Full Judgment
2. The facts are that on 10-10-1995, fifteen Gunny bundles were seized by the Customs officials from Platform No. 8 of Old Delhi Railway Station in the reasonable belief that they contained smuggled goods. On opening the said bundles it was found that they contained 5,730 cartons of 'Classic' brand of American blend cigarettes and 930 pieces of Tiger brand Torches of foreign origin, collectively valued at Rs. 11,73,900/-. The three present appellants, who according to the Officers of the Department, were roaming around the bundles in a suspicious manner, were apprehended and interrogated under Section 108 of the Customs Act on the date of the seizure. Appellant Shri Rattan Banik in his statement admitted that six bundles out of the 15 bundles seized containing smuggled cigarettes belonged to him; that he had bought the same from one Sri Surinder Kumar Bhatia of Dimapur; that the said packages were booked from Dimapur; that the cigarettes were smuggled into Dimapur from Burma; that he and two other persons had invested equally in the said cigarettes; that he had taken delivery of three such packets of smuggled cigarettes in the past; that the cost of the cigarettes contained in the packets was approximately Rs. 1,80,000.00; that the cigarettes were sold in Delhi; that he was to earn approximately Rs. 20,000/- on the deal and that the other person involved viz., Sri Surinder Kumar Bhatia had a shop of Electronic Radios etc., in Dimapur. Appellant Sri Surinder Kumar Bhatia in his statement dated 10-10-1995 under Section 108 of the Customs Act stated that he had come to Old Delhi Railway Station to take delivery of four packages of smuggled cigarettes sent by one Sri Pradeep Agrawal of Dimapur; that he was to sell the said cigarettes in the market; that the proceeds of the sale of the cigarettes was to go to Shri Pradeep Agrawal of Dimapur; that he (Shri Surinder Kumar Bhatia) was to earn 2% commission on this deal and that he had taken delivery of smuggled cigarettes sent by Shri Pradeep Agrawal of Dimapur on two occasions previously. Third appellant Shri Sankar Lal Agarwal in his statement under Section 108 of the Customs Act recorded on 10-10-1995 inter alia, stated that five packages out of the consignment belonged to him and that the said packages were sent to him by one Shri Shamshul Huq of Dimapur; that in the past also he had taken delivery of five such parcels each on two occasions and he had made payment after selling the cigarettes on a commission of Re.l per bundle of 10 packets of cigarettes. On the basis of further statements given by the three appellants giving more details, a Show Cause Notice was issued to the present appellants as well as to the other persons mentioned in the statements given by the three appellants. The matter was adjudicated after granting personal hearing to the parties resulting in the impugned order.
3. By the impugned order, the Commissioner found that the cigarettes and torches had been imported into India without valid import licence required under Para 156 of the Import and Export Policy, 1992-97 read with the provisions of Import Trade (Development and Regulations) Act, 1992 and therefore liable to absolute confiscation. He further found that though the goods were not covered by the provisions of Section 123 of the Customs Act and therefore the initial burden to establish an offence in respect of the goods was on the Department, the Department had discharged this burden as there was no document or evidence to show that the goods in question had been purchased or acquired in a legal manner. Since the three appellants had clearly admitted that the goods had been smuggled across the India-Burma border, the offence is clearly established. Further, on the basis of the statements and evidence on record, it was established that appellants S/Shri Rattan Banik, Surinder Kumar Bhatia and Sankar Lal Agarwal were undertaking the job of marketing the snuggled cigarettes and torches to earn commission/profit. Accordingly, the goods were directed to be confiscated absolutely under Section 111(d) of the Customs Act, 1962 and penalties of Rs. 50,000/- each were imposed on the three appellants before us.
4. We have heard Shri Rama Kant, ld. Advocate for the appellants and Shri M.M. Dube, ld. JDR for the respondent Commissioner.
5. The case of the appellants is that they had been implicated in the matter without any basis and the statements given by them were not voluntary and that they were coerced into making the said statements.
Ld. Counsel had submitted that the Panchnama was not prepared on the spot of recovery of goods but at the office of the DRI Officer.
Therefore, no reliance could be placed on the said Panchnama as no nexus could be said to have been established between the goods and appellants on the basis of the Panchanama. He also submitted that no reliance could have been placed on the Supreme Court decision in Surjit Singh Chhabra v. Union of India [1997 (89) E.L.T. 646 (S.C.)] where the goods had been seized from the person of the assessee, whereas in the present case the goods were seized from the Railway Platform and no material connecting the goods with the appellants has been shown excepting the involuntary statements of the appellants themselves. Ld.
Counsel therefore pleaded for setting aside of the penalties imposed on the appellants.
6. Heard ld. JDR who reiterated the findings in the impugned order and submitted that the Hon'ble Supreme Court had held that Customs Officials were not Police Officials and even if there was failure to call Panch witness for cross examination at the time of adjudication, the same would not amount to violation of the principles of natural justice. He also submitted that the statements given by the three appellants fully corroborated the fact of the smuggled nature of the impugned goods and their involvement. The statements were also fully corroborative in material particulars. He further submitted that the Commissioner had taken into account the fact that the appellants were undertaking the job of marketing the smuggled goods on commission/profit basis and therefore they were only a link in the smuggling and disposal of goods of foreign origin. It was for that reason that the penalty of only Rs. 50,000/- each was imposed on the appellants though the value of the goods seized exceeded Rs. 11 lakhs.
7. We have considered the submissions and the plea of the appellants relating to involuntary nature of their statements and failure to allow cross examination of Panch witness etc., at the time of adjudication proceedings. These pleas do not appear to carry conviction in the undisputed facts of their being present at the time of seizure of the impugned goods at the Old Delhi Railway Station on the date of seizure.
Further, the statements given by that three appellants under Section 108 both on the date of seizure and subsequently clearly established the illegal import of the said goods. All the three appellants had given clear and unambiguous statements about despatch of the goods from Dimapur by different consignors and their own involvement in the matter and their interest in obtaining their commission from the consignors.
As regards the admissibility of the said statements on the grounds they were subsequently retracted, we are in agreement with the ld.Departmental Representative that the Hon'ble Supreme Court as in Surjit Singh Chhabra case (supra) had held that statements given to Customs Officials will be admissible in evidence as they were not Police Officials. Having regard to the detailed nature of the statements given by the three appellants and their corroborative nature in relevant particulars, we also find that the failure to cross examine the Panch witness or seizing officers have not resulted in any failure on the part of the lower authority to observe principles of nature justice.
8. Taking all the relevant considerations into account, especially the fact that the three appellants are only receiving commissions and were not the principal players in the smuggling operations, we feel that the ends of justice will be met in the present case if the three appellants S/Shri Rattan Banik, Sankar Lal Agarwal and Surinder Kumar Bhatia are penalised to the extent of Rs. 10,000/- each instead of Rs. 50,000/- each as held by the Commissioner of Customs in the impugned order.
9. Accordingly, we reduce the penalty on the three appellants to Rs.10,000/- each. Subject to the above modification, we reject the three Appeals in the above terms.