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TMI Blog2003 (7) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... etres valued at Rs. 66,06,120/- was recovered which was seized after preparing Panchnama at the spot. On demand, Shri Vinod Jindal, Manager, who was present in the premises, could produce only one Bill of Entry No. 345/98, dated 14-1-1998. The scrutiny of said Bill of Entry revealed the names of the importer and exporter of the consignment as M/s. Asia Trade Enterprises, Bombay, and M/s. Annapoorna Textiles Ltd., Kathmandu, Nepal respectively (appellants in this appeal). On further inquiry, Shri Vinod Jindal, disclosed that these goods belonged to M/s. Aditya Trading Co. (appellants) and were received in the premises on 21-1-1998. The total number of bales containing the textile fabric were 148, and out of those, 12 were already delivered to the nominees of M/s. Aditya Trading Co., as disclosed by Shri Vinod Jindal. It was also found that out of 206 bales lying in the godown, 136 bales were only covered by the above said Bill of Entry, while for the rest of the 70 bales, no document was available with Shri Vinod Jindal, in order to show the legal import/acquisition/storage of the same. It further revealed to the Officers that 206 gunny bags contained 59562.80 metres of cloth for cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-1998 for 11 bales of polyester curtain cloth and got his signatures on the duplicate copy of the invoice in token of having received the goods, though he did not receive the same. Statement of one Shri Rambir, Helper working in M/s. Jai Durga Woollen Indus, Panipat, was also recorded, who also disclosed that he learnt that some polyester cloth of Nepal Origin had been received from Delhi, but did not bear any stamp of Made in Nepal . Statements of Shri Raj Singh and Shri Jitesh Kumar, Drivers of Tempos were also recorded wherein they disclosed that they had delivered the cloth after taking the same from the premises of M/s. Prakash Transport Co. to the persons at Panipat, whose telephone numbers were provided to them, by the transport company. Statement of Shri Suresh Chand Attree, Godown Keeper at the premises of M/s. Prakash Transport, was also recorded, who disclosed the details of the goods received at the premises of the company and despatched to various persons at the instance of M/s. Aditya Trading Co. Statement of Shri Ashok Kumar, Proprietor of M/s. Jai Durga Woollen Indus, was also recorded during the course of investigation, wherein he denied the receipt of any consig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, on the other hand, the learned SDR has reiterated the correctness of the impugned order passed against these appellants. 7. We have gone through the record and we find that the contention raised by the learned Counsel deserves to be accepted. Before referring to the evidence, it may be stated that no show cause notice even was served on the company, M/s. Annapoorna Textiles Ltd. (appellants No. 2) on whom penalty of Rs. 10 lakhs has been imposed. That being so, the penalty imposed on the company, deserves to be set aside on this short ground alone. Moreover, this company has been shown to be the proprietorship company of Shri Anil Jatia (appellants No. 1) on whom penalty of Rs. 5 lakhs has been imposed. It is well settled that in a case of proprietorship concern, penalty on the firm/company as well as on the proprietor, both, cannot be imposed. Therefore, on this ground also, penalty on the company, M/s. Annapoorna Textiles Ltd. has to be set aside. 8. Apart from this, there is no cogent and reliable evidence on the record to prove that the appellants, Shri Anil Jatia and his company (appellant No. 2) had indulged in the smuggling of the fabrics from Nepal to India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1-1998 and only one Bill of Entry No. 345/98, dated 14-1-1998 covering 148 bales containing 29730.70 mts. of fabrics, was produced at the time of seizure by Shri Vinod Jindal, Manager of that company, who also allegedly disclosed that out of those 148 bales, 12 bales had already been delivered to the nominee of M/s. Aditya Trading Co. and as such only 136 bales stood covered by that Bill of Entry and but for rest of the 70 bales, no document regarding the legal import/acquisition was produced by him. But even if it is assumed that such an excess fabric was recovered from the premises of M/s. Prakash Transport Co. which according to that company belonged to M/s. Aditya Trading Co., still no adverse inference could be drawn against the present appellants that the unaccounted bales were sent by them illegally. They had never despatched any consignment in the name of M/s. Aditya Trading Co. rather as per the show cause notice, M/s. Aditya Trading Co, had purchased the fabrics from M/s Asia Trade Enterprises. The present appellants had been only sending the consignments to M/s. Asia Trade Enterprises and no excess fabric was found from the premises of this company. Therefore, any exces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y occasion. They both in their statement have disclosed that the goods lying in the premises of the transport company belonged to M/s. Aditya Trading Co. which is owned by Shri Mahinder Prashad Goenka. Similarly, statement of Shri Raj Singh, Driver of tempo No. UP-14E-5196 did not carry the case of the department anywhere against the present appellants. He had simply disclosed that he loaded 56 bales from the premises of M/s. Prakash Transport for delivery at Panipat to a consignee whose telephone number was given to him and not complete address, and that on reaching Panipat, he contacted that consignee on telephone and handed over the goods to him. But he has not disclosed the name of that consignee to whom the goods were delivered by him. Moreover, the goods transported by him were never supplied to him by the present appellants, but by the transport company. No doubt, the Department has tried to show that those goods were supplied to M/s. Jai Durga Woollen Indus., appellants at Panipat on 11-1-1998 and were 101 bales, but M/s. Jai Durga Woollen Indus., has nowhere admitted the receipt of those goods from Shri Anil Jatia or his company, rather according to Shri Manik Chand Jhanwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose goods had been claimed by M/s. Aditya Trading Co. of having purchased from M/s. Asia Trade Enterprises. The alleged confessional statement of Shri Mahabir Prashad Goenka that M/s. Asia Trade Enterprises and Shri Anil Jatia of M/s. Annapoorna Textiles Ltd. had indulged in the illegal export/import of the goods by making mis-declaration regarding the quantity of the goods, could not be used against M/s. Asia Trade Enterprises as he never submitted himself for cross-examination. Moreover, that statement as observed above, was retracted by him and there is medical evidence on the record to show that it was obtained from him after torture. His statement being not even admissible in law, did not carry any evidential value against the present appellants, M/s. Asia Trade Enterprises. None of the recipient of the goods, namely, M/s. Dass Textiles, M/s. Jai Durga Woollen Indus., whose partners/representatives were questioned and their statements were recorded, had admitted of having received any fabric directly from M/s. Asia Trade Enterprises. They only claimed to had received the goods from M/s. Aditya Trading Co. No incriminating document or unaccounted goods had been ever found from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company, M/s Prakash Transport and thereafter on 30-1-1998, is said to have admitted that he went to Kathmandu and met Shri Anil Jatia of M/s. Annapoorna Textiles to whom he suggested to switchover to the manufacturing of curtain cloth and suiting cloth and he promised to sell the same on commission basis. He is also said to had further admitted that Shri Anil Jatia promised to sent him fabric in excess of what he would be declaring in the Bills of Entries and he promised to take care of the same. He also further stated that he had been getting excess curtain cloth and suiting cloth of Nepali origin, from M/s. Asia Trade Enterprises (appellants) who had been getting the same from Shri Anil Jatia, by showing lesser quantity in the Bills of Entry and by making mis-declaration. But he, undoubtedly, retracted this confessional statement immediately. He was produced before the Magistrate on the next date where he alleged that the same had been procured from him under duress and by giving him beating. He also complained about the injuries received at the hands of DRI officials during investigation, besides the breakage of his front teeth by them. He was ordered to get medically e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Nepal, from M/s. Annapoorna Textiles Ltd. No reliable evidence has been brought on record to prove that M/s. Asia Trade Enterprises imported the goods illegally. Rather from the documents produced by that concern, it is evident that they had legally imported the goods. The plea of the Department against that company that goods were received by them in excess of the quantity mentioned in the Bills of Entries cannot be sustained for want of any evidence to substantiate the same. No evidence has been also brought on record to prove the allegations of illegal export or import of the goods by M/s. Annapoorna Textiles Ltd. and M/s. Asia Trade Enterprises, as observed above. 17. The other evidence relied upon by the Department also did not substantiate the allegations against Shri Mahabir Prashad Goenka and his company. The statement of Shri Ramesh Chand Narang, Partner of M/s. Dass Textiles, on which the Department has heavily leaned to show that no fabric was sold to him and only his signatures were obtained on the copy of the invoice, is not of much legal value. His statement that Shri Mahabir Prashad Goenka approached him on 29-1-1998 with an invoice No. 270, dated 23-1-1998 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oenka in the godown which was owned by M/s. Prakash Transport, after taking the same on rent. Similarly, Shri Vinod Jindal, Manager of that transport company, had not attributed any illegal import of the fabric to Shri Mahabir Prashad Goenka and his company. He joined the services of the transport company about few months before the seizure of the goods and used to sit in the Head Office of the company and not at the godown. He had simply deposed that the transport company rented out the godown on monthly rent of Rs. 5,000/- to Shri Mahabir Prashad Goenka and the goods lying there were also got insured by him. He produced one bill of entry No. 345/98. The fact that he did not produce any other document regarding the goods not covered by that Bill of Entry, did not lead to an inference that those were illegally imported goods. He was not supposed to be in possession of all the Bills of Entries covering the entire stock of the goods, stored in the godown of his company. The other copies of the Bills of Entries were produced by Shri Mahabir Prashad Goenka himself. The correctness of those Bills of Entries was investigated by the Department by interrogating M/s. Asia Trade Enterprises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny conspiracy with Shri Mahabir Prashad Goenka for illegally importing the fabrics from Nepal. They had produced the documents showing the valid purchase against payment of the fabric from Shri Mahabir Prashad Goenka and his company. Therefore, no penalty under Section 112(b) of the Customs Act could be legally imposed on them. 21. Similarly, the transport company and its partner/proprietor, Shri N.K. Goel, could not be punished under Section 112(b) of the Customs Act as had been done by the adjudicating authority. No show cause notice was served on the transport company, M/s. Prakash Transport and as such no separate penalty on the company could be imposed. The show cause notice was served, on only Shri N.K. Goel, who is the partner of that company. But no evidence has been brought on record to prove his connivance or conspirancy with Shri Mahabir Prashad Goenka for illegal import of the fabric from Nepal. His company gave the godown on monthly rent of Rs. 5,000/- to Shri Mahabir Prashad Goenka. He was not supposed to know the details of the stock of the fabrics being stored by the tenant in the godown. Moreover, the very illegal import of the fabrics stored in the godown and la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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