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TMI Blog2006 (4) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... eign-origin were stored in a godown of one Uma Chawla at 2, Hide Road, Kolkata-43 and pursuant to such information, the officers of the DRI visited the godown. The officers had requested Sri Subhas Chawla, the husband of the proprietor, to show the relevant documents showing payment of duties in respect of the goods stored at that time in the said godown. (b) From the physical verification of stocks and the godown record, seven different items of goods were found. (c) On being asked, Sri Subhas Chawla could not produce any document in support of those seven different items of goods and he said that the goods were deposited in his godown by Sri Man Singh, the proprietor of Man Singh Transport. On being asked by Sri Chawla, Sri Man Singh came to the godown and identified the goods. Man Singh admitted the fact that the goods were brought to the godown through his transport, but he also could not produce any document in support of the payment of duty. The goods were accordingly seized on reasonable belief that those were smuggled/imported without payment of duty. (d) On 28th August, 2002, one Sri Kunal Jhunjhunwala, the authorized signatory of M/s. Swastik S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the working of the firm was looked after both by himself and his wife and that the fabrics of foreign-origin found through search on 23rd August, 2002 from their godown were received by him by Man Singh and that apart from the three road-challans issued by the International Marketing, he did not have any other challan/bill of entry etc. He further stated that he did not know the name of the owner of the goods and the goods were seized after the measurement of the roles was written down. (g) The samples of the fabrics were sent to the Chemical Laboratory of Customs House, Kolkata and those were found to be non-notified items. (h) A voluntary statement by Samir Saha, was recorded under Section 108 of the Act and in the said statement he stated that he had the business of purchasing and selling of imported fabrics for the last eight months and that he generally used to sell the goods to various customers of small quantity. He disputed the allegations that Item Nos. 3 to 5 belonged to him. He, however, stated that the goods mentioned under Serial Nos. 6 and 7 belonged to him and he had with him the bill evidencing the payment of duty for goods of Serial No. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue to prove that those are smuggled goods. According to Mr. Banerjee, it would appear from the Chemical Examiner's report that all the items of the goods contained synthetic fabric and as such, those are very much notified items in terms of Section 123 of the Act and once notified items are found from the godown of Subhas Chawla and Uma Chawla, there was no justification of allowing their appeals. 7. As regards Man Singh, the transporter, Mr. Banerjee contends that in his statement under Section 108 of the Act, he having admitted that he brought those items to the godown, the Commissioner of Customs rightly imposed personal penalty upon him for taking active part in concealing those notified items without any payment of duty and the Tribunal had no sensible cause of allowing the appeal filed by Man Singh. 8. As regards Samir Saha, Mr. Banerjee contends that it would appear from the voluntary statement of Samir Saha itself that he claimed to be the owners of the Item Nos. 6 and 7 and even asserted that he had documents to show payment of duty in respect of Item No. 7 and if those documents were not subsequently filed, he would pay the required amount of duty and fine. As regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h means the balance of 48.6% was fabric comprised of polyester yarn and viscose. Synthetic yarn present there was only 87.6% of 48.6% of the fabric and 12.4% of 48.6% was viscose. The said fabric is, thus, mainly made of polyamide (Nylon) Flock/ Dust and Viscose and not of synthetic yarn and therefore, the item is not covered by the Notification issued under Section 123 of the Act, 1962. 12. As regards Item No. 7, according to Mr. Chowdhury, the test report confirmed that non-woven fabric is composed of polypropylene staple Fibres bonded together. According to him, the said item is not made of synthetic yarn and as such, does not fall within the expression "fabric made wholly or mainly of synthetic yarn" and thus, is not included in the notification issued under Section 123 of the Customs Act. 13. Mr. Chowdhury further contends that "yarn" and "fibres" are two distinct commodities under the Customs Tariff Act and Chapter 55 under Section XI of the 1st Schedule of the Customs Tariff Act, 1975 deals with Synthetic and Artificial Fibres and fabrics made thereof whereas the Chapter 54 under Section XI of the 1st Schedule of the Customs Tariff Act, 1975 deals with synthetic and arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 5 are concerned, sufficient materials have not been placed by the Revenue to connect Sri Saha with those items and Sri Saha himself has also not claimed the ownership of those goods. It appears that statement of Man Singh, the transporter, on the question of ownership of the Item Nos. 3 to 5 is confusing. Moreover, simply on the basis of statement of Man Singh in this case, the Commissioner of Customs was not right in his approach in imposing personal penalty upon Sri Saha. It is now settled law that in order to impose personal penalty, either the items should be recovered from the person concerned or his link or involvement in the act of passing out or concealment of the smuggled goods must be proved. Moreover, we find substance in the contention of Mr. Chowdhury that if the statement of Man Singh is relied upon for the purpose of penalizing his client in respect of Item Nos. 3 to 5, the entire statements recorded under Section 108 of the Act should be accepted unless the ex-culpatory portion is found to be inherently improbable. (See: Nishi Kant v. State of Bihar reported in AIR 1969 SC 422). The statement of the Man Singh that he brought Items Nos. 3 to 5 at the direction of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e unable to accept the contention of Mr. Chowdhury that such statement was made under any compulsion or on the ground that he was unaware of the effect of the statement under Section 108 of the Act. 23. We, therefore, find that the Tribunal committed substantial errors of law in setting aside the order of confiscation in respect of the Item Nos. 6 and 7 as also the imposition of personal penalty upon Samir Saha at least for Item Nos. 6 and 7. 24. We, therefore, set aside the order passed by the Tribunal and restore the order of confiscation of Item Nos. 3 to 7 and imposition of personal penalty upon Uma Chawla, Subhas Chawla and Man Singh. So far Samir Saha is concerned, he having been found to be the owner of two of the five items and having been found to be guilty for non-payment of appropriate duty in respect of two of the items only, we reduce the personal penalty of Rs. 5,00,000/- imposed by the Commissioner of Customs to that of Rs. 2,00,000/-. Samir Saha is also entitled to redeem item Nos. 6 and 7 on payment of appropriate duty prescribed for redemption. 25. The appeal is, thus, allowed to the extent indicated above. In the facts and circumstances, there will be, how ..... X X X X Extracts X X X X X X X X Extracts X X X X
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