TaxTMI 
TaxTMI 
1986 (2) TMI 221
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....stated as under:- On 4-6-1978, the appellant, Kamaljit Singh Chadha, Asst. Flight Purser, Air India, landed at Santacruz Airport as a member of the crew of Air India Flight from London to Bombay. He had three baggages with him. He declared certain items. On questioned by the Customs Officer whether he had anything else to declare, he replied in the negative. He was, however, found nervous. Therefore, his baggages were thoroughly examined in the presence of two panchas by a Customs Intelligence Officer. During the search, 425 pieces of electronic parts of foreign origin were found concealed inside the shopping bag and shoe polish kit bag. They were seized in the reasonable belief that they were smuggled into India and were liable to confiscation. Certain documents found in the possession of Shri Chadha were also seized under a panchnama. His statement was also recorded. Among other things, Shri Chadha stated that on 25-5-1978, prior to his departure to Kuwait, he contacted one Devinder Singh Kohli on telephone and informed him about his flight programme to London, the reasons being that Shri Kohli wanted his help for bringing certain items from abroad. He also stated that Shri Ah....
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.... investment of Rs. 17,547.50 by Chadha in the G.K.D. Engineers. He further stated that between April and May, 1978, G.K.D. Engineers had received 250 electronic parts brought by Chadha and sold them for Rs. 24,000/- and made a profit of Rs. 9,000/- out of which Rs. 5,000/-was given to Chadha and the remaining Rs. 4,000/- was shared by himself and Ahuja by equal proportion. The Customs Officers carried out search of the office premises of G.K.D. Engineers and seized 175 pieces of electronic parts besides certain documents. Shri Kohli in his further statement admitted having paid Rs. 14,000/- to Chadha for the goods brought by him earlier. In the statement dated 17-6-1978, Shri Kohli, among other things, stated that the appellant Gopal Ahuja and himself were the two partners of G.K.D. Engineers and each of them invested Rs. 5,000/-. He also produced a partnership deed dated 15-10-1976. 4. During the course of investigation, the residence of the appellant Ahuja was also searched but nothing incriminating was found and Ahuja was not available for interrogation, as he was reported to have gone abroad. On 18-9-1978, the statement of appellant Gopal Singh Ahuja was recorded. He ad....
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....three appellants preferred three appeals before the Board unsuccessfully. Thereafter, they preferred three Revision Applications before the Central Government which stood transferred to the Tribunal for being heard as appeals and they are under consideration. 8. During the hearing of these appeals, Shri. Gehani, appearing for the appellant, Devinder Singh Kohli made the following submissions: (1) The appellant Kohli and Ahuja were the partners of the firm G.K.D. Engineers. (2) The appellant Chadha, at one stage, claimed that he was also a Partner of the said firm, (3)  Appellant Chadha as well as appellant Kohli made inculpatory statements when questioned by Customs Officers but subsequently retracted those inculpatory statements. 9. In his reply to the show cause notice, the appellant Chadha gave a version, which was altogether different from the versions given earlier to the Customs Officers. The appellant Chadha was a co-accused. His statement cannot corroborate the statement of Appellant Kohli. The electronic circuits, recovered from the appellant Chadha also, would not corroborate the statement of Kohli, at best it could only corrobora....
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....burden of establishing that 175 circuits seized from the business premises of the firm lies on the Department and that the Department had not discharged this burden and no evidence either direct or substantial was there to establish that 175 circuits seized from the business premises of G.K.D. Engineers were foreign origin goods. And therefore, they are liable to be released. 16. Appellant Ahuja and appellant Kohli, no doubt, met at Gazabo Restaurant but the purposes for which they had met was not for the purpose stated by the appellant Chadha. The Addl. Collector proceeded on assumptions and presumptions and not on legal evidence. 17. The appellant Ahuja was not permitted to cross-examine the witness and therefore there was denial of principles of natural justice which had prejudicially affected the appellant. 18. The Board's Order is highly perfunctory and very unsatisfactory and the Board did not consider any of the contentions urged by the appellant. 19. The penalty imposed was fully unjustified and the same may be set aside. 20. The appellant Chadha appeared in person. His only plea was that the penalty imposed was very harsh. He had lost his....
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....submitted that considering the value of the seized goods the penalty was not excessive. Shri Pal was, however, unable to support the Addl. Collector's order as to why a discrimination was made between the appellant Ahuja on the one hand and the two other appellants in the matter of imposing penalty. Finally Shri Pal supported the orders passed by the Addl. Collector and confirmed by the Board. 22. We have carefully considered the submissions made on both sides. The points that arise for consideration are whether the Addl. Collector was unjustified in imposing personal penalties on the appellants; whether the personal penalties imposed on apellants are harsh, unreasonable and unjust; whether the Addl. Collector committed an error in ordering confiscation of 175 circuits recovered from the business premises of G.K.D. Engineers; whether the Board was unjustified in confirming the orders passed by the Addl. Collector. 23. We have in the preceding paragraphs set out in detail the contentions urged on behalf of appellant Devinder Singh Kohli and the appellant Gopal D. Ahuja. In order to appreciate the contentions, it would be necessary to set out certain facts which are e....
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.... Chadha made a copy of the separate list of paper in his own handwriting. The statement of Chadha was to the effect that sometime in the month of March, the appellant Ahuja was introduced to him by Kohli and Ahuja showed him a list of electronic parts and requested him to enquire about their price at London and also proposed that if the prices were reasonable, they would ask him to purchase for some monetary consideration and accordingly during his visit in the month of March he made enquiries at London regarding the availability of parts and price for those items. He had further stated that the address and telephone number of the U.K. firm were given to him by Ahuja. In his statement Kohli has stated that the purchase of electronic items which Chadha was asked to purchase at London would given them a profit of Rs. 30,000/- which was to be shared in proportion of Rs. 15,000/- to Shri Chadha and the remaining Rs. 15,000/- to Kohli and Ahuja. The appellant Ahuja admitted that the other two appellants and himself had met at Gazabo Restaurant. But he denied the plan hatched at that meeting. He also denied he having been a party to the import of 425 electronic parts or 250 pieces of ele....
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....oration to the statements of Shri Chadha and Kohli. Shri Ahuja being the other partner of the firm cannot be ignorant of the operations being carried out by his firm. Taking therefore the evidence available in this case, it is clear that Gopal D. Ahuja was the person concerned in importation of the goods under seizure and also had aided and abetted the said importation, contrary to the provisions of the Customs Act, 1962....... He is, therefore, liable to personal penalty under Section 112 of the Customs Act, 1962". 28. As regards the confiscation of the goods, the Addl. Collector observed : "The goods under seizure valued at Rs. 91,500/- market value and 175 pieces valued Rs. 2130/- seized from the office premises of M/s G.K.D. Engineers are liable to confiscation under Section 111(d) of the Customs Act, 1962. Their liability to confiscation has not been contested by any of the parties..........." 29. As stated earlier, all the three appellants herein have preferred appeals to the Board. Shri Chadha was convicted by a criminal court. On his plea of guilty he was sentenced to nine months R.I. and a fine of Rs. 7,500/-. The Board reduced the penalty in the case of Ch....
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....ellant Kohli and the appellant Chadha. 34. On behalf of both the appellants, it was contended that 175 circuits recovered from the partnership firm are not proved to be smuggled goods in as much as they had not foreign markings. Electronic circuits were not notified goods nor do they fall under Section 123 (2) of the Customs Act and therefore the burden of establishing that those circuits are smuggled goods lie on the Department and the Department had not discharged that burden. 35. As has been stated earlier, on the date of seizure of 425 electronic parts, the statement of the appellant Chadha as well as the statement of Kohli were recorded and they corroborated each other. Their statements clearly established the plan hatched by all the three appellants regarding import of electronic parts from London. The funds for import flowed from the partnership firm and also from Chadha. Chadha's statement, regarding import, was further corroborated from the seizure of 425 electronic circuits. Shri Kohli did not even contend that Chadha was not related to him. Neither Kohli nor Ahuja had at any time contended that Chadha had any axe to grind against them. Shri Kohli's statem....
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....ntion that there had been denial of principles of natural justice appears unfounded and hence rejected. The next contention of Shri Bathija was that the appellant Ahuja was away from India from 1-6-1978 to 18th September, 1978 and therefore he could not have been a party to the illegal import or could have the knowledge of what transpired between the appellant Kohli and the appellant Chadha. The statement of Kohli as well as appellant Chadha was that the meeting in the Hotel Gozabo took place in the month of May, 1978. Therefore, the absence of appellant Ahuja between 1st June to 18th September, becomes immaterial if we accept the statement of Chadha and Kohli. According to both, it is in that meeting they all agreed that Chadha should purchase electronic parts from London and money was provided from the partnership firm as well as from Chadha. Shri Kohli further stated that Ahuja contacted the London firm over a telephone and informed the firm that a person would come and purchase and would give the reference of Kohli. Kohli and Ahuja are partners. This partnership was formed in the year 1976. They have been carrying on business in electronic goods. Shri Kohli had no reason to fal....
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....hus, there was clear admission on the part of the appellant Kohli. In the said circumstances, it has to be held that the Department did discharge the burden initially rested on him. Neither the appellant Kohli nor the appellant Ahuja adduced any evidence to rebutt the evidence on which the Department placed reliance. The only contention urged was that appellant Kohli had retracted his earlier statement. We have considered that retraction and we have observed that his earlier statements were voluntary and acceptable. In the said circumstances, the challenge as to order of confiscation of 175 circuits must fail. 39. The only aspect that remains for consideration is about the quantum of penalty imposed on the appellants. As has been stated earlier, the Addl. Collector had imposed a penalty of Rs. 40,000/-, on each of the appellant Chadha and Kohli and Rs. 30,000/- on appellant Ahuja. The Board had reduced the penalty imposed on appellant Chadha from Rs. 40,000/- to Rs. 32,000/-. The Board probably had taken into consideration the fine imposed by the Criminal Court on the appellant Chadha. 40. The Addl. Collector did not assign any reason as to why he was imposing a pen....