| SooperKanoon Citation | sooperkanoon.com/29120 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Calcutta |
| Decided On | Oct-17-2002 |
| Judge | A Wadhwa |
| Reported in | (2003)(87)ECC23 |
| Appellant | Hiralal Bhagat |
| Respondent | Commissioner of Customs |
2. All the six appeals are being disposed of by a common order as they arise out of the same set of facts and circumstances.
3. Vide the impugned orders the authorities below have absolutely confiscated 34 pieces of silver lump weighing collectively 97.244 kgs.
and valued at Rs. 6,80,700/- absolutely. In addition penalties have been imposed upon various persons.
4. As per the facts on record, a tractor was intercepted by the police officers at Araria Camp on 19-10-94. Search of the said tractor resulted in recovery of 34 pieces of silver bars weighing 97.244 Kgs.
and concealed in the gear oil chamber of the tractor. The tractor at the relevant time was being driven by Shri Ramjee Bhagat Interrogation of Shri Ramjee Bhagat by police revealed that the said 34 pieces of silver were illegally smuggled by one Shri Shree Bhagat, son of Shri Hiralal Bhagat from Nepal and he has kept the same concealed in the tractor. Shri Shree Bhagat was following the tractor on a scooter.
However, the said Shri Shree Bhagat fled away from the scene after the tractor was intercepted by the police officers. Subsequently the silver along with the tractor was handed over to the customs officers on the next day i.e. 20-10-94. Shri Ramjee Bhagat, driver of the tractor reiterated his above statement before the customs officers.
5. After completion of post seizure investigations conducted by the customs, all the appellants were issued show cause notice on 4-4-95 proposing confiscation of the silver in question and imposition of personal penalties upon various persons. The said show cause notice was adjudicated upon by the Deputy Commissioner vide which he confiscated the silver and imposed penalties. The tractor was also confiscated with an option to the appellant to redeem the same on payment of redemption fine. The said order was set aside by the Tribunal and matter remanded to the original adjudicating authority with directions to give an opportunity to the appellant to substantiate their claim that the silver in question was procured by them by melting the old silver ornaments and utensils. Accordingly the impugned order has been passed by the Deputy Commissioner in de nova proceedings and upheld by the Commissioner (Appeals).
6. I have heard Shri K.P. Dey, ld. Advocate for the appellants and Shri T.K. Kar, ld. SDR for the Revenue.
7. The appellants' main contentions are that THE silver in question does not bear any foreign markings; that the statement of the driver given to the Customs authorities was under duress and coersion and was subsequently retracted by him and as such cannot be made the basis for holding that the silver was smuggled; that the silver has been obtained by the appellants from the old ornaments and utensils given to the various members of the Bhagat family from their in-laws' side at the time of marriages; that they were under a threat of dacoity and for which reason they melted entire silver goods for the purposes of keeping the same in the lockers; that inasmuch as the quantity of silver was less than 100 Kgs. the burden of proof that the same was not smuggled did not rest upon the appellant and in terms of the Board's circular issued from F. No. 394/233/88-Cus., dated 11-6-90 wherein it has been clarified that normally the provisions of Section 123 of the Customs Act should not be invoked against persons who are found to be in possession of silver bullion of less than 100 Kgs.
8. The above contentions of the appellants were not accepted by the lower authorities by observing that the purity of the silver was to the extent of 99.28% suggesting thereby that the same cannot be result of melting of silver ornaments and utensils which are generally not made of with such a high purity silver; that the seizure was affected based upon an information by the police; that the fact of secret placing of the silver in the gear oil chamber is indicative of tainted character the silver; that in case of threat of dacoity the appellant would have taken care of gold instead of the silver; that the statement of the driver was retracted after a period of more than two months in spite of the fact that he was produced before the Judicial Magistrate on the next day of his arrest; that the person Shri Ganori Sah, who has been named by the Bhagat family as the person involved for melting of the ornaments and utensils has denied his participation in the melting; that the statements of the in-laws of the Bhagat family are to the effect that their son-in-laws approached them in the end of September, 1994 or beginning of October, 1994 and asked them to sign certain papers on which something was typed and as such it is clear that the affidavits of the in laws are afterthought and fake documents to legalise appellants' illegal businesses.
Both sides relied upon various case laws in support of their submissions.
9. I find that as per the undisputed facts on record silver bars to the tune of 97.244 Kgs. were recovered from the gear oil chamber of the tractor. The driver of the tractor in his on the spot statement has admitted that Shri Shree Bhagat was the owner, who was engaged in smuggling of the silver from Nepal. Silver is a specified item under the provisions of Section 123 of the Customs Act and it is for the person, from whose possession the silver is recovered or who is claiming to be the owner of the silver to prove that the silver in question is not smuggled and has been procured by him from legal indigenous sources. In the present case the appellants have claimed that the old silver ornaments and utensils belonging to the various Bhagat family members and gifted to them from their in-laws at the time of their marriages have been melted into silver bars for the safe custody of the same. They have also contended that the statement of the driver alone cannot be made the basis for holding against them. The above contentions of the appellants have been dealt elaborately by the adjudicating authority in the impugned order.
10. First of all it is seen that as disclosed by the driver of the tractor Shri Shree Bhagat was following the tractor on scooter and when the tractor was stopped by the police he immediately disappeared. As rightly observed by the adjudicating authority that if there was no fear in the mind of Shri Shree Bhagat, there was no good reason for him to disappear from the scene. He could have clarified the position immediately at the time of interception itself.
11. The appellants have also strongly contended that the silver in question was not bearing any foreign markings and as such the same could not be seized by the officers. The appellants' case is that they have melted the silver ornaments and utensils with the help of Shri Ganori Sah, who further deposed that the conversion was done with the help of three labourers. However, on investigation the addresses of two labourers was found to be fake and the other labourer Shri Radhe Shayam Soni in his statement dated 19-12-94 deposed that he neither knew Shri Hiralal Bhagat and his family nor Shri Ganori Sah and has never participated in the melting of silver with Shri Ganori Sah. He also clarified that he does not know the procedure of melting of silver. As such it becomes clear that the appellant could not establish that the silver in question has come into existence as a result of melting of the old ornaments and utensils. The adjudicating authority has also observed that the foreign markings were erased by Shri Ganori Sah from the silver and as such the question of their not being present on the silver cannot be of any help to the Appellants.
12. The next issue is as to whether the statement of the driver is an evidence which is to be relied upon or not. The statement was given on 20-10-94. The driver was produced before the Judicial Magistrate on 21-10-94, but he never retracted from the statement at that point of time. No allegations of use of pressure or coersion was made and no evidence to that effect was produced. It is only on 12-12-94, the appellant retracted his statement. As such I am of the view that the adjudicating authority has rightly ruled that such retraction was afterthought and will not make the statement as devoid of any evidentiary value. It is seen that in the case of Krishan Chand and Ors. v. CCE, Chandigarh - 1987 (29) E.L.T. 198 (T) it was held that the confessional statement of a co-accused is relevant if the confessional statement is self-implicating and also implicates the co-accused.
13. It is also seen that during the course of investigations, the in-laws of the sons of Shri Shree Bhagat were contacted to verify their plea of inheritance of silver items gifts from them. Their statements make it clear that the son-in-laws approached them for giving affidavits and for their signatures on the same without mentioning weight of the ornaments and they were informed that the same would be filled lateron. In one of the cases, it also came on record that the father-in-law has not signed such affidavit. As such I am of the view that they have been rightly discarded by the authorities below as concocted and fake document.
14. It is also seen that the purity of the silver is up to 99.28% and the silver obtained by melting of utensils would not be of that purity as it needs to be mixed with some other metals for hardening the silver, 15. The appellants have strongly relied upon certain decisions in support of his defence that where there is no direct evidence of illegal importation of silver into the country and when the silver does not bear the foreign markings, benefit of doubt should be extended and the silver is to be released. However, I find that in the present case there is strong circumstantial evidences to arrive at a conclusion that the silver in question has been smuggled by the appellants from Nepal, who have tried their best to erase the foreign markings to cover their activities in the garb of melting of old silver utensils. From the discussions above it becomes clear that the appellants' defence plea is not worthy of acceptance. It is in these circumstances that it has to be held the silver in question is not the result of the melting of the old utensils. Inasmuch as the silver is the notified item under the provisions of Section 123 of the Customs Act and the appellants have failed to explain the legal sources of acquisition, the same has been rightly confiscated by the authorities.
16. It is further seen that the appellants have strongly relied upon Board's circular dated 11-6-90 which is to the effect that the provisions of Section 123 of the Customs Act should not be invoked against persons who are found to be in possession of silver bullion of less than 100 Kgs. In the instant case the weight of the silver seized is 97 Kgs. (approx.), which is more or less near to 100 Kgs. and as such the provisions of Section 123 have been rightly invoked against the appellants.
17. In view of the foregoing I uphold the order of confiscation of the silver. However, I am of the view that the appellant should be given an opportunity to redeem the same on payment of redemption fine and on payment of duty under the provisions of Section 125 of the Customs Act, 1962. For fixing the quantum of redemption fine I send the matter back to the original adjudicating authority.
18. As regards the confiscation of the tractor the same has been admittedly used for transportation of illegally imported silver for which the same is liable to confiscation under the provisions of Section 115 of the Customs Act. The owner has already been given an option to redeem the same on payment of redemption fine of Rs. 25,000/- (Rupees twenty-five thousand), which in my views is not on the higher side and needs no interference.
19. As regards the personal penalty on Shri Shree Bhagat in view of my findings above, the same is upheld. As regards the penalties of Rs. 20,000/- (Rupees twenty thousand) imposed on each Shri Satya Narayan Bhagat and Shri Hiralal Bhagat and a penalty of Rs. 10,000/- (Rupees ten thousand) on Smt. Moti Mala Devi Bhagat and Shri Ramjee Bhagat I find that the family members of Shri Shree Bhagat and their specific role in being involved in smuggling of silver from Nepal and selling it in the Indian market has not been discussed by the adjudicating authority. Similarly the adjudicating authority has not discussed as to how the appellant Shri Ganori Sah is liable to penal action. As such by extending the benefit of doubt to the said appellants I set aside the imposition of personal penalties upon them.
(a) Order of confiscation of silver of 97.244 Kgs. valued at Rs. 6,80,700/- is upheld. However, the adjudicating authority will fix the redemption fine and would quantify the duty leviable on the said silver and the appellants would be at option to redeem the same on payment of redemption fine and duty.
(b) The order of confiscation of redemption fine of Rs. 25,000/-(Rupees twenty five thousand) is upheld. (c) Penalty of Rs. 30,000/- (Rupees thirty thousand) on Shri Shree Bhagat is upheld.