2016 (4) TMI 831 - AT - Customs

Whether Betel Nuts, seized are smuggled across Indo-Nepal Border - Confiscation and imposition of penalties - Revenue contended that the documents were pertaining to Betel Nuts loaded on a different truck bearing registration No.RJ-2G-4000 and not truck No.RJ-14-2G-4000 and none of the appellants have claimed the ownership of the goods seized from truck No.RG-14-2G-4000 - Held that - the argument taken by Appellant No.1 that Betel Nuts were sent through truck having registration No.RJ-14-2G-4000 and in the grounds of appeal also it has been taken that digits 14 not getting mentioned in the transport documents was a clerical omission has some weight because truck registration number must have been communicated through phone/mobiles where some digits can get omitted. Such an omission is plausible in view of the omissions, where inspite of truck No.RJ-14-2G-4000 being as record, a different number is written by various persons including the Adjudicating authority and the first appellate authority. The first two alphabets of a vehicle registration number indicate the state of registration. The next two digits represent the Area/District of the vehicle registration authority. Therefore vehicle No.RG-2G-4000 is not the complete registration number of a vehicle and could be same as RG-14-2G-4000. The contradiction in the statement of transporter of Appellant No.1 and the Driver Shri Jagroop Singh clearly brings out that entire story narrated by the Driver/Khalasi, in their statements recorded after interrogation for three days, is not entirely correct. It is now a well accepted legal principle that only a part of the statement, favorable to the department, cannot be considered as acceptable and that the entire statement has to be accepted or rejected. There is no other evidence that Betel Nuts seized were not obtained by the Appellant No.1 from legalized channels. Appellant No.1 has not given any confession statement at any stage. Reliance of third party statements without extending cross-examination is not acceptable as evidence when the entire facts of the statement are not true. Minor procedural irregularities in the documents produced by the Appellant No.1 cannot be considered sufficient to hold that Betel Nuts seized were different than the Betel Nuts procured by Appellant No.1 and were of smuggled nature.Also no investigations have been done whether any truck having registration No.RJ-2G-4000 also exists. Mobile calls of the Appellants made before the seizure have also not been investigated by the department which could have given vital clue regarding movement of persons and vehicle No.RJ-14-2G-4000. Therefore the order-in-appeal is set aside. - Decided in favour of appellant with consequential relief

Issues Involved:
1. Absolute confiscation of Betel Nuts.
2. Penalties imposed on various appellants.
3. Determination of the origin of Betel Nuts.
4. Validity of the statements made by the driver and khalasi.
5. Ownership and documentation discrepancies related to the truck and consignment.

Detailed Analysis:

1. Absolute Confiscation of Betel Nuts:
The primary issue was whether the Betel Nuts seized by the DRI were of foreign origin and smuggled across the Indo-Nepal border. The Revenue relied on the markings on the bags ("COCOA BEANS (Made in Malaysia)") and statements from the driver and khalasi to assert that the Betel Nuts were smuggled. However, the appellant argued that the Betel Nuts were legally procured from NCCF & Cooperative Societies and were documented accordingly. The Tribunal found that the reliance on the markings and statements was insufficient without corroborative evidence, leading to the conclusion that the confiscation was based on presumptions and assumptions.

2. Penalties Imposed on Various Appellants:
Penalties were imposed on multiple appellants, including the company, its staff, and associated individuals. The Tribunal evaluated whether these penalties were justified based on the evidence presented. The appellants argued that they had no knowledge of the goods being smuggled and that the Betel Nuts were legally procured. The Tribunal found that the penalties were imposed without substantial evidence proving the smuggled nature of the goods, thereby setting aside the penalties.

3. Determination of the Origin of Betel Nuts:
The Revenue's case was built on the assumption that the Betel Nuts were of foreign origin due to the markings on the bags. The appellant accepted that the Betel Nuts were of foreign origin but argued that they were legally imported through NCCF. The Tribunal noted that the Revenue's reliance on the markings and the oral opinion of an individual was not sufficient to establish the smuggled nature of the goods. The Tribunal emphasized the need for concrete evidence rather than assumptions.

4. Validity of the Statements Made by the Driver and Khalasi:
The statements of the driver and khalasi were crucial to the Revenue's case, as they indicated that the goods were loaded from Kuwari and not Kolkata. The Tribunal scrutinized these statements, noting that they were recorded after prolonged detention and lacked corroborative evidence. The Tribunal highlighted that these statements alone could not form the basis of a case, especially when there were contradictions and no cross-examination was allowed. The Tribunal referenced multiple case laws to support the inadmissibility of such statements without corroboration.

5. Ownership and Documentation Discrepancies Related to the Truck and Consignment:
There were discrepancies in the truck registration numbers mentioned in various documents and statements. The Tribunal observed that such clerical errors were plausible, especially given the inconsistencies in the records maintained by different parties, including the Adjudicating authority. The Tribunal found that the errors in truck registration numbers did not conclusively prove that the seized Betel Nuts were different from those documented by the appellants. The Tribunal also noted the lack of investigation into the existence of the truck with the disputed registration number and the absence of mobile call records that could have provided vital clues.

Conclusion:
The Tribunal concluded that the case against the appellants was built on presumptions and lacked substantial evidence. The reliance on uncorroborated statements and procedural irregularities in documentation was insufficient to uphold the confiscation and penalties. Consequently, the Tribunal allowed the appeals, setting aside the Order-in-Appeal dated 25.10.2010 and granting consequential reliefs to the appellants.

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