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TMI Blog2024 (12) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... and only) alongwith applicable duty and charges, to its lawful owner against the confiscation of the said goods. The battery scrap has already been released provisionally on furnishing of a cash security of Rs 1,70,000/- (Rupees One Lakh Seventy Thousand only). I, therefore, order for appropriation of Rs. 60000/- against the fine out of the cash security of Rs 170000/- and duty and charges may be appropriated from the remaining amount of cash security of Rs 110000/-; ii. I order for confiscation of the said seized vehicle, Registration No. HR 38 0 9185 valued at Rs. 10,00,000/- used in transportation of the aforesaid seized battery scrap under section 115(2) of the Customs Act, 1962. However, I give an option under section 125 of the Customs Act, 1962, to redeem the vehicle on fine of Rs 50000/- (Rupees Fifty Thousand only) to its lawful owner against the confiscation of the said vehicle. The vehicle has already been released provisionally on furnishing of a cash security of Rs 50,000/- Rupees Fifty Thousand only). I therefore order to appropriate this cash security against the proposed confiscation. iii. I impose Penalty upon each of the following eight noticees under section1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pandey and Shri Santosh Gupta bought the battery scrap loaded in a tractor trolley which was then loaded in the truck. * He was told by Shri Girish Pandey and Shri Santosh Gupta to reach at the shop of Sahu Traders and that the documents for transport of these goods will be arranged there. * Next day i.e. on 24.02.2016 at about 1200 Hrs Shri Santosh Gupta provided him the documents (invoice) of M/s Pandey Traders Thoothibari covering the good i.e. used battery scrap loaded in the truck. * Thereafter he along with other left for Amroha in the truck. 2.5 Fourth person in the truck identified himself as Shri Mohd Arif S/o Shri Chote and stated that he is agent of Shri Mohd Sakir, Proprietor of Turkey Metal Industries Amroha. He stated that he is transporting the Foreign/ Third Country Origin battery scrap from Thoothibari to Amroha as per the directions of Shri Sakir and that he was present at the time of loading of said scrap brought from Nepal on a tractor trolley in the truck near Rajabari village on Indo Nepal Border. 2.6 From the revelations made by the persons on the truck, vehicle was nabbed and Foreign/ Third Country origin battery scrap was found loaded on the truck. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icee No. 4), Shri Santosh Kumar Gupta (Noticee No. 6) and Shri Mohd. Sakir (Noticee No. 8) ar hereby called upon to show cause to the Additional Commissioner, Customs(P) Hqrs, 5th floor, Kendriya Bahawan, Sector-H, Aliganj, Lucknow- 226024 within 30 days from the date of receipt of this show Cause Notice as to why penalty should not be imposed upon each of them under section 112 of the of the Customs Ac, 1962." 2.9 The show cause notice was adjudicated as per the Order-in-Original referred in para 1 above. Aggrieved appellant filed the appeal before the First appellate authority which has been disposed as per the impugned order. 2.10 Aggrieved appellants have filed this appeal. 3.1 We have heard Shri Anuj Agarwal Advocate for the appellants and Shri Santosh Kumar Authorized Representative for the revenue. 3.2 Arguing for the appellant learned Counsel submits that- * appellant have taken a categorical stand that the goods in the truck i.e. used to be scrap was procured locally and the same were transported to Amraoha. * The case has been made up against the appellant on the basis of the statements of the persons who were in the truck apart from the driver and cleaner, the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be decided in this case is whether the seized battery scrap has been smuggled from Nepal into India through off routes, whether the seized vehicle was used in transportation of the smuggled goods in India and whether the noticees 1 to 8 are involved in the smuggling. 29. ... 30. I find that in all the replies dated 06.12.2016 the defence on behalf of all the eight Noticees has emphasized on following points:- a. The seized battery scrap was not smuggled b. It was purchased by vendors c. It was owned by Shri Girish Pandey of M/s Pandey Traders, Thoonthibari d. It was loaded from the shop/godown of M/s Pandey Traders, Thoonthibari. e. Record of purchase of battery scrap is not maintained by M/s Pandey Traders, Thoonthibari f. Seized battery scrap was accompanied with invoice. g. The driver, cleaner and both the representatives of M/s Turkey Industries, Amroha were forced to sign on blank papers and later their statements u/s 108 was written by someone else and without their knowledge. h. Shri Santosh Kumar Gupta (Noticee No. 6) is not involved in this case . i. Battery scrap is not an item of section 123 hence burden of proof lies with the Department j. Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he is owner of the seized scrap; he deals in battery scrap; he sells the battery scrap to M's Turkey Metal Industries, Amroha; he maintains no record of purchase and sale of battery scrap; he has sold 28 MT of battery scrap to M/s Turkey Metal Industries, Amroha; he has issued invoice No. 07 dated 24.02.16 to M/s Turkey Metal Industries, Amroha in respect of seized goods; the seized goods may contain foreign origin battery scrap. Shri Santosh Gupta (Noticee No. 6) stated in his statement dated 27.02.16 that he deals in scrap. Shri Ramkumar Khandelwal (Noticee No. 7) has accepted in his statement ated 02.03.16 that the seized goods were loaded on the vehicle on his directions. The freight also was negotiated by him. Shri Shakir Proprietor of M/s Turkey Metal Industries, Amroha (Noticee No. 8) was summoned vide letter dated 25.02.2016 and 06.04.2016 to tender his statement u/s 108 of the Act but neither the letters returned nor Shri Mohd. Sakir turned up 32.1 Later the noticee No. 1, 2, 3 and 4 retracted from their statements tendered under section 108 of the Act and alleged that they were forced to sign on blank papers and the statements were written by someone el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the inquiry proceedings conducted in Aptil, 2011, Shri Dhamale and Mr. Menon had deposed during their cross-examination that they had given statements admitting their involvement of the commissions and omissions before the DRI under duress and threat and therefore, these statements cannot be taken at face value. This argument is not valid for more than one reason. The proceedings under Section 108 of the Customs Act is a judicial proceeding and if any retraction of the confession has to be made, the same should be made before the same authority who originally recorded the statement. In Zaki Ishrati v. Commissioner of Customs & Central Excise, Kanpur [2013 (291)_E.L.T. 161 (All.)|, the hon'ble Allahabad High Court has held that subsequent retraction cannot take away the effect of the statement; if the retraction is not addressed to the officer to whom the statement |was given. In the present case, it is an admitted position that both Mr. Dhamle and Mr. Menon never retracted their statements given before the DRI in October and November, 2009. Only during the cross- examination conducted during the inquiry proceedings, they have stated that their statements were obtained unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws that he has nothing to offer in his defence, 34.1 Shri Girish Pandey (Noticee No. 5 and Proprietor of M/s Pandey Traders, Thoonthibari, Mahrajganj) has mentioned in his reply dated 06.12.16 to the SCN that battery scrap is not an item of section 123 of Customs Act therefore burden of proof is on the department. In this regard it is to mention that the seized scrap is prohibited in nature when smuggled from Nepal and otherwise it is restricted. I observe a number of contradictions in the defence replies dated 06.12.16 submitted by the advocate on behalf of all the eight noticees which are as under- a. Shri Ehsan Ali (Noticee No. 3) and Shri Mohd. Arif (Noticee No. 4) have mentioned in their joint reply that negotiations for purchase of scrap and the vehicle for its transportation was managed by Shri Shakir their employer; they don't know Shri Santosh Kumar, Shri Santosh Kumar has no relation with the seized scrap; Shri Santosh Kumar has been implicated by the Customs. Now if they don't know Shri Santosh Kumar then how can they| say that Shri Santosh Kumar had no relation with the seized scrap and he was implicated by the Customs b. Seized scrap has been owned by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent man may on its basis believe in the existence of facts in the issue....prosecution is not obliged to prove as part of its primary burden lhe facts which are especially within the knowledge of accused. Since smuggling is done secretly, il s impossible for preventive department to unravel every link of the process. .....It is for him(accused)to explain or establish those facts within his peculiar knowledge , failing which the prosecution will be entitled to take advantage of the presumption of facts arising against him, in discharging its burden of proof. .......... Deptt. Would be deemed to have discharged its burden ( of proof ) if it adduces so much evidence , circumtancial or direct , as is sufficient to raise a presumption in its favour with regard to the existence of fact sought to be proved.' read along with the ratio of judgement passed by the Apex Court in case of Commissioner of Central Excise Madras Vs. Systems and Components (P) Ltd. reported in 2004(165)ELT 136 (SC) wherein it was held that What is admitted need not to be proved.', I find that the said seized battery scrap of foreign origin/Third Country Origin are smuggled into India from Nepal in contrav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roha for monetary gain. He is, therefore, liable for Penalty under Section 112 of the Customs Act 1962; Shri Mohd Sakir (Noticee No. 8) Prop. of M/s Turkey Metal Industries falled to appear beforethe Customs Authorities despite of several Summons. He deliberately not joined the departmental proceedings to conceal the facts. Form revelations made by the noticees No 1 to 4 in the Panchnama and in their respective statements under Section 108 of the Act it is evident that Shri Mohd Sakir, was knowingly involved in purchase and transportation of Foreign Origin/Third Country Origin Battery Scrap. He is, therefore, liable for Penalty under Section 112 of the Customs Act 1962; 4.4 The order in original has held Noticee No 1 to 8 to be responsible for the act of smuggling of battery scrap, through un-notified route from Nepal. The case is based on the interception of the truck containing the said goods and on examination the goods were found to be battery scrap of third country origin. Both the driver and co-driver admitted about the goods being loaded in the truck by the appellant on the Nepal border, and gave other details in respect of transportation. They categorically stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the Magistrate though no complaint was filed and was released on bail. He did not complain to the Magistrate that Ex. P-4 statement was given under inducement, threat or duress. It was raised only subsequently making accusations against PW-5, the Inspector of Customs. Therefore, obviously it was only an afterthought. The High Court, therefore, rightly has not given any weightage to the same. It is true that the Magistrate has given various reasons for disbelieving the evidence of PW-3, the panch witness who had also, at one point of time, indulged in smuggling. It is unlikely that PW-3 would bring 200 gold biscuits of foreign marking and conceal them in the compound of the appellant without appellant's knowledge for safe custody. It is not his case that he had facilitated PW-3 in concealing them in his compound. The place of concealment of the contraband is also significant at this juncture. It is just near and visible from the window of his bed-room through which he or family members could always watch anyone frequenting the place where the contraband was concealed. This fact becomes more relevant when we consider that after concealment of the contraband in the compound ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... metals and other dutiable goods and to facilitate detection and confiscation of smuggled goods into, or out of the country. The contraventions and offences under the Act are committed in an organised manner under absolute secrecy. They are white-collar crimes upsetting the economy of the country. Detection and confiscation of the smuggled goods are aimed to check the escapement and avoidance of customs duty and to prevent perpetration thereof. In an appropriate case when the authority thought it expedient to have the contraveners prosecuted under Section 135 etc., separate procedure of filing a complaint has been provided under the Act. By necessary implication, resort to the investigation under Chapter XII of the Code stands excluded unless during the course of the same transaction, the offences punishable under the IPC, like Section 120B etc., are involved. Generally, the evidence in support of the violation of the provisions of the Act consists in the statement given or recorded under Section 108, the recovery panchnama (mediator's report) and the oral evidence of the witnesses in proof of recovery and in connection therewith. This Court, therefore, in evaluating the evidence fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge was right in his findings that the prosecution has proved the case based upon the confession of the appellant given in Ex. P-4 under Section 108 of the Evidence Act and the evidence of PWs 2, 3 and 5. The prosecution proved the case beyond doubt and the High Court has committed no error of law." 4.6 On the basis of the objective evaluation of the evidences the authorities below have arrived at the conclusion that the impugned goods are smuggled goods smuggled through unauthorized routes from Nepal. Appellant is the master mind in the entire episode has been subjected to penalty of Rs.25,000/- as per the impugned order, which in my view is not excessive and needs to be upheld, which also is not harsh, taking into account the fact that "battery scrap", falls under the category of "Hazardous Goods", to dangerous for the environment and eco system of our country. 4.7 Appellant has claimed that the Old and Used Battery Scrap seized and confiscated was procured by him locally through local vendors and hence no violation of Customs Act, 1962 can be alleged. The story fabricated by the appellant about local procurement of scrap cannot be substantiated, simply for the reason that he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LITIES OF DEALER.- It shall be the responsibility of a dealer to- (i) ensure that the used batteries are collected back as per the Schedule against new batteries sold; (ii) give appropriate discount for every used battery returned by the consumer; (iii) ensure that used batteries collected back are of similar type and specifications as that of the new batteries sold; (iv) file half-yearly returns of the sale of new batteries and buy-back of old batteries to the manufacturer in Form-V by 31st May and 30th November of every year; (v) ensure safe transportation of collected batteries to the designated collection centers or to the registered recyclers; and (vi) ensure that no damage is caused to the environment during storage and transportation of used batteries. (vii) (a) registration with State Pollution Control Board for five years and a provision of cancellation for failure in collection of the required number of used batteries as per the said rules, non-submission of timely half yearly returns to the State Pollution Control Boards, renewal of the registration shall be as per the compliance status, to submit details as per Form IV, registration would be cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement have been relied upon by the lower authorities are in appeal before the CESTAT. The statements of the of the co-noticee relied in the proceedings were retracted only in the defence reply filed by them to the show cause notice, and adjudicating authority has not found any merits in the retraction made during the course of adjudication proceedings as per the defence reply, filed by those co-noticees. The findings recorded by the lower authorities on the retraction made by co-noticees have not been challenged by the said co-noticee have thus acquired finality. 4.12 However I find that Additional Commissioner has in the impugned order imposed a penalty of Rs. 25,000/- on the appellant whereas penalty Shri Shakir who was to be the actual beneficiary of these goods penalty imposed is only Rs 10,000/-. I also find that penalty of Rs 10,000/- has been imposed on Shri Santosh Kumar Gupta, who was equal accomplice in the case with Appellant as he had gone along with the appellant for loading the scrap on truck at Nepal border with the appellant, and was responsible for arranging the invoice of the appellant as cover up during the transportation. Taking note of this fact I am inclin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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