TaxTMI 
TaxTMI 
1983 (11) TMI 321
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....ing the order of the Collector of Central Excise & Customs, Bangalore dated 28-12-1977 in C. No. VII/10/43/71-Cus. (OR 36/71). As the above appeals arise out of a common order passed by the Collector of Central Excise, Bangalore, they were heard together and are being disposed of by a single order. The Collector of Central Excise, by his impugned order, has imposed penalties on the appellants in No. 104/80 (Kallatra Mahin), A. No. 105/80 (Haji K. Abdul Khader) and A. No. 106/80 (M.M. Abdulkhader) in a sum of ₹ 10 lakhs, ₹ 2 lakhs and ₹ 2 lakhs, respectively, under Section 112(b)(i) of the Customs Act. 4. The brief facts relating to the cases are as under. On receipt of specific recorded information, the Superintendent, Customs Special Preventive, Mangalore, with his staff proceeded to Manki village in Honawar Taluk, Karnataka State, on the night of 30-12-1971 and at about 2.30 AM. on 31-12-1971 intercepted two lorries, respectively bearing registration Nos. MYX 7985 and MYG 4219. The lorry bearing registration No. MYX 7985 was driven by one K.M. Ahmed, while cleaner Narasimha was the other occupant of the same, and the lorry bearing registration No. MYG 4219....
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....ggled goods had been transported along with fish manure. After detailed investigation and examination of the witnesses, show cause notices were issued to the above appellants and others concerned as per law which eventually culminated in the impugned order, now appealed against. 6. The learned Counsel appearing for appellants Kallatra Mahin and Haji K. Abdulkhader of Ponachi (104/80 and 105/80) made the following submissions : (1) The confessional statements of the lorry driver, K.M. Ahmed of MYX 7985 recorded on 31-12-1971 and 6-3-1972 have to be rejected because they are at variance inter se in certain vital aspects besides other material discrepancies and prevarications, rendering them unacceptable. (2) It was contended that the fact that lorry driver K.M. Ahmed disowned the very ownership of his lorry bearing registration No. MYG 4219, coupled with the introduction of a fictitious name like D'Souza, whose whereabouts are to this date shrouded in mystery, would only indicate that driver K.M. Ahmed is unreliable. (3) It was further urged that according to the statement of driver K.M. Ahemed, he was paid a sum of ₹ 500/- as remuneration for transporti....
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....he case. 9. We have carefully considered the contentions of the respective parties and we shall first take up for consideration the questions that arise for determination with reference to appeals No. 104/80 and 105/80 and deal with appeal No. 106/80 thereafter. The fact that at or about 2.30 A.M. on 31-12-1971 two lorries bearing registration Nos. MYX 7985 and MYG 4219 were intercepted by the authorities and on examination of the contents, they were found to contain contraband goods, viz. Japanese and German made synthetic fabrics and metallic yarn of foreign origin does not admit of any controversy. The two respective drivers of the lorries and the cleaner who were examined immediately after seizure gave statement admitting their complicity, implicating the appellants herein. The main contention of the learned Counsel for the appellants is that the statements of the two lorry drivers which are inculpatory and confessional in nature, implicating the appellants are incredible and unreliable because of certain vital contradictions between the statements recorded on 31-12-1971 and those recorded on a later date. On a scrutiny of the statements recorded from the lorry drivers we....
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.... Ahemed and merely because the Department is not able to trace the whereabouts of D'Souza, it does not mean that very introduction of a person by name D'Souza by K.M. Ahmed must be the figment of his imagination. The cleaner of the lorry MYX 7985, Narasimha, in his statement dated 31-12-1971 before the Inspector of Customs, has stated that the permanent driver of lorry MYX 7985 is one D'Souza of Kasargode. Even if D'Souza had been traced and examined by the Department, that would not in any way alter the basic factor that K.M. Ahmed and Abubacker were drivers who drove the two respective lorries with contraband goods on the day in question. Likewise, it is possible that the remuneration of ₹ 500/- alleged to have been received by the lorry driver could have been either spent or given to some persons and the mere fact that the same was not recovered from the person of the lorry driver would not certainly lead to the logical conclusion that such version is false. It has not been even contended before us by the learned Counsel that the statements of the two lorry drivers and the cleaner were either not voluntary or extorted under coercion. Minor discrepancies here and other woul....
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.... would stand in the name of K.M. Ahmed alias Ahmed Kunhi, Haji Abdulkhader has been found to be the real owner not only on the basis of other records but also certain circumstances such as his standing as surety for the purchase of the same. Haji Abdulkhader himself in his statement before the Inspector of Customs, Mangalore, on 28-1-1972, admitted having paid the tax and surcharge on vehicle MYG 4219 and that he looked after the daily income and expenditure accounts of lorry MYX 7985. It is common case that Haji Abdulkhader is the registered owner of the other lorry bearing No. MYX 7985. The adjudicating authority has observed in para 16.5 of the order that the statement of the lorry driver K.M. Ahmed alias Ahmed Kunhi disclosed that the two lorries under seizure belonged to the family of Kallatra Mahin. The indisputable fact remains that Kallatra Mahin and Haji Abdulkhader are related to each other and driver K.M. Ahmed who was found driving lorry MYX 7985 is admittedly a relation of Kallatra Mahin himself and was staying with him attending to various items of work as per his instructions, as clearly evidenced by Kallatra Mahin's statement dated 4-1-1972 before the Superintendent....
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.... a violation of the law. In the case on hand we have factually found that the materials on record clearly implicate the appellants in respect of the offences committed by them and therefore, this ruling also would not help the appellants in any way. 17. The learned Counsel lastly relied upon the ruling reported in AIR 1964 S.C. 1184 (Haricharan Kurmi v. State of Bihar). That was a case where the Supreme Court considered the scope of Section 30 of the Evidence Act dealing with evidentiary value of the confessional statement of a co-accused as a piece of evidence vis-a-vis Section 3 of the Evidence Act. The Supreme Court has held in that case that the testimony of an accomplice may be treated as substantive evidence and is evidence under Section 3 of the Evidence Act, though very weak and tainted, whereas the confession of a co-accused stands on a different footing and cannot be treated as a piece of substantive evidence and can be pressed into service only when the Court is inclined to accept the other evidence and feels the necessity of an assurance in support of the conclusion deducible from the said evidence. It should be noted that the Supreme Court in the above Ruling dis....
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.... adduced by the prosecution or the Department would rebut the initial presumption of innocence in favour of that person and in the result prove him guilty." 19. In a recent judgment reported in AIR 1980 S.C. 593 (State of Maharashtra v. Natwarlal Damodardas Soni), the Supreme Court has observed : "18. It is trite law that even in cases where Section 123(1) of the Customs Act is not attracted, the prosecution can discharge its burden by establishing circumstances from which a prudent man, acting prudently, may infer that in all probability the goods in question were smuggled goods, and the accused had the requisite guilty knowledge in respect thereof. The leading case is : Issardas Daulat Ram v. Union of India, 1962 Supp. (1) SCR 358. In that case, in reaching the conclusion that the gold had been smuggled, the Collector of Customs considered the credibility of the story put forward by the appellant about the purchase of the gold and also the conduct of the appellant in trying to get the gold melted so as to reduce its fineness by mixing silver with it, in an attempt to approximate the resultant product to licit gold found in the market. The ratio of this decision was fo....
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....ed in 1978 Tax. L.R. 1735 (R.S. Kalyanasundaram v. Collector of Customs, Madras) has held that departmental proceedings under Section 112 of the Customs Act could not be said to be vitiated merely because they were based on consideration of the confession of the co-accused especially when such confession was only one of the pieces of evidence taken into consideration. Therefore, we uphold the finding of the adjudicating authority that appellant Haji Abdul Khader is liable for a penalty under Section 112(b)(i) of the Act. 21. This leaves us only with appeal No. 106/50 in respect of M.M. Abdulkhader. The learned Counsel appearing for this appellant raised an important question of law which should dispose of the appeal without further probe into the factual remifications. It was contended that no show cause notice at all was issued to this appellant and the show cause notice has been issued only to M/s. M.M. Abdul Khader, a partnership firm, of which M.M. Abdul Khader was one of the partners. A copy of the partnership deed was also produced for our perusal. We find from the records that the adjudicating authority has issued a show cause notice in the name of the firm, M/s. M.M. ....