1. The appellants herein are aggrieved by the order of the Commissioner of Customs, New Delhi who has confiscated Maruti Car No. DBG-1901 (valued at Rs. 1 lakh) belonging to the appellants, from which computer parts of foreign origin valued at approximately Rs. 11 lakhs were recovered on 25.4.1996, with option to redeem the same on payment of a fine of Rs. 75,000/- and imposed a penalty of Rs. 2 lakhs on appellant No. 1 and Rs. 3 lakhs on appellant No. 2.
2. The brief facts of the case are that on 25.4.1996, DRI officer searched the residence of one Sushil Kumar Verma at Vivek Vihar, Delhi, but nothing incriminating was recovered therefrom. After the completion of the search, Sushil Verma was interrogated about one white Ambassador car bearing Registration No. RSR-6009, which was found parked in the precincts of his residence and he stated that this car was sent to him on the same day by one Narain Agarwal of Shanti Vihar, Delhi and that the car driven by Vinod Kumar reached his house at about 12 noon. Vinod Kumar was also present at the spot. Both Sushil Verma and Vinod Kumar admitted that smuggled computer parts were concealed in a secret cavity in the car and Sushil Verma further stated that one Sushil Gupta and Anil Hans would be reaching his residence in a Maruti car to take delivery of the consignment concealed in the Ambassador car. The car was brought to the DRI officers and its search resulted in recovery of 100 pieces of hard disc drives (computer parts of Seagate make) made in China valued at approximately Rs. 6.9 lakhs, from two secret cavities in the hollow portion behind the head light of the car. The goods were seized under the reasonable belief that they were smuggled and hence liable to confiscation under Section 111 of the Customs Act, since neither Sushil Verma nor Vinod Kumar produced any evidence for lawful import/acquisition, etc. and the Maruti car was also seized. The search of the residential premises of Anil Hans at Ashok Vihar resulted in recovery of computer parts of foreign origin valued at Rs. 10,900/- and search of business premises of Sushil Gupta in Nehru Place resulted in recovery of computer parts of foreign origin valued at approximately Rs. 1.35 lakhs. These goods were also seized by the Customs Officers.
Statement of Sushil Verma was recorded under Section 108 of the Customs Act, 1962 on 25.4.1996 and 26.4.1996 in which he stated that he had met one Narain Agarwal who was dealing in computer parts in Kathmandu, Nepal, that Narain Agarwal told him that the appellants had already been engaged by him to sell computer parts, that he (Sushil Verma) and Narain Agarwal agreed that the goods smuggled from Nepal would be delivered at his residence and he would sell the goods as per Narain Agarwal's directions, that he was to get Rs. 1,500/- from Narain Agarwal for each trip. He stated that on 23.4.1996, he received a consignment of computer parts which was handed over to Sushil Gupta and Anil Hans on 24.4.1996, that on 25.4.1996, Narain Agarwal telephoned to inform him that a consignment of 100 pieces of hard disc drive was reaching his residence in Ambassador car No. RSR 6009 and that he informed both the appellants to take the goods from his residence at about 2 O clock, and that Vinod Kumar reached there with Ambassador car and told him that the computer parts were concealed in the cavities behind the head light. The driver of the Ambassador car corroborated the statement of Sushil Verma in respect of goods seized from the Ambassador car. Statement of both the appellants were recorded in which they corroborated with the statement of Sushil Verma. Sushil Gupta also stated that the goods recovered from the Maruti car on 25.4.1996 were the same computer parts which he and Anil Hans had lifted from Sushil Verma's residence on 24.4.1996 and that the ledger recovered from the Maruti car contained details of sale and purchase of smuggled computer parts.
3. On the basis of the above investigation, the Department was of the view that the appellants had contravened the provisions of Notification 9/96-Cus. dated 22.1.1996 which prohibits import from Nepal to India of goods which have been exported to Nepal from countries other than India, thereby rendering the goods liable to confiscation and the appellants liable to penalty; accordingly, show cause notices proposing confiscation of the goods and proposing penal action were issued to Narain Agarwal, Sushil Verma, Sushil Gupta, Anil Hans, Vinod Kumar and one more person. The notice was adjudicated by the Commissioner of Customs who has absolutely confiscated the computer parts seized from both the cars as well as from the residence of Anil Hans and the office of Sushil Gupta, absolutely confiscated the Ambassador car, confiscated Maruti car with option to redeem and imposed penalties on all the noticees.
4. We have heard Shri Harbans Singh, learned Counsel who primarily contends that the Department has not discharged the burden cast upon it to show that the seized goods had been exported to Nepal from countries other than India, which is required to be established for proving contravention of the Notification 9/96, and he further submits that the goods recovered from the Maruti car do not bear any foreign markings and their recovery is itself doubtful in view of the fact that the search took place in the DRI office instead of at the place of interception i.e. Vivek Vihar, that the panch witnesses were two lift operators in the DRI Office, one of whom (Sunil Kumar) had stated that the panchnama had already been drawn up before he reached the spot and he only signed the same but did not witness the recovery and from the statement of the other person (Hari Singh), it transpires that search did not take place during his hours of duty. Learned DR, Shri Panchatcharan, however, contends that since the recovery of computer parts of foreign origin has not been disputed by any of the noticees who have clearly admitted that these goods were being smuggled from Nepal to India, the Department has discharged the burden under Section 123 of the Customs Act 1962. He submits that the goods recovered from the Ambassador car had Chinese markings, some of the goods recovered from Anil Hans's residence had markings "made in China" and "made in Malaysia", that some of the goods recovered from the office of Sushil Gupta had Taiwanese/Korean/Malaysian markings and that although the computer parts recovered from the Maruti car belonging to the above appellants did not bear any foreign markings, both the appellants have admitted that these were of foreign origin which had been smuggled into India from Nepal and Sushil Gupta has also admitted that the goods recovered from the Maruti car are the same which they took from Sushil Verma on 24.4.1996. He, therefore, submits that contravention of the provisions of the Notification has been clearly made out and therefore, confiscation of the goods and penalty on the appellants is sustainable.
5. We have carefully considered the submissions of both sides. The statements of Sushil Verma, Sushil Gupta, Anil Hans and Vinod Kumar clearly bring out that they have been knowingly engaged in purchasing/acquiring/possessing/storing/carrying/concealing/selling computer parts of foreign origin smuggled into India from Nepal in specially made cavities of the Ambassador car and delivered to Sushil Verma at his house in Delhi by Narain Agarwal's driver and that they were in turn delivered to the appellants by Sushil Kumar Verma for further disposal on commission basis and that the sale proceeds were handed over to the nominee of Narain Agarwal. The contention of the learned Counsel that there is nothing to show that the seized goods had first entered Nepal from countries other than India cannot be accepted, in view of the various statements and in view of the fact that neither of the appellants, nor Sushil Verma could produce any documents to show that they had legally acquired any of the seized goods. The retraction by the appellants of their statements does not result in eradicating the evidentiary value of their original statements which are in their own hand-writing and which have not been disproved or proved to have been obtained under duress or coercion. The manner of carriage of the goods in the Ambassador car also supports the case of the Department that the goods were smuggled from Nepal into India.
6. The recovery of goods from the Maruti car also cannot be questioned.
The narration in the panchnama was admitted to be correct, the appellants never challenged the correctness of the panchnama, search was carried out in the presence of two independent witnesses who have signed the panchnama and there is no charge that the goods were planted by the investigating/seizing officers and, therefore, any discrepancies in the cross-examination of Hari Singh and Sunil Kumar who were cross-examined in April 1997 and September, 1997 (several months after the seizure) does not vitiate the recovery.
7. The evidence on record clearly establishes that the goods are liable to confiscation under Section 111 of the Customs Act, the vehicles are liable to confiscation under Section 115 and the appellants are liable to penalty under Section 112 of the Customs Act. We, therefore, uphold the confiscation, but reduce the redemption fine levied on the Maruti car to Rs. 40,000/- and reduce the penalty on appellant No. 1 to Rs. 50,000/- and the penalty on appellant No. 2 to Rs. 1 lakh.