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TMI Blog2016 (4) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... oned supra. Since the matter is liable to be remitted to the file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, the substantial questions of law settled in the present Civil Miscellaneous Appeal need not be decided. 11. In fine, this Civil Miscellaneous Appeal is allowed without costs and the Final Order No.322 of 2010 passed in Appeal No.C/26/2008 by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai is set aside and Appeal No.C/26/2008 is remitted to the file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai and the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai is strictly directed to consider the factual aspects putforth on either side and also consider recent decisions rendered by the Hon'ble Apex Court and pass suitable orders on merits. Consequently, connected Miscellaneous Petition is dismissed." 2.0 In pursuance to the above directions of the Hon'ble High Court the appeal was heard and proceeding was recorded on 22.2.2016. 3.0 Investigation made allegation against the appellant noticing him to be involved with one Alexander i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.Ten crates of gypsum boards not concealing Red Sanders were meant for inspection of Customs Officers to obtainlet export order. 3.5 The red sanders hidden as above in gypsum board were sent toone M/s Raja Agencies CFS meant for export to Malaysia and Shipping Bill No. 1590098 dated 24.03.2006 was filed by Alexander in that behalf at Tuticorin Custom House on self assessment basis declaring that 104 crates of gypsum boards meant for export to Malaysia by M/s Freedom Impex, Tuticorin. Cargo was examined by Customs at M/s Raja Agencies CFS on 24.03.2006 and let export order was given.But such cargo was intercepted by DRI and they examined the contents thereof thoroughly. Upon such examination, 1500 pieces of Red Sanders were found to have been concealed in 94 packages of Gypsum boards. So also investigation found few Gypsum boards without concealing red sanders and some packing material weighing 6.318 MT were in the cargo. 3.6 Investigation found that above said preparations were made to commit attempt to export the red sanders of aforesaid description by Alexander under the instructions of the Appellant. Such goods are prohibited goods rendering that liable to confiscation under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... numbers of red sanderpieces in 94 packages containing gypsum boards and strapped with steel for concealment; (viii) he made ten crates containing gypsum boards without concealing red sanders pieces therein to produce before Customs officers for physical inspection; (ix) he filed the Shipping Bill 1590098 dated 24.3.2006 with Tuticorin Custom House declaring 104 crates of gypsum boards were being exported to the address of the buyer in Malaysia given by Shri Manivannan; (x) the detailed examination conducted by the investigating officers at Raja Agency CFS found 1500 Nos. of red sander in three shapes weighing 1.650 MT were attempted to be exported in the guise of gypsum boards used for concealment and those boards were also seized; (xi) he knew that export of red sanders is an offence under the Customs Act; (xii) he confirmed the photograph shown to him by investigation was of Shri Manivannan of Perambur, Chennai, and admitted the Offence committed by him. All such depositions remained uncontroverted. 4.3 Adjudicating Authority found that John Alexander had a unit called M/s. Gilpa Agencies at Tuticorin. During February, 1997, when he attempted to export sandalwood sent by Shri Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 recorded from John Alexander * He details how came into contact with Appellant Mannivannan * How Mannivannan sent a contraband. * What was the remuneration given by Appellant for the work. He states that the total remuneration was Rs. 2 lakhs out of which Manivannan sent Rs. 40,000/- through a person who came with the Red Sanders in the Lorry and Manivannan deposited 60,000 into ICICI Bank Account No.613905014790 of his (not verified nor investigatged). * He had paid Rs. 1 lakh earlier (not verified). * The buyers addressed at Malaysia were sent through KPN Bus Courier (not verified). * Earlier to the present consignment, a test consignment of smaller lot sent under Shipping Bill No.1581521 dated 02.03.2006. 'Not verified'. * The buyer is one FG Global resources (no verification). * He implicates Manivannan stating that he had supplied that he had supplied the contraband and is residing at Perambur High Road having a Government manufacturing factory. He also states that he does not know the contact phone number of Manivannan. 54-61 6. 27.03.06 John Alexander arrested by the officers of D.R.I. at about 0700 Hours. 57 7. 27.03.06 John Alexander remanded to Judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board. 130-132 21 13.09.06 Show Cause Notice issued. Allegations at para 17(iii) proposal at para 17(ii) for penalty. 19-29 22 14.10.06 First reply to the Show Cause Notice. Disputes statements of John Alexander. Denies depositing money in Bank at Chennai for John Alexander account. States that Advisory Board opinion in COFEPOSA is unanimous that there is no material to connect the Appellant to the transaction. 133-135 23 30.10.07 Second reply to the Show Cause Notice. 136-137 24 30.11.07 Order in Original passed. 138-148 25 01.02.08 Appeal filed to this Honble Tribunal. 1-12 26 17.03.10 Tribunal rejects the appeal in Final Order No.322/2010. 27 June-10 CMA filed before the Honble High Court of Madras at Madurai Bench. 28 25.08.10 High Court admitting the appeal grants interim stay on the condition that the Appellant deposits 50% of the penalty amount within 8 weeks. 29 01.11.10 Appellant deposit Rs. 2.50 lakhs. 30 31.01.14 CMA disposed of the High Court remanding the matter to the Tribunal for consideration of facts and latest case laws. 5.1 It was submitted on behalf of the appellant that all a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reading of statement of John Alexander is made that brings out the innocence of the appellant and because Revenue found the export misdeclared that shall not ipso facto create an evidence against the appellant. Revenue has failed to bring the sourceof procurement of red sander as well as mode of delivery of the goods by the appellant to Alexander. That rules out the alleged supply thereof by appellant to John Alexander. The consideration, if any, paid for the alleged supply was not corroborated by any bank account in absence of detection of such account by Revenue. How the goods moved is not proved by Revenue.That remainedin mystery without any evidence of purchaseof the impugned goods attaching the appellant to such goods, found. Adjudication is therefore baseless to penalise the appellant. The person who were connected with the export were not at all brought to the fold of law. Therefore, statement of co-accused shall not bind the appellant to charge and no penalty under Section 114 (i) of the Customs Act, 1962 is imposable on the appellant. 5.4 It was further submitted on behalf of the appellant that even though this appellant was arrested under COFEPOSA,that did not sustain a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roof of supply of red sander to him which was seized by customs. Seizure itself is testimony of involvement of the appellant who sent offending goods to Alexander. Revenue need not prove its case with mathematical precision. Preponderance of probability is in its favour.Circumstances of commitment of offence speak for itself as to the involvement of the appellant in red sander smuggling. 6.1 To support the case Revenue, learned departmental representative relied on the decision in the case of Naresh J. Sukhawani Vs Union Of Indiareported in 1996 (83) E.L.T.258 (S.C.). According to Revenue,had this appellant been innocent, he would not have attached himself consciously to the offencesupplying the offending goods to Alexander nor been in close association with Alexander sending gypsum board supplying to him for hiding the offending goods. He was in constant contact with Shri John Alexander withcommon intent to make ill gain with ill will. He not only made arrangementof supply of the impugned goods to Alexander but also abetted to misdeclare the goods asGypsum Board.Truckwas sent by him for delivery of the said goods at the destination. That has come to record.These are enough evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be ruled out by appellant in the course of appeal hearing. He also specifically stated before investigation that the Red Sanders were concealed in the Gypsum Boards which was discovered by investigation. The offending goods being prohibited for export and the appellant having sent that along with gypsum board to conceal the same for export, he could not detach himself from the commitment of the offence when conspiracy of illegal export was diffused by investigation. 7.5 Statements of Alexander were recorded before his arrest and even thereafter in the presence of the Jail Superintendent. That authority was an independent witness. His presence during recording of the statement under section 108 of the customs Act, 1962 was not challenged to rule out binding nature thereof. He revealed name of the appellant every time repeatedly and unequivocally. His acquaintance with the appellant came to record confirming his photograph when that was shown to him by the investigation in Jail. He never retracted his depositions given to Customs before the Magistrate when he was produced before the Court for trial. His depositions were therefore believable. Statements of Alexander brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the carrier of the Red Sanders meant for delivery at the premises of Alexander. Law is well settled that evidence gathered under section 108 is credible and cogent and can be used against the author of the statement as well as against others. There is no material to show that belated retraction was made by appellant honestly and truthfully. In his statement dated 31.03.2006, appellant had also disclosed the source of procurement of Red Sanders in the past. Accordingly his dealing with the Red Sanders was nothing new. Various direct and circumstantial evidences as above question conduct of the appellant.Plea of retraction is a mere pretence and not truthful. His complacity is proved when he did not make any retraction before the Magistrate when he was produced under COFEPOSA. 8.0 Cogent, credible and circumstantial evidence as aforesaid having come to record, Customs 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 absolute proof being unattainable, the law, accepts for it, probability as a working substitute in jurisprudence and prosecution is not required to prove the impossibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that sphere the decision of the final fact finding Authority is made conclusive by law. The normal rule which governs civil proceedings is that a fact can be said to be established if it is proved by a preponderance of probabilities. A fact is said to be proved when the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case to act upon the supposition that it exists. The belief regarding the existence of a fact may thus be founded on a balance of probabilities. A prudent man faced with conflicting probabilities concerning a fact situation will act on the supposition that the fact exists, if on weighing the various probabilities he finds that the preponderance is in favour of the existence of the particular fact. The court applies this test for finding whether a fact in issue can be said to be proved. 8.4 When fraud surfaces, that unravels all. Revenue's stand is fortified from the Apex Court judgment in the case of UOI v. Jain Shudh Vanaspati Ltd. - 1996 (86) E.L.T. 460 (S.C.). So also fraud nullifies every thing as held by Apex Court in CC v. Candid Enterprises - 2001 (130) E.L.T. 404 (S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reless whether it be true or false'. This aspect of the matter has been considered by Apex Court in Roshan Deen v. Preeti Lal [2002 (1) SCC 100] Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education [2003 (8) SCC 311], Ram Chandra Singhs case and Ashok Leyland Ltd. v. State of T.N. and Another [2004 (3) SCC 1]. Suppression of a material document would also amount to a fraud on the court (see Gowrishankar v. Joshi Amha Shankar Family Trust, [1996 (3) SCC 310] and S.P. Chengalvaraya Naidu's case AIR-1994 SC-853. No judgment of a Court can be allowed to stand if it has been obtained by fraud. Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity. Mis-declaration of the goods made in shipping bill was a fraud committed against Revenue. 9.0 Learned counsel relied on para 10 of the judgment in the case of Haroon Haji Abdula Vs. State of Maharashtra - 1999 (110) ELT 309 (SC)to submit that evidence of the accomplice should be corroborated. There is no doubt to the proposition that confession of a co-accused should not be sole basis to convict an accused. There should be other corroborative evidence on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Act, 1962 may not be necessarily accepted by Customs authorities in absence of further material to substantiate the contents of the statement. Appellant fails to succeed on this proposition for the reason that customs authorities are not the Police officers for which the statement recorded under section 108 of the Customs Act, 1962 is binding on the appellant. The appellant did not cooperate to investigation on few occasions when summon was issued against him, apprehending his guilt. Such an approach of appellant speaks his contumacious conduct trying to escape from the tests of the evidence gathered from Alexander. Therefore, he fails to be benefitted from the judgment. Appellant when failed to rule out that the evidence gathered from Alexander is inadmissible in law, customs authorities discharged their burden of proof to hold that the appellant was the supplier of the red sanders and was liable to face the charge of smuggling. 9.4 Relying on the decision of the Hon'ble High Court of Delhi in the case of Shri Vinod Kumar Jatia Vs. Commissioner of Customs -2014 (303) ELT 532 (Del.), appellant submitted that mere statement of a third party shall not bind the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer as is defined under Evidence Act and Code of Criminal Procedure. Accordingly, appellants plea that the exculpatory statement of the appellant has credence in evidences does not sound well when he had pre-meditated design to commit fraud against Revenue. Even though the customs officer has the power to arrest, he does not act like a police officer as may be appreciable when section 163 of the Code of Criminal Procedure is analyzed. The customs officer cannot be equated with the police officer although he files compliant under special Act. A police officer is recognized under section 73 of the Code of Criminal Procedure to file a complaint on behalf of the State before the Magistrate. But a customs office does not do that. Therefore, the statement recorded from Alexander was examined in the course of discharge of duty by a customs officer. That cannot be presumed to be done by a police officer. There was no force or coercion used by the investigating authority to examine him. Therefore, his statement can be used against appellant when that showed path to investigation to trace the source of the goods. 10.1 Further, a Customs officer not being permitted to file a charge shee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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