2019 (10) TMI 64 - AT - Customs

Imposition of penalty - exporter of alleged goods - psychotropic substance - Ketamine Hydrochloride - it was alleged that the Appellants were procuring the goods under fictitious firms name and were also clearing the same - impugned goods were exported - Goods not available for confiscation - imposition of redemption fine and penalty. HELD THAT - The payment alleged to have been received by Appellant on account of export goods is also based merely upon hearsay. None of the payments could be linked to the Appellant Shri Sanjay. It is only statement of persons that payments were received on account of Sanjay but no other details are forthcoming as to how the same were related to Shri Sanjay. No person would permit any other person to receive payment in his account unless he is sure of any legal transaction. I also find that none of the buyers of the goods has been identified. No consignment alleged to have been exported has been brought on record. It is not appearing when the goods were exported, what mode of transportation was made, no shipping or airway bill linking with alleged exports is on record. There is no evidence as to how the Appellant paid for alleged receipt of Ketamine to the supplier. Shri Jayesh Vadaliya was not made even noticee even though he was the person alleged to be taking delivery of Ketamine and forwarding the same in name of fictitious firms. The movement of goods for export is through courier firms but nowhere the clearance of goods exported were doubted even though the export goods are subjected to testing and examination and especially in case of drugs. It is also not on record as to when and how the Appellant dealt with the impugned goods in transporting, packing the export consignments. In such case we find that only on the basis of statements, it cannot be concluded that the Appellant had exported 165 Kgs of Ketmaine HCL. Seizure of 25 kgs of Ketamine - HELD THAT - No evidence has been brought on record to show that the Appellant was attempting to export the same. No evidence of Appellant having in contact with any foreign buyer for export of said quantity is on record. No export documents were prepared or no shipping bill airway bill was prepared. In such case it cannot be said that the Appellant was attempting to export the goods. The Appellants cannot be accused of export of 165 Kgs of Ketmaine HCL or of attempt to export 25 Kgs of Ketamine seized from Choudhary Roadways - The impugned order in as much as it relates to imposition of penalty on Shri Sanjay Manjibhai Gadhesariya and Shri Kishan Manjibhai Gadhesariya is set aside - appeal allowed.

Summary

Issues Involved:
1. Legitimacy of the export of 165 Kgs of Ketamine Hydrochloride.
2. Confiscation of 25 Kgs of Ketamine Hydrochloride.
3. Imposition of penalties on the appellants.

Issue-Wise Detailed Analysis:

1. Legitimacy of the Export of 165 Kgs of Ketamine Hydrochloride:
The adjudicating authority relied heavily on statements from various individuals, including Shri Jayesh Vadaliya, who claimed to have taken delivery of the Ketamine HCL on behalf of the appellants. However, the appellants argued that these statements were not corroborated by concrete evidence such as shipping bills, airway bills, or any documentation showing the actual export of the goods. The appellants also pointed out discrepancies in the statements of Shri Jayesh Vadaliya, who initially claimed to have received the lorry receipt from an unknown person but later stated it was given by Shri Sanjay at his office. The adjudicating authority failed to trace the supplier, Shri Rajesh Joshi, or provide evidence linking the appellants to the alleged exports. The court found that the reliance on uncorroborated statements and lack of concrete evidence could not substantiate the claim of exporting 165 Kgs of Ketamine HCL.

2. Confiscation of 25 Kgs of Ketamine Hydrochloride:
The 25 Kgs of Ketamine HCL seized from Choudhary Roadways were proposed to be confiscated under section 113 (d) of the Customs Act. The appellants contended that they never claimed ownership of the seized goods and that no evidence was presented to show their involvement in any attempt to export the seized Ketamine. The court noted that no export documents, such as shipping or airway bills, were prepared for the seized consignment, and there was no evidence of the appellants being in contact with any foreign buyers. Consequently, the court concluded that the appellants could not be held responsible for attempting to export the 25 Kgs of Ketamine.

3. Imposition of Penalties on the Appellants:
The adjudicating authority imposed penalties of ?50 Lakhs on Shri Sanjay Manjibhai Gadhesariya and ?5 Lakhs on Shri Kishan Manjibhai Gadhesariya under section 114 (i) of the Customs Act for making illicit exports. The appellants argued that the penalties were based on statements obtained under duress and later retracted. They also highlighted the absence of incriminating documents from their premises and the lack of evidence linking them to the alleged transactions. The court found that the retraction of statements, discrepancies in the statements of Shri Jayesh Vadaliya, and the lack of concrete evidence undermined the basis for imposing penalties. The court set aside the penalties, stating that the appellants could not be accused of exporting 165 Kgs of Ketamine HCL or attempting to export the 25 Kgs of Ketamine seized from Choudhary Roadways.

Conclusion:
The court concluded that the appellants could not be held responsible for the alleged export of 165 Kgs of Ketamine HCL or the attempted export of 25 Kgs of Ketamine. The penalties imposed on the appellants were set aside, and the appeals were allowed with consequential reliefs. The judgment emphasized the need for concrete evidence and corroboration in substantiating allegations of illicit export activities.