Uma Shankar Vs. Commissioner of Customs

2. In the impugned order, the penalty of Rs. seven lakh on Shri Uma Shankar, partner of M/s. Pawan Cargo Forwarders and a penalty of Rs. three lakh on Shri Ravinder Kumar, an employee of M/s. Pawan Cargo Forwarders was imposed under Section 112 of the Customs Act. A Matador vehicle, belonging to M/s. Pawan Cargo Forwarders, was also confiscated under Section 115 of the Customs Act and the appellants were given an option to redeem the same on payment of redemption fine of Rs. two lakh.

3. Brief facts of the case are that M/s. Pawan Cargo Forwarders are in the business of courier/transporter of parcels/documents. On 30-12-97, the vehicle number DL-2CF-0639, belonging to M/s. Pawan Cargo Forwarders, was intercepted by the Customs authorities and on search of the vehicle, 54 cardboard boxes wrapped with paper adhesive tape alongwith other packages were recovered. On scrutiny cardboard boxes were found containing cellular phones and computer parts. These goods were of foreign origin and at the time of search of the vehicle, no document was produced for import of these goods and the goods were taken into possession. The statement of Sh. Ravinder Kumar was recorded under Section 108 of the Customs Act and the premises of Shri Uma Shankar, the appellant, were also searched and his statement was also recorded. In their statements under Section 108 of the Customs Act, according to the revenue, they admitted the fact that the goods were of smuggled nature. Thereafter, a show cause notice was issued and the adjudication order was passed and vide impugned order, the goods were confiscated and the penalties were imposed on the appellants and the vehicle was also confiscated.

4. Ld. Counsel submits that the appellants are not claiming the goods, in question, nor they challenged the order in respect of confiscation of the goods. They were challenging the imposition of penalties and confiscation of their vehicle.

5. Ld. Counsel submits that the appellant, Shri Uma Shankar was a partner of M/s. Pawan Cargo Forwarders and they were in the business of courier and they had different branches in India and were receiving documents/parcels tendered by various consigners and such packages containing documents/parcels were supplied to various destinations as per addresses given by the consigners and they were charging fees according to weight and destination in the normal course of business.

His contention is that these parcels were deposited by various consigners for supply at various destinations and the appellants were only paid charges for their transportation. He submits that the goods were not notified under Section 123 of the Customs Act or falls under Chapter IV of the Customs Act, therefore, the burden of proof that the goods were of smuggled nature, is on the department and not on the appellants. He submits that the goods, in question, as per Policy 1997-2001, were under OGL. He submits that the revenue authorities also made enquiries in respect of the consigners of the goods and the goods in respect of one of the consigners i.e. M/s. Superfast Courier, were released unconditionally as they produced evidence in respect of legal import into India. He, further, submits that one Susheel also submitted copies of bills of entries in respect of the goods in question through his counsel, Sh. G.L. Rawel and no investigation was conducted in respect of these bills of entries and there is no finding by the adjudicating authority, whether the goods, in question, were covered under the bills of entries or not. Ld. Counsel submits that the adjudicating authorities only relied upon the statement of the appellant, recorded under Section 108 of the Customs Act. He submits that the appellant was produced before the Judicial Magistrate on 1-1-98 and the appellants retracted from their statements in writing by saying that their statements were recorded under coercion. Therefore, their statements were not volunteer in nature and cannot be relied upon. He also relies upon the decision of the Tribunal in the cases of Ravi Mittal v. C.C.E. reported in 2000 (117) E.L.T. 182; in the case of Ashoke Shamooi v. C.C. (Prev.) reported in 2000 (116) E.L.T. 503; in the case of J.P. Bearing Co. v. C.C. reported in 1999 (109) E.L.T. 538 and in the case of C.C.E. (Prev.) v. Surya Rao reported in 2000 (115) E.L.T. 521 in support of his arguments and submits that since the goods were not notified, the burden of proof that the goods are of smuggled nature, is on the customers. He, therefore, prays that the appeals be allowed.

6. Ld. D.R., appearing on behalf of the revenue, submits that foreign brand goods were recovered from the appellants and the appellants had not produced any document in respect of legal import of the goods and reiterated the findings of the lower authorities.

8. The appellants are not claiming the goods, in question, nor challenged the order of confiscation. The appellants are challenging the penalties imposed on them and the confiscation of vehicle. The contention of the appellants is that the goods are not notified under provisions of Section 123 of the Customs Act nor under Chapter IV of the Customs Act and are allowed to be imported freely under OGL. This fact is not disputed by the revenue. Therefore, the burden of proof that the goods are of smuggled nature, is on the Customs Authorities.

The Tribunal in the case of Ravi Mittal; in the case of Ashoke Shamooi; in the case of J.P. Bearing Co.; and in the case of Surya Rao (supra) held that when the goods are not notified under Section 123 of the Customs Act, the burden of proof of illicit nature of the goods lies on the department.

9. In the present case, the department is relying on the statements of the appellants recorded under Section 108 of the Customs Act whereby they admitted that the goods were of smuggled nature. The statements were retracted at the time when the appellants were produced before the Judicial Magistrate. Further, certain goods were claimed by M/s.

Superfast Courier and the adjudicating authorities released some of the goods to M/s. Super-fast Courier unconditionally. In respect of certain goods, one Susheel Kumar filed copies of bills of entries through his advocate and no investigation was conducted in respect of their bills of entry and there is no finding that the goods, in question, are not covered in the bills of entry. As the goods, in question, were not notified under Section 123 of the Customs Act, the burden to prove that the goods are of smuggled nature is on the customs authorities and the retracted statements in respect of admission made are not to be relied upon for imposing penalty. Therefore, in the circumstances of the present case, the revenue failed to discharge the burden that the goods were of smuggled nature, therefore, the penalties imposed on the appellants and the order of confiscation of vehicle No. DL-2CF-0639 are not sustainable, hence are set aside and the appeals are allowed.