. 5,00,000/- on each of these persons u/s 112(b) of Custom Act, 1962. While the allegations of smuggling and its abetment against the passengers, Sh. Mamoor Khan, Sh. Dil Agha, Sh. Zanjeer Khan, Sh. Sadullah etc. and the Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey did not know that the aforesaid persons were dealing with smuggled goods or were dealing with goods, which had been clandestinely imported into India without payment of customs duty or by mis-declaration. The contention of the appellants, which is strenuously urged, therefore, is that penalty under the said Section can be imposed only if the appellant, traders had knowledge or reason to believe that the goods in question i.e., Chinese Silk, was liable to be confiscated. The next sentence in paragraph 27 refers to the intimacy of the appellants with the smuggling racket and it is observed that this proves their dealing with the smuggled goods. The aforesaid sentence does not carry forward and is merely a statement or an inference, which does not discuss the material and evidence against the appellants. The tribunal thereafter has mentioned and recorded that the statements made by the seven appellants as well as the smuggling racket disclose their identity and destination of the offending goods. The statements of the seven appellants have not been referred and or specifically examined in paragraph 27 or any other portion of the impugned order. 9. There is no other discussion in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten submissions which were filed by the appellants before the tribunal and have been placed on record. We do not think the tribunal was right in disposing of the appeal by recording the reasons given in paragraph 27, which according to us do not specifically deal and examine the contentions and issues raised. The order is virtually a non-speaking order and does not meet the requirements of law, what is mandated and required to be discussed and examined by the first appellate authority which is also the final fact finding authority. The contentions and issues raised by the appellants on facts and law have to be specifically examined, dealt with and considered. A speaking and reasoned order is required to be passed after referring to the evidence and material relied upon by the parties. We find that the appellate order passed by the tribunal in the present case does not meet the prescribed and legal parameters. Accordingly, we answer the question of law mentioned above in negative i.e., in favour of the appellants and against the Revenue. We pass an order of remit and the tribunal will re-hear the arguments and thereafter pass a reasoned and speaking order as is mandated and require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest. 18.1 From the perusal of this section, it will be seen that for imposition of penalty on a person under section 112(b), the following conditions must be satisfied. (i) The person must have acquired possession of or must be in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which are liable for confiscation under section 111 of Customs Act, 1962. (ii) The person must have knowledge or have reason to believe that the goods acquired by him or dealt with by him in the manner as mentioned above, are liable for confiscation under section 111 i.e. he has knowledge or has reason to believe that any one or more of the contraventions mentioned in Clause (a) to (p) of Section 111 have been committed in respect of the imported good acquired or dealt with by him. Thus in contrast to Section 112(a), where mere act or omission by a person, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the shop keepers and that these were:- Arun, Gopal, Bunty(Nitesh Kedia), Sanjeev Jain, Mahender Jain, Jasbir Textiles and Khem Singh. (d) The record of telephonic contacts of Mamoor Khan/ Dil Agha with the appellants or on around on the days when the passengers arrived with Chinese Silk. This record is as under:- Dots Name of person whose Telephone No. interacted. 01/02.02.2000 Niktesh Kedia 27.02.2000 Anudeep Singh Nitesh Kumar Kedia Sanjeev Jain Anup/Khem Singh Mahender Jain 10.04.2000 Mahender Jain Anup/Khem Singh Arun/Gopal Dokania Nitesh Kumar Kedia 17.04.2000 Mahender Jain Anudeep Singh Arun/Gopal Dokania Nitesh Kumar Kedia Anup/Khem Singh 23.04.2000 Khem Singh Arun/Gopal Dokania Nitesh Kumar Kedia 08.05.2000 Mahender Jain Nitesh Kumar Kedia Anup/Khem Singh Arun Gopal Dokania 15.05.2000 Anudeep Singh Arun/Gopal Dokania Nitesh Kumar Kedia 22.05.2000 Arun/Gopal Dokania Mahender Jain Anup/Khem Singh 12.06.2000 Mahender Jain Arun/Gopal Dok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts, in any manner prove that the appellant had knowledge about the smuggling activities of Sh. Mamoor Khan/ Sh. Dil Agha, that for imposition of penalty under section 112(b), the evidence showing that the person alleged to have acquired certain imported goods or having dealt with certain imported goods, had knowledge or reason to believe that the same were liable for confiscation, is essential and in this regard there is no evidence, that in this regard, no adverse inference can be drawn from record of Appellants telephonic contacts with Sh. Mamoor Khan as the same were for sale of fabrics to them rather than purchasing anything from him, and that in case of Sanjeev Jain, no enquiry was made with him and no statement was recorded and penalty is sought to be imposed on him simply on the basis of statement of Sh. Abdul Qahar and Dil Agha. 19.1 The contention of the Department on the other hand, is that the statements of Sh. Abdul Qahar, Sh. Waliullah and Sh. Dil Agha clearly show that the silk being smuggled through Uzbek lady passengers was being sold to appellants, that the statements stand corroborated by the record of telephonic contacts between Mamoor Khan/Dil Agha and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trs. Chinese Silk from one Khan. There is also a record of telephone contact of Sh.Mamoor Khan/Sh. Dil Agha with Sh. Anudeep Singh. (3) SH.GOPAL DOKANIA SH. ARUN DOKANIA:- Sh. Gopal Dokania is the proprietor of M/s. Anjali Feb., Chandni Chowk, Delhi and Sh. Arun Dokania is his relative. While both Gopal Dokania and Arun Dokania have been named by Sh.Dil Agha his statement 11.07.2001, Sh.Walliullah in his statement dtd. 19.05.2001 has named only Gopal Dokania. Besides this, there is also record of telephonic contact between Sh. Mamoor Khan/Sh. Dil Agha and Sh. Gopal Dokania /Sh. Arun Dokania. (4). SH. ANUP SINGH:- He is the proprietor of M/s Amar Emporium. Sh. Khem Singh was also working with him. Sh. Anup Singh has not been named either by Sh. Abdul Qahar or by Sh.Dil Agha or Sh.Walliullah. However, Khem Singh has been named in the statements of Sh.Walliullah and Sh. Dil Agha. There is also record of telephonic contact between Mamoor Khan/Sh Dil Agha and Sh. Anup Singh/Khem Singh. (5) NITESH KUMAR KEDIA:- He is also known as Bunty and is the proprietor of M/s. Durga Creations, Chandni Chowk. He has been named by all the three persons mentioned above in their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court or a Statutory Authority may be able to determine its probative value and that using a deposition that is not so tested, may, therefore, amount to using the evidence which the party concerned had no opportunity to question. Same view has been taken by Hon ble Allahabad High Court in case of Parmarth Iron Pvt. Ltd. reported in 2010 (260) ELT-514 (All.) and also by Hon ble Bombay High Court in the case of Gyan Chand Sant Lal Jain Vs. Union of India, reported in 2001(136)ELT-9 (Bom.). The Apex Court s Judgment in case of Surjeet Singh Chhabra Vs. Union of India reported in 1997 (89) ELT-646 (SC) was in the background of the fact that the petitioner in that case had admitted that he had purchased gold bars abroad and got the same converted into Gold Kara and the cross-examination of pancha witnesses was sought only on the point regarding the place at which the recovery was made-at the baggage belt on at Green Channel and since this point, in view of his confession admitting the purchase of gold and its conversion into Kara, was not relevant, the Apex Court held that the denial of cross-examination of the witnesses was not violative of principles of natural justice. The ratio of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsence of their probative value having been tested by cross examination are of little evidentiary value. 20.3.1 Hon ble Gujrat High Court in case of State of Gujrat Vs. Hasmukhlal Ambalal Kariwala reported in 1999 (109) ELT-51 (Guj.); Hon ble Bombay High Court in case of Paru Marugeb Jaikrishna Vs. Assistant Collector of Custom reported in 1988 (36) ELT-394 (Bom.) and the Apex Court in case of Mohtesham and Mohd. Ismail Vs. Sp. Director, Enforcement reported in 2007 (22) ELT-3 (SC) has held that- (a) confessional statement of a co-accused cannot be treated as substantive evidence; and (b) confessional statement of a co-accused by itself is not sufficient to prove the charge unless corroborated by other evidence. In this case from the other evidence i.e. the record of telephonic contacts between the Appellants and Sh. Mamoor Khan/Sh. Dil Agha, it cannot be inferred that the Appellants had purchased smuggled Chinese Silk fabrics as it cannot be presumed that the telephonic contacts had materialized into purchase deals, more so when the Appellants plea is that their telephonic contacts with Mamoor Khan were for sale of fabrics to him, rather than purchase of fabrics from him, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Airport where a Customs Officer B was on duty and if on or around that date, he was in telephonic contact with the Customs Officer B and calls of considerable duration were made from both the sides, the record of telephonic contacts between A and B , even if its content is not known, would be a strong circumstantial evidence against B in support of allegation that he was also involved in the smuggling Act of A and this evidence would be sufficient to shift the burden of proof to B and if B is unable to give satisfactory explanation for the telephonic contacts with A , this can be treated as an evidence against B of his involvement. In this case, had there been some record of Appellants telephonic contacts with the Uzbek lady passengers smuggling Chinese Silk fabrics into India, that record would have been a strong circumstantial evidence of their involvement. But the record of telephonic contacts of the Appellants with Sh. Mamoor Khan/Sh. Dil Agha cannot be treated as an evidence of the Appellants having purchased smuggled Chinese Silk fabrics from Sh. Mamoor Khan/Sh. Dil Agha and that too with knowledge or reason to believe about its smuggled origin more so, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants, at the most, it is presumed that they were buying some quantity of smuggled goods from Sh. Mamoor Khan/Sh. Dil Agha, no presumption can be made about the knowledge or reason to believe of the Appellants about smuggled origin of the goods. For this purpose it has to be proved that the Appellants had knowledge about smuggling activities of Sh. Mamoor Khan/Sh. Dil Agha or that the quantity of Chinese Silk fabrics being purchased by the Appellants was so huge that no normal law abiding business man would have purchased the same without satisfying himself about its legal import. But in this case, there is no evidence from which such a presumption can be made as there is no evidence to indicate as to whether on each incident of smuggling by Uzbek lady passengers, the fabrics were purchased by the Appellants and if so how much quantity. While the Department is not required to prove every link in the smuggling chain from the persons smuggling the goods into India to the persons buying the smuggled goods, for imposition of penalty on the buyer under Section 112(b), Some evidence, direct on circumstantial, indicating acquisition or dealing with the goods with knowledge or reason to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above discussion I hold that the impugned order, imposing penalty on the appellants under section 112(b) of the Custom Act, 1962 is not sustainable. The same is set aside. The Appeals are allowed. 25. Since there is difference of opinion between the Member (Judicial) and Member (Technical), the Registry is directed to place this matter before Hon ble President for constituting a bench in terms of Provisions of Section 129C (5) of the Customs Act, 1962 for deciding the following point of difference. Whether the facts situation, evidence, surrounding circumstances and principles of preponderance of probability recorded by the judicial member calls for imposition of penalty to the extent ordered u/s 112(b) of the Customs Act, 1962? OR Whether the evidence of record is sufficient to uphold the imposition of penalty on the Appellants under section 112(b) of the Custom Act, 1962. (Pronounced in the open Court on ..) PER SAHAB SINGH: 26. I have gone through order passed by Member (Judicial) Shri D.N. Panda and Member (Technical) Shri Rakesh Kumar also and I have seen the difference of opinion referred to me by the President. 27. Brief facts of the case have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sake of convenience, Section 112 of the Customs Act is reproduced below :- Any person - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111 shall be liable- (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater. (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sough to be evade on such goods or five thousand rupees,, whichever is the greater; (iii) in the case of goods in respect of which the value stated in entry, made, under this Act or in the case of baggage, in the declaration made under section 77 (in either case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jmeri gate and thereafter goods were brought to Sameer Guest House in rickshaws. (iii) Mamoor Khan used to phone to many shopkeepers Bunty, Gopal, Khem Singh, Jabbir Singh and Sanjiv Jain and Nawal (iv) Named persons used to come to Guest Home and pack their goods. (v) Money was collected by Mamoor Khan. (C) Shri Dil Agha in his statement dated 23.5.2001 and 11.7.2001 has mainly stated that ; (i) He was employed by Mamoor Khan and his allotted work was to go to Airport and get goods loaded in a vehicle, bring the same to Ajmeri Gate and from there to bring the goods to Samir Guest House in Rickshaw. (ii) Mamoor Khan used to sell the goods in the market from Guest house. (iii) Mamoor Khan introduced him to various shopkeepers and these were Arun and Gopal, Bunty, Sanjeev Jain and Mahender Jain, Jasbir Textiles and Khem Singh. From these statements, it is noticed that goods brought into India by Uzbek Ladies were purchased by the appellants traders. Appellant traders also visited the Guest house and selected goods, packed for themselves. Payment was made after delivery of goods to Ms. Olga or Mammor Khan both foreign national. Goods delivered to shopkeepers were firs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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