1. The above captioned appeals have been preferred by the appellants against the common Order-in-original dated 18.4.2001 passed by the Commissioner of Customs vide which he had imposed penalty of different amounts, on them under Section 112(b) of the Customs Act.
2. The facts giving rise to these appeals may briefly be stated as under: On the basis of specific intelligence, the officers of the DRI intercepted two tempoes loaded with goods, in front of godown-cum-residence located at Vikas Nagar. Appellant Dhiraj Singh was present at the spot at that time holding mobile in his hand. The two tempoes were found loaded with ball bearings with markings of foreign origin. The search of the godown was also taken and from there also ball bearings of foreign origin were recovered. The tempoes and the ball bearings were taken to the office of the DRI where panchnama was drawn bearing the date 2.5.98. On the way to DRI office, from the godown, Attar Pal Singh appellant was also taken along while he was found standing near his car. He was identified by Dhiraj Singh, appellant.
3. On 2.5.98, the officers of the DRI also raided another godown located in House No.496, Parmanand Colony, Delhi, owned by one Inderjit Singh who was also present there. On conducting search of that premises, ball bearings of foreign origin were also recorded and those were seized through panchnama, as Inderjit Singh could not produce any document regarding legal acquisition of the same.
4. Still another premises located at Yograj Colony was also searched by the Officers of the DRI, on that very date, which was owned by Inderjit Singh and which he had rented out to Attar Pal Singh, appellant. On carrying out search of that premises, also ball bearings of foreign origin were recovered and those were seized through panchanama. The statements of the appellants Dhlra] Singh & Attar Pal Singh, both were recorded, Dhiraj Singh claimed to be an employee of Attar Pal Singh on a monthly salary of Rs.1500 and also stated that Attar Pal Singh, appellant had told him that the ball bearings had come from Nepal and under his direction, he was getting the tempoes unloaded when the officers of the DRI arrived at the spot and seized the goods.
Similarly, Attar Pal Singh, appellant also admitted that the ball bearings were brought from Nepal, He also named J.S. Anand, appellant, in his statement, who knew about the details of the goods. The statements of Inderjit Singh, owner of the godown, drivers of the tempoes namely Itzar Singh and Inderjit Singh, were also recorded wherein they stated that they loaded the goods on the directions of Ishwar Singh, owner of the tempoes which were attached to the company M/s. Patiala Carriers for local delivery of the goods. Similarly, statement of Kamal Singh, cleaner of one of the tempoes was also recorded who stated that on the direction of Pragat Singh, Manager of M/s. Patiala Carriers, he loaded the goods at Nangloi-Najafgarh Road.
The statement of Pragat Singh, Manager of M/s. Patiala Carriers was also taken down who, however, did not accept the transportation of the seized goods from his transport company. Inderjit Singh, driver of one of the tempoes stated that the goods were loaded from the place situated In front of M/s. Patiala Carriers. Chander Prakash alias Mahesh was also questioned being incharge of the godown situated at Parmanand Colony but he denied the knowledge about the smuggled nature of the seized goods and maintained that he was an employee of J.S.Anand, appellant. His residential premises was also searched in his absence, situated at Parmanand Colony, with the help of his landlord Inderjit Singh and 161 packages were recovered which contained assorted ball bearings of foreign origin and those were seized through panchnama, on the belief that they were liable to be confiscated.
Similarly, the residential premises of J.S.Anand was also searched on 3.5.98, resulting in recovery of two loose papers containing telephone number of Attar Pal Singh, appellant. However, from the residential premises of Attar Pal Singh and Dhiraj Singh, appellants which were searched on 3.5.98, no incriminating document or article was recovered.
The premises of M/s. Patiala Carrier was also searched on 4.5.98 but nothing was recovered.
5. On completion of investigation, show cause notice was served on the appellants vide which seized goods were proposed to be confiscated and penalty was also proposed to be imposed on them, under the Customs Act.
The appellants contested the correctness of the show cause notice.
Attar Pal Singh, appellant claimed the impugned goods and produced the documents showing the purchase of the same from the open market. The other appellants, however, did not claim the impugned goods. The Commissioner did not accept the version of the appellants and passed the impugned order. The Commissioner ordered the confiscation of the impugned goods i.e. 351606 pieces of ball bearings and allowed the redemption of the same to J.S. Anand, appellant, on payment of redemption fine of Rs. 30,00,000 under Section 125 of the Customs Act.
He also imposed penalty of Rs. 20,00,000 on him. On the other two appellants namely Attar Pal Singh, and Dhiraj Singh, the Commissioner imposed penalty of Rs. 5,00,000 each under Section 112(a) & (b) of the Customs Act.
6. The learned Counsel for the appellants has contended that the impugned goods were not notified goods under Section 123 or under Chapter IV-A of the Customs Act and as such, the initial burden was on the department to prove the smuggled character of the goods and no presumption that the goods were smuggled one could be drawn under the law. The counsel has further contended that there is not an iota of evidence to prove that the goods were smuggled from Nepal to India by any of the appellants and that the statements of the appellants Dhiraj Singh and Attar Pal Singh in that regard could not be relied upon by the learned Commissioner for having been obtained under coercion and later on also retracted by them. The goods being freely tradable and available in the market, and that the documents regarding purchase of the same by Attar Pal Singh, appellant could not be ignored. The counsel has further argued that J.S. Anand, appellant had never claimed the goods and as such, he could not be given any option to get the same redeemed. The goods, according to the counsel, belongs to Attar Pal Singh, appellant, who claimed the same before the Commissioner and deserves to be released to him. Regarding Dhiraj Singh, appellant, the counsel has contended that he was only an employee and there is no evidence on record to prove that he had knowledge about the smuggled nature of the goods. He was only a student of 10th class and on account of poor financial background, took up the job on a monthly salary of Rs. 1,500 from Attar Pal Singh. Therefore, he could not be legally penalised.
7. On the other hand, the learned SDR has only reiterated the correctness of the impugned order of the Commissioner (Appeals).
9. Admittedly, the impugned goods (ball bearings) at the time of seizure on 1/2.5.98 were not notified goods under Section 123 or under any provision of Chapter IV-A of the Customs Act. Therefore, no presumption about the smuggled nature of the impugned goods on account of bearing a foreign mark, could be legally drawn. The goods, at that time, were freely tradable and available in the market. That being so, the intial burden was on the department to prove that the goods were smuggled from Nepal to India, as alleged in the show cause notice. In this connection, the reference may be made to Goel Bearing Com. and Ors. v. CCE, New Delhi 2002(50) RLT 925 and Anand Aggarwala v. CCE, Shillong 2002 (51) RLT 222, wherein it has been ruled that in a case of non-notified goods, the onus is always on the department to establish their smuggled/tainted character.
10. The department has not led any reliable evidence to prove the smuggling of the impugned goods from Nepal to India by the appellants, as averred in the show cause notice. The alleged statement of Dhiraj Singh, appellant recorded on 2.5.98 that the goods were brought from Nepal, could not be attached any evidential value. He was only an employee at that time with Attar Pal Singh, appellant, on a monthly salary of Rs. 1,500 for looking after his godown. He joined this service as is clear from his statement on account of his poor financial background, otherwise he was a student of 10th Class studying in National Open School. He was aged 17 years at that time. He nowhere admitted in his statement that the goods, in his presence, were brought from Nepal by his employer Attar Pal Singh, appellant. He only stated that he was informed that such like goods are brought from Nepal, but his information was only hearsay and inadmissible in evidence. He did not state that the goods were smuggled by Attar Pal Singh or J.S.Anand, appellants. Therefore, his hearsay knowledge that such like goods are brought from Nepal, could not of any help to the department for proving the smuggled nature of the goods.
11. Similarly, the alleged statement of Attar Pal Singh, appellant himself recorded on 3.5.98 wherein he allegedly admitted that the impugned goods had come from Nepal, could not be used against him. The record shows that his statement was recorded on 2.5.88 at DRI office after the seizure of the goods from Vikas Nagar godown on 1.5.98. After his arrest when he was produced in the Court on 3.5.98, he filed the petition before Magistrate, alleging that he was beaten and tortured by the DRI officers for giving statement. He categorically denied that statement was given by him voluntarily. He further denied of having stated before the DRI officers that he was an employee of J.S. Anand appellant and that the goods were brought from Nepal and that J.S.Anand knew about the complete details. He also averred in that petition of having purchased the goods from the market and even produced the documents before the DRI officers who refused to accept the same. The record also shows that he signed panchanama and the documents under protest. He gave another petition before ACJM, Delhi on 4.5.98 alleging that he was picked from his house and detained by the DRI officers for three days and was tortured. Under all these circumstances, it could not be said that the alleged confessional statement, relied upon by the learned Commissioner for holding the smuggled nature of the goods was made by Attar Pal Singh, appellant voluntarily. His statement lost the evidential value when retracted by him immediately on the following day. Even V.K. Budhiraja, SIO, DRI, did not deny the retraction of the statement by Attar Pal Singh, when he was called for cross-examination.
Here reference may be made to Bhana Kalpa Bhai Patel v. A.C. Balsar 1997 (73) ECR 721 (SC), Shiv Charan Vijpayee v. CCE, Kanpur 1995 (56) ECR 736, Kali Charan Vasant Lal v. CCE and Mangi Lal Bahiru Mal v. CCE (P) Mumbai , wherein it had been observed that the statement when retracted at the first available opportunity, by the maker, loses its evidential value.
12. The finding of the learned Commissioner that no retraction was made by Attar Pal Singh, appellant and the alleged retraction was made after a long time, prima-facie cannot be sustained. The retraction of the statement was made by Attar Pal Singh, appellant as soon as he was produced before the ACJM. Even the DRI officer, named above, did not deny this fact. No other witnesses i.e. owner of the premises, drivers and cleaner of the tempoes, manager of the transport company, named above, in their respective statement admitted the smuggling of the goods, by any of the appellants from Nepal to India. We also find that no witness to the panchnama appeared before the Commissioner for facing the cross-examination by the appellants. Only V.K. Budhiraja, SIO appeared and submitted himself for cross-examination by the appellants wherein he did not deny the retraction of the statement by Attar Pal Singh, appellant. One Shri Bhasin, officer of the DRI who participated in search proceedings taken out at the premises of M/s. Patiala Carriers, no doubt appeared but he was not called for cross-examination by the appellants. The observation of the learned Commissioner that the appellants did not wish to cross-examine the officers who appeared during the adjudication proceedings, cannot be said to be correct.
13. Shri J.S. Anand, appellant, as we find from the record, never claimed himself to be the owner of the impugned goods. No statement to that effect was ever made by him before the adjudicating authority during the investigation. There is also no independent evidence to prove his ownership. But strangely enough, the learned Commissioner still had held him to be the owner of the impugned goods, who smuggled the same from Nepal and allowed him redemption of the goods on payment of redemption fine, after ordering confiscation, in the impugned order.
The goods had been claimed by Attar Pal Singh, appellant for having purchased the same from the market. The documents produced by him had been not taken note of by the learned Commissioner, without sufficient cause and without holding the same to be forged and procured for creating evidence of ownership of the impugned goods.
14. The department, is our view, has miserably failed to prove the smuggled nature of the impugned goods. The burden of proof, as observed above, was on it. There is no evidence whatsoever to establish that any of the appellants was involved in the smuggling of the goods from Nepal, Therefore, none of them could be penalised under Section 112(a) & (b) of the Customs Act. Similarly, the confiscation of the goods also could not be ordered under Section 111(b) & (d) of the Act for want of any evidence to prove the tainted or smuggled character of the same.
15. In view of the discussions made above, the impugned order of the Commissioner cannot be sustained and the same is set aside in toto. The appeals of all the appellants are allowed with consequential relief, permissible under the law.