Judgment:
1. All the six appeals are being disposed of by a common order as they arise out of the same impugned order passed by the Commissioner of Customs, Patna vide which he has absolutely confiscated copper slabs and M.S. Scrap owned by Shri Bimal Kumar Gupta and has imposed a personal penalty of Rs. 1,00,000 upon him. The adjudication authority has also confiscated the truck transporting the copper slabs in question with a option to the owner to redeem the same on payment of redemption fine of Rs. 1.50 lakhs in additon to impsoing personal penalites upon the Transport Agencies, Faridabad and Raxaul of Rs. 20,000 each. Personal penalty of Rs. 30,000 has been imposed on Shri Bhanwar Singh, employee of Shri Bimal Kumar Gupta and of Rs. 10,000 has been imposed on Shri Ravi Shankar Prasad Jaiswal, a person found siting in the truck alongwith copper slabs. In addition, a penalty of Rs. 50,000 has been imposed on Shri Shanti Kumar Ramsesaria, owner of one found M/s A-One Batteries Pvt. Ltd. to whom the goods were consigned.
2. As per the facts on record, the Customs Officers acting on intellingence intercepted one truck when the same was in a standing position near Laukhan village between Dhaka and Ghorasahan. They found a person, Shri Ravi Shankar Prasad Jaiswal, siting in cabin of the truck. On interrogation, the said Jaiswal deposed that the tyre of the truck was punctured and that is why it was standing. He was informed that the truck was loaded with M.S. Scrap. However, the truck was searched in the presence of two public witnesses and after removal of M.S. Scrap, was found to be laded with gunny bags containing copper slabs. As M.S. Scrap was found to be of foreigin orign as per the marks and identification, Shri Jaiswal was again put to interrogation. In his statement, Shri Jaiswal revealed the modus-operandi of smuggling the copper slabs from Nepal through Simrongarh. He stated that the copper slabs are brought in India through Simrongarh Border through Bullock cart and are loaded into truck at Ghorasahan. The truck was sent from Motihari and the goods belonged to one Shri Kumar. He disclosed that the goods from there reached to M/s Sumeet Udyog, Raxaul and a fresh set of papers to cover the consignments are issued. He produced a bill dated 22.6.2001 rasised by M/s Swastik Enterprises in the name of M/s Ganesh Foundry, Industrial Area, Muzaffarpur, describing the goods as "old scrap". A transporter's bill bearing No. 4418 dated 24.6.2001 issued by M/s Dhillon Transport Agency describing the goods as "iron scraps" was also produced by him. In the said bill and transport documents, there was no mention of copper slabs.
3. Subsequently, the officers visited the factory of M/s Ganesh Foundry, Muzaffarpur, Shri P.K. Jha, Authorised Signatory of the said firm, denied having any knowledge about any consignment of copper slabs and stated that they have never dealt with M/s Swastik Enterprises and they do not deal in non-ferrous metals. Inasmuch as the consignor of the goods denied having placed any order with the consignee and the documents produced by Shri Jha did not reveal the transportation of the copper slabs and inasmuch as the truck in question was found in the immediate vicinity of the Indo-Nepal Border and there was sufficient reason to believe that the slabs in question was smuggled, the offiers accordingly seized the copper slabs with the M.S. Scrap. Shri Jha was also arrested.
4. During the post seizure investivation, the officers found that M/s Swastick Enterprises was a non-existing firm. However, they found another factory M/s Sumeet Udyog at Raxaul and visited the same on 11.7.2001 in regard to locate Shri Kumar Saheb", owner of the scraps in question as disclosed by Shri Jaiswal. One Shri Bhanwar Singh was found in the said factory who claimed to be its Supervisor and a Gate-Keeper.
Shri Bhanwar Singh in his statement given to the officers disclosed that he had joined the factory on 1.4.2001 and the factory had functioned only for three days ever since his joining. There was no electricity connection for running the factory and the same is run on generators which are brought from market on rent; that the owner of the factory was one Shri Bimal Kumar Gupta; that the production is carried out with the help of contractual labourers; that the blower was new and puja had been performed on the same recently. He however could not produce any documents to show the rent paid for the generators and any payments particulars to contractual labourers. Efforts made by the Revenue to locate Shri Bimal Kumar Gupta failed.
5. Subsequently, the said M/s Sumeet Udyog claimed the ownership of copper slabs and filed a Writ Petition in the Hon'ble High Court of Patna with a prayer to order for release of the seized goods. In support, he produced photo copy of the bill dated 23.6.2001 issued in the name of M/s A-One Batteries Pvt. Ltd., Libaspur, Delhi and a consignment note bearing No. 4419 dated 23.6.2001 issued by M/s Dhillon Transport Agency on which there was a stamp of Excise Check Post, Motihari and a Sales Tax Permit. They also produced the documents for purchase of raw materials (copper scrap) from M/s Ankit Steel Traders and M/s Bharat Enterprises. The said Writ Petition was however subsequently withdrawn by them.
6. In order to test the veracity of the documents produced by M/s Sumeet Udyog, the officers conducted the concealment of raw materials of M/s Ankit Steel and M/s Bharat Enterprises. Both the said firms denied having sold any raw materials to M/s Sumeet Udyog and sumitted that the bills so produced by M/s Sumeet Udyog were never raised by either their firm or by any of their staff. They also deposed that their firm was not dealing in non-ferrous metals. It was further found that the godown/office of the transporter at 58, Strand Road, Kolkata, had been closed for the last three years. Investigation made from the Excise Check Post, Motihari as regards the stamp bearing on consignment note of the transporter revealed that the signature on the documents was not of any of the staff posted at the Check-post and the stamp also did not tally with that of the stamp used at the Check-post. M/s Sumeet Udyog was found to be a provisional by registered SSI unit for manufacture of batteries.
7. In follow-up action, the Revenue Officers again visited the factory premises of M/s Sumeet Udyog and seized 1227.5 kg. of coppper slabs totally valued at Rs. 1,22,750 lying in the factory inasmuch as the same was also believed to have been smuggled into India from Nepal.
8. On the basis of the above facts, all the appellants were issued a show-cause notice porposing confiscation of copper slabs, copper scraps and M.S. scraps and imposition of personal penalties upon the various persons. The said show-cause notice resulted into impugned order passed by the Commissioner of Customs, Patna.
9. We have heard Shri K.P. Dey, Ld. Advocate appearing for four of the appellants and Shri P.K. Das, ld. Advocate appearing for the transporters. The appellants have attacked impugned order by submitting that the Commissioner has relied upon the statement of Shri Ravi Shankar Prasad Jaiswal whose statement was retracted by him from jail.
Shri Dey however contended that the copper slabs, metal scraps are not covered by the provisions of Section 123 of the Customs Act, 1962 and as such the burden to show that the same have been imported from Nepal is upon the Revenue. He submits that there is no direct evidence showing the importation of the goods from Nepal; that all the papers showing consignee as M/s A-One Batteries (P) Ltd. owned by Shri Santi Kumar Ramsesaria were given to the Customs Officers at the time of interception, the same were not taken on record. Shri P.K. Das, Ld.
Advocate submitted that there is no role attributable to the transporters' agency and the confiscation of the truck and the imposition of personal penalties is neither justified nor warranted.
10. Shri Ashoke Kumar Singh, Superintendent, appearing on behalf of the Revenue had drawn our attention to the various circumstancial evidences discussed by the Commissioner in his impuged order leading to inevitable conclusion that the copper slabs, copper scraps and M.S.scraps in question were smugged goods from Nepal.
11. We have considered the submissions made from both the sides. As regards the confiscation of the copper slabs, copper scraps and M.S.scraps, the appellants have contended that the same are non-notified items under the provisions of Section 123 of the Customs Act, 1962 and as such the Revenue is under an onus to prove beyond doubt the smuggled character of the goods. In any case, we find that the truck was intercepted by the Officers when the same was standing near immediate border of Indo-Nepal. Initially, Shri Jaiswal, who was siting in the truck denied the presence of anything else but M.S. scraps in the truck. It was only on search of the truck that copper slabs were found to be concealed under M.S. scraps. Thereafter, Shri Jaiswal admitted that the same were brought from Nepal and also disclosed the modus-operandi for bringing the goods from Nepal. The said statement of Shri Jaiswal coupled with the other factors revealed during the course of post seizure investigation constituted important pieces of evidence as regards the smuggled character of the goods in question. The appellants have contended that such statement having been retracted by Shri Jaiswal from jail has lost its evidentiary value cannot be appreciated inasmuch as Shri Jaiswal was produced before the Presiding Officer, Economic Offence Court, Patna immediately after his arrest where he could have retracted from his statement. It is also seen that the statement was written by Shri Jaiswal in his own handwriting and there is no evidence of use of any pressure or coercion upon him. Mere retraction of the submission after a period of fifteen days from jail custody is not enough, especially when the said Shri Jaiswal failed to avail of the very fast (sic) [first] opportunity of retraction when he was produced in the Economic Offence Court. Such retraction is also required to be rejected for the reason that the details disclosed therein have been further corroborated by the officers during the course of post seizure investigation. M/s Sumit Udyog who has claimed to have manufactured the goods has been found to be deficient in its manufacturing capacity inasmuch, as on a visit to the factory, it was seen that the same was not in running condition and Shri Bhanwar Singh, supervisor, was present in the said factory and had also deposed that the factory had run only three times from the date of his joining. He had also disclosed that the blower was new and puja had recently been performed. It was also seen that the consignee shown in the douments produced by Shri Jaiswal has denied having placed the order with M/s Sumeet Udyog, Raxaul. Even subsequently, the productions by the said firm showing dispatch of the goods to M/s A-One Batteries Pvt. Ltd., Delhi have also been proved to be forged documents inasmuch as the said M/s A-One Batteries (P) Ltd. was found to be closed. Even the documents produced by M/s Sumeet Udyog, Raxaul for procurement of raw matierals have been proved to be false inasmuch as the alleged supplier i.e. M/s Ankit Steel Traders and M/s Bharat Enterprises have denied having supplied the materials to the said firm and having issued the bills.
Even the Excise Check Post stamp appearing on consignment note of the transporter was found to be false as informed by the said check post officers vide his letter dated 6.9.2001. The transportbilty number 4418 dated 24.6.2001 issued by M/s Dhillon Transport Agency, Raxaul was for iron scraps whereas subsequently the appellants produced another transportbilty number 4419 dated 23.6.2001 showing the stamp of Excise Check Post, Motihari, which was proved to be bogus. Similarly, it was seen that for supply of raw matierals to M/s Sumeet Udyog, transporter, Kolkata, consignment not (issued, were produced but their Kolkata Office was found to be closed for the last three years. All these evidences as discussed by us above, lead to only one inevitable conclusion that the copper slabs in question have been smuggled into India from Nepal by the appellants and their efforts to cover consignment by the documents have become futile inasmuch as the Revenue Officers have been able to prove the false and bogus character of the documents by the intensive investigation carried out by them. As such, the Revenue is said to have discharged its burden placed upon them under the provisions of Section 123. The appellants have not been able to negate the evidences so produced showing the fake character of the documents. In the circumstances, we are of the view that the Commissioner has rightly held the goods to be of tainted character and has rightly confiscated the same. However, we note that the goods are not restricted items for the purposes of import and as such the owner of the goods should be given an option to redeem the same on payment of redemption fine and on payment of appropriate duty under the provisions of Section 125 of the Customs Act. For fixing the quantum of redemption fine and for quantifying the duty leviable on the said goods, we remit the matter to the Commissioner.
12. As regards the confiscation of the seized truck, we have already discussed the role played by the Transport Agency, Raxaul and when they tried to cover the nefarious activities of M/s Sumeet Udyog by issuance of Tansport Bil ty No. 4418 dated 24.6.2001 & Transport Bility No. 4419 dated 23.6.2001. Even the consignment notes issued and received raw materials have been found to be bogus. As such the truck belonging to M/s Dhillon Agency and Sales (P) Ltd., Faridabad is held liable to confiscation under the provisions of Section 115 of the Customs Act, 1962, inasmuch as the same has been found to be transporting smuggled goods. However, keeping in view the overall facts and circumstances of the case, we reduce the redemption fine of Rs. 1,50,000 to Rs. 75,000 (Rupees seventy five thousand only).
13. As regards the imposition of personal penalties of Rs. 1,00,000 on Shri Bimal Kumar Gupta, owner of M/s Sumeet Udyog, we have already discussed the role of M/s Summet Udyog in providing documents for covering the smuggled goods. As such, we are of the view that the personal penalty imposed upon Shri Bimal Kumar Gupta is not required to be interfered with.
14. As regards the penalty of Rs. 30,000 imposed on Shri Bhanwar Singh, it is seen that he was an employee of M/s Sumeet Udyog and was working in the capacity of Gate-Keeper. He was not having any knowledge about the smuggled activities of M/s Sumeet Udyog. As such, by extending the benefit of doubt to the said appellant, we set aside the personal penalty imposed upon him.
15. As regards Shri Ravi Sankar Prasad Jaiswal, it is seen that he was accompaning the goods and was having full knowledge about she smuggled character of the same. He was also having complete knowledge about the modus-operandi by the owner of the goods for bringing the same clandestinely from Nepal into India and as such was actively participating in the smuggling activities. We accroingly upheld the personal penalty of Rs. 10,000 imposed upon him.
16. As regards personal penalty of Rs. 20,000 imposed on M/s Dhillon Agency and Sales (P) Ltd., Faridabad, we find that the said penally has been imposed on the sole ground that they were the owner of the seized truck. The truck has already been confiscated and there is no justification for imposition of personal penalty, the same is accordingly set aside. However, personal penalty imposed upon the proprietor of M/s Dhillon Transport Agency, Raxaul is upheld inasmuch as the said transporter at Raxaul has been found to be an accomplice of M/s Sumeet Udyog.
17. Penalty of Rs. 50,000 imposed on Shri Shanti Kumar Ramsesaria who was the Director of the consignee firm of M/s. A-One Batteries Pvt.
Ltd. is set aside by extending him the benefit of doubt inasmuch as there is no evidence on record showing his involvement in the matter.
(a) Copper slabs, copper scraps and M.S. scraps are held to be liable to confiscation. However, the matter is remanded to the Commissioner for fixing of redemption fine and for quantification of duty leviable on the same in terms of the provisions of Section 125 of the Customs Act, 1962; (b) The truck in question is also held liable to confiscation under the provisions of Section 115 (2) of the Customs Act, 1962. However, redemption fine is reduced from 1,50,000 (Rupees one lakh fifty thousand only) to Rs. 75,000 (Rupees seventy five thousand only); (c) Penalty of Rs. 1,00,000 (Rupees one lakh only) on Shri Bimal Kumar Gupta is upheld; (d) Penalty of Rs. 30,000 (Rupees thirty thousand only) imposed on Shri Bhanwar Singh is set aside; (e) Penalty of Rs. 10,000 (Rupees ten thousand only) imposed on Shri Ravi Shankar Prasad Jaiswal is upheld; (f) Penalty of Rs. 20,000 (Rupees twenty thousand only) imposed on M/s Dhillon Agency and Sales (P) Ltd., Faridabad is set aside; (g) Penalty of Rs. 10,000 (Rupees ten thousand only) imposed on proprietor of M/s Dhillon Transport Agency, Raxaul, is upheld; (h) Penalty of Rs. 50,000 (Rupees fifty thousand only) imposed on Shri Shanti Kumar Ramsesaria is set aside.
19. All the appeals are disposed of in the above manner. MA filed by M/s Dhillon Agency & Sales (Pvt.) Ltd. also gets disposed of.