2016 (5) TMI 601 - AT - Customs

Confiscation of goods under section 113(c) and imposition of penalty under Sec 114 of the Customs Act 1962 - Paddy/Rice stored by the appellants in two godowns situated close to the Indo-Nepal border - Appellant contended that goods seized from the godowns situated in India can at best be a preparation but can not be said to be an act indicating attempt to export the same out of India. Held that - there are two statements of Sh. Vijay Kumar Bajaj & Smt Soni Jaiswal that the seized goods were meant for illegal export to Nepal. It is also observed that there are documentary evidences to the effect that on earlier occasions also appellants have illegally exported similar goods to certain Rice Mills in Nepal on tractor trolleys. There are also documentary evidence to that effect collected by investigation during search. Denying the relevance of these documents later on can only be considered as an after thought on the part of the appellants. Appellants did not cross examine the persons whose statements were implicating them. There is no reason to brush aside the statement of Smt Soni Jaiswal, wife of Sh. Umeshwar Prasad Jaiswal to the effect that the seized goods were meant for export to Nepal. Further the words dutiable or prohibited existing in Sec-113 (c) have been deleted with effect from 14.05.2003, making the provision applicable to any goods brought near to the land fromties for the purpose of being exported. Therefore, on the basis of the existing evidences in these proceedings the activities of the appellants have to be considered as an attempt to export and not a simple preparation. This bench, therefore, does not find it proper to interfere with the orders passed by the first appellate authority which is based on cogent reasoning. - Decided against the appellant

Summary

Issues Involved:
1. Whether the paddy/rice stored by the appellants in two godowns situated close to the Indo-Nepal border are liable to confiscation under Section 113(c) of the Customs Act, 1962.
2. Whether penalties can be imposed upon the appellants under Section 114 of the Customs Act, 1962.

Detailed Analysis:

1. Confiscation under Section 113(c) of the Customs Act, 1962:
The primary issue was whether the stored paddy/rice near the Indo-Nepal border could be confiscated under Section 113(c) of the Customs Act, 1962. The appellants argued that the goods were stored in godowns within India and were not in transit towards the international border, citing various case laws to support that mere storage does not constitute an attempt to export. The cited cases included:
- Abdus Selam Biswas Vs CC (P), West Bengal
- CCP (Prev) Kolkata Vs Md. Abdus Selam
- Ajay Gurdamal Rahra Vs CC (P), Mumbai
- Asif Hossain Vs I.G. BSF West Bengal
- CC (P) West Bengal Vs Kamala Rangan Saha
- Sashmiri Vs CC

The respondent, however, relied on case laws such as:
- Manilal Bhanabha Patel Vs UOI
- Zenith Drugs & Allied Agencies Vs CC, Shillong

The respondent argued that the intention to export could be inferred from the circumstances, such as the proximity to the border and documentary evidence showing prior illegal exports. The tribunal noted that the Gujarat High Court in Manilal B. Patel Vs UOI held that bringing goods near the border with intent to export suffices for confiscation under Section 113(c).

2. Penalties under Section 114 of the Customs Act, 1962:
The tribunal examined whether penalties could be imposed under Section 114 of the Customs Act, 1962. The first appellate authority observed that the seized goods were stored in rented godowns close to the border, and the owners of the goods were not regular businessmen in the area. The quantity of paddy stored was disproportionate to the local demand, indicating an intent to smuggle to Nepal. The tribunal also considered statements from individuals involved, such as Sh. Vijay Kumar Bajaj and Smt Soni Jaiswal, which implicated the appellants in planning to export the goods illegally.

Judicial Pronouncements and Evidence:
The tribunal reviewed various judicial pronouncements and the evidence on record. It noted that different courts and CESTAT benches had interpreted Section 113(c) differently. However, the tribunal emphasized that each case must be evaluated based on its specific facts and evidence. The tribunal found that the evidence, including statements and documents, indicated a clear intent to export the goods illegally. The tribunal held that the actions of the appellants constituted an "attempt" to export, not merely a "preparation."

Conclusion:
Based on the evidence and judicial precedents, the tribunal concluded that the appellants' activities amounted to an attempt to export the goods illegally. Therefore, the goods were liable to confiscation under Section 113(c), and penalties could be imposed under Section 114 of the Customs Act, 1962. The appeals filed by the appellants were rejected, and the orders passed by the first appellate authority were upheld.

Final Judgment:
The tribunal upheld the confiscation of the goods and the imposition of penalties on the appellants, rejecting the appeals. The operative part of the order was pronounced in the open court.