TaxTMI 
TaxTMI 
1992 (11) TMI 168
X X X X Extracts X X X X
X X X X Extracts X X X X
....the car was registered and from whom it was seized has stated in his appeal that he has not exercised the option and the car is still in the custody of the customs authorities. 3. Acting on information that a Mercedez Benz Car (German make) with Registration No. DDB-782 being used by Appellant No. (1) who was living in New Delhi was neither legally imported into India nor was any duty paid on it at the time of its importation, officers of the Directorate of Revenue Intelligence questioned Shri Shally Thapar on 6-1-1989 and seized the car on his failure to produce any documents of legal importation. In his statement, Shri Thapar disclosed that he had purchased the car from one Shri Haren P. Choksey of Bombay for a consideration of Rs. 4 lakhs paid in cash; that according to the Registration Book of the car, it was previously owned by one Shri Rupen Roy resident of C-61, Defence Colony, New Delhi and that he did not know this person; actually it was Shri Haren P. Choksey, whom he knew for several years, who had arranged the transfer of the car in his name through one Inder Pal Singh alias Pali, resident of Lajpat Nagar, New Delhi - and this person used to be available on Rajpur Ro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ause the Registering Authorities wanted the documents of customs clearance of the car and these were not given to him. He admitted having received a sum of Rs 400/- from Haren P. Choksey for the work done by him. 6. Enquiries made from the Bangalore Registering Authority about the vehicle CAU 4352 revealed that the Mercedez Benz Car (1984 model) was registered there on 6-6-1984 in the name of one Rupen Roy, S/o Suresh Roy/ resident of 219,Siddaiah Road, Bangalore and the said Rupen Roy had applied for a NOC (No Objection Certificate) for Bombay and it was issued to him. He surrendered the NOC for Bombay and applied for a fresh NOC for Delhi which was granted to him and the car was transferred to Delhi and was assigned Delhi No. DBB 782 and the ownership was changed from Rupen Roy, S/o Suresh Roy, C-61, Defence Colony to Shally Thapar E-69, South Extension, Part-1, New Delhi. 7. Prior to its registration as CAU 4352 at Bangalore, the car was registered at Calcutta RTO office under Registration No. WME 9290 on 27-2-1984. Enquiries at Calcutta showed that this Registration No. was actually of a Premier Padmini Car which was registered in the name of one Abdul Reshia of Calcutta.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....were aware of the fact that the vehicle was not legally imported into India. Finally, it was alleged that all the three persons namely, S/Shri Shally Thapar, Haren P. Choksey and Inderpal Singh had conspired to get the illegally imported vehicle regularised and registered on the basis of bogus documents with a view to hoodwink the enforcement agency. It was also alleged that all the three persons were known to each other for quite a long time and had some understanding with each other and had conspired in acquiring the said illegally imported Mercedez Benz Car. The car was liable to confiscation because, being a foreign car, it could not be imported into India without a valid import licence or CCP and these persons were liable to penalty. 11. After receiving the replies of the three appellants and after hearing them, the Additional Collector passed the impugned order which has been challenged before us. 12. Arguing for Shri Shally Thapar, Shri G.L, Rawal, the learned Counsel first submitted that while the matter was heard by Shri I.R. Soni, Additional Collector of Customs, the order of confiscation and penalty has been passed by Shri Yuv Raj Gupta, his successor in office, wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....harges were not includible in the sale price under the Rajasthan Sales Tax Act, 1954. As far as the bona fides of Appellant No. (1) were concerned, he submitted that the appellant had misled himself in this case. 13. Shri Ashok Mehta, the learned SDR submitted that Appellant No. (1) had been dealing with imported cars for quite sometime and should have known the law that foreign cars could not be imported except against a Customs Clearance Permit. The fact that a car which was registered in the name of a non-existent person had been seized from Appellant No. (1) and the latter had got the registration transferred in his name through the RTO was significant and, in these circumstances, the plea of bona fide belief on the part of the Appellant No. (1) was not tenable. The whole transaction was a fraud in which bogus documents were created including a Ration Card and registration and transfer in the name of Rupen Roy, who could not be found anywhere. It was for Appellant No. (1) to explain that the purchase of the car from a person who had subsequently been found to be non-existent was bona fide. The learned SDR placed reliance on the disclosures made by Appellant No. (1) in his va....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the prosecution and, save in a very exceptional class of case, never shifts. He also referred to the decision of the Tribunal in the case of Balvir Singh v. Collector of Customs, [1991 (56) E.L.T. 64] in which the Tribunal had held that in a case where either clause of Section 112 of the Customs Act has not been specifically mentioned, the order imposing penalty was liable to be set aside. 17. Arguing on behalf of Haren P. Choksey, Appellant No. (2), Shri S.L. Sethi, the learned Advocate submitted that his client was neither an importer nor a dealer but an Automobile Consultant. He submitted that three main questions had to be considered against Appellant No. (2) on whom a penalty of Rs. 3 lakhs had been imposed for mala fide involvement. These were:-(a) Whether Appellant No. (2) had at all sold the car to Shri Shally Thapar for Rs. 4 lakhs; (b) Whether Appellant No. (2) had done anything knowing or having reason to believe that the car was not legally imported into India & (c) Whether Appellant No. (2) had done anything attracting liability to penalty under Section 112. 18. Shri Sethi submitted that the vital fact of purchase of the car by Shally Thapar on 31-1-1987 had been....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Car from Bangalore to Delhi was available, Appellant No. (3) could have no reason to believe that the car was liable to confiscation. Referring to sub-para (e) of Paragraph-22 of the impugned order, the learned Counsel submitted that there was no allegation against his client that he was aware that the car was not legally imported into the country and submitted that whatever he did was in the normal course of business. Referring to Paragraph-7 of the impugned order in which there was a reference to Appellant No. (3) as having rendered help in getting the registration of the car transferred, the learned Counsel submitted that such an action was not violative of the provisions of Section 111(d) of the Customs Act. On the question of validity of the statement of a co-accused, the learned Counsel referred to the decision of the Tribunal in the case of Orient Enterprises, New Delhi v. Collector of Customs, Cochin [1986 (23) E.L.T. 507], in which it was held that an exculpatory statement of a co-accused or co-conspirator is always tainted with falsehood because he twists the story or colours the version in a way to show himself innocent and paints his companion as the prepetrator ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rers and this fact had specifically been referred to in the show cause notice. It had also to be remembered that a motor car was different from textiles, video cassette recorders and other articles in the sense that while they were manufactured in India, a Mercedez Benz Car is not manufactured in India and had necessarily to be imported from abroad and this could be done only under, and in accordance with, a Customs Clearance Permit. The presumption was that all the three appellants being concerned with purchase, sale and registration of foreign cars, would be aware of the provisions of the law regulating the import of cars into India and the liability of payment of duty and of producing documentary evidence of import and payment of duty. Appellants No. (1) & (2) were known to each other and had entered into transactions relating to sale, and purchase of foreign cars in the past. Appellant No. (2) had admitted that he had sent his driver from Bombay to Delhi and there was no reason why he did this unless he had interest in the matter. Moreover, Choksey had not mentioned anything about brokerage. 22. This was apparently done to fit in with his defence that he had merely acted as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o-accused. But before even a number of such confessions can be used each such confession must inspire confidence both in its content and in the manner and circumstances of its making. If there be any suspicion of false implication the confession must be discarded as of no probative value. This may result from a variety of circumstances of which a few alone may be mentioned, such as why the accused confessed, whether he expected a gain for himself by implicating his co-accused, the part he assigns to himself and that to his co-accused, the opportunity for being coached up to narrate a false story or a story false in certain details. Where there is a single retracted confession corroborating other accomplice evidence, the caution must necessarily be still greater and the probative value smaller. Even if there are more than one such confession and they are proved to be given independently and without an opportunity for a prior concert, the probative value may increase but the need for caution remains because a number of suspects may be prompted by the same or different motives to embroil a particular individual. It is only when false implication is excluded after close scrutiny that c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shok Mehta. The evidence in this case consists of the statements recorded from the appellants, the enquiries made from the RTO at Bangalore, Calcutta and Delhi and from the manufacturers of the car, enquiries about Rupen Roy, besides the documents of registration etc. seized during the enquiries. None of the statements which were recorded under Section 108 of the Act, have been retracted. Before considering the merits of the appeals we have to decide four points which are as under :- (a) Whether, as was claimed in Shally Thapar's appeal, while the matter was heard by one officer the impugned order was passed by his successor-in-office without giving an opportunity of hearing afresh in violation of the principles of natural justice. (b) Whether the value of the car has been fixed at Rs. 7 lakhs without any basis and the fine in lieu of confiscation accordingly put at Rs. 4 lakhs. (c) Whether it was permissible for the learned Additional Collector to have refused cross-examination of Shri Shally Thapar - a co-noticee specially when his testimony was relied upon against Shri Haren P. Choksey - another co-noticee in the proceedings. (d) Whether, in the facts and circumstanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dings against Haren Choksey. The Supreme Court has held in the case of State of Kerala v. K.G. Shaduli [AIR 1977 (S.C.) 1627], its judgment which we quote :- "This rule which requires an opportunity to be heard to be given to a person likely to be affected by a decision is also like the genus of which it is a species, not an inflexible rule having a fixed connotation. It has a variable content depending on the nature of the enquiry, the framework of the law under which it is held, the constitution of the authority holding the enquiry, the nature and character of the rights affected and the consequences flowing from the decision. It is, therefore, not possible to say, that in every case the rule of 'audi alteram pattern requires that a particular specified procedure to be followed. It may be that in a given case the rule of an audi alteram partem may import a requirement that witnesses whose statements are sought to be relied upon by the authority holding the enquiry should be permitted to be cross-examined by the party affected while in some other case it may not" (emphasis supplied). 29. We observe that copies of the statements of Shally Thapar, on the basis of which Haren C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ority on a question of fact whether there was a request for cross-examination in the reply to the show cause notice. In Eros Metal Works (supra), the conclusion was that while granting adjournment of hearing the appellants could have been called upon to cross-examine the witnesses present, particularly because the appellants' request for adjournment was accepted by the adjudicating authority. Thus, we find that all the four cases cited by the learned Counsel in support of his plea for cross-examination are distinguishable on facts, and we have seen that in the circumstances of this case when corroboration of material facts about the sale of the car by Haren P. Choksey to Shally Thapar was available, denial of Shally Thapar's cross-examination did not result in violation of principles of natural justice. 31. There are only two points on which Haren Choksey and Pali have not admitted the allegations made against them by the co-noticees and, in terms of the Supreme Court judgment in Haroon Haji Abdulla's case (supra), we have to consider the nature of direct or circumstantial evidence available in support of the allegations. The allegation against Haren Choksey is that it was he wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s about the arrangements for change of registration of the car, Pali has denied two material facts and these are very significant. While admitting that it was he who filled the three forms prescribed for transfer of registration, he denies having got them signed by Rupen Roy for which purpose alone he had given them to Shally Thapar after filling them. Secondly, he denies having done the transfer of ownership in Shally Thapar's name because the documents of customs clearance were required by the R.T.O. and these were not given to him. His conduct too would have to be judged in the light of the circumstantial evidence which has come on record and, like the case against Haren Choksey, Inderpal Singh too has tried to avoid admitting anything which would directly implicate him. Since he filled the forms in which Rupen Roy's name and address has also been filed by him, the legitimate question which should have arisen in his mind was who Rupen Roy is and why he has not come forward as the seller of the car. It is significant that he is completely silent on this point. Secondly, the reason for not admitting the transfer of the car in Shally Thapar's name is that a bogus document - the rat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he clauses is relevant and would be attracted. The power and the discretion given to the Authority functioning under S. 112 of the Act are judicial in character and are open to judicial review, and if they are found to have been exercised on irrational and ambiguous basis, the court will strike down the orders." 34. It will be seen from the above that the Court had observed that apart from absence of reference either to Clause (a) or Clause (b) or both because of the absence of essential ingredients with reference to either of the clauses, the order imposing penalty was not sustainable. On this question, the learned SDR had specifically invited our attention to Paragraph-22 of the show cause notice and had laid stress on the allegation of conspiracy on the part of all the appellants in sub-para (f) thereof. He had also referred to sub-paragraph (e). It is necessary for a proper appreciation of the matter to refer to the entire paragraph in the show cause notice, which is reproduced as under:- '- "22. From the foregoing it emerges, (a) that there are no import papers/customs duty paid papers/import licence to show that the mercedez car bearing Engine No. 61594010323029 and Cha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e. (h) From the foregoing paragraphs, it appears that the said Mercedez Benz Car 200-D-LHD Engine No. 61594010323029 has been illegally imported into India without payment of customs duty." 35. Shri Ashok Mehta had also submitted that complete details of the offence committed by the three appellants were mentioned in Paragraphs-22 to 25 of the show cause notice and had placed reliance on two decisions of the Tribunal, namely, in the case of M.V. Chidambaram & Others v. Collector of Customs, Madras [1987 (29) E.L.T. 601] and Borivli Hosiery Mills v. Collector of Customs & Central Excise [1991 (56) E.L.T. 76], in both of which it was held that non-mention of the sub-clause of Section 112 of the Act does not vitiate the proceedings when the order of adjudication as well as the show cause notice gives sufficient material and evidence on the basis of which the proposed penal action is taken against the appellants. These decisions are in line with the decision of the Madras High Court in Lakshmichand's case (supra) and, when applied to the facts of the present appeal, it would be seen that the allegations in sub-paragraphs (d) to (g) of paragraph-22 have spelt out all the ingredien....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arly go to establish the allegations contained in the show cause notice rendering the appellants liable to penalty. The adjudicating authority has, after examining all the evidence rightly held their mala fide involvement and we agree with him and reject all the appeals. 36. Before we finally dispose of the appeals it is necessary to deal with a few points about the case law cited before us. Shri Rawal had stated in reply to the learned SDR's submission about the applicability of the judgment of the Supreme Court in the case of Collector of Customs, Madras &Others v. D. Bhoormull, [1983 (13) E.L.T. 1546], that the judgment in Ambalal's case (supra) being a 5 Judge Bench decision, would prevail over the judgment in Bhoormull's case. We notice that the judgment in Ambalal's case was pronounced on 3rd October 1960, whereas in Bhoormull's case on 3rd April 1974 and the Bench which decided Bhoormull's case, had distinguished Ambalal's case. We have also seen that the import of foreign cars not only requires a Customs Clearance Permit but that in the present case, there is evidence to show that the car was initially sold to the Swedish General Agent by the German manufacturers. Furthe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t imposition of penalty. (ii) The adjudicating authority's finding against the 3rd appellant that he had got the registration and ownership of the illegally imported car changed is based upon an incorrect premise i.e. the alleged admission of appellant No. 3 in his statement dated 13-1-1989. No where in the statement does the 3rd appellant admit that he got the ownership of the Car transferred and his statement is to the effect that he got only the Registration transferred and withdrew himself afterwards. Para 9 of the show cause notice which is a reproduction of the statement of Shri Inder Pal Singh dated 13-1-1989 records as follows: "that after this he was asked by Shally to get the car transferred in his name (Shally's) but he (Pali) refused as the Registration authority people wanted customs clearance or Bond Clearance papers, for the work, which were not given to him; that he did not have any knowledge if the vehicle was subsequently got transferred by (Shally) in his name or not." (iii) Moreover, at internal Page 25 of the impugned order at Para 7.3, the Additional Collector of Customs has given a finding that the appellant No. 3 rendered his help in getting the reg....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Shri Shally Thapar was also done with his assistance. He also referred to charge (e) framed in the show cause notice wherein it was alleged that Shri Haren P. Choksey and Shri Shally Thapar were aware of the fact that the vehicle was not legally imported into the country and contended that there was no allegation that his client had knowledge regarding illegal importation of the car into the country. Shri Anand stated that the adjudicating authority had also observed in Para 7 of the impugned order that his client had rendered help only in regard to the change of the registration of the vehicle from Bangalore to Delhi for which he was paid a sum of Rs. 400/-. He argued that in view of the fact that there was no evidence that his client was in any way concerned with the transfer of the registration of the vehicle in the name of Shri Shally Thapar he could not be held liable for penalty under Section 112 of the Customs Act, 1962. 42. On behalf of the revenue the learned SDR Shri Ashok Mehta placed reliance on the findings of the Assistant Collector in the impugned order. 43. I have examined the record of the case and considered the submissions made on behalf of both sides. ....