9911796707
TMI Blog2001 (4) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... premises and who introduced himself as the son of Bechan Mishra, Proprietor of M/s Mishra Enterprises, No 34/2, Annadanappa Lane, Bangalore, he produced Invoices bearing Nos. 1629 and 1630 both dated 17-9-1999 and invoice No. 1627 and 1628 both dated 17-9-1999 issued by M/s Rajdhani Cotton, AS Char Street, Bangalore in the name of one Sri Huckumchand, Annadanappa Lane, Bangalore. He produced photocopies of Bills of Entry No. 001024, dated 24-2-1999 and two more bills of entry whose Nos. were not legible, of M/s Prashanth Glass Works Pvt. Ltd., Varanasi, and invoice No 99-2000/005, dated 28-7-1999 of M/s. Prashant Glass Works raised on M/s. Rajdhani Cotton. He also produced copies of invoices Nos. UL/7023/99, dated 2-2-1999 with packing list, UL/7024/99, dated 2-2-1999, UL/7025/99, dated 2-2-1999, UL/7022, dated 2-2-1999 and UL/7028/99, dated 2-2-1999 all of M/s. Unisilk Limited, Rm 1615, 16/17, Star House, 3, Salisbury Road, Kowloon, Hong Kong. On verification of the invoices of Rajdhani Cotton it was found that the Silk Yarn was received in the name of Sri Hukumchand of Annadanappa Lane and not in the name of Sri Anand Mishra or in the name of his father Sri Bechan Mishra or in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ukumchand who was only a loader (labourer) was used as a sacrificial goat in their smuggling operations. Further, it was seen that 33 bales of silk had paper slips showing only the gross weight and net weight and no other markings or numbers not with any indication as to their origin, the remaining 33 bales had no tags or slips. The weights also did not tally with the packing list. Further Sri Rajat Gupta, when confronted with the fact that the vehicle had not passed through check post and other facts enumerated above and whether the goods can be construed as smuggled silk, refused to answer. This showed his criminal intent. From the above and from the statements of Shri Rajat Gupta and Shri Bechan Mishra, it appeared that the silk yarn under seizure was illicitly brought into the country and the documents furnished by Sri Rajat Gupta of M/s. Rajdhani Cotton and Bechan Mishra of M/s. Mishra Enterprises were clearly a ploy adopted by them to cover their smuggling activities in case they were caught." and since Mulberry Raw Silk Yarn is dutiable and import thereof is restricted being permissible only under an import licence, in absence of which the import is prohibited. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parison has been made between the net weight of the bales recorded in the mahazar with the gross weight indicated in the packing list, which is incorrect. As such this statement shows very minor difference of ranging from 0.01 kg to 0.40 kgs on the positive side and -0.45 to -0.07 on the negative side which gives an impression that the variation is very minimal. To get a correct picture, only the gross weights should be compared. The investigating officers have weighed all the 66 bales individually and recorded the gross weight and net weight of each bale. A comparison of the gross weight so recorded with the gross weight indicated in the packing list shows that in almost all the cases the gross weight of bales are higher than the gross weight recorded in the packing lists and the variation ranges from 0.50 KGs to 1.50 KGs on the higher side. Even admitting that the atmospheric conditions, especially the moisture content affects the weight, variation can not be said to be minimal and in at least some of the cases the weights should tally. Therefore, the Bills of Entry in question do not relate to the import of the impugned goods. Further, it is a well known fact that the imported s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted 253 bales of raw silk yarn in his lorry No. MIT 7921 on 28-7-1999 from Varanasi to Bangalore vide invoice No. 11699 and challan No. 5427, dated 28-7-1999 and that no other goods were transported in the said lorry. Shri Rajat Gupta has claimed that 253 bales of silk yarn were transported in lorry No. M.I.T. 7921 and the said lorry passed through Devanahalli check post on 2-8-1999 and that the entry relating to this movement has been recorded in the Sales Tax register at Sl. No. l4, dated 2-8-1999 (which was assigned special register Sl. No. 11782). Verification of this entry in the extract of Sales Tax register furnished by the Sales Tax Authorities shows that it relates to lorry No. CRQ 7115 which has carried cotton valued Rs. 99,62,741/- and the consignee is M/s. Rajdhani Cotton, Bangalore. Obviously, this does not pertain to the transport of silk yarn by lorry No. MIT 7921 as claimed by Shri Rajat gupta and as stated by Shri Ramsunder Yadav of Barnwal Carriers, Varanasi. Further, the invoice No. 99-2000/005, dated 28-7-1999 produced by Shri Rajat Gupta, has the special register Sl. No. 11682 written on the check post seal. Verification of this serial number in the extract of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not know anything about importation of silk yarn. (c) Shri Bechan Mishra in his statement dated 29-2-2000 has stated that the silk yarn in question was kept in his godown belong to Shri Rajat Gupta of Rajdhani Cotton and that the same were kept in his godown for the purpose of sale only; that he gets a commission of Rs. 5/- per KG of silk yarn that he sold; that he had not made any payments to either Hukumchand or to Rajat Gupta for the said silk yarn; that Shri Hukumchand was only a labourer and his name was only being used by himself and Rajat Gupta to raise invoices and Shri Hukumchand had no other role to play. (d) Shri Rajat Gupta in his statement dated 29-2-2000 has stated that he had sold the silk yarn to Bechan Mishra and that Shri Hukum Chand had no role to play in this transaction; that he is the owner of 66 bales of yarn as he has not yet received the payment for the same. From the above, it can be seen that the statement of Shri Rajat Gupta and the other two persons in this transaction are contradictory. Shri Rajat Gupta has stated that he has sold the impugned silk yarn to Hukumchand/Bechan Mishra whereas both Hukumchand and Bechan Mishra have denied having pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at statement recorded under Section 108 of the Customs Act, when found to be voluntary and not vitiated in any manner, is admissible in evidence. (c) In the case of Hazari Singh v. U.O.I. reported in 1999 (110) E.L.T. 406 (S.C.), the Hon'ble Supreme Court has held that confessional statements of appellant recorded by Customs Officers are admissible in evidence and do not come within the inhibitions of Sections 24 and 25 of the Indian Evidence Act, because Customs Officers are not Police Officers. A similar view has been expressed by the Supreme Court in the case of Shri Rameshchandra Mehta v. State of West Bengal reported in 1999 (110) E.L.T. 324 (S.C.) and Jethmal v. U.O.I. reported in 1999 (110) E.L.T. 379 (S.C.). 44. The noticees have contended that Mulberry Raw silk yarn is not a notified item under Section 123 or Chapter IVA of the Customs Act, 1962 and hence the smuggled character of the goods is to be proved by the department. This apart, the learned advocate of Shri Bechan Mishra has also pointed out to the Order-in-Original No. 22/2000 passed by me in the case of M/s. Pacific Exports, wherein this established law was accepted and the proceedings were dropped. I have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gupta has sold the entire consignment of 253 bales of silk yarn received by him from Varanasi to various customers and also that he had paid Sales Tax correctly on all the transactions which would prove his bona fides. The above documents have not been enclosed to the reply of Shri Rajat Gupta as stated. However, this claim is not going to make any material difference in the face of elaborate findings and discussion above which have established that the goods are smuggled and illicitly brought into India." 3. We have heard both sides, considered the submissions and find - (a) Mulberry Raw Silk Yarn or Silk Yarn mentioned in the impugned notice are not goods covered by Section 123 of the Customs Act, 1962. Therefore, the burden to prove that they were not smuggled goods, does not lie or does not shift to the person from whose possession they were seized i.e. A-2; who is claiming/found to be the owner i.e. A-1. We find the provisions of Section 123 are very clear viz. i.e. (i) the goods must be one to which Section 123 applies (ii) the goods are seized under the Act (iii) the goods must be seized on the reasonable belief that they are smuggled. As pointed by the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect, the department would be deemed to have discharged its burden, if it relies on both direct and circumstantial evidence which are sufficient to raise a presumption in its favour, with regard to the existence of the facts." The learned DR has relied on the Supreme Court decision in the case of C.C. Madras v. D. Bhoormul [1983 (13) E.L.T. 1546 (S.C.) = 1985 ECR 2284 S.C.] wherein paras 30 & 31 of the reported decision are almost verbatim, appear to have been extracted as found above, by the learned Adjudicator, without even mentioning this decision. However, the Adjudicator failed to notice, that in the facts of that case, there was not only a declaimer of ownership, but also all knowledge about the contents, (para 36 of the reported decision refers) and other facts and conduct subsequent to the proceedings before the Collector. In the case before us there is no shadow of figure as 'D. Bhoormul' talking through Solicitors A-1 & A-2, are very much present and producing documents of possession and duty payments as made over to them in the course of normal trade in the goods. While applying the law as in 'D. Bhoormul's' case, the learned Adjudicator not only overlooked these importa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 1 to 5 is set aside." (Emphasis Supplied) Therefore, in the present case, as in all such cases, of goods not covered by Section 123 of the Customs Act, 1962, the onus is in the department to prove the case as a fundamental principle of Criminal jurisprudence, or basic canons of jurisprudence, the phrase used in D. Bhoormul's case (supra) which the Adjudicator is relying upon. (b) Therefore, keeping in mind the above, and looking at the evidence we find - (i) The appellant A-1 had submitted before the learned Adjudicator, a list of invoices bearing number 1201 to 1244 along with relevant Sales Tax forms for having conducted the business of selling 253 bales of silk yarn received by him from Varanasi, of which the seized 66 bales were a part and were sold to A-2. It was therefore, incumbent upon him to have looked at this positive proof of dealing with the goods in the normal course of Trade in Bangalore. The Adjudicator in para 45 of the order, has dismissed this essential evidence to prove the bona fides, only on the ground that invoices were not enclosed to the reply of A-1. What prevented him for calling for the same is not found without resorting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, the conclusion we can draw is that, possibly, enquiries with M/s Prashanth Glass Works would have made the claim of A-1 & A-2 unassailable. In any case, there is no denial of the goods not having been supplied by the importers, which was the initial defiance Al & A2. We cannot subscribe to the findings of the Commissioner in para 41 - "....it is clearly established that the goods are not legally imported/acquired and therefore are smuggled...." (ii) We have considered the findings in para 44, regarding entry No. S/No. 11682 written on one of the books by the Sales Tax Check Post clerk. The same finding, conveniently, omits the entry No. 11782, claimed by A1 to be the correct entry made on 2-8-1999 and the plea of clerical mistake. This absence of a finding on plea of defence, not only weakens the findings and the need for upholding of the orders, but also exhibit a pre-determined approach to a case, if not bias, on the part of the Adjudicator. Either way, such orders cannot be sustained, when the invoice bears a stamp of the Check Post. An entry has been made on 2-8-1999 on II shift, of the entry No. 14, column 3 showing M/s. Rajdhani Cotton, with value and invoices number un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed in the paper book and find that the goods supplied are of Grades 2 A & C. The B/No. the Grade and the N.W, G.W. & C.W. in Kgs are given. Therefore, there is an accepted practice of differences in the declared weight and ascertained weights. The trade practice appears to be to charge a weight, in between Gross weight & Net weight. The invoices from Rajdhani Cotton to R. Hukamchand are for 25 bales each vide invoice Nos. 1627 & 1628, dated 17-9-1999 and invoice Nos. 1629 & 1630 both dated 20-9-1999 i.e. 100 bales were transacted out of this quantity only 66 have been seized. These invoices give the bale numbers as per the packing list of the Foreign Supplier, the net weight as given in the packing list and are billed on that quantity. Therefore, the Adjudicator should have considered a comparison of net weight and not gross to gross weight. Since gross weights are not commercially acceptable, for any purpose, as evidenced by these documents. The net weights as per Mahazar and packing list were compared and a compilation handed over to the Adjudicator during the hearing. The compilation has the Bale Nos. and the net weight as per Mahazar, but the column heading shown therein re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and are presumptive. Especially when the importer has not been questioned, as no evidence of his is on record. We therefore reject these arguments for being reasons to confiscate the goods under seizure. (vi) We have considered the findings of an alleged contradiction in the statements of A-1, A-2 & one Hukamchand, arrived at in para 42 of the order. We find that the statements are not in conflict, it is only the interpretation being given which is causing the trouble. A perusal of the invoices shows that they are addressed to Hukamchand, Anandanappa Lane, Bangalore and bear the signature of receipt, the quantity is 100 bales on four invoices. Only 66 bales have been found and seized and there is no finding about the remainder Hukamchand, Bechan Mishra (A-2), his brother A. Mishra who was found in the premises and produced the documents at the time of seizure, or A-1 have not been questioned on this aspect. Therefore, the case being made out that Hukamchand was a broker and the Mishra brothers were storing the goods belonging to A-1, appears to us to be the reasonable explanation of the alleged contradiction. The findings of the Adjudicator do not appeal to us. (vii) In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he gold not smuggled in the country at a particular time without resort to smuggling....." In that case, the appeal preferred by the Customs Authorities, however was dismissed on the ground that even if Section 178A was valid as held by the Court previously, its terms were not attracted to the particular case because of non-fulfilment of an essential requisite for its application (see para 13 of CC Madras v. N. Sampath Chetty & Other [1999 (110) E.L.T. 157 (S.C.) = 1983 ECR 2198D S.C.)]. This summary, would be applicable to all such goods, now being freely or almost freely being allowed to be imported on payment of duty as far as Import Trade Control & Licensing law is concerned and are not covered by Section 123 of the Customs Act, 1962. (e) We have considered the decisions relied upon by the Adjudicator viz. - (i) Rajendra Prabhu [1997 (96) E.L.T. 412] where initial statements volunteering wrong information is not applicable in this case since there is no initial misleading statement, the claim and presentation of the Import documents, invoices, etc. was almost spontaneous and the documents are not enquired into from the importers at Varanasi and Banks. (ii) There can be no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nquiries are made from Banks regarding the receipt/ remittance for the goods, nor any efforts made to call for and check the sale invoices of not only the subject goods, but other part of the very same consignment which were brought to the notice of the enquiry officers. We therefore find that the equating the case of seizure of Silver without purchase documents with seizure of Silk Yarn and non-verification of acquisition documents cannot be made. (iv) We agree that reliance on 1999 (109) E.L.T. 247 & 1999 (112) E.L.T. 1058 for 'admitted facts' not to be proved is validly held by the Adjudicator, but he is not admitting the facts so admitted. (v) The appellants have relied upon many case-law to contest the confiscation and the liability of penalty. We find the High Court and the Tribunal have held in many cases that the onus rests with the department and they should prove the illicit import and the smuggled nature of the goods. We need not deal with all those cases except look at the very latest case as reported, are relied upon by us also, to find that no case for confiscation and penalty is made out by the department. They are [2000 (124) E.L.T. 133 (All.)] wherein it was foun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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