Mohd. TahsIn Vs. Commissioner of Customs Lucknow - Court Judgment

Per Archana Wadhwa, J.

1. As per facts on record, the Customs officers intercepted one truck on 24.7.06, coming towards Faizabad. Four persons were found to be sitting in the vehicle. On being questioned, driver of the vehicle deposed that the zinc was loaded in the vehicle from a place beyond Adapur village at Indo-Nepal border. Search of the truck resulted in recovery of 162 bags of zinc. Revenue by entertaining the view that the said goods stand smuggled from Nepal, seized the same along with seizure of the truck.

2. During post seizure investigation, statement of various persons including the driver of the truck were recorded. Shri Rajendra Prasad, driver of the vehicle, deposed that he had loaded 162 bags of zinc in the vehicle from a place which is near Indo-Nepal boarder. He further stated that the said zinc was brought from Nepal by truck and the same were subsequently loaded in the truck. The statement of other cleaner of the truck was also to the same effect.

3. Further inquiries were made to ascertain the owner of the goods. It was disclosed by the said deponents that the goods were meant for the appellant proprietor of one M/s. Kohinoor Enterprises. The said appellant produced bills of one M/s. Shiva Scrap Mart located at Yamunapur, Adapur showing the sale of the zinc in question.

4. However on the basis of statements of various persons, proceedings were initiated against the appellants for confiscation of the zinc in question on the allegation that the same was smuggled from Nepal. The said proceedings culminated into an order passed by the lower authorities vide which the same was confiscated with an option to the appellant to redeem the same on payment of redemption fine of Rs.64,000/- as also on payment of Customs duty. In addition, penalties were imposed upon the applicant.

5. After hearing both the sides, duly represented by Shri Naveen Mullick, learned advocate for the appellant and Ms. R. Jagdev, learned SDR for the department, I find that the Revenues case is solely based upon the statement of driver and the other persons found in the truck. As per the driver's statement, the zinc in question was loaded from Adapur village and prior to that was brought from Nepal in two truck trolleys.

6. Learned advocate appearing for the appellant has strongly contested the reliance on the statement of driver on the ground that they were illiterate deponents and the statements were recorded under thumb impression. Except the hear say evidence, there is no evidence to support the statement of drivers. The same being in the nature of statement of co-noticee require corroboration from independent sources.

7. Learned advocate also submits that for holding any goods to be of smuggled nature, they have to be first established as being of foreign origin. There is nothing in the present case to reflect upon the foreign origin of the goods in question. Even the test report which the Revenue get conducted, did not establish the foreign origin of the goods.

He further submits that the zinc is a non-notified item under the provisions of section 123 of the Customs Act, in which case the onus to show that the same is smuggled lies heavily on the Revenue and is required to be discharged by production of tangible and positive evidence on record and cannot be established merely on the basis of statements of some illiterate driver or cleaner.

He also draws my attention to the three invoices issued by M/s. Shiva Scrap Mart showing sale of the goods. The statement of the supplier accepting such sale also stands accepted by the Revenue. The lower authorities have not accepted the above invoices on the sole ground that inquiries conducted by the Revenue reveal that there is no company named M/s. Shiva Scrap Mart inasmuch as the officers could not locate/ trace the scrap dealer. He submits that failure on the part of the Revenue to trace out the said unit cannot ipso facto lead to conclusion of non-existence of said unit.

8. Learned SDR Ms. Jagadev appearing for the Revenue reiterates the finding of the lower authorities and submits that the goods having been loaded from a place near Indo Nepal boarder as stated by the driver clearly establishes that the goods have been smuggled from Nepal.

9. After appreciating the submissions made by both sides, I find that admittedly the goods are non-notified items. The law on the issue is well settled that in case of non notified items, the onus to establish the smuggled nature of goods is on the Revenue. Apart from the absence of any evidence produced by the Revenue, I find that the appellant has produced on record copies of invoices showing sale of the zinc in question. The supplier has also deposed in his statement to the above effect. Failure on the part of the Revenue to locate the supplier cannot be held to be conclusive proof of his non-existence. I also note that the first issue required to be decided by the authorities below was as to whether zinc in question was of foreign origin. This issue does not stand addressed by the lower authorities and there is no evidence on record to show that zinc in question was of foreign origin.

10. In view of the foregoing I find no merits in the impugned order confiscating the seized zinc and imposing penalty on the appellant. Accordingly, I set aside the same and allow the appeal with consequential relief to the appellants.