9911796707
TMI Blog1998 (3) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... on specific information to the effect that contraband goods such as bearings, etc. are smuggled along with the declared item, Gambier in the Container No. GSTU 4544667, the movement of the said container was monitored discreetly and necessary follow up action was taken to secure the documents and the goods. 2. Enquiries revealed that the relevant Bill of Entry No. 56720, dated 21-12-94 (I.M. No. 976/94, Line No. 397) was already filed on 21-12-94 by the Custom House Agent, M/s. Madras International Supping Clearing Agency, 81, Linghi Chetty Street, Madras-1 on behalf of M/s. Sargam Enterprises, 53, III Main Road, Jawahar Nagar, Madras 600 082 and it was found that the Bill of Entry was already assessed to duty by the concerned assessing Group 21-12-94 and duty amount of Rs. 5,39,356/- was also paid on 22-12-94 vide Cash No. HD 1202146 even before the arrival of the vessel. It was also seen that duplicate open order was given for the examination of the cargo. The Bill of Entry was hence collected, for further investigation. SIIB officers of this Custom House also visited discreetly the addresses available in the documents; to locate the importers. However the importers were not fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adras 600 082) revealed that it was only a residential premises. Neither the firm nor its proprietor on record, Shri S. Somasundaram were available. Further, the address furnished was found to be a residential premises and in no way related to the importers on record. Efforts were made to locate the importers and to get their residential address. 8. Pursuant to the efforts made, a copy of the application filed by the importers with the Joint Director General of Foreign Trade, Madras for allotment of the Import Export Code No. was collected. The same was perused and it was noticed that in the said application, the office address is in agreement with the address given in the Bill of Entry. On further perusal of the application, it was found to contain the residential address as at 12, I Main Road, Jawahar Nagar, Madras-85. Enquiries made at the address revealed that the same was occupied by one M/s. North West Madras Benefit Society and not related to the importers. 9. The Import Export Code No. 0494008644 allotted to M/s. Sargam Enterprises, was found to have been cancelled by JDGFT vide their circular No. 5/IE/94 issued in November, 1994 on the ground that the firm was not existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prises, 53, III Main Road, Jawahar Nagar, Madras-82 was not available in the said address. The residential address furnished by Shri S. Somasundaram (12, I Main Road, Jawahar Nagar, Madras-85) was also found to be not related to the importer. Enquiries made at the premises of Shri Kamlesh M. Sanghvi, introducer of Shri S. Somasundaram located at 27, Kalappa Achari Street, Madras-3 revealed that it was an earlier address of Shri Kamlesh Sanghvi. 12. Further enquiries made at 27, Kalappa Achari Street, Madras-3, the address given in the Bank documents for Shri Kamlesh M. Sanghvi, revealed that the building is owned by Shri P.M.A. Ramadas Chetty of M/s. P.M.A. Metals and Alloys 102, Naniappan Naicken Street, Madras-3, Shri P.M.A. Ramadas Chetty vide letter dated 22-5-1995 has stated, inter alia, that he is owner of the building; that Shri Mulvantrai V. Sanghvi and his son Shri Rohit Kumar M. Sanghvi were the tenants in the II floor of the building from 21-4-1977 to 7-11-1992 and that Shri Kamlesh M. Sanghvi is the second son of Shri Mulvantrai M. Sanghvi who left the family in 1980. Enquiries with Shri Rohit Sanghvi brother of Shri Kamlesh M. Sanghvi revealed that Shri Kamlesh M. Sang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equested him to clear the consignments of some companies for which he would bring and give the documents; that Shri Gulabchand (Sanghvi) used to give him documents for import clearance in respect of the following firms, viz., (a) M/s. Sagar Supplies, (b) M/s. Srinivasa Agencies, (c) M/s. Manek Traders, (d) M/s. Kiran Trading and (e) M/s. Sargam Enterprises, all based at Madras; that he knew Shri Gulabchand (Sanghvi) and that he did not know the proprietors of the above firms. Regarding handling of the documents, he stated that after getting the documents from Shri Gulabchand (Sanghvi) he would get the bills assessed and used to collect the duty amount by way of Pay Order from Shri Gulabchand (Sanghvi); that as per the request of Shri Gulabchand (Sanghvi) he used to arrange for the destuffing of the containerised cargo at 83, SIDCO, Industrial Estate, Ambattur, Madras-58; that he did not know whether the said premises is owned by the importers and that he had cleared four consignments of M/s. Sargam Enterprises in the past. Regarding the subject import by M/s. Sargam Enterprises covered by Bill of Entry No. 56720, dated 21-12-1994, he stated that this bill along with other documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake committed. He further added that only Shri Sanghvi gave the documents in respect of the subject import. To certain specific questions Shri Kannan replied stating that it was Shri Sanghvi who represented the five firms for giving documents relating to imports; that he did not know the details such as address etc., of Shri Sanghvi; that these firms are owned by Shri Ishwarlal Surana and Shri Mardia and he heard that both these persons are in Vishranthi Apartments, Vepery, Madras. Finally Shri Kannan stated that he made several attempts to contact S/Shri Sanghvi, Iswarlal Surana and Mardia and found that they are still absconding. 17. Shri D. Kannan in his further statement dated 6-1-1995 stated inter alia that Shri Sanghvi used to come to his office to deliver import documents for clearance of import goods in respect of M/s. Sargam Enterprises and other firms; that Shri Sanghvi used to contact their office till delivery of the goods; that after payment of duty by way of Bankers pay order and examination of the goods, the containers, after executing a bond with the steamer agents would be delivered to the premises at No. 83, SIDCO Industrial Estate, Ambattur, Madras-58 as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had taken steps to find out Shri Somasundaram and Shri Sanghvi of M/s. Sargam Enterprises to produce before the Department. 22. Shri D. Kannan also stated, vide his further letter dated 20-3-1995, that he along with officers of Customs visited the premises of Shri Ishwarlal Surana and Shri Raichand Mardia and found that they had left for Rajasthan 3 months back and not yet arrived and that steps taken by him to find out S/Shri Somasundaram and Sanghvi also proved futile. 23. Enquiries were made at the premises of Shri Ishwarlal C. Surana and Shri Raichand G. Mardia revealed that they were at large. Statements were recorded from Shri Dharmendra Surana, S/o Shri Ishwarlal C. Surana and Shri Manish Mardia, S/o Shri Raichand G. Mardia. Shri Dharmendra Surana in his statement dated 28-12-1994 has stated, inter alia, that he is the Managing Director of two limited companies viz., M/s. Surana Holdings Pvt. Ltd., and M/s. Surana Agro Exports Pvt. Ltd., in which his father, Shri Ishwarlal C. Surana and Shri Gulabchand T. Uchat are other Directors. When asked about his father, Shri Ishwarlal C. Surana s whereabouts, he stated that his father had left the house on 24-12-1994 and did not tur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated, inter alia, that he couldn t appear before the Department, as he had left for Rajasthan in the first week of January and returned only on 25-5-1995; that previously he was one of the partners in M/s. Mardia Metal Enterprises, Madras, M/s. Padmavathi Metals and Alloys (P) Ltd., that at present he is one of the partners of M/s. Decofloor at 10/10B, Ambattur Industrial Estate, Madras, which is engaged in the import of plastic scrap and processing to produce plastic granules; that Shri Ishwarlal C. Surana is the other partner of M/s. Decofloor and that he used to do import clearance through M/s. Madras International Shipping and Clearing Agency, Madras. 28. In his further statement on 26-5-1995, Shri Raichand G. Mardia has stated, inter alia, that he knows Shri Kamlesh Sanghvi; that Kamlesh Sanghvi was previously staying at Jawahar Nagar and he doesn t know Sanghvi s present whereabouts. He also added that the factory at 10/10B, Industrial Estate, Ambattur, Madras, is owned jointly by himself, S/Shri Ishwarlal C. Surana and Arunkumar Gathalia and that the property at No. 9 Subbu Chetty Street, Madras-3, was taken for rent by his son Shri Dharmendra I. Surana and the same was gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustrial Estate, belongs to M/s. Deco Floors, in which he himself is one of the partners, and said that the premises has been rented out to Shri Kamlesh Sanghvi. When asked about his non-appearance before the Department, despite several summons, he stated that since he left for Rajasthan in the last week of December, 1994 he could not appear. When confronted with his earlier statement wherein he stated that he had left for Rajasthan in the month of January, 1995 he admitted that he had left for Rajasthan only in the last week of December, 1994. When enquired about his relationship with Shri Raichand Mardia, he told that Shri Mardia is his business partner and his best friend. Shri Surana was informed that Shri Kannan in his statements has stated that he and Shri Raic hand G. Mardia visited Shri Kannan s office and requested for early clearance of the consignment covered by Bill of Entry No. 56720, dated 21-12-1994. In the light of the above position, Shri Ishwarlal C. Surana was specifically questioned that how could he say that the consignment does not belong to him. To this Shri Ishwarlal C. Surana maintained that he might not have asked for the subject clear ance. Shri Ishwarlal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... everse of original Bill of Lading and authorisation letter, it is very clear that the signatures made as S. Somasundaram are different. 34. Enquiries with Shri D. Kannan of M/s. Madras International Shipping Clearing Agency, Custom House Agent revealed that the documents relating to the clearance of goods imported by all the five firms including M/s. Sargam Enterprises were used to be handed over by Shri Sanghvi, but he failed to disclose the address of Shri Kamlesh M. Sanghvi. According to Custom House Agent Shri Sanghvi used to handover the documents and duty amount after assessment. The Custom House Agent has identified Shri Kamlesh M. Sanghvi as representative of above firm owned by S/Shri Raichand G. Mardia and Ishwarlal C. Surana. Even Shri Kamlesh M. Sanghvi who was identified by the Custom House Agent as the representative could not be traced by the Department de spite several efforts made in this regard. As the result of investigation and en quiries with several persons the address of Shri Kamlesh M. Sanghvi was found. However he is still absconding. It is pertinent to point out here that the Custom House Agent, has full knowledge of the real importers, their names and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the container in 63 gunny bags. The bags stacked in the front portion of the container contained only gambier. This shows that but for the specific information and detailed examination, the fraud committed cannot be detected in the normal course. Thus, this is a clear case of concealment and smuggling of high value bearings in the guise of gambier. The persons, namely, S/Shri Ishwarlal C. Surana, Raichand G. Mardia, D. Kannan, Kamlesh M. Sanghvi and S. Venkatesh have planned, conspired and arranged to clear the bearings by way of smuggling without payment of huge duty. These goods valued at Rs. 1,194 Crores (Market Value) were not declared in the Bill of Entry, and smuggled into India by way of concealing the same along with the gambier in 63 gunny bags (62 bags contained 2 packets of bearings and 1 bag contained 1 packet of bearings, totalling 125 packets of bearings), with a deliberate intention to defraud the Government of its lawful revenue and escape the detection by Customs in the normal course of examination. Thus, the goods do not correspond to the declaration made in the Bill of Entry with respect to the material particulars like description and value. Further, dutia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used to open the account in the name of M/s. Sargam Enterprises with Punjab National Bank, Park Town, Madras-3 with the help of Shri Venkatesh. Shri Kamlesh M. Sanghvi has a separate account of his own in the same branch of Punjab National Bank and enquiries with the Bank revealed that Shri Sanghvi used to maintain and monitor the account of M/s. Sargam Enterprises with the help of Shri Venkatesh. (vii) As an employee of Shri Ishwarlal C. Surana, Shri Kamlesh M. Sanghvi handled the import documents. During the course of his employment only, the documents for the clearance of the subject consignment were handed over to Shri D. Kannan of M/s. Madras International Shipping and Clearing Agency, 81, Linghi Chetty Street, Madras-1. Shri D. Kannan and his assistant Shri K. Yuvaraj had identified Shri Ishwarlal C. Surana and Shri Raichand G. Mardia as the real owners of M/s. Sargam Enterprises, the fictitious firm floated by them, under which the smuggling of bearings in the guise of gambier was effected. The very fact that S/Shri Kamlesh M. Sanghvi, Ishwarlal C. Surana and Raichand G. Mardia were ab sconding from the date of detection of the smuggling of bearings confirms that the positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a in the smuggling of bearings valued at Rs. 1,194 Crores in guise of and along with gambier. Shri S. Venkatesh, brother-in-law of Shri Kamlesh M. Sanghvi, allowed himself to be used and impersonated as S. Somasundaram and abetted in the act of smuggling. (xi) Shri D. Kannan has stated that the documents relating to the present consignment were handed over by Shri Sanghvi (Kamlesh M. Sanghvi) representative of Shri Raichand G. Mardia and Shri Ishwarlal C. Surana, who are the owners of the goods covered by the Bill of Entry No. 56720, dated 21-12-1994. The last two visited Kannan s office and requested for the early clearance of the subject goods. Shri Raichand G. Mardia and Shri Ishwarlal C. Surana by their above detailed acts of omission and commission rendered the goods covered by the Bill of Entry No. 56720, dated 21-12-1994 liable to confiscation under Section 111(m), (i), (l) and (d) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992 apart from the confiscability under Sections 118(a) and 119 of the Customs Act, 1962 and thereby rendered themselves individually liable to penalty under Section 112(a) of the Customs Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them to show cause as to why : (a) the bearings under seizure valued at Rs. 1,194 crores which were not declared, smuggled into India, concealed in the gunny bags contain ing gambier should not be confiscated under Section 111(i), (l) and (m) of the Customs Act, 1962; (b) the said bearings of value of Rs. 1,194 crores, should not be confiscated under Section 111(d) of the Customs Act, read with Sections 3(3) and 7 of the Foreign Trade (Development and Regulation) Act, 1992; (c) the 214 bags of gambier under seizure of a declared CIF value of Rs. 8,21,562/- used for concealment for the purpose of smuggling of bearings should not be confiscated under Section 119 of the Customs Act, 1962; (d) the bearing packages found along with the gambier in the gunny bags, the said gambier in the packages thereof should not be confiscated under the Section 118(a) of the Customs Act, 1962; (e) penalty should not be imposed on S/Shri Raichand G. Mardia, Ish warlal C. Surana under Section 112(a) of the Customs Act, 1962 for their detailed acts of omission and commission in rendering the subject goods liable to confiscation under the different provisions of the Customs Act, 1962 referred to above; (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and acted as Somasundaram and abetted the offence. They further pointed out that the statement of D. Kannan from the beginning is contrary in nature and no reliance could be placed on his statement to find them guilty. On the whole, it was their contention that the whole finding against the appellants is based on presumptions and assumptions and not on any reliable evidence. 38. It was further pointed out that there are absolutely no evidences to show that M/s. Sargam Enterprises, a fictitious firm was floated at the instance of the appellants Raichand Mardia and Ishwarlal Surana. These are all presumptions of the adjudicating authority without any evidence on record. They further pointed out that the findings in the adjudication order that Venkatesan was in active association with Kamlesh Sanghvi and that he along with Venkatesan abetted on behalf of the appellants about the illegal import of the above said goods is only presumption drawn by the adjudicating authority without any reliable materials on record. They also drew our attention to the impugned order and the findings therein and stated that all such findings are only presumptions. Therefore they stated that no case is ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of penalty on the appellants is arbitrary and unreasonable. The appellant has no mens rea and the penalty cannot be imposed without any mens rea. He further relied on the decision reported in AIR 1975 SC 175 and stated that in order of constitute abatement, the abettor must be shown to have intentionally aided to the commission of the crime. It was therefore pointed out that mere proof of a crime is not sufficient to the appellant as an abettor. He further relied on the decision of the Hon ble Supreme Court reported in AIR 1977 SC 666 in the case of Trilok Chand Jain v. State of Delhi wherein the Hon ble Supreme Court held that the offence of abatement and intention should be proved and it must be established that the appellant had aided in the commission of the crime. He also pointed out that the penalty cannot be imposed as a matter of course. He further pointed out that in the absence of any mental condition of the appellant to aid the offence, would call upon imposition of penalty and he relied on the decision of the Hon ble Supreme Court in the case of Akbar Badruddin reported in 1990 (47) E.L.T. 161 (S.C.). He further pointed out that even previously the appellant had cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the father and brother of Kamlesh to say a false statement before the authorities. Therefore the stand of Ishwarlal Surana that Kamlesh was not employed with him is a false statement; which is one of the considerations to be taken into account while assessing the evidence in this case. 42. The Hon ble Supreme Court in the case of D. Bhoormull reported in 1983 (13) E.L.T. 1546 (S.C.) = 1985 ECR 2284 (SC) has clearly held that the Department is not expected to prove its case with mathematical precision. These principles are to be borne in mind while assessing the evidence in this case. 43. It is further seen that the investigations reveal that M/s. Sargam Enterprises was a fictitious firm. The person who represented the proprietary of the firm was one S. Somasundaram. It was also clear from the investigations that Shri S. Venkateshan who is the brother-in-law of Kamlesh Sanghvi acted as Somasundaram and opened Bank accounts in favour of this firm M/s. Sargam Enterprises. Therefore the connection between M/s. Sargam Enterprises represented by S. Venkateshan and Kamlesh Sanghvi is established. When the statement of the father and brother of Kamlesh Sanghvi establishes that he was wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a and Raichand Mardia had admitted that they knew Kamlesh Sanghvi and their godown at 10/10-B, Ambattur Industrial Estate, Madras. They had also stated that they had rented it to Shri Kamlesh Sanghvi. Ishwarlal Surana in his statement also confirmed that he knew that Kamlesh Sanghvi was staying at 53, III Main Road, Jawahar Nagar, Madras-82, and this premises is the premises of M/s. Sargam Enterprises. Ishwarlal Surana also had admitted that he knew the father and brother of Kamlesh Sanghvi and had given their names before the officers who recorded the statements. Kamlesh Sanghvi and Raichand Mardia had also confirmed that they knew D. Kannan. 47. In this connection it is further to be noted that D. Kannan also has given a statement. It is further seen that in the statement dated 4-1-1995 Shri Kannan had stated that he made a mistake in his statement dated 28-12-1994 by referring Gulabchand Sanghvi. He stated that Gulabchand and Sanghvi are different persons and Sanghvi had given him all documents with respect to the five firms and he also stated that these firms are owned by Ishwarlal Surana and Raichand Mardia. He had also stated that he made attempts to trace Sanghvi, Ishwarlal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to connect the petitioner in the contravention inasmuch as Mr. Dudani s statement clearly inculpates not only himself but also the petitioner. It can, therefore, be used as substantive evi dence connecting the petitioner with the contravention by exporting foreign currency out of India. Therefore we do not think that there is any illegality in the order of confiscation of foreign currency and imposition of penalty. There is no ground warranting reduction of fine. 49. It is therefore seen that this statement of the co-accused clearly goes to show Ishwarlal Surana and Raichand Mardia requested him for early clearance of the goods. He also stated that they are the owners of M/s. Sargam Enterprises. This is further corroborated to the fact that Shri Sanghvi was working with them and Sanghvi s brother-in-law opened the bank accounts by putting fictitious name as Somasundaram in the records of the Bank. Merely because a statement is retracted, it cannot be said that the same is untrue. In the decision reported in [1997 (89) E.L.T. 646 (S.C.) = 1997 (1) SCC 508 in the case of Surjeet Singh Chhabra v. Union of India and Others the Hon ble Supreme Court held as follows :- 3. It is true t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Raichand Mardia who are the actual owners of M/s. Sargam Enterprises. Any one of the statements or one of the circumstances may not by itself be sufficient to prove the case against these appellants. But the totality of all the above statements which connects one statement with the other is sufficient to hold that it was Raichand Mardia and Ishwarlal Surana who are the persons who floated M/s. Sargam Enterprises and they were the persons who were pressing Kannan for early clearance of the goods in question. The very fact that they denied about their connection with Kamlesh Sanghvi, which is found to be false, is another circumstance to show their guilty mind. 51. Shri Kannan also has stated in his letter dated 20-3-1995 that he visited the house of Ishwarlal Surana and Raichand Mardia and found that they had left for Rajasthan 3 months back and not yet arrived. The Department also made en quiries in terms of the other two persons and found that they were at large. So also the son of Ishwarlal Surana, Shri Darmendra Surana when questioned had stated that his father Ishwarlal Surana left the house on 24-12-1994 and since then he did not turn up. He had given this statement on 28-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the inculpatory statement of the maker, is not com pletely relieved of his obligation at least subjectively to apply its mind to the subsequent retraction to hold that the inculpatory statement was not extorted. It thus boils down to this that the authority or any Court intending to act upon the inculpatory statement as a voluntary one should apply its mind to the retraction and reject the same in writing. It is only on this principle of law that this Court, in several decisions, has ruled that, even in passing a detention or der on the basis of an inculpatory statement of a detenu who has violated the provisions of the Foreign Exchange Regulation Act or the Customs Act, etc., the detaining authority should consider the subsequent retraction and record its opinion before accepting the inculpatory statement lest the order be viti ated. Reference may be made to a decision of the Full Bench of the Madras High Court in Roshan Beevi v. Joint Secretary to the Government of Tamil Nadu, Public Department etc., 1983 Mad LW (Crl.) 289: 1984 (15) E.L.T. 289: AIR 1984 NOC 103, to which one of us (S. Ratnavel Pandian, J.) was a party. 53. Initially Shri Kannan stated that Gulabchand handed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onted with him he recognised also the said person. Statement was thereafter recorded from him i.e. Gulabchand on 30-12-1994 and he denied the version of the clearing agent and any connection with the goods. On 4-1-1995 he pleaded another statement was recorded from Shri Kannan, Proprietor of the clearing agency and he named another person i.e. Sanghvi who later was identified as one Kamlesh Sanghvi as the one who handed over the documents. He pleaded that the said Kamlesh Sanghvi was not traced and was never produced. The companies whose documents the said Sanghvi used to bring him (to clearing agent) were stated to be five and among these were M/s. Sargam Enterprises importing firm of the goods in question and also one Srinivas Agencies. The proprietor of the latter firm he mentioned was one Shri K.P. Shankaran. What was this K.P. Shankaran he pleaded has not be enquired into by the authorities. He pleaded thereafter a letter had been addressed by Shri Kannan and the authorities on 3-3-1995 wherein he stated that he had done some enquiries on his own and as a follow up of that the authorities visited the premises of the appellants on 16-3-1995 and a further letter was addressed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought in the name of Sanghvi and later on only on 25-4-1994 he mentioned that both Mardia and Surana the appellants herein visited his office and requested for early clearance of the goods in question. He pleaded that Shri Kannan s employee likewise first recognised Gulabchand and later changed his version that it was Sanghvi who gave the papers. He pleaded that as could be seen from the statement of Yuvaraj he accepts whatever Kannan said. He pleaded that both of them were cross-examined and they have stated that their statement was given under coercion and even the ld. Collector also posed questions to them. 60. He pleaded as it is Kannan s statement was not reliable and not corrobo rated in any manner by any evidence. The statement given so far as it is related to the appellants was quite vague and shorn of details and did not inspire confi dence. He pleaded over the period there were improvements in his statement. He pleaded that the authorities also did not question him to elicit details about the information about the appellants connection with him and surprisingly it was totally lacking in the matter of eliciting the details. 61. He pleaded that appellants were made victi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the ap pellant Surana when he appeared before the authorities stated that he had gone to Rajasthan and this fact of his having gone out of Madras in the last week of December, 1994 was confirmed by his son Shri Dharmendra Surana in his statement before the authorities. He pleaded that for the first time his name was mentioned or he was implicated only in January, 1995 and there was no need for him to disappear in December for the reason of the importation of the goods. He pleaded as it is there is no attribution that Shri Venkatesh was asked to run away at the instance of the appellants. Shri Surana he pleaded had left even before the detection of the case. He pleaded that the ld. lower authority has mentioned in para 63.1 of his order that Shri Kannan has stated that Shri Kamlesh Sanghvi was employee of Shri Surana. He pleaded that this was contrary to the facts as Shri Kannan in none of his statements has said so. He pleaded that ld. lower authorities, observations in para 63.2 to say that Surana and Mardia were identified from the beginning was not correct as their names came to be men tioned by Shri Kannan only subsequently. He pleaded that ld. lower authority has heavily rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aded that on investigation by the departmental officers the appellants had the import and export code allotted to them in August, 1994 and computer of the customs accepted the Bill of Entry. The appellant he pleaded had no information about the cancellation of this code. He pleaded that no knowledge has been attributed to the appellant regarding smuggling. He pleaded that the person who gave the appellants documents for clearance namely Shri Kamlesh Sanghvi escaped and no statement was recorded from him. He pleaded that Shri Kannan proprietor of the CHA firm had suffered bereavement on 26-12-1994 and was not in state to give a statement and referred to the pleas as taken before the ld. lower authority in para 40.19 which is reproduced below for convenience of reference : 40.19 The Custom House Agent states that its proprietor, D. Kannan s mother died on 13-12-1994 and he was mentally very upset and the 13th day s obsequies was to be held on 25-12-1994. After the function was over on 25-12-1994, D. Kannan s father-in-law died in the midnight on 25/26 December, 1994. It need not be emphasised that D. Kannan was further very greatly upset and was not in the normal frame of mind. He re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for penalising the appellant and cited the judgment of the Hon ble Allahabad High Court reported in 1978 Cr CJ 1690 (DB) and also the judgment reported in 1971 (27) STC 337 (All). He pleaded intention to aid the crime is gist of the abetment and cited the judgment of the Hon ble Supreme Court reported in AIR 1977 SC 666. He pleaded in the facts of the case benefit of doubt should go to the appel lant in the absence of any clinching evidence to hold against the appellants and cited the decision reported in 1992 (60) E.L.T. 433 and 1978 (2) E.L.T. (J159) (S.C.) = AIR 1970 SC 253. 68. I have considered the pleas made on behalf of the appellants and the department. I observe that this is a case where a very clever attempt had been made to smuggle in a very large quantum of contraband. There are no claimants for the same for the reasons recorded by the ld. lower authority confiscation of the goods as held by the ld. lower authority is sustainable in law and the same is upheld. 69. It is seen from the record that the departmental authorities had intelligence about the import of the contraband and their interdiction resulted in the seizure of the goods. The authorities as seen from the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Krishnan Moogapur, Madras 600 101. The name of the proprietors who signed for these firms were indicated in the statement as under: For Sargam Enterprises, the Proprietor was signed as S. Somasundaram. For Manek Traders, the Proprietor was signed as S. Venkatesh. For Srinivasa Agencies, K.P. Sankaran has signed as Proprietor. For Kiran Trading Company, S. Kumar has signed as Proprietor. All the above parties we be lieve only on I.E.C. Code Nos. for filing the Bill of Entry. Shri Kannan explained how the interaction for clearance of goods took place regarding payment of duty and despatch of the goods. It is seen from this statement that no information was elicited as to when for all these firms Shri Sanghvi was dealing with him for clearance of goods whether at any time Shri Surana and Mardia had contacted him or he had got knowledge about any one of these firms belonging to them or that they at any time showed any anxiety about clearance of goods for these firms. This aspect is relevant as one of the factors which has weighed with the ld. lower authority is that Shri Sanghvi has been stated by father of Shri Sanghvi to be employee of Shri Surana. If he was his employee then he wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y me is true and voluntary and I undertake to appear before you as and when required. It is significant that he on his own stated that Shri Surana and Mardia were absconding. On what basis he said that when no question in regard to them was put to him and when the authorities themselves were graping to ascertain the identity of the persons who were responsible for the smuggling and had not even queried Shri Kannan about the involvement of the two only, their name had been brought in as owner of one of the five firms while not coming on record about the owners of other firms. In the subsequent statement of 6-1-1995, the names of other owners were brought on record. Only on 25-4-1995 in his statement he stated that Shri Surana and Mardia were owners of M/s. Sargam Enterprises and they had come to him requesting for early clearance of the goods. It is significant that in his statement on 6-1-1995, he explained as to how the modalities of dealings between him for the purpose of clearance of goods for the five above firms including M/s. Sargam Enterprises were worked out and with whom, he made no mention of Shri Mardia and Surana having visited him. A reading of the statements of Shri K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . K.K. Metal and M/s. Padmavathi Metal according to Mr. Kannan is correct. His evidence therefore on his own showing is not reliable. He has also resiled from this position in cross-examination. 71. The other evidence which has been relied upon by the ld. Collector to hold against the appellants is the letters of father and brother of Shri Kamlesh Sanghvi and statement of his brother Shri Rohit. It is seen that both of them wrote letters to the Customs Authorities to say that Shri Kamlesh was employee of Shri Surana and that they used to contact him at certain telephone numbers which later were ascertained to be of Shri Surana s. Shri Rohit has also stated in a statement later that his brother was working with Shri Surana and it has been further said that Shri Kamlesh had left Madras at the behest of his boss. 72. It is to be noted that both the father and brother of Shri Rohit were not in any way concerned in the matter and yet suo motu they wrote the letters to the authorities. It does not appear to be a normal behaviour when no information is sought by the authorities from them that they should write to the authorities as to for whom he was working. After the letter a statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition is not controverted by the revenue. The other evidence of Shri Kannan that they had visited him and requested him to get the clearance of the goods early. Shri Surana has stated in his statement on 14-6-1995 to a query as to the above that he might not have asked for the above clearance. The words as above are of dubious import. These do not indicate total denial. But at the same time a note has to be taken of the assertion both by Shri Surana and Mardia in their statements that M/s. Sargam Enterprises did not belong to them and that they were not the owners of the consignment in question. Shri Mardia has stated in his statement dated 26-5-1995 that Shri Kamlesh Sanghvi was the owner of the consignment and also the firm in question as heard by him. Their acquaintance with Shri Kamlesh and how they came to know about him has been explained by them in their statements. He had rented a godown on rent from Shri Surana in Ambatur. The possibility of the firm belonging to Shri Kamlesh cannot be ruled out. As it is his brother-in-law Shri Venkatesh who was living with him had signed the Bill of Entry as owner of the goods as Shri Somasundaram. He was living with him. He had introduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on such goods or one thousand rupees, whichever is the greater; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage in the declaration made under Section 77 (in either case hereafter in this section re ferred to as the declared value) is higher than the value thereof, to a penalty not exceeding five times the difference between the declared value and the value thereof or one thousand rupees, whichever is the greater; (iv) in the case of goods falling both under Cls. (i) and (ii), to a penalty not exceeding five times the value of the goods or five times the dif ference between the declared value and the value thereof or one thousand rupees, whichever is the highest; (v) in the case of goods falling both under Cls. (ii) and (iii), to a penalty not exceeding five times the duty sought to be evaded on such goods or five times the difference between the declared value and the value thereof or one thousand rupees, whichever is the highest. It has to be shown that the parameters set out thereunder had been proved. There is nothing to show that the goods had been either paid for or the appellants were concerned or ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Act. That material in criminates the petitioner inculpating him in the contravention of the provi sions of the Customs Act. The material can certainly be used to connect the petitioner in the contravention inasmuch as Mr. Dudani s statement clearly inculpates not only himself but also the petitioner. It can, therefore, be used as substantive evidence connecting the petitioner with the contravention by exporting foreign currency out of India. Therefore we do not think that there is any illegality in the order of confiscation of foreign currency and imposi tion of penalty. There is no ground warranting reduction of fine. It is seen from the above that the statement of the co-accused can be accepted only as piece of evidence on which reliance can be placed without corroboration only in the event the co-accused incriminates himself and also incriminates the other person. Here in the present case in case of the statements recorded from Shri Kannan from time to time in none of these he incriminates himself in anyway about the smuggling of the goods in question. His statement therefore needs to be corroborated. His statement as brought out above is not reliable and in any case cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd filed the same. The Bill of Entry was accepted when the particulars were fed into the computer and thereafter it was processed and the duty was paid and examination of goods ordered by the authorities. The goods were examined in the presence of the representative of the clearing agent. The department had the intelligence about the smuggling of the goods. No incriminating documents connecting the clearing agent with the importation as such have been recovered. The circumstance highlighted against the appellant is that he filed the bill of entry for a fictitious firm whose code given by the import and export authorities had been cancelled. The plea of the appellants is that he had cleared the consignments for the said firm earlier and he had no information about the cancellation of the code number as above. In any case the computer had accepted the Bill of Entry despite the cancellation of the import and export number. I observe that the Customs authorities would have been informed about the cancellation. It is not the case of the department that a public notice regarding cancellation had been issued and the clearing agent was expected to know about this. The computer check when B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the knowledge of ownership of the goods. What has to be shown is that he had the knowledge of the importation of contraband and which has not been done. He does not inculpate himself. In the above view of the matter, I hold that benefit of doubt has to be given to the appellant. 79. The three appeal are therefore allowed. Dt. 15-5-1997 Sd/- (V.P. Gulati) Vice-President POINT OF DIFFERENCE Whether in the facts and circumstances of the case, in the absence of any re liable and sufficient evidence, penalty under Section 112 of Customs Act could not be levied on the appellants and by giving them the benefit of doubt the appeals of the appellants have to be allowed, as held by the Vice President; or Whether in the facts and circumstances of the case, taking the evidence cumulatively the learned lower authority s order of levy of penalty on the appellants is sustainable, as held by Member (Judicial) in his order. Sd/- (T.P. Nambiar) Member (J) 16-5-1997 Sd/- (V.P. Gulati) Vice-President 16-5-1997 80. [Per : Shri V.K. Ashtana, Member (T)]. - The above difference of views is to be considered. Both Hon ble Vice-President and Member (J) have since retired on superannuation. 81. Heard ld. Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bank Account was opened on introduction by Sanghvi and that address thereof could be traced back to where Sanghvi and family resided from 1977 to 1992. 86. Ld. Advocate argued that these facts (para 6) showed that all roads lead to Sanghvi and more significantly, they stop there i.e. no nexus is seen with Mardia and Surana. 87. Ld. Advocate continued to reiterate other admitted facts that in his first statement dt. 25-5-1995 and 2nd statement dt. 26-5-1995 Shri Mardia s deposition is totally exculpatory, denying any connection with these imported goods. Statements dt. 31-5-1995, 1-6-1995 and 14-6-1995 of Shri Surana is also exculpatory totally. He has deposed that he knew Kannan having used his services as CHA earlier and he knew Kamlesh Sanghvi as a tenant of one of the premises of his firm M/s. Decofloor. 88. Ld. Advocate argued that these facts (para 8) show that as 1st time summons to Mardia and Surana were issued U/S 108 of Customs Act, 1962 only on 19-4-1995 for appearance on 28-4-1995, therefore the department s charge that they were abiding is baseless, as they gave their statements soon thereafter. When no attempt was made to summon them earlier, where is their abscon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good evidence, particularly as it conflicted with other documentary evidence. He cited 1996 (82) E.L.T. 129 (T) wherein Hon ble Tribunal had held that when there is a conflict between documentary evidence and a statement, the documentary evidence prevails. In view of all this, C/E of Rohit Sanghvi was not called for and was not fatal. He reiterated Hon ble Vice-President s views in para 72, page 52 of the order recorded. (c) Ld. Advocate further argued that even if statement of Rohit Sanghvi considered to show that Kamlesh Sanghvi was working for Surana, it at best shows that K. Sanghvi was merely working for him but does not establish any nexus between Surana and the consignment, as any employer is not concerned with the actions of an employee for himself and on his own. Further, Mardia is not mentioned at all, and is so not at all implicated. (d) In para 43 of the order, Hon ble Member (J) concludes that a connection between Venkatesh and Sanghvi is established. Ld. Advocate argued that a mere connection does not mean anything and it cannot logically lead to a conclusion that K. Sanghvi handled the import on behalf of Surana. A link between Venkatesh and Sanghvi in no way establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous pressure by the officers who threatened and coerced him. Though this fact was agitated at both original and appellant stages, neither Order-in-Original nor Order of Hon ble Member (J) has commented on this. This evidence on C/E needed to be critically evaluated and hence both Order-in-original and Hon ble Member (J) s order on record are not fully speaking orders. Ld. Advocate further argued that Kannan, in his statements dt. 4/6-1-1995 had deposed that Mardia and Surana were owners of 5 firms including Srinivas Agencies. But it is on record that owner of Srinivasa Agencies is K.P. Sankaran. Therefore, Kannan s statements are not reliable and do not prove anything. He reiterated Hon ble Vice-President s order at page 55, para 75 ibid. (k) Ld. Advocate concluded that documentary evidence showed Kamlesh Sanghvi was not working for Surana. Only knowing him is not enough. Also merely because Surana knew Kannan, it does not establish any nexus. (l) Ld. Advocate then submitted that with respect to para 51 of Hon ble Member (J) s order, the conclusion reached is not correct. Kannan s letter dated 20-3-1995 merely stated that concerned persons were not available. Mere absence does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 1992 (60) E.L.T. 433 - benefit of doubt always to importer 1983 (12) E.L.T. 322 Madras HC - Penalty power under S 112 Customs Act, 1962 to be exercised judiciously Case laws of Mahabir Prasad wherein Allahabad High Court held that suspicion cannot take the place of positive material and prayed for concurrence with Hon ble Vice-President s order. 94. Heard ld. J.D.R. Shri Ravinder Saroop. He reiterated the findings of Hon ble Brother Member (Judicial). Facts had already been outlined and need not be repeated. He argued that in 1986 (24) E.L.T. 308 it had been held that discrepancies should not be allowed to let off the culprit and the chaff should be separated from the grain. He reiterated the findings of Hon ble Member (Judicial) in para 13 of the Order and submitted that as per Bhoormull s case, no mathematical precision of proof was called for. He argued that use of false Importer-Exporter Code could not be detected by Custom House due to huge volume of workload. But it was clear that the importer had used wrong name and address, opened bank account with false information to obtain the code falsely. The address of introducer in Bank was also not correct. Kannan had stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments on both sides as also the views recorded by Brother Hon ble Vice-President and Brother Hon ble Member (Judicial). With due respects to Brother Hon ble Member (Judicial), I cannot subscribe to the learned conclusions reached by him, because of the following infirmities in the conclusions reached therein. 98. In paras 41 44 of his order, Hon ble Brother Member (J) has rejected the documentary evidence led that Kamlesh Sanghvi did not work for Surana on the ground that Rohit and his father were not cross-examined. Ld. Advocate argues that it was so because the letters from them were of not much value, being suo motu and not evidence obtained under S. 108 of Customs Act, 1962. Hon ble Brother Vice-President holds that their suo motu nature, make the documents unreliable. While I agree that suo motu letters raise unanswered questions posed by him, I also find that Hon ble Brother Member (J) s conclusion that lack of C/E vitiates the documentary evidence is not based on any legal principles. It is well laid down that when statements conflict with documents, the latter have more value. Further, now a logical explanation for not cross-examining them is also given. Therefore, I ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime. The case law is therefore not an all fours. 104. The value of evidence of Yuvaraj is not discussed. In view of his admission that he was toeing his employer s views, I am unable to accept the conclusion in para 50. 105. In this case, the offences alleged and confirmed at original stage vis-a-vis the penalties imposed are based on the following types of evidences: (a) Statements of Shri Kannan (b) Statement of Shri G. Yuvaraj (c) Letters of Shri Rohit Sanghvi and his father and the statement of Rohit 106. Shri Kannan is an interested party inasmuch as that he is charged with acts of commission or omission in this illegal import. To exonerate himself, he has to show the actual importer as well as that he had no mens rea and that he acted in good faith by taking normal precautions of his profession. To this extent he is not totally independent witness. Secondly, he has been shifting his stand in this endeavour as has been argued by ld. Advocate for Appellants Shri Surana and Mardia. This argument has not been rebutted. Thirdly, his deposing that Mardia and Surana came to him for requesting early clearance is without any corroborative backgrounds i.e. when they came, what was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble Vice-President in his dissenting order has analysed at length, why did they write their letters suo motu to Customs? Secondly, these are not statements recorded under Section 108 of Customs Act, 1962 and so need further corroboration. Thirdly, as ld. Advocate Nankani has argued in detail, in the absence of examination of his mother, they tend to be hearsay. Even if in spite of these infirmities, if we still accept that they have some value and as statement of Rohit is also recorded under S. 108 of Customs Act, 1962, then we have to evaluate them in the face of contradictory evidence led in defence i.e. that Mardia/Surana deny such an employment and doc umentary evidence has been led in this behalf. Such documentary evidence cannot be brushed away lightly. The net result is same as in para 20 - nothing is clear except that nowhere in their deposition Mardia is mentioned. 109. Apart from these, there are other facts to be considered : (a) Kamlesh Sanghvi and Venkatesh are missing (b) Mardia and Surana s whereabout were not even divulged by relatives for some length of time; and (c) Rohit Sanghvi used to contact brother Kamlesh on Phone numbers be longing to Surana. 110. Each of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence is neither compatible with the guilt, nor totally incompatible with the innocence, as there is no clear predominance of either. An objective and judicious approach in these circumstances would be to give benefit of doubt to the appellants S/Shri Mardia and Surana. 112. As far as the CHA firm and its partner Shri Kannan is concerned, I find that there is nothing to show that he was knowingly involved in the smuggling activities, that he was the recipient of any extra consideration out of this business other than his normal professional fees, or that he had deliberately misled Customs by subscribing to false declarations wilfully. It is not that the importing firm is totally fictitious. It is not the case that the person who hired his services does not exist - he is only now not traceable. Even duty assessed (on goods declared) was paid. No evidence is led to show that he knew that the consignment contained contraband or that the Import-Export Code was fictitiously obtained and hence cancelled. There is no charge that he wilfully obstructed in investigations. Therefore at best he was negligent in his work as a responsible CHA - negligent because he did not visit or got verified ..... X X X X Extracts X X X X X X X X Extracts X X X X
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