1. The appellant was imposed a penalty of Rs. 5 lakhs by the Commissioner of Customs, Lucknow by Order-in-Original dated 12.9.97.
The matter relates to the seizure and confiscation of dried ginger recovered from two trucks by the Customs (Prev.) officers on 233.95 on the National Highway between Lucknow and Sitapur. By the impugned order the said ginger valued at Rs. 8,01,040 was confiscated under Section 111(d) of the Customs Act, 1962 and personal penalties were imposed on six noticees under Section 112(b). The Commissioner found that the said ginger was liable to confiscation since it was smuggled from Nepal and it was not of Indian or Nepalese origin. The penalty on the present appellant was imposed on the finding that the Export certificate issued at Bhairaw Nepal and the transport builty of Bajrang Transport Corpn.
showed that the smuggled goods in question were to be transported to Shri Raj Kumar Gupta (appellant), Khari Baoli, Delhi and statements of Shri Ranjit Singh, cleaner of the vehicle and Shri Guru Sewak Singh Driver, both supported the allegation that the appellant was the consignee in respect of the impugned goods. Commissioner therefore held that the appellant was a person who was concerned in the purchase/ sale/disposal of the smuggled dry ginger and therefore liable for penalty under Section 112(b).
2. Arguing the case of the appellant (Shri Raj Kumar Gupta), Ld.
Counsel Shri Naveen Mullick submitted that the entire case of the Department has been built on the statements given by the cleaner and driver of the seized truck. These persons had never met or seen the present appellant. On the other hand, the appellant had even from the beginning (in reply to the show cause notice) denied having any connection with any of the other noticees or the goods seized. Even the address shown in the builty accompanying the goods was vague and incomplete. Even the statement given by Shri Sanwar Mall, Proprietor of Kedar Rice and Oil Mills in Nepal on 17.10.95 had stated that as per his knowledge the goods were of Nepalese origin. The Department had not shown any record of any payment made by the appellant towards the seized goods to the supplier. No allegation of purchase/sale/disposal of smuggled dried ginger in question can therefore, be made against the appellant. The Department had also failed to discharge the burden of initially proving that the goods were of Third-country origin (other than India and Nepal) which alone would make the goods liable to confiscation. The statements of the driver and the cleaner only went to the extent of saying that they were of 'foreign origin'. On the other hand, the statement of Shri Sanwar Mall was clearly to the effect that the goods were purchased by him from Nepalese farmers. Shri Sanwar Mall had denied that the ginger was of Third-country origin.
3. Ld. Counsel also made pointed reference to the observations made in the finding portion of the order (internal page 10) where reliance has been placed on the opinion purported to be of some experts in the trade of dry ginger. The Commissioner had observed that the experts had opined that the dry ginger in question was neither of Nepalese origin nor of Indian origin but of Third country origin. He had also observed that one can distinguish the dry ginger of Chinese origin with dry ginger produced in India and Nepal. The dry ginger produced in India and Nepal was reddish in colour while dry ginger produced in China was white in colour. Ld. Counsel submitted that no copy of the trade opinion referred to in the impugned order had been made available to the appellant. He had no occassion to examine the said trade opinion or to question the competence of the so called experts or to contest their opinion. He submitted that the reliance placed by the Commissioner on such an important piece of evidence against the appellant without providing appellant with an opportunity to examine and contest its reliability and authenticity had vitiated the conclusions arrived at by the Commissioner and the penalty imposed on the appellant.
4. He also drew attention to the fact that even if it is assumed for the sake of argument that the goods were of Third country origin, the market value of the said variety of the goods seized would not exceed Rs. 40,000. The penalty of Rs. Five lakhs, imposed on the appellant was therefore far disproporionate to the value of the goods.
5. Ld. Counsel therefore pleaded for setting aside of the penalty imposed on the present appellant under the impugned order.
6. Ld. JDR Shri P. Ravinder Babu submitted that the statements given by the driver tallied with the testimony of the cleaner of the truck on both questions, viz, the dry ginger having been brought from Krishna Nagar, Nepal as well as of the Third country origin of the said goods.
Further, the statement of Shri Sanwar Mall, proprietor of Kedar Rice Dal and Oil Mills, Nepal, had mentioned that Shri Raj Kumar Gupta, the present appellant, was the consignee of the goods. There was therefore sufficient matrial on record to show that the seized goods were of Third country origin making it liable for confiscation and the involvement of the appellant as a person concerned with the purchase/sale/disposal of the smuggled goods making him liable to penalty under Section 112(b) of the Customs Act, 1962.
7. We have considered the submissions. We find that from the statement dated 25.5.95 given by Shri Guru Sewak Singh, driver of the truck bearing No. DIG 7521 from which the impugned ginger was seized (in reply to question No. 5) that he had loaded the Nepalese ginger at Nepal and he had described the goods as 'foreign' ginger in answer to question No. 7. In answer to a further question he had stated that the owner of the ginger had informed him that it was Nepalese ginger. Even in the statement dated 25.9.95 given by the cleaner the goods were referred to as foreign ginger and not as ginger from country other than India and Nepal. The Panchnama dated 25.9.95 also described the ginger as 'foreign' ginger. Further, the Bill of the Entry and invoice referred to in the Panchnama at Paras 3 and 4 also refer to the goods as Nepalese ginger. It is therefore, clear that the only document which establishes the Department's allegation that the goods were of 'third country origin', meaning country other than India and Nepal, was the trade opinion referred to in the Commissioner's order. It does not appear that the said document had been made available to the appellant.
Ld. Counsel had submitted that if the appellant had an opportunity of examining the said evidence, he would have been able to rebut the said opinion. There is nothing on record to show that the said opinion was made available to the appellants. To the extent the Commissioner had relied upon a piece of evidence which had been collected behind the back of the appellant and no opportunity had been given to the appellant to contest the reliability of the said evidence, we are in agreement with the appellant's Counsel that the finding of the Commissioner that the goods were of third country origin is vitiated.
8. During the submissions, Ld. JDR had submitted that if the Bench was inclined to accept the contention of the appellant relating to the trade opinion relied on by the Commissioner, the matter may be remanded for allowing the appellant an opportunity for examining and contesting the trade opinion. Ld. Counsel on the other hand, had submitted that no purpose will be served in remanding the matter at this stage since it will be necessary for the appellant to get the samples of the goods tested for proving that the goods were of Nepalese origin and not of Chinese origin. Since the impugned goods (dry ginger was a perishable item), it would not be possible to get a correct chemical/ expert examination report as to the quality of the goods since they might have deteriorated in condition. Further, it was also not clear from the record whether any samples had been drawn or whether the goods are still available for taking samples, leave alone the current condition of the said goods. We find force in the contentions of the Ld. Counsel on the question of remand for the reasons given by him. As a result, we find that no purpose will be served in remanding the matter to the Commissioner for readjudication.
9. In the result, we allow the appeal insofar as the present appellant Shri Raj Kumar Gupta is concerned and set aside the penalty imposed on him by the impugned order. The appellant will be eligible for consequential relief, if any, under law.