Full Judgment
The Preventive Officers of the Central Excise, Allahabad intercepted the truck No. RRF 6285 on 16-4-1989 and recovered 4752 Kgs. of polyester texturised yarn of foreign origin contained in 132 gunny bags, concealed under bundles of old rejected ply-wood. Besides 24 dibbies of Chinese balms were also recovered which were owned by Shri Satya Narain Modi and were stated to have been purchased by him from Siliguri. Indian currency of Rs. 23,500 /-was also recovered from him.
The occupants of the truck were S/Shri Satya Narain Modi, Balbir Singh and Bahadur Singh, who were drivers of the truck and Addu Ram, Khalasi.
On demand, Satya Narain Modi produced the hire payment copy of Bombay Delhi Freight Carrying Corporation, declaration for rejected ply-wood, challan of Sharda Ply Wood, etc. The documents indicated that 1256 bundles of corefalli patti were being transported from Sharda Ply Wood Industries, Jalpaiguri to M/s. Raj Dhani Ply Traders, Bombay. Shri Satya Narain Modi stated that he had loaded the truck in a jungle beyond Bagdogra through one Daljit Chowdhary who settled the freight at Rs. 32,000/- for carriage of the contraband which was loaded on 14-4-1989. Satya Narain Modi was paid Rs. 15,000/- as advance and he was instructed to stop the truck at a Petrol Pump at Vapi where somebody was to meet him and take delivery of the goods. No vouchers or documents to evidence licit importation of the yarn or balm into India was produced. As polyester texturised yarn is a notified item under Section 123 of the Customs Act, 1962 and was found being carried in contravention of the relevant provisions of the law.
3. Show cause notices were issued to all four occupants of the truck and to Daljit Chowdhary, and to the transport companies, proposing confiscation of the yarn, ply-wood waste used for concealing the yarn, the Chinese balm and the currency which was treated as sale proceeds of smuggled yarn, confiscation of the vehicle used to transport the smuggled goods and proposing penal action. The occupants of the truck denied knowledge of the contraband nature of the goods loaded in the truck and submitted that the driver agreed to book only ply-wood for Sh. Daljit Chowdhary Proprietor of M/s. Haryana Gauhati Transport Company and the loading was done by the labourers of Daljit Chowdhary.
They also submitted that the truck in question belonged to Anil Kumar Modi, cousin of Satya Narain Modi and that Satya Narain Modi had only gone to Siliguri in his cousin's truck to survey the routes for the purpose of plying his own truck. They also submitted that the statements had been recorded from them under duress. The adjudicating authority rejected the defence of the appellants and passed the impugned order of confiscation of goods and imposed penalty of Rs. 20,000/- on Satya Narain Modi and penalties on the two drivers of the truck. Hence these appeals by Sh. Satya Narain Modi and by the owner of the truck i.e. Sh. Anil Kumar Modi.
3 We have heard Shri Jitendra Singh, learned Advocate and Shri K.N.Gupta, learned SDR and carefully considered their submissions.
4. We find that the case of the Department is based upon the recovery of the yarn and Chinese balms concealed behind ply-wood rejects, and the statements of Satya Narain Modi and Shri Bahadur Singh, Balbir Singh, drivers of the truck and Addu Ram, the Khalasi. The statements clearly bring out their involvement in the smuggling of synthetic polyester texturised yarn of foreign origin. No doubt the yarn does not bear any foreign markings - the description on the yarn is "75 - D x 36 x F x OSD"; however, the contraband nature of the goods is established from the statements. The statement of Shri Satya Narain Modi is very detailed and elaborate. He has stated that "on 7-4-1989, I loaded mustard oil in truck No. 6285 from Ram Kali Oil Mills, Bikaner and reached Siliguri on 12-4-1989, where the oil was unloaded at the premises of Priti Rajendra Traders. On 13-4-1989, I met Shri Daljit Chaudhary, owner of Haryana Gauhati Transport and talked to him for taking goods in the truck on return journey. He told me to take foreign yarn to Ahmedabad to which I agreed. He collected my Registration and Driving licence for preparation of goods receipt. On 14-4-1989 at 8 in the night, Daljit Chaudhary came to me along with another person, whom I did not know and told me to get the goods loaded from that person.
Sh. Daljit Chaudhary agreed to pay Rs. 32,000/- although the transportation charges from Siliguri to Ahmedabad are Rs. 12,000/- because I knew that foreign goods were to be transported by me and, therefore, the higher amount was settled. On 14-4-1989, I along with the abovesaid persons accompanied that person at about 8 in the night and reached at a place in a jungle about 50 Kms. from Siliguri beyond Bagdogra. At about 11 in the night, foreign yarn was brought there in 11 bullock carts. 132 bags of foreign yarn were loaded in truck No.6285 in my presence, which were covered from all sides by 156 bundles of ply wood planks. Rs. 15,000/- as advance of transportation charges were given to me. Documents of the truck and goods receipts (bills) in which 1256 bundles of ply wood were written, were also given and I was instructed to disclose bundles of ply wood only if the truck is checked on way. The above person whose name was not known to me gave me envelope of badami colour with a chit on which sign of "(iii)" was made and told me that after Ahmedabad on a Petrol Pump near Bombay Choraha, his man will be there, who will show the above type of sign, which is written on the chit given to me. The goods of origin which is written on the chit given to me. The goods should be given to that man, who will pay balance of Rs. 17000/- as transportation charges. I knew it fully well that the goods were of foreign origin and, therefore, higher charges would be given to me and, therefore, I was carrying those goods. One blue coloured Ambassador car No. MX 1246 also accompanied me upto Punia in Bihar, which is about 300 KMs from Siliguri and then went back. The name of the owner of the car is not known to me. I have come to Siliguri on this truck three times within the month. On the first occasion again mustard oil was taken. On the second occasion again mustard oil was taken and came back without anything. This time this was my third trip. On my personal search, Rs. 23,500/- were recovered from me by the officers. Rs. 15,000/- were the advance transportation charges for these foreign goods and remaining Rs. 8500/- were the transportation charges for carrying mustard oil. During the course of the search of my truck 24 Dibbles of China balm valued at Rs. 48/- were also recovered. The same had been purchased by me from Siliguri but I have no document for that ... I have no duty paying document, bill, voucher etc. regarding 132 bags of polyester yarn weighing 4652 kgs.
valued at Rs. 95.0400/- and 24 dibbies of China blam ... . This statement was therefore, got written from Shri MadanGopal, s/o Shri ...
resident of 44, Purana ... Allahabad. Thereafter it was read to me.
This is my own statement, which has been given by me without any coercion and I am statisfied". The contention of the learned Counsel that the statement of Shri Satya Narain Modi and others was obtained under duress and, therefore, was not voluntary in nature is not acceptable as there is nothing on record to show that the statements were retracted. The bail application of Satya Narain Modi referred to by the learned Counsel does not appear to have been placed before the adjudicating authority and in the absence of any finding thereon, we are not in a position to comment upon it. The learned Counsel has referred to the report dated 9-4-1989 of medical examination of Satya Narain Modi, by the Medical Officer, Central Jail, Naini, Allahabad which reveals injuries such as contusion on left side of the right fore arm just below elbow, contusion on both left and right side legs and abrasion and the medical officer has opined that all injuries are simple and caused by blunt object.
This injury report although authenticated has been rightly rejected by the adjudicating authority on the ground that it was submitted only at the time of personal hearing on 16-2-1990 and not at any prior point of time. The plea of the learned Counsel that the statement of Satya Narain Modi was not recorded by a proper officer of the Customs is also mis-conceived as we have seen the copy of the statement recorded in Hindi which bears the endorsement of having been signed before a Customs Officer and further this point having not been agitated before the adjudicating authority cannot be pressed at this stage when it will not be possible to ascertain this fact.
5. The case law cited by the learned Counsel for the appellants is not applicable to the facts and circumstances of this matter. The judgment of the Delhi High Court in the case of Shantilal Mehta v. Union of India reported in 1983 (14) E.L.T. 1715 cited by the learned Counsel to support his argument that there must be reasonable belief that the goods in dispute are smuggled goods, is distinguishable as in that case, though the siezed goods viz. ornaments and diamonds were not accounted for by the petitioner who is a Jeweller, there was nothing to suggest the foreign origin of the goods or their illegal importation into India from Nepal or elsewhere while in the present case, the reasonable belief stems from the statements of the occupants of the truck.
5.1 The order of the Hon'ble Supreme Court in the case of Union of India v. Shri Prakash Chand Lunia reported in 1994 (53) ECR124 does not come to the aid of the appellants as the Court, on hearing an appeal against the quashing of a complaint under Section 135 of the Customs Act, 1962 against the respondents, has only set aside the quashing and directed the Trial Court to proceed with the trial.
5.2 The reliance by the appellants on the order of the Tribunal in the case of Amco Electronics v. Collector of Customs reported in 1992 (61) E.L.T. 650 setting aside the confiscation of the seized Indian currency under Section 121 for non-discharging of the burden of proof by the Department that it represented the sale proceeds of the smuggled goods is also misplaced, as in this case, Shri Satya Narain Modi has clearly admitted that Rs. 23,500/- is the consideration for transport of the contraband yarn.
6. In the light of the above discussion, we hold that Sh. Satya Narain Modi has not discharged the burden cast upon him under Section 123 of the Customs Act, 1962 and that the Department has discharged the burden under Section 121 in respect of the currency, and, therefore, the penalty imposed upon him is sustainable.
7. The plea of Shri Anil Kumar Modi against confiscation of his truck is non-fulfilment of the mandatory requirement of Section 124, as no notice proposing confiscation thereof was issued to him. We see no merit in this. Shri Satya Narain Modi has clearly stated that he was sitting in the truck in the capacity of its owner, who is the son of his maternal uncle. Further, he has not come up with any claim to the truck before the adjudicating authority. In these circumstances, we see nothing wrong in the Department having treated Sh. Satya Narain Modi as the representative of Shri Anil Kumar Modi and no infirmity in the order of confiscation of the truck under Section 115(2) and the decision of the Hon'ble Calcutta High Court in the case of Pradeep and Company v. Collector of Customs reported in AIR 1973 Calcutta 131 wherein the person incharge of the car seized for carrying smuggled goods was the driver who could not be said to be the agent of the owner, is not applicable. The argument that the confiscation is not legally permissible as the truck has not been seized under Section 110 was not advanced before the adjudicating authority and at this belated stage, it is not open to consideration, particularly in the absence of case records such as seizure memo, etc. However, we see force in the contention of the learned Counsel that only the amount of fine in lieu of confiscation could be recovered by encashing the bank guarantee executed and not the penalties imposed upon on Sh. Satya Narain Modi and the two drivers of the truck and accordingly order that only the fine amount of Rs. 60,000/- be encashed from the bank guarantee executed in terms of the Allahabad High Court order. In the result we hold as under : (a) the penalty of Rs. 20,000/- on Sh. Satya Narain Modi is confirmed.
(b) the confiscation of the Indian currency and Chinese Balm is confirmed (there is no challenge to the confiscation of the seized yarn).
(c) the redemption fine of Rs. 60,000/- is directed to be recovered by encashment of the bank guarantee.
Subject to the modification at Sl. No. (c), the impugned order is upheld and the appeals rejected. The cross-objections accordingly abate.