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TMI Blog2004 (12) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... n that Nokia brand mobile phones and watch movements of foreign origin were smuggled into the country by one Shri Joitkumar Jain and stored in his premises at Room No. 9, 1st floor, Rassiwala Chawl, R.S. Nimkar Marg, Mumbai 400 008, the said premises was searched by the officers on 17-9-2003. The search resulted in the recovery of 2940 pieces of Nokia brand mobile phones and 54,000 pieces of watch movements totally valued at Rs. 1.58 crores approx. On being asked, the owner of the said premises, Shri Joitkumar Jain could not produce any stock register or customs duty paying documents in respect of these goods. Hence, the said goods were seized under panchnama dated 17-9-2003 under a reasonable belief that they are smuggled and were handed over to the appellant under supratnama for safe custody. The appellant produced photocopies of invoice of M/s. Rishabh Industries, Mumbai, for watch movements and two incomplete bills of entry having only one page each in respect of import of Nokia mobile phones by one M/s. Time Land Trading Co., Vasai. Later on, the appellant was reluctant to hand over the seized goods to the department, the officers with the help of police under panchnama dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; octroi was paid on 7-10-2003; (iv) MRP stickers were not found on boxes at the time of seizure; (v) Payment to the sellers was not made immediately; (vi) Sanjay Singh was not available for investigation; (vii) There is no explanation about the disposal of the balance stock of the said phones by M/s. TLTC. (h) Bill of entry shows goods are of Korean origin. The goods however have no indication of such origin. It does not mean that hey are not of Korean origin and not covered by the bills of entry. (i) Respondent erred in over-emphasising the statement of the appellant that he was General Manager of M/s. TLTC. (j) Liability to pay octroi is on the seller. On learning that the octroi has not been paid, the appellant has opted to pay the octroi himself. (k) The statement of the CHA does not believe or contradict the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, thus as per the judgment in S.K. Chains v. C.C., [2001 (127) E.L.T. 415], the burden under Section 123 is discharged by the appellant. (h) Respondent failed to appreciate that the premises of M/s. Rishabh Industries in Mumbai are owned by the wife of the appellant or that M/s. Rishabh Industries have borrowed money from the appellant. It does not mean that the watch movements are smuggled and that the bill is a cover up. (i) Thus the watch movements are fully explained and they are not liable to confiscation and no redemption fine can be imposed. III. In regard to penalty, the appellant submitted: (a) Since goods are not liable to confiscation under Section 111(d), no penalty under Section 112 can be imposed. (b) Order-in-original shows pre-determined, prejudiced or biased mind and is based on assumptions, presumptions, inferences, conjectures and surmises. (c) Section 112(a) & (b) are mutually exclusive and therefore no pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that he had not seen the part numbers etc. inscribed on the watch movements themselves as he did not have the magnifying glass with him during the course of search and seizure. He also deposed that the numbers written on the covers containing the samples tallied with the numbers on the cartons. The appellant's contention that because incorrect part numbers were written in the panchnama the whole proceedings got vitiated cannot be accepted. It is fact that the watch movements were seized from the premises of the appellant. There is, therefore, a recovery. Any lacunae in the panchnama do not vitiate the seizure itself. The panchnama is drawn in the presence of the appellant and a copy of which was given to him. It is well settled that illegality of search does not effect the validity of the seizure of goods. Nor it vitiates the recovery of the articles or the subsequent trial ACCE v. Wilfred Sebastian & others [1983 (12) E.L.T. 122 (Ker.)]. If the person from whose possession the goods were seized does not object to the manner in which the panchnama is drawn in his presence, he cannot later turn round to say that the seizure is illegal. 6.Insofar as non-production of Pop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1999 (110) E.L.T. 292 (S.C.) = AIR 1966 SC 955] held that Indian Evidence Act applies only to all judicial proceedings and that it has no application to quasi judicial or departmental proceedings. The same view was expressed in the case of U.O.I. v. K.T. Verma (AIR 1957 SC 882). Again in the case of Employees of Firestone Tyre v. Workmen (AIR 1968 SC 230) and Central Bank of India v. Prakash Chand (AIR 1969 SC 983), the Apex Court held that in a domestic enquiry, technical rules of evidence do not apply. In the light of these decisions, one has to see how fatal it is to the case when a person whose statement is relied upon is not produced for cross-examination. A departmental officer can only summon a witness but cannot ensure his presence unless he goes to the route of prosecuting him for non-attendance. The Commissioner made every attempt to ensure the presence of Popat Rambia. There are important aspects in the statement of Popat Rambia which can be relied upon even otherwise. The fact that he has sold some watch movements in December, 2002 is admitted by all concerned. The Commissioner was right in holding that the watch movements sold by M/s. Rishabh Industries in September, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was further urged that the burden was wrongly placed on the appellant. Repelling these contentions the Apex Court held in the case cited supra that although the burden is on the Customs authorities, they had discharged that burden by falsifying in material particulars the story put forward by the appellant. The court further held that a false denial could be relied upon by Customs authorities for the purpose of coming to the conclusion that the goods had been illegally imported. In our opinion, these principles applied by the Supreme Court in the above cases have not been set aside by any subsequent decisions of the Apex Court. Thus, these principles hold the field in spite of many decisions to the contrary by lower judicial forums. We also observe that an officer investigating into an offence under the Customs Act can legitimately ask the person with whom foreign marked goods are found as to where he acquired the goods from. By doing so he is only pursuing an investigation. In none of the cases cited by the appellant except in the case of Vikram Jain [2003 (158) E.L.T. 205] any reference is made to the law as laid down in the case cited supra. Even in Vikram Jain's case, the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The department is able to falsify the version presented by the appellant. As per the ratio laid own in Kanungo's case cited supra the department can come to a conclusion that the goods are smuggled into the country. The Commissioner also relied on the fact that the appellant was working as a General Manager in M/s. TLTC till the other day and so could not have purchased such a huge quantity of telephones from his previous employer. He also laid stress on the fact that the seller (M/s. TLTC) has made himself scarce during the investigation. We find that the department has sufficiently falsified the explanation of the appellant that the goods seized from him were legally imported into the country. Insofar as the department is concerned, it is not required to establish its case with mathematical precision. The present import policy does not restrict the import of mobile phones but that does not mean that such phones are not smuggled into the country to avoid customs duties. 12.The Commissioner held that the appellant is liable to penalty under Section 112 of the Customs Act, 1962 (para 59). In this regard, the learned Advocate argued (that penalty has been imposed under Section 112( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm. All these attempts made by Shri Joitkumar Jain prove his full and wilful involvement in dealing with these smuggled goods which have been held liable to confiscation. He has been found keeping and purchasing such goods which he bad reasons to believe were liable to confiscation under Section 111 of the Customs Act, 1962. (Emphasis added). His these omissions and commissions and dealing with such goods have rendered the same liable to confiscation. As such, Shri Joitkumar Jain is liable to penalty under Section 112(a) and 112(b) of the Customs Act, 1962." 13.From the above, it is evident that the Commissioner was intending to impose penalty under Section 112(b) of the Customs Act. The mention of Section 112(a) in the order appears to be unintentional and is of no consequence. Merely a mention of Section 112(a) in addition to Section 112(b) in the order is not fatal to the imposition of penalty under Section 112(b) when the allegation and finding point out that Section 112(b) is invoked. Imposition of penalty of Rs. 15 lakhs in a case where the value of the smuggled goods is Rs. 1.58 crores is not excessive. We, therefore, uphold the penalty under Section 112(b) of the Customs A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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