1. A show Cause Notice C.No. VIII/10/93/99 Cus. Adj. Dtd. 23.12.99 was issued to Shri Gurmail Singh, Shri Asadulla Khan and Shri Syed SaLeem.
This was consequent to the working out of a credible information about the receipt and storage of ball bearings of foreign origin, smuggled from Nepal, by the Preventive Officers of Customs, Bangalore. The Officers had kept surveillance on the premises belong to M/s. Sodhi Freight Carriers Pvt. Ltd. on 1.7.99 as they found that no responsible person was available In the said premises. On 2.7.99 at about 0830 hrs.
Shrf Gurmail Singh, Manager of M/s. Sodhi Freight Carriers (P) Ltd. Bangalore, appeared on the scene. He disclosed that another godown situated opposite the said premises, also belong to the same M/s. Sodhi Freight Carriers (P) Ltd. and the godown was locked and key was lost.
The godown was searched as per authorisation dtd. 2.7.99 and on search of the same, the officers found/noticed that 66 gunny bags were stored in an orderly manner and on opening and examining them they found the bags to contain 4 cartons of bait bearings of POLAND Make in different sizes and specifications. The total number of Ball Bearings was 59,584 valued at Rs. 24,88,136.00. Shri Gurmail Singh when asked to produce import documents for the abovesaid ball bearings, replied that he does not have any documents for receipt of the said gunny bags and the bearings and stated that they were delivered to him by one Asadulla Khan. The goods of foreign origin were considered to be contraband in nature. They were seized under the provisions of the Customs Act, 1962.
The statements of Shri Gurmail Singh and ShrI Asadulla Khan were recorded and a show cause notice was issued.
2. From the investigation conducted, following the seizure, it appeared prima facie that - (a) The 59584 Nos. of ball bearings of Polish origin of 4 different specifications totally valued at Rs. 24,88,136 found in the premises of M/s Sodhi Freight Carriers (P) Ltd., 112 B, 5th Cross, Kalasipalayam, Bangalore appears to have been smuggled into India in contravention of various sections of the Customs Act, 1962, thereby rendering the said goods, i.e. ball bearings liable for confiscation under Section 111 (d) of the Customs Act, 1962. Shri Gurmail Singh by receiving the smuggled Ball Bearings without any documents and storing the same In his godown has also rendered himself liable for penalty under section 112 (b) of the Customs Act, 1962. Further, Shri S. Saleem and Shri Asadulla Khan have also indulged themselves in the smuggling of Ball Bearings from Nepal and tried to transport the same to Delhi and have rendered themselves liable for penalty under Section 112 (b) of the Customs Act, 1962.
(b) Shrl Syed Saleem and Shri Asadulla Khan were called upon Show Cause to the Commissioner of Customs, Bangalore, as to why: (i) the 59,584 Nos. of Ball Bearings of four different specifications of polish origin packed in 66 gunny cloth packages valued at Rs. 24,88,136 (approx.) under seizure should not be confiscated under the provisions of section 111 (d) of Customs Act, 1962 and since the goods have been disposed of after taking necessary permission as contemplated under Section 110 of the Customs Act, 1962 and the sale proceeds realised amounting to Rs. 10,11,389 should not be appropriated to the Govt. exchequer.
(ii) penalty should not be imposed in Shrl Saleem, a resident of Channapatna, under Section 112 (b) of Customs Act, 1962, for his involvement In smuggling of the goods.
(iii) penalty should not be imposed on Shri Asadulla Khan under Section 112(b) of Customs Act, 1962 for assisting, receipt, storing and transporting of smuggled goods.
(c) Shri Gurmail Singh, Manager of M/s Sodhi Freight Carriers (P) Ltd., 112 B, 5th Cross, Kalasipalyam, Bangalore was called upon to show cause to the Commissioner of Customs, as to why: (i) penalty should not imposed on him under Section 112 (b) of the Customs Act, 1962 for receipt without documents and storing the smuggled Ball Bearings with an intention to transport the same to Delhi.
3. The Commissioner after hearing the parties in considering the material inter-alia came to conclusion that- "I have persued the case laws cited by the learned Advocate to defend the charges, especially relating to corroboration of material particulars and regarding the onus vesting on the Department to establish that the confession was not voluntary. The facts and circumstances of the present case not being identical to the decisions relied upon, the same are not relevant to the present proceedings and hence are distinguished. As regards the contention that there is no evidence produced by the Department to establish that the goods under seizure have crossed the Customs frontiers of India without payment of duty, I notice that Shri Gurmail Singh from whose possession the goods were seized has categorically stated that he does not possess any documents since no documents were given at the time of unloading. Shri Asadullah Khan has stated that when he was casually talking to the driver while escorting the lorry from Mekhri Circule, the driver had expressed his difficulties that he had encountered en route the journey from Nepal and therefore he understood that the goods were brought from Nepal. Just because the goods are freely importable and tradable, it does not mean that the possessor need not possess any document to establish legal importation. The Ball Bearings, 59584 in number and having markings on both sides of ball bearings as "KBC Bearings HANWHA Machinery Co.
Ltd., and KBC 6202 2 KOREA" confirms that the Ball Bearings are of Korean origin. In the absence of any documents with the possessor, the Department has all reasons to believe that the goods have been smuggled into India and are liable for confiscation. Therefore, there can be no doubt to hold that the goods under seizure are liable for confiscation and Shri Syed Saleem renders himself liable for penal action. Shri Asadulla Khan and Shri Gurmail Singh are liable for penal action since they were concerned in transportation, keeping, harbouring, concealing and dealing with the goods which they knew or had reasons to believe are liable for confiscation and therefore render themselves liable for penal action." and ordered confiscation of 59584 of the Ball Bearings of four different specifications packed in 66 gunny cloth packages.
Confiscation was ordered under the provision of Section 111 (d) of the Customs Act, 1962. The order also appropriated the sale proceeds amounting to Rs. 10,11,389 to the Government of India since these goods had been disposed of after obtaining necessary permissions required under Section 110 of the Customs Act, 1962. A penalty of Rs. 7,00,000 (Rupees seven lakhs only) was imposed on Shri Syed Saleem, Rs. 2,00,000 (Rupees two lakhs only) on Shri Asadullah Khan and Rs. 1 lakh (Rupees one lakh only) on Shri Gurmail Singh under Section 112(b) of the Customs Act, 1962.
4. The present appeals being disposed of by this order, have been filed by Shri Syed Saleem praying the Tribunal to hold that-- "(i) The impugned order passed by the Commissioner of Customs is not maintainable in law, in as much as, the same is passed based on assumptions and presumptions and without adducing any evidence and therefore may be quashed/set aside; (ii) The appellant is not liable for penalty inasmuch as, he has not acquired possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing selling, purchasing or in any way dealing with the impugned goods.
(iii) Confession of co-accused has no evidentiary value unless corroborated in material particulars by independent evidence.
(iv) Such further and other interim order (s) be passed and directions be given, as the Hon'ble tribunal might deem fit under the facts and circumstances of the case." and Shri Gurmail Singh praying before the Tribunal to set aside the order and to grant consequential relief.
5. After hearing both sides and considering the material on record it is found-- (a) The 66 gunny bag bundles of Ball Bearings of Polish origin i.e.
of Poland were seized from the godown of M/s. Sodhi Freight Carriers (P) Ltd. on 2.7.91 on the said godown being voluntarily shown by Shri Gurmail Singh, Manager who did not have the key. The bags were admittedly, neatly stocked in godown and no evidence appears of the said bags and their storage, to be other than in the normal course of business of a Freight Transport Company. It is an admitted position that the said bags were received In two lots on 24.6.99 and 27.6.99 by the Transport to send the same to Delhi and the transport was awaiting the documents for the same from the party i.e. Shri Asadulla Khan who had brought the bags which the officers intercepted and seized. Ball Bearings are normal items of Trade and are freely imported and traded in the country. There is no material on records to raise any suspicion about the tainted non-duty-paid nature of the same, when they were received in the Godown for onwards transportation for Delhi and the carrier was awaiting the documents. Merely because the officers had certain information and that also not for the godown where the goods were found and the documents were not available with the Manager of the Carrier Company, who indicated and identifies the person who brought these goods for transportation to Delhi, viz. Shri Asadulla Khan, it can lead a reasonable person to a bona fide belief that the Ball Bearings which are not goods notified under Section 123 of the Customs Act, 1962 or and Chapter IVA of the Customs Act and are freely importable to be smuggled. Presumption would be in favour of the same being not 'uncustomed' goods, the onus would be on the Department to establish, the place where such goods have breached the Customs Act Barriers of India and their non-duty-paid nature.
This onerous burden has not been found to be discharged in this case. The confiscation therefore cannot be upheld. (b) The Mahazar of seizure and the show cause notice and para 9 of the order-in-original, record the fact of the goods being of "Polish" i.e. Poland Origin/made. While in para 54 of the impugned order the findings arrived by the learned Adjudicator is-- "54. I have persued the case laws cited by the learned Advocate to defend the charges, especially relating to corroboration of material particulars and regarding the onus vesting on the Department to establish that the confession was not voluntary. The facts and circumstances of the present case not being identical to the decision relied upon, the same are not relevant to the present proceedings and hence are distinguished. As regards the contention that there is no evidence produced by the Department to establish that the goods under seizure have crossed the Customs frontiers of India without payment of duty, I notice that Shri Gurmail Singh from whose possession the goods were seized has categorically sated that he does not possess any documents since no documents were given at the time of unloading. Shri Asadullah Khan has stated that when he was casually talking to the driver while escorting the lorry from Mekhri Circle, the driver had expressed his difficul ties that he had encountered enroute the journey from Nepal and therefore he understood that the goods were brought from Nepal. Just because the goods are freely importable and tradable, it does not mean that the possessor need not possess any document to establish legal importation. The Ball Bearings, 59584 in Number and having markings on both the sides of Ball Bearings as "KBC Bearings are of Korean origin. In the absences of any documents with the possessor, the Department has all reasons to believe that the goods have been smuggled into India and are liable for confiscation. Therefore, there can be no doubt to hold that the goods under seizure are liable for confiscation and Shri Syed Saleem renders himself liable for penal action. Shri Asadullah Khan and Shri Gurmail Singh are liable for penal action since he has concerned himself In transportation, keeping, harbouring, concealing, and dealing with the goods which they knew or had reasons to believe, are liable for confiscation and therefore renders themselves liable for penal action." How and on what material the Commissioner has concluded Goods of Poland Origin to be goods of Korean Origin, is explained by the learned Departmental Representative to be a typographical error. This explanation is not acceptable. Since the words used in the underlined sentence, are "... markings on both the sides of ball bearing as "KBC Bearing, HANWHA Machinery Co. Ltd....." which indicate that the adjudicator has inspected the goods and then concluded the Korean Origin. It indicates total misapplication of the mind and predetermined intent to somehow order the confiscation of the goods. Orders exhibiting such gross misapplication of mind and predetermined approach cannot be sustained.
``.... Shri Asadullah Khan has stated that when he was casually talking the Driver while entering the lorry from Mekhri Circle, the driver had expressed his difficulties that he had encountered enroute the journey from Nepal and therefore he understood that the goods were brought from Nepal. ..." Besides being in the nature of "Hearsay Evidence", which is totally unreliable, this statement only exhibit a talk Shri Asadullah Khan had with the Driver. However that talk, as it appears from the statement, could be with the Driver of truck No. WB-73-6076, which he allegedly escorted on 9.30 p.m. from on 30.6.99 from Mekhri Circle, Bangalore.
The Ball Bearings, in the present case before us, have been admittedly delivered by Shri Asadullah Khan on 24.6.99 and 27.6.99 to the godown from where they were seized. They cannot be therefore brought by truck No. WB-73-6076 allegedly from Nepal. There is no evidence to that effect or about other trips of same or other trucks from Nepal on record. If the Ball Bearings of Polish Origin In this case cannot be established, on basis of evidence, to have contravened the prohibition of third country imports from Nepal to India and there is no finding how they are otherwise restricted or prohibited from import, than the order of confiscation under Section 111(d) of the Customs Act, 1962 cannot be upheld. The same is set aside.
(e) Since no evidence is produced by the Department to show the Poland Origin Ball Bearings to be smuggled relying upon Ravi Mittal v. CCE, 1999 (32) ELJ 709 and there is no reasonable belief to seize it is not found and relying upon Hindustan Bearing Corporation v. CC, Calcutta 1991 (25) ECR 276 and also following the case of Arvind Bhai Nyalchand Mehta v. CC 2000 (39) RLT 366, we would set aside the confiscation and the penalties as imposed.
6. Since Shri Asadullah Khan is not in appeal before us, we allow the appeals only of Shri Syed Saleem and Shri Gurmail Singh as regards only penalty. Since the Ball Bearings under Seizure are not claimed by Shri Syed Saleem or and Shri Gurmail Singh no orders on the return of the Bearings are being passed.
7. Appeals of Shri Syed Saleem and Shri Gurmail Singh are allowed as above.