1. When the case was called none appeared on behalf of the respondent.
The notice issued to the respondent was received back with the postal remarks "Addressee Left". In these circumstances the appeal is taken up in the absence of the respondent. The brief facts of the case are as under: On 28.1.1996, one passenger namely Satpal Kanojia S/o. Sh. Jhau Ram holder of Passport No. C-670801 resident of M/s. Pal Dry Cleaner, G.T. Road, Goraya District Jallandhar (hereinafter called the pax) arrived at IGI Airport from Dubai by Emirates flight No. EK-702. The pax on arrival from Dubai reported at customs counter no. 14 and declared one colour T.V. Sony KCV-14, one Radio Cassette Recorder Sony CFSW-4355, 42 Gold Biscuits of 10 tolas each of 'Johnson Mathey London' weighing 4-914 Kg and one Aiwa Music System NSX-999 and personal effects. The passenger had paid customs duty on Colour Television, Radio Cassette Recorder (RCR), 42 Gold Biscuits and Music System vide B.R. No. 44873 dated 28.1.1996 amounting to Rs. 123708/- (Rupees one lakh twenty three thousand seven hundred eight only). After clearance from customs counter, while he was going out, on suspicion Satpal Kanojia was diverted by the Custom Officer for screening of his baggage through X-Ray machine. His baggage consisted of 4 pieces of baggage, two of which were check in and another two were carried as hand baggages. His check in baggage i.e.
one dark blue coloured 'Carona' suitcase bearing tag no. EK-072698 and the other a bundle (potali) wrapped with a printed green white bed sheet without any baggage tag were screened through the x-ray machine. On screening the dark blue coloured suitcase nothing incriminating was noticed but when the bundle (potali) wrapped with the printed green and white bed sheet was screened through the x-ray machine, some dark black item in unusual shape was noticed in the colour T.V. The hand baggage of the pax which consisted of a brown coloured zipper rexine bag and a Sony brand Radio Cassette Recorder CFSW-4355 were also screened through the x-ray machine. On screening the hand baggage nothing incriminating was noticed in the zipper rexine bag but when Radio Cassette Recorder was screened, some objects were noticed in the speaker of the Radio Cassette Recorder.
The pax was asked whether he was carrying any contraband goods like gold etc. or had he declared all the goods, the pax replied that he had already declared the gold and all other items which he was carrying and had already paid the customs duty thereon. Thereafter the pax along with this baggage was taken inside the preventive room in the Arrival Hall and two independent witnesses were called. In the presence of the witnesses, the pax was again asked whether he was carrying any contraband goods or any undeclared goods like gold etc. to which he again stated that he was carrying gold and other items and on which he had already paid the customs duty. Then the 'Sony' RCR and its speakers were unscrewed which resulted in the recovery of 3 pieces of 'ERICSSON' brand cellular phone and 3 pieces of chargers from the empty space inside the speakers. The dark blue coloured suitcase was opened by the pax and it was found to contain two pieces of blankets. The bundle (potali) wrapped with printed green-white bed sheet was opened which was found to contain two cartons of AIWA NSX-999 Music System with a pair of Speaker and one carton containing 'Sony'- 14 inches Colour Television Model No. KVC-14. The carton containing the Colour Television was opened and ten pieces of Ac/Dc adaptors and two pieces of battery packs of Video Camera were recovered. The cabinet of T.V. was unscrewed and the back-cover was removed which resulted in the recovery of seven pieces of 'ERICSSON' cellular phones wrapped in polythene pouches affixed to the back of the picture tube with the help of adhesive tapes.
Satpal Kanojia, the pax stated that all the goods except the gold and the personal effects were given to him by one Beant Singh in Dubai and these were to be handed over to Kartar Singh who had come from Ludhiana and was standing outside the customs Arrival Hall of the IGI Airport. Immediately thereafter the customs officers took the pax and the witnesses outside the Arrival Hall to identify Kartar Singh. In the presence of the witnesses the pax identified Kartar Singh, then the customs officers brought Kartar Singh, pax and the witnesses in the Preventive Room which is inside the Arrival Hall. Kartar Singh admitted that the description of the goods tallied with the description of the goods sent as per message conveyed by his father.
On demand the pax could not produce any evidence, documentary or otherwise, for the lawful possession/import of the above said goods.
Ten pieces of Acc adaptors, ten pieces of 'ERICSSON' brand cellular phones, ten pieces of chargers, two pieces of battery packs of video camera along with the Colour Television and RCR in which concealment was made, were seized under Section 1 10 of the Customs Act, 1962, collectively valued at Rs. 2,85,000/-, on the reasonable belief that the same had been smuggled into the country in contravention of various restrictions/prohibitions on their import and were liable to confiscation under the Act ibid.
In his voluntary statement recorded under Section 108 of the Customs Act, 1962, the pax while admitting the recovery and seizure of the above mentioned goods in the manner as detailed in the panchnama dated 28.1.1996, inter alia, stated that he had been residing in Dubai for the last seven years and had been doing ironing of clothes in a garments company, that he had six children-two sons and four daughters, out of whom two sons and two daughters were married, that this time also that he had came from Dubai for the marriage of his daughter; that his wife lives in Goraya (Punjab) with his children; that the above said Colour Television, Music System and RCR were handed over to him by one Beant Singh at Dubai Airport to hand over the same to his son to Kartar Singh outside the customs Arrival Hall at IGI Airport, New Delhi, in India, that Beant Singh had told him the description of his son Kartar Singh. Beant Singh had given him UAE Dirhams 700 for carrying these goods, that he had done this for allurement of money; that he did not know anything about the concealment of cellular phones in Colour Television and RCR; that he know that he had committed an offence.
The statement of Kartar Singh was also recorded under Section 108 of the Customs Act, 1962. Kartar Singh inter alia stated that they were four brothers and one sister, that he was the eldest, that he was resident of Ludhiana and was a mechanic, that his father Beant Singh was residing in Dubai for the last 10-12 years; that his father had come to India in January, 1996 for 3-4 days; that his father had gone to Dubai on 21.1.1996, that he had received a telephonic call from his father on 27.1.1996 informing him that one Satpal was coming from Dubai by Flight No. EK reaching New Delhi IGI Airport on 28.1.1996 at about 2.30 in the morning; that his father had given the detailed description of Satpal to him; that Satpal would be bringing Television, Music System and RCR in which cellular phones had been concealed; that he should come to Delhi Airport to receive Satpal who would recognize him, that he reached IGI Airport at about 12.00 midnight, that on 28.1.1996 at about 6.00 in the morning Satpal came to him and took Rs. 10,000/- for the payment of customs duty; that after some time Satpal along with some men in plain clothes came out and stated in their presence that except gold and his personal effects, all other goods were to be handed over to him; that Satpal told him that the men accompanying him were customs officers and the other two were witnesses; that customs officers took everyone inside the customs Preventive Room in the customs Arrival Hall where the goods of Satpal, which included one Colour Television, One Deck and one RCR were kept and were similar to what his father had told him over telephone; that ten cellular phones, ten adaptor, ten chargers and two battery packs of video camera were seized by the customs officer in his presence after drawing the panchnama; that the said panchnama was read over to him; Satpal and both the witnesses in Hindi; that never before he had received such goods from Satpal or any other person; that his father had also never brought goods concealed in that manner; that he was to sell these goods in Delhi or in Ludhiana to different shops, that he did not know the address of any such shop who were to purchase such goods.
In a follow up action, the Assistant Commissioner of Customs (Preventive) Chandigarh, was requested to conduct the enquiries/searches at the residential addresses of both Satpal Kanojia and Kartar Singh but nothing incriminating was found from their premises.
The above facts and material evidence reveal that Satpal Kanojia and Kartar Singh have indulged in smuggling activities in an organised manner.
Satpal Kanojia and Kartar Singh were arrested on 28.1.1996.and were produced in the court of Hon'ble ACMM, New Delhi on 29.1.1996.
Import of cellular phones and accessories as mentioned in this panchnama dated 28.1.1996 is restricted under the import-export policy 92-97. The import of cellular phones is permitted only against a licence or in accordance with a public notice issued in this behalf. The above mentioned restrictions are deemed to be prohibitions under Section 11 of the Customs Act, 1962 by virtue of Section 3(3) and 4 of the Foreign Trade (Development and Regulation) Act, 1992. Any such goods imported into India in contravention of the aforesaid prohibition are liable to confiscation under Section 111 (d) of the Customs Act, 1962.
Section 77 of the Customs Act, 1962 provides that the owner of the baggage shall for the purpose of clearing it, make a correct declaration of its contents to the proper officer, and, any goods in respect of which such declaration is not made are liable to confiscation under Section 111(1) of the Customs Act, 1962.
Any person who in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111 of the Customs Act, 1962 or abets the doing or omission of such an act, or who acquires possession of or is in any way concerned in carrying, removing, depositing, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which he knows or has reason to believe, are liable to confiscation under Section 111 of the Customs Act, 1962, is liable to penalty under Section 112 of the Customs Act, 1962.
Any goods used for concealing the smuggled goods are also liable to confiscation under Section 118/119 of the Customs Act, 1962.
Whereas it appears that Satpal Kanojia has imported the goods under seizure into India from Dubai in contravention of the provisions of law as mentioned above. Satpal Kanojia did not declare the said goods under seizure as required under Section 77 of the Customs Act, 1962 and thus by his above said act of omission and commission done in relation to the goods under seizure has rendered the same liable to confiscation under Section 11 l(d) and 111(1) of the Customs Act, 1962 and has also rendered himself liable to penal action under Section 112 of the Customs Act, 1962 and the goods i.e. Colour Television and RCR used for concealing the goods under seizure are also rendered liable to confiscation under Section 118/119 of the Customs Act, 1962.
2. A show cause notice was issued vide C. No. VIII(AP) 10/PandI/6-B/96/ 3833-3834 dated 23.4.1996 to Satpal Singh Kanojia and to Kartar Singh, (who came to receive the passenger) calling upon them, to show cause to the Additional Commissioner (Adj.) IGI Airport, New Delhi as to why the goods under seizure valued at Rs. 2,85,000/- should not be confiscated under Section 111(d) and 111(1) of the Customs Act, 1962 and also why the goods i.e. colour television and RCR used for concealing the goods under seizure should not be confiscated under Section 118/119 of Act ibid and as to why the penalty should not be imposed upon them under Section 112 of the Customs Act, 1962.
3. After adjudication the Deputy Commissioner of Customs order the absolute confiscation of the seized goods under 111(d) and 111(1) of the Customs Act. The Deputy Commissioner also ordered the confiscation of Colour T.V. set and Radio Cassette Recorder used for concealing under Section 118 and 119 of the Customs Act. A personal penalty of Rs. 20,000/- was imposed on the respondent.
4. Satpal Singh present respondent filed an appeal and vide impugned order the learned Commissioner of Customs set aside the penalty imposed on the respondent on the ground that the order imposing the penalty is not legally sustainable as specific Sub-section of Section 112 was not mentioned in the adjudication order.
5. Learned JDR appearing on behalf of the appellant submits that from the facts of the case it is clear that respondent wilfully concealing the goods which are liable to confiscation under Section 111. Hence is liable to penal action under Section 112(b) of the Customs Act, 1962.
He, therefore, submits non mentioning of Sub-section 112 in the show cause notice or the adjudication order will not be fatal to the case of the department. For this purpose he relied upon the decision of the Tribunal in the case of Aganval Udyog v. Collector of Customs, Kandla and cases the Tribunal held as long as the reading of order makes it clear as to which Sub-clause of Section 112 is relied upon for the purpose of imposing of penalty, specific non mentioning will not be fatal to the case of the department. He, therefore, prays that the appeal be allowed.
6. Heard learned JDR and perused the appeal papers. The learned Commissioner in the impugned order after relying upon the decision of the Tribunal in the case of Collector of Customs and Central Excise, Chandigarh and Anr. v. Ajit Singh and Anr. held that the order of imposing of penalty is not sustainable, if order imposing penalty under Section 112 of the Customs Act is passed without mentioning specifically the clause applicable.
7. The Tribunal in the case of Shally Thapar supra relied upon by the Revenue. After considering the ratio of the decision of the Tribunal in the case of Collector of Customs and Central Excise, Chandigarh and Anr. v. Ajit Singh and Anr. held that non mention of Sub-clause of Section 112 of the Customs Act does not vitiate the proceedings when the order of adjudication as well as the show cause notice give sufficient material and evidence on the basis of which the proper penal action is taken against the appellant.
8. The Tribunal in the case of M.V. Chidambaram and Ors. v. Collector of Customs, Madras, and in the case ofBorivli Hosiery Mills v. Collector of Customs and Central Excise, and the same view. In the present case from the facts and evidence on record have spelt duty of the ingredients of Clause (b) of Section 112 of the Customs Act.
9. In view of the above decisions of the Tribunal it cannot be said that mere non-mentioning of Clause 112 resulted in another failure of justice to the respondent.
10. In view of above discussions the impugned order is set aside and the order passed by the Deputy Commissioner of Customs in respect of imposition of penalty is restored and the appeal is allowed.