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TMI Blog2016 (4) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... this is known as “buffer containers”, as it is shown as being stuffed at CFS but the same were already stuffed at the factory of the Exporter, then the shipping bill is filed and 2nd type of exports opted by the forwarder is where the goods arrive by the trucks and the same is stuffed at the CFSs at Mundra and then export Customs documents i.e. Shipping Bill is filed. If the Appellant cleared the export materials without sealing the containers, the burden of proof heavily lies with them that the offending goods were not loaded by them. Here, the appellants failed to prove that the offending goods were not loaded by them. So, from the impugned order it is seen that Shri Mangi Lal Lohiti, Proprietor of M/s Lahoti Impex and Director of M/s Indo Sino Impex P. Ltd, in his statement dt.09.10.2013 recorded under Section 108 of Customs Act, 1962 stated that Shri Rameshwar Sharma used to come with transport on which partly filled containers were loaded and in these partly loaded containers, he himself used to get the goods stuffed in the containers with the help of crane and labour, that the crane and labour were also arranged by Shri Rameshwar Sharma; in addition the partly stuffed goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case, in brief, are that M/s Eurro Exports, Prop. Shri Rameshwar Sharma, (hereinafter referred to as the exporter) cleared 5 (five) consignments from their factory at Jaipur for export through Mundra port. The exporter filed 5 Shipping Bills Nos. 7656093 dt.25.9.2013, 7615545 dt.23.9.2013, 7628969 dt.24.9.2013, 7616229 dt.23.9.2013 and 7630622 dt.24.9.2013, declaring the goods Indian Polished Granite Slabs in respect of Shipping Bill dt.25.09.2013 and in other Shipping Bill Albeta Marble Slabs, through their Customs House Clearing Agency (CHA). Acting upon the intelligence, on 28.09.2013, the officers of the Directorate of Revenue Intelligence (DRI) called back the 5 containers attempted to be exported and examined the goods in presence of two independent witnesses, under Panchnama dt. 28.9.2013. It was found that the said 5 containers contained 93.31 MT of Marble Slab and all the containers except Shipping Bill dt.25.09.2013, also stuffed with total quantity of 14.25 MT of Red Sanders logs. During the course of investigation, it was found that the exporter attempted to export Red Sanders logs illegally, which is prohibited by Convention of International Trade in En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11th and today i.e. 12th February, 2016. Shri Pradeep Jain with Shri Ashish Batra, learned Advocates are appearing on behalf of Shri Rameshwar Sharma and Shri Suresh Sharma. Shri Hardik Modh, Ld Advocate is appearing on behalf of Shri Anil Gadodia. 5. The learned Advocates on behalf of Shri Rameshwar Sharma and Shri Ashish Batra, submit that the Adjudicating Authority rightly dropped the penalty after examination of the records thoroughly. He submits that the exporter is a well reputed firm for export of the Marble slabs since last 13 years with unblemished records and obtained certificates from various authorities for performance and transparent records. In the present case, the appellants cleared the Marble Slabs from their factory in 5 containers procured from the Freight Forward Agency. As per the long standing practice, the Marble Slabs were loaded in the containers and cleared from the factory in buffer containers without sealing the same. The appellant had no knowledge of the alleged loading of Red Sanders in the containers. There is no evidence that the appellants had loaded Red Sanders in the containers. It is submitted that on 28th Sept 2013, the DRI officers visited t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made such goods available to M/s Euro Exports. It is observed by the Commissioner (Appeals) that it is not the case of the Department that the appellant was actually involved in clearing the goods from Jaipur or in export such goods. He particularly drew the attention of the Bench to Para 13.3 and 13.4 (last three lines) of the impugned order. None of the ingredients to invoke Section 114 AA of the Act 1962 is available against the appellant. Even, the words causes to be made in Section 114AA has to be direct or indirect nexus with the export of goods. In the present case, there is no evidence that the appellants were involved in illegal export of goods. The Commissioner (Appeals) observed that the entire case was made out on the basis of statements, which were retracted. So, it has no evidentiary value. He relied upon the decision of the Hon ble Supreme Court in the case of Vinod Solanki Vs UOI - 2009 (233) ELT 157 (SC), Shafeek P. K. Vs CC, Cochin - 2015 (325) ELT 199 and A. Tajudeen Vs UOI - 2015 (317) ELT 177 (SC). He further submits that statements of co-accused as relied upon. cannot be considered as evidentiary value, because of the oral statement. He relied upon the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hipping bills mis-declaring as Marble Slabs . Thus, that the goods are liable to confiscation under various clauses of the Section 113 of the Act, 1962. Accordingly, imposition of penalties under Section 114 and Section 114 AA of the Act are warranted. 11. He submits that the exporter had not denied the preparation of the shipping bills and ownership of the seized goods. It is submitted that there is no evidence that the Customs Officers at Port ever examined export of goods. It is submitted that even the statements were retracted, it would not loose the evidentiary value as per Section 138 B of the Customs Act 1962, as the statements were voluntary nature and corroborated with the circumstantial evidence. He drew the attention of the Bench to the Para 13.4 of the impugned order, where the Commissioner (Appeals) discussed circumstantial evidence in detail. The retraction of the statements was replied by the DRI Officers immediately. He also relied upon the decision of the Hon ble Supreme Court in the case of Vinod Solanki (Supra) as the retraction of the statement is not sufficient as the Court is obliged to examine the pros and cons of circumstantial evidence and confessional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he port, appointment of CHA, declaration before the customs etc. It is the matter on record that he was also not named by the CHA or any clearing persons. Further, it has not been brought on record any evidence which shows the involvement of Shri Anil Gadodia in relation of smuggling of the Red Sanders wood. 127. It is the matter of fact on record that statement of Anil Gadodia was retracted at the first available opportunity. It is also found that Anil Gadodia was neither a proprietor of partner or anything to do with M/s Eurro Exports or their business. It is fact that Anil Gadodia has not been made as an exporter but what has been alleged is that he had supplied the material namely red sander which in fact had been attempted to be exported out of India. And, further earlier also he had supplied such material. As per the defence pleaded by Anil Gadodia in his reply, he has pleaded that no act u/s 50 51 of the Customs Act, can be attributed to the applicant and in the absentia of such act penalty cannot be imposed. Similarly, it has been argued that he has been dealing with the red sander and other sanders wood for last several years in the name and style of his firm M/s Ji ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of penalty on the Appellant are reproduced below:- 13.3 As regards the finding that Shri Anil Gadodia was not named by the CHA or any clearing persons, I find that Shri Gadodia arranged for red sanders and made such goods available to M/s Eurro Exports. Even in the Show Cause Notice, it is not the case of the Department that Shri Anil Gadodia was actually involved in clearing the goods from Jaipur or in export of such goods because the case against him is engaged himself in an organized crime of smuggling of Red Sanders to Mr.Lin of China with the help and association of other syndicate members Shri Mayur Ranjan, Shri Yodying, Shri Rameshwar Sharma others and it was Shri Rameshwar Sharma who was exporting such offending goods in the guise of marbles for monetary consideration with help and aid of this supplier. The transporters, CHA and such other agencies were arranged by Shri Rameshwar Sharma/Suresh Sharma and therefore the CHA or any clearing persons not naming Shri Anil Gadodia is not an evidence on which the Adjudicating authority can give him clean chit from the involvement in smuggling of red sanders by the Respondent No.1 Shri Rameshwar Sharma. The observation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the person who made such statement, but the facts of this case are very different. In addition to the statements of all the persons when the smuggling racket was admitted by all of Shri Rameshwar Sharma, Shri Anil Gadodia, Shri Mayur Ranjan, Shri Suresh Sharma, Shri Yodying etc, there are other evidences and circumstances also which lend credibility to the admissions of these persons made before the investigating officers under Section 108 of the Customs Act. The other attending circumstances are just ignored by the Adjudicating authority. 17. We find that the Commissioner (Appeals) heavily relied upon the statements of Shri Anil Gadodia, the Appellant herein, recorded on 28.09.2013 and 29.09.2013 and the Appellant was arrested immediately. By letter dt.30.09.2013, the Appellant informed the Additional Director General, D.R.I. that he was taken in custody by the D.R.I. officers from Four Point Hotel at Jaipur on early morning of 28.09.2013 and he was kept in unauthorized custody and on 29.09.2013 evening, he was arrested. It was also stated that during the unauthorized custody, statements on 28.09.2013 and 29.09.2013 were recorded under duress, which were not given vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow give a finding in favour of the Department. The investigator has to proceed to gather evidence by way of seized records, depositions, ascertain the facts of the case, and thereafter the charges are to be framed. Investigating officer must maintain his impartiality and the decision making process is in the domain of the Adjudicating authority. We find that after recording the statements of the Appellant, who was arrested and in Central Jail, Jaipur, the investigating officer had decided that the retraction is an afterthought and had not taken any further statement and proceeded on the basis of the statement of co-accused. In the case of Tejwal Dyestuff Industries Vs CCE Ahmedabad -2007 (216) ELT 310 (Tri-Ahmd), the Tribunal observed that confessional statement would not put an end to the investigation and the Revenue officer should be careful that they are not tricked out of regular and detailed investigation by making strategic confession which are retracted by them. The relevant portion in the case of Tejwal Dyestuff Industries (supra) is reproduced below:- 54. It appears that, having obtained? confessional statements the Revenue Officers did not carry out the detailed inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Vinod Solanki (supra), held that mere retraction of confession may not be sufficient to make the confessional statement irrelevant for the purpose of the proceedings in a criminal or quasi-criminal case, but there cannot be any doubt whatsoever that the Court is obligated to take into consideration the pros and cons of both the confession and retraction made by the accused. The issue is what would be effect of a retracted statement for the purpose of levy of penalty under Section FEMA, 1973. In that case, on or about 25-10-1994, the office premises of the appellant was searched. Recovery of Indian currency amounting to ₹ 2,65,000/- was made. He was thereafter detained. On the next two succeeding dates, i.e., on 26-10-1994 and 27-10-1994, he allegedly made two statements before the Authorities under the Act, disclosing that all the transactions in the name of M/s. Sun Enterprises, Ahmedabad and M/s. Suraj Enterprises, Bombay relating to import of goods had been made by him and no import of goods had taken place in the name of the said firms. He is stated to have confessed that he was responsible for remittance of the foreign exchange worth US Dollars 11,400 and US D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been obtained. According to him, he had no connection with any alleged import transactions, opening of bank accounts, or floating of company by name of M/s. Sun Enterprises, export control, Bill of Entry and other documents or alleged remittances. He stated that confessions were not only untrue but also involuntary. 21. The Commissioner (Appeals) proceeded on the basis of call data and details were brought on record by the D.R.I. officers. Further, the statement of co-accused Shri Mayur Ranjan implicated the Appellant. Furthermore, the Appellant was having permit or licence for trading of Red Sanders and the huge stock was found unaccounted in godown. The learned Advocate submits that as revealed from the Panchnama that stock register was lying in their office, which was not examined by the officers. In any event, the unaccounted stock would not construe that the Appellant exported the Red Sanders, and if any irregularity in the account would adjudicated by the Licencing authority and not the Customs authority. The evidence of call data has no force as there is material available in record of conversation of the Appellants for smuggling of goods. The Tribunal in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination of the reported decisions of the various High Courts in India , said Imam, J., who spoke for the Court in that case, indicates that the preponderance of opinion is in favour of the view that the retracted confession of an accused person may be taken into consideration against a co-accused by virtue of the provisions of Section 30 of the Act, its value was extremely weak and there could be no conviction without the fullest and strongest corroboration on material particulars . The last portion of this observation has been interpreted by the High Courts in the present case as supporting the view that like the evidence of an accomplice, a confessional statement of a co-accused person can be acted upon if it is corroborated in material particulars. In our opinion, the context in which the said observation was made by this Court shows that this Court did not intend to lay down any such proposition. In fact, the other evidence against the Appellant Ram Prakash was of such a strong character that this Court agreed with the conclusion of the High Court and held that the said evidence was satisfactory and in that connection, the confessional statement of the co-accused person was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if a person knowingly or intentionally causes false and incorrect material in the transaction of any business, penalty would be not exceeding five times of the value of goods. So, the words causes to be made would have some nexus with the transaction of the goods of any business. In the present case, we find that there is no material available that the Appellant was involved in preparation of documents or signed by him relevant to export of goods. The Appellant is a licence holder for storage and selling of Red Sander within the Country. Commissioner (Appeals) also observed that the Appellant was not actually involved in clearing of the goods from Jaipur or in export of goods. There is no material available that the Appellant had supplied the Red Sander knowingly for export of the goods. The Tribunal in the case of S.P. Bahl (supra) held as under:- 7. From the perusal of the above sections, it can be seen that penalty under Section 114(i) can be imposed on the person whose act renders the goods liable for confiscation. In the present case the role of the appellant, that too as per the statement of Shri Pradeep Dhond is that the appellant supplied the goods only in domestic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stained. Re: Appeal No.C/10181/2016-DB and C/10182/2016-DB (Shri Rameshwar Sharma and Shri Suresh Sharma): 26. In the case of Shri Rameshwar Sharma, the Commissioner (Appeals) imposed penalty of ₹ 50 lakhs each under Sections 114 and 114AA of Customs Act, 1962 separately. In the case of Shri Suresh Sharma, the Commissioner (Appeals) imposed penalty of ₹ 2.50 lakhs each under Sections 114 and 114AA of Customs Act, 1962 separately. In both the cases, the Adjudicating authority dropped the penal proceedings against the Appellant. 27. Shri Rameshwar Sharma, is the Proprietor of M/s Eurro Exports. On 28.09.2013, the officers of the Directorate of Revenue Intelligence (DRI) examined the 5 containers at Mundra Container Freight Station, attempting to export by M/s Eurro Exports vide Shipping Bills No.7656093, dt.25.09.2013, 7615545, dt.23.09.2013, 7628989, dt.24.09.2013, 7616229, dt.23.09.2013, and 7630622, dt.24.09.2013 respectively, were called back. The shipping bills were filed by CHA M/s Mahendra Shipping Agencies on behalf of the exporter. The goods were declared Indian Polished Granite Slabs, Albeta Marble Slabs in the shipping bills. After examinatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt or has kept the wooden logs of Red Sander in his consignments which are seized at the port. From the series of events, it is clear that the goods were beyond the control of the noticee and at the time when the goods were received in the Customs Area and were checked by the Customs authority and confirmed about the contents as declared that is marble slabs and therefore, subsequent recovery of wooden logs, could only lead one conclusion that same were incorporated and substituted after the buffer containers were handed over to the CFS. 119. It is also matter of record that the Applicant have never came to the Port as per the investigation as he was apprehended in Jaipur itself on 28th September, 2013 when the container was recovered at the port found to contain wooden logs of Red Sanders. The investigation has not been done against the person who probably had kept the said Red Sanders wood logs in the container after knowing the difference in weight and number of packages exported by M/s Eurro Exports. The allegation that forklift found in the factory premises of the noticees at Jaipur was used for stuffing Wood into the container is also not been verified and believed since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vocates Shri Pradip Jain and Shri Ashish Batra argued the matter at length. It is submitted that M/s Eurro Export is a reputed export firm and earned huge foreign exchange by exporting the Marble Slabs. They are holding un-blemished record till date. The loading of the Red Sanders in the export container was without their knowledge as evident from the record and circumstantial evidences. It is submitted that the DRI officers immediately searched their business premises on 28.09.2013 and no incriminating documents was found. The CHA and the transporter had not mentioned their names for loading of the goods. It is submitted the entire case was made out on the basis of statements of co-accused, which were retracted and has no evidentiary value as settled by various decisions of Hon'ble Supreme Court and the Tribunal. 31. We find that the exporter can book the containers for stuffing the export goods in their factory mainly under two procedures. First, they can adopt the procedure related to self sealing wherein they declare that the goods have been stuffed by them and sealed by them. Another procedure is that they can get the goods stuffed in containers in their factory in pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not loaded by them. In the present case, the Appellants failed to prove that the offending goods were not loaded by them. In this context, we find from the impugned order that Shri Mangi Lal Lohiti, Proprietor of M/s Lahoti Impex and Director of M/s Indo Sino Impex P. Ltd, in his statement dt.09.10.2013 recorded under Section 108 of Customs Act, 1962 stated that Shri Rameshwar Sharma used to come with transport on which partly filled containers were loaded and in these partly loaded containers, he himself used to get the goods stuffed in the containers with the help of crane and labour, that the crane and labour were also arranged by Shri Rameshwar Sharma..; in addition the partly stuffed goods wre packed in wooden boxes with lassing and were not visible. Hence, the penal provisions would be invoked against the Appellant. This fact was not disputed by the Appellants and the presumption would be in favour of the Revenue. 33. The other aspect of this matter is that the Adjudicating authority confiscated 93.31 MTs of Marble Slabs under the provisions of Section 119 of the Act, 1962. It provides any goods used for concealing smuggled goods shall also be liable to confiscation. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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