Whether the stay application of the Revenue is required to be rejected as proposed by Member (J).
2. I have perused the Order passed by the Hon'ble Member (J) as well as the order passed by the Hon'ble Member (T).
3. Shri M.K. Gupta, Ld. JCDR appeared on behalf of the Revenue. He reiterated the order passed by the Hon'ble Member (T). The Ld. JCDR also reiterated the Revenue's Order of the Board dated 22.1.2003. He particularly drew my attention to para 3 thereof, which is reproduced as under:- 3. The aforesaid findings thus prima-facie indicated that the said car was unauthorisedly imported in contravention of the restriction imposed under Import Trade Control Order Public Notice No. 3 (RE-2000) 1997-02 date 31.3.2000 by Shri Aditya Singh in the name of Shri Gangaram Kerkar by resorting to hawala payment and that the said car had been shipped to India by M/s. Nirvana Trading Company, Dubai who were the importers of rags at Dubai exported by M/s.
Quality Apparels Pvt. Ltd., of Shri Aditya Singh being the co-conspirators in the said drawback fraud. On account of the violations/liabilities of the said car to confiscation under the provisions of Section 111 (d) and 111(m) of the Customs Act, 1962 were invoked by way of Show Cause Notice wherein penal liabilities of Shri Aditya Singh and G.P. Kertkar were also invoked under the provisions of Section 112 of Customs Act, 1962.
4. Shri S.N. Kantawala, Ld. Advocate appeared on behalf of the respondent. He reiterated the Order passed by the Commissioner. He also drew my attention, to para 3 of the Member (Judicial)'s Order, which is reproduced as under: 3. We have heard both sides. The Commissioner has considered all aspects including the fact that loan was given by Shri Aditya Singh to respondent only for paying the duty on the car after mortgaging the car for collateral security and that the Public notice in question does not stipulate any condition for possession of car prior to its importation into India and the recovery of blank invoice of M/s. Dollar Auto Sharjah (car dealers) from M/s. Quality Apparels Pvt. Ltd. does not establish that the respondent was only a name lender for Shri Aditya Singh in view of the fact that the respondent did not claim that he had purchased the car from M/s.
Dollar Auto but from a used car dealer in Karama used car market in Dubai. The respondent also undertakes not to dispose of the car pending the appeal, and further undertakes to produce it for inspection by Customs, if called upon to do so. In the light of the above, the plea of the Revenue that the car is liable for absolute confiscation and that the Commissioner's order should be stayed as otherwise the car will be released to the respondent, is not prima facie tenable. No satisfactory ground has been brought out for exercise of our inherent powers. We, therefore, reject the stay application.
He further drew my attention to the following provisions of the Policy PN-3 (RE-2000)/1997-2002 dated 31.3.2000 for import of car: 1. "In exercise of powers conferred under paragraph 4.11 of the Export and Import Policy 1997-2002, and in suppression of Public Notice No. 3(PN/97-02) dated 31.3.1997, as amended from time to time, the Director General of Foreign Trade hereby amends the Policy/procedures for the import of car and automobile vehicles, effective from 1.4.2000 as under: 2. Passenger cars/jeeps/multi utility vehicles etc. which are in the restricted category may be imported without a licence on payment of full Customs duty by the following categories of importers: a. Individuals coming to India for permanent settlement after two years' continuous stay abroad; b. Resident Indians presented with a car as an award in any international event/match/competiton; e. Companies incorporated in India having foreign equity participation; g. Charitable/Missionary institution registered with the Ministry of Welfare and the Ministry of Home Affairs, Government of India; h. Honorary Consuls of foreign countries on the recommendations of the Ministry of External Affairs Government of India; i. Journalists/Correspondents of foreign news agencies having accredition certificate with the Press Information Bureau, Ministry of Information and Broadcasting, Govt, of India.
3. All the above categories shall be entitled to import only one vehicle except categories (e) and (f) which has been entitled to import maximum of three vehicles. Persons in Category (d) shall be entitled to import only specifically designed vehicles suitable for use by handicapped. All such imports shall carry a "NO SALE" condition of two years which shall be endorsed by the Customs authorities on the passport/registration documents at the time of import and by the Regional Transport Authorities which such vehicles are presented for registration in India. All such imports, except by the physically handicapped persons, shall not involve any foreign exchange remittance from India directly or indirectly. The DGFT may, however, permit relaxation of these conditions or imports by any other category not listed in the Pubic notice in special circumstances.
4. All bonds/bank guarantees executed by importers of cars/two wheelers etc. prior to 31.3.97, where the vehicle has not been transferred, shall be deemed to have been discharged with the issue of this Public Notice. This issues in public interest.
He also drew my attention to paras 30 and 31 of the Order-in-Original, which are reproduced as under for the sake of reference: 30. However, in the Show Cause Notice, the name of the person who has issued the cheque has not been mentioned. Further, even the name of the beneficiary in whose favour the cheque has been issue (sic), has also not been mentioned. It has not been ascertained whether the cheque was issued from Indian branch or overseas branch of a bank and whether the bank was Indian or of any foreign country. To prove that the hawala transaction is involved in the purchase of car, all these aspects should have been investigated in detail as these are very important factors to establish that some sort of adjustment has been made by Shri Aditya Singh and Shri Richie or any such other person in Dubai for collection of amount in India and its illicit transfer to Dubai through hawala channel or else this should have been established beyond reasonable doubt that Shri Richi has made adjustment from the export proceeds due to M/s. Quality Apparel Exporters P. Ltd. on account of their exports consignments imported by his firm M/s. Nirvana Trading Co. L.L.C., Dubai.
31. Here it is important to establish that remittance of foreign exchange has been effected from India directly or indirectly.
However, it is noticed that this allegation has not been established beyond reasonable doubt. It is noticed that the chain of entire investigation is broken at the stage of the role played by Shri Arif Shri Jairaj Anandan has stated that he cannot identify Shri Arif as he met him in an unfamiliar place. It is not understood how a place of meeting can affect the identification of a person. It is not clear as to why and how Shri Jairaj Anandan has accepted cheque for a such huge amount from a person without knowing him and why he has given the cheque to Shri Richie. Investigation has not established whether the proceeds of the cheque was used to purchase the said car. Investigation talks about one blank invoice of M/s. Dollar Auto, Sharjah and the statement of Shri Sanjay Somaiya, Manager of M/s. Dollar Auto, stating that the said vehicle has not been sold by them to Shri Gangaram P. Kerkar. This finding does not lead anywhere in the direction of alleged involvement of hawala channel. Here, it is noticed that even the importer has never stated that he has purchased the car from M/s. Dollar Auto, Sharjah. As stated, if Shri Sanjay is not the supplier of car, then the relevance of alleged handwritten note of Shri Aditya Singh directing Shri Sanjay to use passport of Shri Gangaram P. Kerkar to send car on T.R. basis, looses its worth as corroborative documentary evidence. Therefore, the statement of Shri Sanjay Somaiya, Manager of M/s. Dollar Auto regarding not having sold the said car to importer Shri Gangaram P. Kerkar does not substantiate any findings of alleged violation of hawala transaction as stated in the investigation. The investigation agency should have identified the overseas seller of the said car and any tangible evidence regarding alleged hawala transaction could have been established by showing that the money for purchase of the said car originated from India or the money utilized for the purchase of the said car had been compensated by any other mode like adjustment in export proceeds or such similar manners. Thus, from the perusal of facts available on records and findings of investigation as mentioned in Show Cause Notice, it is not proved beyond reasonable doubt that foreign exchange remittance has taken place from India directly or indirectly for purchase of the said car and thus any violation on this account does not appear to have taken place. Here, it is noticed that based on suspicion investigation can be initiated but based on suspicion nobody can be held guilty of committing any offence. Suspicion provides scope for investigation and investigation has to convert the suspicion into definitive facts. Here, the investigation does not appear to be complete and conclusive as the circle is broken in between in the form of Shri Arif who has not been identified so far. There is a plethora of judgments wherein Tribunals held that conviction cannot be based on mere suspicion. In case of Tayyab Junus Khatri v. Commissioner of Customs (Prev.), MumbaiChandrakant U Shah v. CC 2000 (123) ELT 730, and Jain Mehtra v. CC Tribunal has held that although the strong ground for suspicion notwithstanding, suspicion could not take place of conviction. In case of Sanjay Dhawan v. CC, Delhi has held that benefit of doubt is extendable to petitioner in absence of clinching evidence of connivance or collusion.
Further in support of his contention he relied on the decision of the Bombay High Court in the case of Abdulla Kalingal Andu v. Union of India . He forcefully contended that he fully relies on the findings of the Commissioner. He also submitted that the car is rotting for the last two years. The same does not come within the prohibited goods. He also referred to grounds of stay in the appeal particularly paras 6.1 and 6.2 which are as under: 6.1 In view of the evidence on record and investigations, there are greater chance of success of the appeal and for absolute confiscation of car.
6.2 The car was imported as part of unaccompanied personal baggage item and for reasons stated in memorandum of appeal, the car is liable to absolute confiscation.
He contended that the show cause notice does not propose absolute confiscation. He also contended that the so-called sale-deed does not mention any consideration and the date is also left blank. Therefore, the same cannot be relied, he also contended that no independent documents to corroborate the allegations of the Revenue have been brought on record. He also submitted that an undertaking has been given not to dispose of the car and to produce the same as and when required.
In view of what has been contended by him, he reiterated the Order passed by the Member (Judicial) and submitted that the stay application filed by the Revenue may be rejected.
5. After hearing rival submissions, perusal of the records and the case law relied on by the Ld. Advocate, I find that mainly two conditions are required to be satisfied in such a case subject to residence abroad for the purpose of import of a car viz. (1) that the import does not involve any foreign exchange remittance from India directly or indirectly, (2) such imports shall carry out no sale condition of two years. I am unable to gather from the records any evidence with regard to out go of foreign exchange from India. I also find that the respondent has already given an undertaking not to sell the vehicle and to produce the same as and when required. Besides, these two conditions no other conditions have been stipulated in the policy and, therefore, reading into any other condition in the policy will be extraneous to the provisions of the policy. The Bombay High Court's decision relied on by the Ld. Advocate in the case of import of gold states that the ownership of gold and silver is not a criterion for its eligibility to be imported by the passenger. It is also stated that in fact passenger can import the gold so long as they satisfy the conditions of stay abroad and those relating to payment of duty in foreign exchange.
6. Thus, on an analogy drawn for the said decision, the question of ownership is irrelevant in this case. As regards the outgo of foreign exchange, nothing has been brought on record as a piece of evidence to show that there has been any direct/indirect remittance of foreign exchange from India as stipulated in the Policy. Other conditions being satisfied, I find that it is difficult to grant stay in the matter as prayed by the Revenue. Accordingly, I concur with the Order passed by the Member (J)