TMI Blog2020 (6) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of such circular Metal Scraps imported in unshredded should be accompanied by pre shipment inspection certificate. The said consignment is required to be examined by 25% in respect of manufacturer importers and 50% in respect of traders - the custom officer has examined the goods as evident from the examination order and during examination the officers did not find the cigarette concealed under the said scrap. After examination the goods for past imports were allowed clearances for home consumption without any hindrances. This shows that the procedure as required under Section 47 which is mandatory has been complied with. In view of the examination of the goods, it is important to note that examining officers have not been questioned about the manner of examination of the past consignment. If this be so, the examination report cannot be discarded. If at all there is any lapse on the examination officer, some action should have been taken by the department. In this fact in one hand department accepted the examination of goods and on the other hand solely relying on an email held that appellants have smuggled cigarettes concealing under Aluminum scrap in past consignment, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wards confiscation of aluminum scrap for which there was no fault of the appellant as there was no mis-declaration. As regard the aluminum scrap the import documents are also for import of aluminum scrap therefore, penalty with respect to aluminum scrap should not have been imposed. Penalty u/s 114AA and 112a of CA - HELD THAT:- The penalty under Section 114AA was imposed upon M/s. Shivanjali Corporation and Shri Bharat Patel is relating to past consignments and as we held that in the past consignment there is no case of smuggling of cigarettes, the penalty under Section 114 AA will not sustain - Keeping in view the smuggling of cigarettes in the past as well as live consignment since the demand of past consignment was set aside and in the live consignment the penalty was imposed under section 114A as well as Section 112a(i) there should not be further penalty under Section 114AA. Appeal allowed in part. - Customs Tax Appeal No.11723 of 2018, Customs Appeal No. 11724 of 2018, Customs Appeal No. 12355 of 2018, Customs Appeal No. 12447 of 2018 - A/11114-11117 /2020 - Dated:- 12-6-2020 - HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed as camouflage for concealing cigarettes are liable for confiscation under the provision of section 111(m) and 119 of the act. As the goods were not available for confiscation no redemption fine was imposed, a penalty of ₹ 30,000 was also imposed under section 112A(2) of the act. A penalty was also imposed on Shri Bharat Patel, personal penalty of ₹ 1 Lakh each was also imposed on Shri Dharmendra Rathor, proprietor of M/s. Dwarkesh Recycling and Shri Ketan C. Gujjar, proprietor of M/s. Shivanjali Corporation under the provision of section 117 of the act for not honouring the summons. The respondent confirmed and demanded duty and imposed penalties and redemption fine on the two counts:- (i) The Customs Authority found Gudang Garam branded cigarettes from the live consignments imported under Bill of Entry No.7720230 dated 06.12.2016 and therefore, ordered for absolute confiscation. Secondly, the respondent imposed penalty upon M/s. Dwarkesh Recycling. (ii) The respondent confirmed and ordered for customs duty and imposed penalties for the past consignments imported by M/s. Dwarkesh Recycling and M/s. Shivanjali Corporation based on emails retrieved from ema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weight mentioned by HKM in the email dated 15.08.2016. All other details found in the email were tallied with the details mentioned in the Bill of Entry. The said thereafter corroborated with the statement of the Appellant including Shri Bharat Patel. B) The entire demand has been confirmed based on assumption and presumption basis without any documentary evidences except the email dated 15.08.2016. The appellant imported un-shredded metal scraps. In terms of Circular No. 43/2001-Cus dated 06.08.2001 as amended from time to time, metal scraps imported in un-shredded should be accompanied by Pre-Shipment Inspection Certificate (PSIC). The said consignment is required to be examined by 25% in respect of manufacturer importers and 50% in respect of Traders. The selected container is required to be 100% examined. Relevant extracts for examination of the containers for metal scrap in un-shredded form is extracted herein below: 11. Clearance of imported metal scrap: 11.1 In terms of the relevant provisions of the Foreign Trade Policy, the following procedure is prescribed for clearance of imported metal scrap. (i) Import of any form of metallic waste, scrap will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is a presumption in law that procedure under Section 47 has to be followed. Two following conditions are to be specified by the proper officer to pass the order permitting clearance of goods for home consumption: (i) That the goods should not be prohibited. (ii) If the importer has paid import duty assessed thereon; 3. In the present case, the respondent allowed clearance of goods for past imports for home consumption without any hindrance. It shows that the procedure as required under Section 47 has been complied with. He submits that in the case of past consignment imported by M/s. Dwarkesh Recycling, there is a reference made in the email retrieved from email ID of Shri Bharat Patel and therefore, demanding duty and imposed penalty for the past consignment under Bill of Entry No. 6920436 dated 30.09.2016 cannot be sustained. In support of his submission he placed reliance on the judgment in the case of : (i) SYED IRFAN MOHAMMED vs. UNION OF INDIA- 2017 (349) ELT 462 (A.P.) (ii) C.N. SANGHVI vs. COMMISSIONER OF CUSTOMS- 2009 (237) ELT 190 (iii) STELLA INDUSTRIES PVT. LTD. Vs COMMISSIONER OF CUSTOMS- 2017(357) ELT 1097 3.1 He further submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es it is held that documentary evidences prevailed over the statement recorded under Section 108 of the Customs Act (i) PHILIP FERNANDES vs C.C. 2002 (146) ELT 180 (T); (ii) R.P. INDUSTRIES vs. C.C.- 1996 (82) ELT 129 (Tri.); (iii) AEROSTAR HELMETS LTD. vs. C.C.Ex 2017 (346) ELT 120 (T); (iv) CLASSIC STRIPS LTD. vs. C.C.Ex 2016 (339) ELT 144 (T) 4. As regard the demand in respect of consignment which was absolutely confiscated he submits that 13,68,000 sticks of Gudang Garam branded cigarettes which were concealed to the aluminum scrap. The appellant submits that they placed an order for supply of Metal Scrap, the appellant is in the business of trading of scrap. Since the appellant filed bill of entry based on the order placed by them, mis-declaration on the part of the appellant cannot be sustained. He also submits that respondent imposed disproportionate amount of penalty and redemption fine upon the appellant. The appellant never ordered for supply of cigarettes, since the supplier supplied cigarettes along with aluminum scrap the appellant should not be punished with huge amount of penalty in a case where the appellant never placed order for su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of penalty on Shri Bharat Patel is also not sustainable. He submits that in any event Shri Bharat Patel has not been held as importer in the impugned order entire duty demand has been confirmed against M/s. Dwarkesh Recycling M/s. Shivanjali Corporation. In that view imposition of penalty upon appellant in absence of any reliable evidence to show that appellant has aided and abated importers of the goods in smuggling cigarettes is not sustainable. Without prejudice he further submits that in any event even if, it is held that Shri Bharat is liable for penalty in respect of allowed consignment of M/s. Dwarkesh Recycling penalty upon Shri Bharat Patel could have been restricted to that extent only. 5.1 He further submits that the Adjudicating Authority contended that Shri Bharat Patel is the master mind for the entire smuggling of cigarettes on the basis of statement recorded under section 108. He submits that the statement is not admissible as no examination was done under Section 138B of the Customs Act. Moreover, except statement no documentary evidence was found to show that Shri Bharat Patel was involved as a master mind therefore, a penalty on Shri Bharat Patel is not su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Bharat Patel which was sent by M/s. HKM Trading Co. As regard the past consignment it is observed that all the consignments have been physically examined by the customs officers. One copy each of examination order in respect of the three appellants are scanned below: 7.1 From the perusal of the above examination order and also in the examination order in other consignments we find that in respect of all the consignments physical examination of the container was carried out and no discrepancy was found therefore, as per the physical examination of imported aluminum scrap there is no evidence that the cigarettes were concealed under the imported aluminum scrap. The revenue s sole reliance is on email retrieved from the email ID of Shri Bharat Patel. However, even if it is accepted that email was sent to Shri Bharat Patel but on the face of the examination order it is clear that cigarettes were not supplied along with the aluminum scrap in the past consignment. 7.2 We find that as regard import of Metal Scrap a circular No. 43/2001-Cus dated 06.08.2001 as amended from time to time was issued. In terms of such circular Metal Scraps imported in unshredde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The rigour of this procedure is exempted only in a case in which one or more of the handicaps referred to in clause (a) of Section 9D(1) of the Act would apply. In view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaway rely on the statement recorded during investigation/inquiry before the Gazetted Central Excise officer, unless and until he can legitimately invoke clause (a) of Section 9D(1). In all other cases, if he wants to rely on the said statement as relevant, for proving the truth of the contents thereof, he has to first admit the statement in evidence in accordance with clause (b) of Section 9D(1). For this, he has to summon the person who had made the statement, examine him as witness before him in the adjudication proceeding, and arrive at an opinion that, having regard to the circumstances of the case, the statement should be admitted in the interests of justice. 17. In fact, Section 138 of the Indian Evidence Act, 1872, clearly sets out the sequence of evidence, in which evidence-in-chief has to prec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the veracity and authenticity of the moneychanger s certificate, all the more when the adjudicating authority caused enquiries to be made and has accepted the certificates only after satisfying himself on verification. We also note that Philip Fernandes had retracted his statement on 16-3-1998 itself i.e., immediately after his statement was recorded under Section 108 of the Customs Act, 1962 on 15-31998 and that he had written a letter to the department on 24-4-1998 explaining that he was a man of means being an engineer with the National Drilling Company, Abu Dhabi since 1980 and drawing a salary of more than ₹ 1.50 lakh per month; that he had lend 8 lakhs UAE Dirhams to one Mr. Jimmy Johnson for purchase of water well drilling rig from USA; that Mr. Johnson returned 8,30,000/- Dirhams (capital with interest); that he used a sum of 7,17,202/- Dirhams to buy assorted foreign currency from Thomas Cook and that he brought foreign currencies to India on 11-2-1998 in order to make payment of ₹ 74,65,000/- to purchase ground floor and basement of a commercial complex at Mumbai as his wife had entered into an agreement on 6-2-1998 with Laxmi Builders and Developers for purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Section 108 of the Customs Act, 1962, (which are retracted), are inconsistent with the documentary evidence, the documentary evidence is to be preferred. This is the view expressed by the Tribunal in the case of R.P. Industries v. Collector of Customs - 1996 (82) E.L.T. 129. Although in that case the documentary evidence was seized during the search that would not alter the position in this case since the documentary evidence in the form of moneychanger s certificate submitted to the department before the issue of the show cause notice has been verified and found to be genuine and correct. The same view has been taken in final Order Nos. CI/2874 2875/WZB/2001, dated 19-9-2001 [2002 (140) E.L.T. 225 (T)] in the case of Kishin Shewaram Loungani Another v. CC, Mumbai. In case of R.P. INDUSTRIES vs COLLECTOR OF CUSTOMS, AHMEDABAD-1996 (82) ELT 129 (Tri.) it was held as under:- 11. Considering the submissions made, and going through the documents made available, M/s. R.P. Industries have been granted Import licence No. P/S/1894102, dated 6-12-1984 to import raw material components/consumables for manufacture of their end product Draw Texturising Machinery. Five ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence, leading to raise a doubt as to their admissibility and in any case, with the factual position as brought out on record, the allegation of the appellant M/s. R.P. Industries having imported complete machines in the form of components, cannot be held as duly established and order of confiscation of the machines under Section 111(d) of the Act does not appear justified. That part of the order-in-original is therefore, held as not sustainable and is set aside. 11.1 In view of the above judgments it is a settled law that documentary evidence must prevail over the oral evidence i.e. statement recorded under section 108. In the present case the undisputed documentary evidences are the examination order in respect of past consignments therefore, the examination orders should be given preference over the overall statements. 12. The identical issue has been considered by the Hon ble Andhra Pradesh High Court in the case of SYED IRFAN MOHAMMED vs UNION OF INDIA (supra) wherein on the basis of the live consignment in respect of past consignment also demand of duty and penalty was made. In the live consignment. Custom Authority found cigarettes and on the basis of the Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Paragraphs 136 to 138 of the Orders-in-Original that the 2nd respondent has come to the conclusion that the past containers should have also contained cigarettes, solely on the basis of the statements of the person who transported material. Though none of the witnesses stated that they transported cigarettes, the 2nd respondent has drawn an inference on the ground that if those containers contained only Baby Diapers, there was no need to transport those goods to safe places and that there was no need to engage a 3rd person to get the goods cleared. These presumptions are also completely unknown to law. 12.1. In view of the undisputed fact in respect of past consignment that the goods were physically examined and allowed for clearance for home consumption and also by taking support of the Hon ble Andhra Pradesh High Court judgment, we are of the view that merely on the basis of an email it cannot be presumed that in the past consignments also the appellants have smuggled cigarettes concealing under the consignment of aluminum scrap. Therefore, we set aside the demand of duty and penalties in respect of past consignment. 12.2. As regard the live consignment which was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stly, for non honouring the summons, the appellants were already penalized under IPC in the ACMM Court. Secondly, both these persons are proprietor of M/s. Dwarkesh Recycling and M/s. Shivanjali Corporation. The cases were made out against the Proprietorship concerned wherein demand and penalties were proposed in such case a separate penalty cannot be imposed on the Proprietor of proprietorship concerns. On this observation the penalties of ₹ 1 Lac. each imposed under Section 117 upon Shri Dharmendra N. Rathore and Shri Ketan C. Gujjar is set aside. 14. It is pertinent to note that in respect of past consignments we have decided the matter on the basis of examination order and invoking section 138B. Therefore, we are not inclined to deal with the issue heavily raised by the appellant on section 138C that whether the Investigating officers have followed the proper procedure for retrieving the email from the computer hence, this issue is kept open. 15. The respondent also imposed penalty under Section 114AA upon M/s. Dwarkesh Recycling, M/s. Shivanjali Corporation (Ketan C Gujjar) and Bharat Kumar Patel, we find that the penalty under Section 114AA was imposed upon M/s. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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