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2015 (3) TMI 1037 - DELHI HIGH COURT

2015 (3) TMI 1037 - DELHI HIGH COURT - 2015 (321) E.L.T. 604 (Del.) - Offense of smuggling - Import of prohibited / restricted goods - Levy of penalty - Import of bulk (commercial) quantity of Chinese silk textiles of 81,160 yards in contravention of provisions of Customs Act, 1962 - Held that:- The order of the Commissioner - as well as the CESTAT in each of the case of the appellants before us, has noted exhaustively the dates and time when the conversation between the appellants and the forei .....

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ants were traders in Chandni Chowk area who legitimately dealt in silk no doubt is a circumstance which has to be borne in mind. However, we notice that when confronted with the telephone numbers, either there was denial or refusal to answer the queries of the investigators. In these circumstances, given the nature of the materials which were otherwise established, painstakingly collected evidence such as movement of trucks etc. and the statement of transporters of certain commodities, it cannot .....

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e grievance articulated is in respect of order dated 22.10.2013. It appears that the previous order of the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as CESTAT ) dated 25.11.2011 was set aside (to the extent of the appeals filed by these assessees) in CUSAA No.8/2011 and connected cases on 25.4.2012. 2. The Court had directed re-examination of the contentions and issues urged by the present appellants holding that the reasoning contained in para 27 of the CESTAT .....

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0 Olga Kozireva, a Uzbek National, was intercepted at Delhi airport, attending to smuggle a large quantity of prohibited Chinese silk. Her statement under Section 108 led the agencies unraveling a network of smuggling which had in the past managed to ensure that similar large quantities of article were smuggled in on several occasions. During the course of investigation statements of those suspected, including Olga Kozireva and other foreign nationals Dil Agha, Mamoor Khan, Nazira, Valichko were .....

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e textile traders in Chandni Chowk. The statements of these appellants too had been recorded in the course of investigations. The appellants replied denying various allegations. 4. After considering the submissions of the parties-which included those on behalf of present appellants/traders, the adjudicating Commissioner on 27.9.2007 imposed penalty upon each of them to the tune of ₹ 5 lakhs. Whilst doing so, the Commissioner in a 317 page order on 27.9.2007 exhaustively analysed the materi .....

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were exonerated whereas in respect of the others guilt was established. The findings in respect of the present appellants were summarized as follows : 546. The show cause notice has also been issued to 8 persons (Noticee No. 26 to 33) alleging that these noticees were involved in knowingly acquiring, possession, dealing or selling of smuggled silk textiles rendering them liable for penal action under Section 112(b) of the Customs Act, 1962. These 8 persons are, namely, Nitish Kedia @ Bunty, Anu .....

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d 8.12.2000 that he purchased imported silk fabrics from one Afghan, who introduced himself as Khan. (ii) All of these noticees have also been in touch with Mamoor Khan on telephone. (iii) Gopal Prasad Dokania in his statement dated 5th Jan., 2001 has admitted that he knew Mamoor Khan and that he purchased silk fabrics from him. (iv) Nitish Kedia in his statement recorded on 5th Jan., 2001 has admitted knowing Mamoor Khan but he denied that he had purchased silk fabrics from Mamoor Khan. (v) Anu .....

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sing silk fabrics from most of the above noticees which was exported to Afghanistan through Kultar Exports. However, most of the noticees while admitting to knowing Mamoor Khan and having some small dealing with him but have denied any knowledge about the passenger like Olga K., or smuggled nature of the imported goods. A perusal of Section 112(b) of the Customs Act, 1962 lays down that possession, removal, keeping, selling, purchasing etc. of imported goods is punishable under Section 112(b) on .....

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this regard. However, on the other hand, the testimony of Abdul Qahar who was one of the points of contact for delivery of contraband silk textiles brought in by Olga K. and her group to these traders is clear and unambiguous that the traders were aware of the illegal activities of Olga K. and her associates. Let us now examine whether any evidence exist to support this testimony of Abdul Qahar. In this regard, the examination and evaluation of the telephonic conversation records as available in .....

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f silk textiles. The significance of Table No.11 which shows that these traders were in touch with Mamoor Khan, Dil Agha and passengers on the date when they actually arrived in India with their heavy baggage. For example, when Olga K. and Shakista K. arrived by HY-151 at 12.51 PM on 27th Feb., 2000, 7 conversations took place between Sanjeev Jain and Mamoor Khan between 11.06 AM and 5.43 PM. Mamoor Khan also spoke to Anoop Khem Singh at 11.30 AM. On the same date, Mamoor Khan and Nitish Kedia s .....

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quite exhaustive. A careful perusal of this table shows that every time passengers came with heavy baggage to IGI Airport at Delhi, frequent exchange of calls took place between Mamoor Khan and Dil Agha on one hand and all the traders who are noticees on the other. None of the traders have offered any valid explanation of this uncanny coincidence of timing. In my opinion, this evidence lend coorboration (sic) and credence to the testimony of Abdul Qahar and on the basis of this evidence, the ele .....

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knowingly involved themselves in possession/sale, purchase etc. and the goods which they had knowledge, were liable to confiscation under Section 111 of the Customs Act. 1962. 5. The appellants grievance in respect of this order was considered by the Tribunal in its remand order. The member judicial Shri D N Panda after noticing the different categories of noticees who had approached the CESTAT and the nature of evidence against each one of them, was of the opinion that the Commissioner s order .....

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enue led cogent evidence against the deals of the appellant which remained un-rebutted except technical pleas raised on flimsy grounds. Evidence gathered by Revenue were not more piece of papers but well founded and stand to reason. Even statement recorded from Dil Agha whowas produced before Metropolitan Magistrate on 16.07.2001 self speak appellant's active role in abetment of disposal of the smuggled goods knowing character thereof. He could not go out of the mess of smuggling racket havi .....

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cion 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. The appellant and his brother were in conversation with Mamoor Khan 259 times of call made and received from April 2000 till 28.8.2000. But he refused to identify the mob .....

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rrna 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 close relationship between: the parties to the calls. The appellant failed to lead any cog.ent reason why calls were made as appearing in Table 10 and 11 of the impugned order .....

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uggled goods consciously knowing origin of the goods and the oblique motive. It has also been laid down in the case of Bhagvvan Swarup and Others V. State of Maharashtra -AIR 1965 SC 682 that an agreement between the conspirator need not be directly provide the offence of conspiration which can be established by either direct or circumstantial evidence. There were reasonable grounds in the case of investigation to appreciate malafide of the appellant being in association with the smuggling racke .....

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recorded by investigation discovered truth of the deals. Their statements remained unrebutted, unwarranting their cross-examination following the ratio laid down in the case of Surjeet Singh Chbabra v. UOI - 1997 (89) ELT 646 (SC.). Similarly, as has been held in the case of K. T. M. S. Mohammed and Others UOI - 1992 sec (3) 178 that merely because a statement is retracted that· cannot be said to be involuntary or unlawfully extracted. It is for the maker thereof who alleges inducement, .....

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f 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 .....

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has reason to believe are liable to confiscation, under section 111 of the Act, he is charged by that section. In the present case conscious knowledge of the trader appellant about character and nature of the goods illicitly imported and his deal theron was established by the seller racketeers. His ill will and deal satisfied essential ingredients of section 112 (b) of the Act. The appellant was aware of the origin and destination of goods demonstrating his intimacy with the racketeers by telep .....

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n 111, the revenue had to necessarily prove that each of the appellants knew that they were dealing in smuggling goods- an element which according to him had not been established in the facts of the case. The said learned Member was also of the opinion that the call details ipso facto could not be sufficient to prove culpability. In view of this divergence of opinion, the matter was referred for the opinion of the third member. Sh. Sahib Singh in his order - extracted in para 32 of the common or .....

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denied to the appellants in respect of statements of witnesses who had deposed against them and (b) that the materials relied upon by them, on taking a cumulative view, could not lead to necessary proof of culpability. 8. Learned counsel submitted that in respect of the appellants the statements of witness Abdul Qahar was generic in the sense that he only mentioned that Olga Kozireva entrusted him with certain Chinese silk which used to be delivered to the traders; the appellants cannot be impl .....

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oss-examine the foreign nationals and had also contended that telephone records ipso facto could not establish their guilt among other arguments were rejected in the common judgment dated 27.02.2015. Those reasons also apply with equal force in the present appeals. The Court in the judgment had relied upon various rulings of the Supreme Court to conclude that the questions of law urged had to be answered against the appellants and in favour of the revenue. 10. In these appeals, we notice that th .....

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