TMI Blog2020 (2) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... be co-related with the goods under seizure, without specifying anything further. The department has failed to discharge the initial burden cast on them to prove that the goods were illicitly cleared by the appellants. Confiscation do not sustain - appeal allowed - decided in favor of appellant. - Customs Appeal No. 143 of 2011, 144 of 2011, 145 of 2011, 146 of 2011 - A/87117-87120/2019 - Dated:- 23-9-2019 - Hon ble Dr. D.M. Misra, Member (Judicial) And Hon ble Mr. Sanjiv Srivastava, Member (Technical) Shri D.H. Nadkarni, Advocate, with Shri C.S. Birader, Advocate, for the Appellant Shri Bhushan Kamble, Assistant Commissioner, Authorised Representative for the Respondent ORDER PER: SANJIV SRIVASTAVA These appeals are directed against the Order in Original CAO No 102/2010/CAC/CC/BKS dated 27.12.2010 of the Commissioner Customs (Adjudication), Ballard Estate, Mumbai. By the impugned order passed in remand proceedings by the Commissioner following has been held- 4.1 In view of my above discussion and findings the following orders are passed:- (i) The demand of duty is confirmed against M/s. Noble Marine Works, M/s. M.A. Traders, M/s. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Only) each is imposed on Shri D.K. Mukhopadhyay and Shri Y.B. Sawant under Section 112(a) of the Customs Act, 1962. (v) Bonds backed by Bank Guarantee executed separately by each of noticees M/s. Noble Marine Works, M/s. M.A. Traders, M/s. Shree Durga Traders and M/s. Jubilee Traders, are to be enforced and encashed towards the amounts to be recovered from them. 2.1 The facts and observation as recorded in the tribunal earlier order while remanding the matter are as follows: M/s Noble Marine Works and M/s M.A. Traders were awarded contract for removing scrap from the vessels of the Shipping Corporation of India (SCI) for the period March, 1994 to May, 1995 and accordingly these parties took delivery of several consignments of scrap from several vessels belonging to the SCI. Later on, upon investigation, officers of Customs found certain stocks of scrap in the premises of M/s. Shree Durga Traders. A statement of the proprietor of M/s. Shree Durga Traders was recorded under Section 108 of the Customs Act, 1962, wherein he stated that he was dealing in sale and purchase of scrap in the local market and that the stock of Polypropylene (PP) Ropes (scrap) found in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order, wherein total amount of duty of ₹ 11,67,231/- was demanded from M/s Noble Marine Works, M/s M.A. Traders, M/s Jubilee Traders and M/s Sri Durga Traders under Section 28 of the Act and interest thereon was also demanded under Section 28AB of the Act. The break-up of duty for the purpose of recovery from these four parties was also furnished in the Commissioner s order. Penalty equal to duty was imposed on each of them under Section 114(A) of the Act. In respect of the goods seized from the premises of M/s Sri Durga Traders, which was subsequently released provisionally to the above four parties against Bond and Bank Guarantee, confiscation was ordered under Section 111 of the Act and, in connection therewith, penalties were imposed on the two functionaries of SCI under Section 112 of the Act. 3. After examining the records and hearing both sides, we find that the two parties who were found to have evaded payment of duty of customs on the goods in question by suppressing before the department the factum of having imported the scrap from foreign-going vessels are M/s Noble Marine Works and M/s M.A. Traders. Both these parties contested the demand of duty on merits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance of Custom Officers filed the Bill of Entry describing the goods as P P Ropes i.e. condemned ship stores, as they were in the nature of the waste and scrap among other items described as 8 P P Howser , 10 P P Howser , Pieces of M Howser Dia 100 mm and 10 inch coil P P Howser worn out and in Pieces . After clearance the P P Ropes were stored in the godown of M/s Shree Durga Traders. Shree Durga Traders had also procured about 8 MT of goods locally against invoice No 12/94-95 dated 3.08.1994 43/94-95 dated 01.02.1995. This quantity of the goods procured locally is more than the quantity of 5.280 MT seized by the department. M/s Jubilee Traders had locally procured 9920.3 kgs (M/s Naval Store Department) + 6967 Kgs (M/s Naval Store Department auction sale) + 5306 kgs (local purchase against invoice No 0849 dated 29.06.1993) + 8120 kgs (local purchase against invoice No 42/94-95 dated 01.02.1995) = 30313.3 kgs. After having furnished all the details of local procurement of goods, from Shipping Corporation of India and Naval Store Department, the learned adjudicating authority was not justified in holding that they had not discharged the burden of proof to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In absence of the notification, notifying the goods under Section 123, the burden to prove that the impugned goods were of foreign origin and were imported/ cleared from the customs area illicitly without payment of duty, is on the revenue. Hon ble Bombay High Court has in case of Mahendra Singh Purohit [2008 (225) ELT 426 (Bom)] held as follows: 2. The reason for setting aside the confiscation is that the goods in question are non notified goods and the revenue failed to discharge the burden that the said goods are smuggled illegally into the country. The Tribunal has further held that even if the duty paying documents produced by the respondent did not tally with the description of the goods, still the onus was on the revenue to discharge the burden by producing positive evidence. The Tribunal has held that in the absence of such evidence, the confiscation order cannot be sustained. 4.3 Hon ble Supreme Court has in case of D Bhoormull [1983 (13) ELT 1546 (SC)] laid down the law in this respect stating as follows: 43. If we may so with great respect, it is proper to read into the above observations more than what the context and the peculiar facts of that case d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greatly strengthened the initial presumption of innocence in his favour. Amba Lal s case thus stands on its own facts. 4.4 In the present case based on intelligence/ information, the premises of the Appellants were searched on 02.02.1995 (Resulting in detention of 3600 kgs of Polypropylene Rope) and on 03.02.1995 (Resulting in detention of 32,680 kgs of Polypropylene Rope). In the statement recorded on or about the same time i.e. on 02.02.1995, 04.02.1995 and 06.02.1995 they took a definitive stand in respect of procurement of the goods locally and also produced certain documents in respect of the purchases made by them. The facts as stated by the Appellants, were also corroborated by Shri D K Mukhopadhyay (Assistant General Manager, Shipping Corporation of India) and Shri Yeshwant B Sawant (Deputy Manager Freight Customs, Shipping Corporation of India) in their statements recorded on 16.02.1995. Commissioner has in para 3.5, 3.6, 3.7 and 3.8 of his order recorded as follows: 3.5 Further M/s. Jubilee Traders and M/s. Shree Durga Traders respectively claimed ownership of 13 MTs and 5 MTs of the seized goods. They produced certain documents vide their letters No. Nil date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f SCI during the course of investigations could not confirm the origin of the goods purchased by M/s. Noble Marine Works and M/s. M.A. Traders i.e. whether same were of foreign origin or otherwise. They stated that while issuing delivery orders they had indicated Indian Origin without verifying the same. They also never indicated on the delivery orders as to whether the goods were removed from Coastal-run vessels or foreign going vessels. 3.8 Both Shri D.K. Mukhopadhyaya and Shri Y.B. Sawant, the employees of M/s. Shipping Corporation of India have clearly admitted in their statements recorded under Section 108 of the Customs Act, 1962 before the investigating officers of the DRI Zonal unit, Bombay that they had mentioned by mistake, on the delivery challans that the goods sold to the Noticees were of Indian Origin without knowing anything about the origin of the goods. Moreover, one of the Vessels shown in the Bills of Entry mentioned by the Noticees was admittedly a Foreign going vessel . Further, there is a wide difference in the description of the seized goods vis- -vis the goods described in the Bills of Entry submitted by the Noticees. Whereas the impugned goods ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on concerned in it. On the principle underlying Section 106, Evidence Act, the burden to establish those facts is cast on the person concerned: and if he fails to establish or explain those facts, an adverse inference of facts may arise against him, which coupled with the presumptive evidence adduced by the prosecution or the Department would rebut the initial presumption of innocence in favour of that person, and in the result prove him guilty. As pointed out by Best in Law of Evidence (12th Ed. Article 320, page 291), the presumption of innocence is, no doubt, presumptio juris : but every day s practice arising from the recent (unexplained) possession of stolen property, though the latter is only a presumption of fact. Thus the burden on the prosecution or the Department may be considerably lightened even by such presumption of fact arising in their favour. However, this does not mean that the special or peculiar knowledge of the person proceeded against will relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden to discharge which very slight evidence may suffice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he correct legal position is that in the absence of special notification under Sec. 123 of the Customs Act specifying goods to which the section applies, the onus of proof under that section cannot be placed on persons whose goods are seized. Where no presumption under Sec. 123 of the Act could be used against the accused it is for the prosecution to prove that the accused knew that the goods in possession was smuggled and imported into the country without a permit. 14. The Digest of the Law of Evidence by Stephen, Article 104 wherein it is stated that - the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the burden of proving the fact shall lie on any particular person; but the burden may in the course of a case be shifted from one side to the other and in considering the amount of evidence necessary to shift the burden of proof the Court has regard to the opportunities of knowledge with respect to the fact to be proved which may be possessed by parties respectively. The Hon ble Supreme Court delivered a landmark judgment in the case of CC, Madras and Others v. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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