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TMI Blog2014 (6) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... lace elsewhere - cause of action arose in Mumbai and as per the admission of the Managing Director of the appellant firm, the goods were smuggled through passenger baggage of carriers. Therefore, we do not find any infirmity in the Commissioner in charge of Mumbai Airport adjudicating the matter - Following decision of K.P. Abdul Majeed v. Collector of Customs & Central Excise, Cochin, [1995 (7) TMI 76 - HIGH COURT OF JUDICATURE AT MADRAS]. Onus to prove - Held that:- Department had clearly established the smuggled nature of the goods by conducting a thorough investigation. The claims made by Mr. Jajodia with respect to procurement of DSP from Indian sources were thoroughly verified and found to be bogus. Then the onus is on the appellant to prove that they have licitly procured the goods which they failed to do. The goods were smuggled at their behest and on their behalf and they sold the smuggled goods. The bill for the supply of smuggled goods were issued in the name of M/s. LCPL and it is LCPL who received the proceeds for the supply/sale of goods. Therefore, they are liable to discharge the duty liability in respect of the smuggled goods procured by them and we hold acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Directorate of Revenue Intelligence (DRI in short), intercepted three post parcels bearing Nos. 10963, 10568 and 10690 imported by Shri. N.P. Jajodia, Managing Director M/s. Lark Chemicals Pvt. Ltd., Mumbai, (LCPL in short) the appellant herein. It was noticed that in respect of one post parcel, the goods were declared as 2- Metronidazole and in respect of the other two post parcels, the goods were declared as Mifepristone . The consignments were attempted to be cleared under the guise of trade samples and the total value declared was US $ 75 for customs purposes. Shri Jajodia claimed that he had imported these consignments for supply to M/s. Cadilla Healthcare Ltd. against their confirmed purchase order. A show cause notice was issued proposing to revise the assessable value declared for the said goods to Rs. 20,49,300/- and demanding a duty of Rs. 11,68,320/- and imposing penalty, interest, etc. and the notice was adjudicated by the Commissioner of Customs (Imports), ACC, Sahar vide O-I-O No. CC- 67/2002, dated 18-12-2002 confirming the demands. 3. Further investigations carried out by DRI with Sri A.K. Sarkar, Vice-President of M/s. Cadilla Healthcare Ltd. reveale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral excise duty. A search of the factory premises of Earnest Healthcare was conducted on 9-12-2002 which showed that the factory had been non-functional for a long time and certain incriminating documents were recovered. The statement of Sri John was again recorded on 12-12-02 wherein he confessed that his earlier statement dated 29-11-02 was incorrect and they had not sold any material to LCPL and the invoices showing the supply were fabricated at the behest of Mr. Jajodia who had promised financial assistance to his firm. Sri John also confirmed that they had not manufactured or sold DSP since 1999. Statements of other employees of Earnest Healthcare such as Chandrasekhar Vyas, Technical Director (on 17-12-2002), Gurudayal Kaushik, Supervisor (on 13-1-2003), Sameera Gazge, Secretary of Mr. Jon (on 15-1-2003) were recorded which confirmed the fact M/s. Earnest Healthcare had not supplied any DSP to M/s. LCPL and the entire documentation for the supply were fabricated at the behest of Mr. Jajodia. 3.3 When Sri Jajodia was confronted with these evidences on 17-12-2002, he admitted that Earnest Healthcare had not supplied the DSP and the entire transaction was fake. He further st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jajodia and he did not deal with any affairs of the company. 3.6 When Sri Jajodia was confronted with these evidences and his statements were recorded on 24th, 26th and 27th February, 2003, he admitted that the goods procured and supplied were both of foreign and Indian origin. The Indian origin goods were procured through one Sri Harishbhai. He further stated that in the case of goods of foreign origin, he was aware of their smuggled nature and agreed to pay the duty voluntarily. 3.7 The investigations conducted revealed that Sri N.P. Jajodia, Managing Director of LCPL had run an organized syndicate to smuggle expensive chemicals into India and sold such chemicals to several parties, utilized the services of carriers to smuggle the goods into India in contravention of the Customs Act and used the names of fictitious persons and firms to conceal the smuggled nature of the goods. He did not provide any information about the carriers working for him. Sri N.P. Jajodia expired on 18-3-2003. Accordingly a show cause notice dated 21-7-2003 was issued to M/s. LCPL demanding customs duty of Rs. 1,66,95,951/- at the rate applicable to baggage on a value of Rs. 2,78,25,987/- in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Cadilla does not tally with the Chinese Test reports. (5) Duty can be demanded from the owner of any baggage as per Sections 77 and 78. Admittedly, the appellant which is a corporate entity did not import Mifepristone in its baggage. Thus even if it subsequently dealt with such goods, import duty cannot be demanded from it. (6) Commissioner of Customs, CSI Airport, who adjudicated the case has jurisdiction only over the goods imported through CSI airport, Mumbai. The department has not brought any evidence on record to establish that the goods involved in the instant case were smuggled through CSI Airport. (7) The goods are neither specified under Section 123 nor notified under Chapter IVA. Therefore, the burden of proving that the goods are smuggled goods is on the department. This burden has not been discharged. The appellant has established that such goods are manufactured in India also. He relies on the following judgments in support of this contention :- (a) National Radio Products - 2011 (263) E.L.T. 236 (Cal.) (b) Ritu Kumar - 2006 (202) E.L.T. 754 (Cal.) (c) Aakash Enterprises - 2006 (205) E.L.T. 23 (Bom.) affirmed by Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. The appellants participated in the said proceedings without any demur or protest. Only in the appeal filed before this Tribunal, this issue has been raised which is clearly an afterthought. If a point has not been raised before the adjudicating authority and has not been considered by the said authority, it would be incorrect and inappropriate for the appellate authority to give a finding thereon. Be that as it may, M/s. Lark Chemicals Pvt. Ltd. is situated in Mumbai and not anywhere else. The cause for investigation originated in Mumbai with the detaining of the post parcels and the subsequent seizure of the same and adjudication proceedings connected therewith. The Managing Director of the appellant firm Mr. N.P. Jajodia, has clearly admitted that the goods supplied to M/s. Cadilla were brought through carriers in their baggage by mis/non-declaration. If that be so, it is only reasonable to presume that the goods were smuggled through passenger baggage through Mumbai air-port. Mr. Jajodia has not divulged any details regarding the carriers or when or how they arrived with the goods. When pressed for the details in this regard, he refused to divulge the details as can be seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not tally with the Chinese test reports. In his statement dated 25-11-2002 recorded under Section 108 of the Customs Act, Mr. Jajodia had clearly admitted that he had arranged to smuggle 24 kgs of Mifepristone through carriers. This position has been reconfirmed by Mr. Jajodia in his further statement dated 17-12-2002 and also before the Addl. Metropolitan Magistrate when he was arrested and applied for bail. These statements have never been retracted. If that be so, the department is not required to prove the foreign origin of the goods and the smuggled nature of the goods. It is a settled legal position that admitted facts need not be proved as held by the Hon ble High Court of Madras in the case of Govindasamy Raghupati [1998 (98) E.L.T. 50 (Mad.)]. 6.4 As regards DSP, the initial version of Mr. Jajodia about its procurement was that the same was supplied by Earnest Healthcare. From the statements of Mr. I. John, MD of the said firm, dated 12-12- 02, 16-12-02 and 7-1-03, it is evident that the said goods had not been supplied by them and they had only issued fabricated invoices as per the request of Mr. Jajodia. This position has been further confirmed by the employees of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly the Addl. CMM granted bail and also directed him to deposit a further sum of Rs. 25 lakhs, in addition to the amount of Rs. 1 crore already paid by Mr. Jajodia. When a fact has been admitted before a judicial authority and bail was obtained on such admission, we do not think there is any need for further evidence to show that the goods are smuggled. It is a well settled position in law that statements recorded under Section 108 of the Customs Act is an admissible evidence under Section 25 of the Evidence Act. In Illias v. Collector of Customs, Madras decided on 31 October, 1968 [AIR 1970 SC 1065 = 1969 SCR (2) 613 = 1983 (13) E.L.T. 427 (S.C.)], the Hon ble Supreme Court held that even though the customs officers have been invested with many of the powers which an officer in charge of a police station exercises when investigating a cognizable offence he does not thereby become a police officer within the meaning of S. 25 of the Evidence Act and so the confessional statements made by accused persons to customs officials would be admissible in evidence against them. The Apex Court followed their decision to the same effect in the case of Romesh Chandra Mehta v. State of West Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uasi-criminal proceedings, where there is no statutory provision to the contrary. But in appreciating its scope and the nature of the onus cast by it, we must pay due regard to other kindred principles, no less fundamental, or universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree; for, in all human affairs absolute certainty is a myth, and as Prof. Brett felicitously puts it- all exactness is a fake . El Dorado of absolute Proof being unattainable, the law, accepts for it, probability as a working substitute in this work-a-day world. The law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. Thus legal proof is not necessarily perfect proof often it is nothing more than a prudent man s estimate as to the probabilities of the case. 31. The other cardinal principle having an important bearing on the incidence of burden of proof is that sufficiency and weight of the evidence is to be considered to use the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thoroughly verified and found to be bogus. Then the onus is on the appellant to prove that they have licitly procured the goods which they failed to do. The Hon ble High Court of Bombay, in the case of Phoenix Mills Ltd. v. UOI [2004 (168) E.L.T. 310 (Bom.)] held that - There is an essential distinction between burden of proof and onus of proof. The burden of proof lies upon the person who has to prove a fact and it never shifts, but the onus of proof shifts. Onus means the duty of adducing evidence. In this case, the department established the nature of foreign origin of the goods from the documents recovered from M/s. Cadilla and the statement of the VP of the said firm stating that they had procured Mifepristone and DSP of Chinese origin from M/s. LCPL for which no duty paying documents were given to them. When Mr. Jajodia was confronted, he admitted to smuggling Mifepristone through carriers and as regards DSP, he stated that had procured them indigenously. The department verified the details of indigenous procurement as given by Mr. Jajodia and found them to be false. Then the onus shifts back to Mr. Jajodia and LCPL to adduce evidence about the licit procurement of DSP whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argument has been advanced by the counsel for the appellant that duty cannot be demanded at the highest (baggage) rate in view of the law laid down by the Hon ble Apex Court in the case of M. Ambalal Co. cited supra and the decision of this Tribunal in the said case subsequent to the Apex Court judgment. There is merit in this argument. In the instant case for the purpose of calculation of duty, a rate of 60% adv. has been adopted which is the rate applicable for passenger s baggage under CTH 9803. The said heading applies to All dutiable articles imported by a passenger or a member of a crew in his baggage . In the Ambalal case cited supra, the Hon ble Apex Court held that smuggled goods cannot be considered as imported goods. Therefore, even if the goods have been brought into India by concealing the same in the baggage, the goods cannot be classified as baggage. The Supreme Court has further held that in respect of smuggled goods, no duty exemption shall apply. Therefore, the rate of duty to be applied in the instant case is the tariff rate applicable on the goods after properly classifying the same. As per technical literature Mifepristone is a synthetic steroid compound use ..... X X X X Extracts X X X X X X X X Extracts X X X X
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