TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 820
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....o by their names for the sake of convenience. The appeals had arisen out of common adjudication order dated 01.10.2007 by the Commissioner of Customs (hereafter referred to as the "Commissioner"). 2. The following questions of law are sought to be urged by the appellants: (a) Whether the findings in the impugned order with regard to abetment by the appellants are justified in law; (b) Did the CESTAT fall into an error of law in upholding the findings based on denial of natural justice, especially the refusal to grant cross-examination to the appellants; (c) Whether the findings based upon mobile phone records and confessional statements of some individuals, notably the co-noticees, is sustainable in law, in the circumstances of the case, in the absence of any other corroborative material; (d) Did the CESTAT err in its findings regarding the method adopted in arriving at the average weight to assess liability, and the absence of essential documents like the passenger declarations. Facts of the case: 3. On 28.08.2000, a foreign national Olga Kozireva tried to illegally import and smuggle into India, a quantity of 81160 yards (74212 meters) of silk textiles without declaring th....
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....ity sought to be smuggled into India, on 28.08.2000 by Olga, the Commissioner deduced, on the basis of an averaging exercise, that the unseized extent of silk textiles was to the tune of 4,21,245 metres, which would have weighed 26,485 kgs and that the Customs Duty evaded was to the extent of Rs. 1,75,78,322/-. The SCN relied upon the following table, which spelt out such details - the table is extracted below: "175. The quantity of silk textiles imported computed on the above basis vis a vis the quantity of textiles assessed on relevant dates prior to 28.8.2000, showed that substantial silk textiles escaped assessment resulting in the evasion of customs duty. The details are presented below:- Date Wt. in Kg Mtr.of silk textileimported Mtrof textile assessed Unasses sed mtr of silk textiles Value of unassessed mtr of silk textiles Customs duty evaded Person who evaded duty A B (imputed on 5 dates) C B x 17.62 D As per record available E C-D in mtrs F E x Rs. 68 in Rs. G 61.2 % of F in Rs. H 1 17.1 2.98 757 13338.34 2000 11338 771007 519659 OK, NI, SK 2 17.9.99 258 4545.96 0 4546 309125 189185 OK 3 1 / 2.2. 00 1264 22271....
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....ded off." 6. In response, all the appellants resisted the SCNs. It was contended that the reliance placed upon the mobile phone call records was insufficient to render any findings and that it was unsafe to rely upon them, as it would be inconclusive in establishing the allegations. The statement of R.N. Zutshi could not, in the absence of any corroborative evidence or material, lead to a finding of abetment as alleged; that in the absence of passengers' manifest and properly secured documents, no evidence of their involvement had been led and that at best the materials in some of their cases were conjectural and entirely speculative. It was also argued that the involvement in previous incidents alleged against Olga could not be based on sketchy surmises, not premised on any material or corroborative evidence but entirely upon suspicion. Furthermore, it was submitted that the appellants acted bona fide and were not in the normal line of their duties and functions expected to go into the matter as was alleged. 7. The Commissioner, after considering the appellants' defenses as well as those of the other respondents to the SCNs, by his order in original proceeded to drop the....
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....ral justice does not impose on administrative and domestic tribunals a duty to observe all the technical rules of evidence applicable to proceedings before courts of law. Members of tribunals may be entitled to draw on their specialized or local knowledge of the type of, issue before them in order to supplement as well as evaluate evidence to find facts by inquisitorial methods, and inspections and to obtain information from other persons; but it will generally be a denial of justice to fail to disclose to a party specific material relevant to the decision if he is thereby deprived of any opportunity of comment on it." [Emphasis supplied] The HonâEUR(tm)ble High Court observed thus:- "In other words, it seems to be a fairly settled position in law that it is not necessary that persons whose statements have been previously recorded must be examined in the presence of the party against whom such previous statements are intended to be used. The rules of natural justice do require that their previous statements must be made available to the party against whom they were intended to be used and such party must be given a fair opportunity to explain the same or comment on them. W....
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....nder Section 111. It was argued that the goods in the present case, having been cleared after payment of redemption fine by the importer, had no co-relation to any of the appellants. The orders of redemption based on spot assessment had attained finality. In the circumstances, the penalty of fine leviable under the Act could not be imposed upon someone who had nothing to do with the importation or exportation of goods. 11. It was argued that there is no record to show that the goods in question were imported in contravention of the Act. Therefore, the question of levying penalty did not arise. Further, for levying penalty under Clause (d) of Section 111, the fact that the possessor has knowledge of the goods being liable for confiscation under Section 111 has to be proved. In the instant case no such knowledge was proved. Importantly, it was argued that the phraseology in Section 112 - which was ultimately used in the present case- presupposed the existence of the goods. In the present case, the goods had been cleared. Section 112(a) is attracted on showing that all the ingredients of that provision are satisfied. One such ingredient is that the prejudicial act or omission must be....
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....licesâEUR(tm) smuggling activities and absence of any seized material, coupled with the finality attained by previous spot assessment orders, meant that the Customs authorities had no evidence to go by. Merely because some appellants were present at the time when some of the previous spot assessments were made could not lead the adjudicating authority, or CESTAT, to hold that they had been complicit in any wrong doing. The broad brushing nature of allegations seeking to implicate the appellants failed to assign any distinctive role to each of them. In fact, some of them were never implicated in confessional statements, like in the case of Sudhir Sharma. In the case of others, such as Shri R.N. Zutshi, the official had and could have had no role to play, considering that he was in the Protocol and Ceremonial Wing of Customs in the airport. His confessional statement could, in the absence of any corroborative material, not have been used to penalize him. 16. It is argued that what is alleged is the acts of omission, which amount to abetment. To establish the charges, the department had to rely on reliable, cogent legal evidence. No presumption in this respect can be raised on ....
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....Reliance is also placed on the decision in Pon Adithan v. Deputy Director, Narcotics Control Bureau Madras 1999 (6) SCC 01. It was argued that Shri R.N. Zutshi's statement contains only vague allegations casting adverse reflections upon the conduct of the Appellants, which was not the subject matter of the SCN as distinguished from the specific allegations in Table 14 of the SCN. It was reiterated that the allegations in R.N. Zutshi's statement were neither true nor voluntary and are not corroborated by independent sources on any material point vis-a-vis the Appellants. It was submitted that R.N. Zutshi retracted his statement at the earliest opportunity i.e. on 19.01.2001 but the other appellants were not confronted with R.N. Zutshi to confirm the truth of his statement. Notwithstanding the controversy regarding retraction of R.N. Zutshi, no evidentiary value can be attached to his statement vis-a-vis the charge against the other appellants. 19. Highlighting that the charge against the appellants is abetment/for assisting the passenger in removal of goods without payment of duty, it is argued that goods were removed from the gate and it is the function and duty of the gat....
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....t in criminal proceedings, the law insists upon the prosecution proving its case beyond reasonable doubt - which is the highest threshold of proof, in quasi-judicial proceedings that involve evasion of tax law or evasion of Customs Duty, the lower threshold of proof - preponderance of probabilities - is to be followed by the adjudicating authorities, learned counsel submitted that a retracted confession is not per se inadmissible or irrelevant in customs proceedings and can always be used as a corroborative evidence to record adverse findings. 22. It was next argued that weight metre scale adopted by the Commissioner was rationally explained. Mr. Rahul Kaushik, learned counsel stated that the smuggled goods were not available for examination and that there was lack of material evidence to show correlation between weights of various varieties of silk brought on various dates and the respective weight metre ratio. The Commissioner had to go by the record of concerned airlines which showed excess baggage weight in kilos whereas the AOs showed them in metres. In these circumstances, taking into consideration manipulation of quantities of silk fabrics, and the suppression and misdeclar....
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....mtrs on 19.6.2000 producing average of 16.50 mtrs per kg. It is fairly comparable to a variety of silk fabrics having 16.79 mtrs per kg and 45.7 gsm brought in on 28.8.2000. Similarly, 229 kgs of a variety of silk fabrics relating to Olga Kozireva were assessed to 5000 mtrs. leading to average of 21.83 metres per kg. This average is again rationally comparable to another variety of silk fabrics with 36 gms having average of 21.81 mtrs per kg brought in on 28.8.2000. A conjoint study of the baggage weights on 19.6.2000 and 28.8.2000 as reported by Airlines through manifests or letters and the metres assessed by customs leads me to positive finding that these metres are reliable and rationally co-relatable to the manifested/reported weights of baggage brought in by the relevant passengers. Having regard to the Test Reports of CRCL on all the six varieties of silk fabrics seized on 28.8.2000, market enquiries conducted thereon, availability of the goods and the wider details thereof as summarized in the above said Tables, I find the weight metres ratio of 17.62, which is duly supported by the above varieties of silk fabrics brought on 19.6.2000, as more authentic, reliable and legally....
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....e smuggling racket. It was submitted that the same reasoning applied in the case of T.K.R. Reddy, Pradeep Rana and V.K. Khurana. Learned counsel also invited the attention of this Court to the various tables set out in the adjudication order, set out in the SCN and later in the adjudication order which linked the telephone numbers of the appellant with those of the foreign nationals and others, i.e. Olga, Dil Agha, Mammor Khan, Nazira, Shalu etc. Some of the appellants even admitted knowledge of their acquaintanceship with Mamoor Khan or the others who placed calls or received them. However, either their explanations were not forthcoming or were unconvincing. These, submitted learned counsel, were sufficient materials to establish the culpability of the appellants. Analysis and Conclusions 26. Before analyzing the merits of the rival contentions, it would be convenient to set out the materials which formed the basis of fixing responsibility and imposing penalty upon the appellants. A tabular statement disclosing the foundation of each appellantâEUR(tm)s liabilitywhether implicated in the statement of anyone else, phone call details, etc. is set out below:- Sl. No. Name of....
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....ding involvement of Mamoor Khan. This was confirmed by Ajay Dhiman, Traffic Supervisor, Kyrgyzstan Airlines in his statements dated 26/27.12.2000, 30.12.2000 and 01.02.2001; he also identified Mobile No.9811135982 as belonging to Mamoor Khan. MamoorâEUR(tm)s involvement in illegal import of Chinese silk fabrics was also corroborated by Purshottam Lal Tandon in his statement dated 30-12-2000; he too confirmed that Mobile No.9811135921 belonged to Mamoor. This received further corroboration by Pradeep Singh Dhamija in his voluntary statement dated 03.01.2001. M/s Arun Kumar Dokania, Gopal Prasad Dokania, Nitish Kumar Kedia, Anudeep Singh and Mahender Jain, dealers in the Chinese silk fabrics imported by Uzbeki women also confirmed the involvement of Mamoor Khan in their statements of 05.01.2001. It was, therefore, apparent that Mamoor KhanâEUR(tm)s involvement in the conspiracy was as a key player, if not its ring leader. However, he could not be caught. Several other witnesses confirmed his involvement in smuggling of silk textiles independently. He was regularly in touch with various officers of Customs, passengers like Olga K., Nazira, Shahlo etc. and buyers of silk te....
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....,- (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable,- (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sought to be evaded on such goods or five thousand rupees, whichever is the greater; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value ther....
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....d to him (Dil Agha) and that after August, 2000, Dil Agha used No.9811158376. This statement corroborated the statement of Dil Agha recorded on 23.05.2001. Dil AghaâEUR(tm)s unsigned statement was duly supported by two independent witnesses. It established a close connection between Mamoor Khan and Dil Agha on one hand, and regular passengers (or couriers) such as Olga K, Gulia etc. on the other. Dil AghaâEUR(tm)s association with Mamoor was also confirmed by Abdul Qayum, Manager of Sameer Guest House, Ballimaran, Delhi in his statementdated 20.12.2000. Dil AghaâEUR(tm)s further statements were recorded on 11/12.07.2001, and 25.07.2001 where he gave detailed description of his involvement as well those of others, viz Sadullah, Zanjir Khan and Sanak etc. Importantly, he spoke about involvement of the Customs officers and his money dealings with them. Dil AghaâEUR(tm)s role was also confirmed by others such as Pawan Kumar (driver of Sehrawat Goods Carrier), Abdul Qayum, Manager, Sameer Guest House, Ajay Dhiman, Traffic Supervisor, Krygyzstan Airlines, Pradeep Singh Dhamija, Gopal Prasad Dokania, Nitish Kumar Kedia and Anudeep Singh in their statements under Se....
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....at telephone calls were made and received during these periods. What actually was said during these telephone calls is not known. Making or receiving of telephone calls by itself is a very harmless activity. However, it acquires certain sinister dimensions if it takes place between known carriers of commercial goods and Air Customs Officers on regular basis, especially if the timing is such that the passenger is arriving by a flight on a particular occasion when the officer concerned also happens to be on duty. If the circumstances surrounding such telephonic exchange are suggestive of possible connivance and the frequency and timing of the calls further enhances such a suspicion, then it does give rise to the possibility of existence of an unholy nexus. In the absence of transcript or details of what happened during these telephone contacts, such calls by themselves do not constitute an evidence which itself is enough to prove the existence of conspiracy. At the most, they can be used to buttress the force of other pieces of evidence that might independently exist. Again, it would make a lot of difference if a particular noticee is said to be only on the receiving end of the calls....
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....gers and allowing them to pass through Green Channel, improper inventorization, gratification and valuation of goods brought by them and so on, the acts of omission and commission are illustrative in character, no exhaustive list of such illegal acts or omission can be made. While analyzing the role of co- noticees in abetment, the above parameters have been applied to the overall facts of the given situation." 32. The absence of goods or the fact that in earlier instances they had been cleared without dispute, or even after payment of differential duty, in the opinion of the Court do not constitute impediments to a SCN and proceedings on the question of abetment of any of the appellants. In all such instances where a conspiracy (that has achieved its objective) is unearthed, the articles - especially in the form of goods would be no longer available. However, that would in no manner absolve the culpability of those involved, especially those who play key roles in the fulfillment of such conspiracies. The fact that differential duties were paid on particular dates and the record of entry of those involved in the smuggling racket, precisely constitute the evidence which both corrob....
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....rport also confirmed the stories of Olga and Dil Agha about the frequency of visits and that on several occasions differential duty was paid; the corroboration of quantities was likewise founded on scrutiny of the records. 34. It would be worthwhile to also notice the essential findings rendered by the Commissioner, who went into a detailed analysis of the evidence- which included the statements of R.N. Zutshi, Dil Agha, Olga, etc. He also compared the passenger manifests of the different dates involved, the duty roster of various Customs officers, the declarations made on those dates by those alleged to have participated in the smuggling racket, the notings made by the appellants in respect of the declaration and the phone call records relative to the appellants, Dil Agha, Mamoor Khan, Olga, Nazira, Shaloo, etc. Relevant extracts of the findings- which were both date wise, and in respect of each noticee who participated in the smuggling on the relevant date are as follows. The findings in respect of Sudhir Sharma are as follows: "445A. Now, I proceed to analyze (sic) the role of Sudhir Sharma in the matter. It has been stated by Zutshi in his statement dated 17th Jan, 2001 that ....
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.... is quite intriguing that one hour after the arrival of flight on the said date, the noticee spoke to Mamoor Khan on 6 occasions. This fact has neither been denied nor rebutted. The noticee has denied knowing Mamoor Khan but has given no explanation or justification of his interaction, especially during the period when the flight was being cleared. Under these circumstances, it cannot be said that the statement of Zutshi and others are not supported by corroborative evidence. The date and timing of the telephone calls matches with what has been stated by Zutshi and corroborates the allegation of connivance, abetment, collusion and conspiracy. I, therefore, hold that the charges leveled against Sudhir Sharma are established and he is liable for penal action under Section 112 of the Customs Act, 1962. ********************* **************** 484. The main evidences against Sudhir Sharma are in the form of ZutshiâEUR(tm)s statement and his numerous telephonic interaction with Mamoor Khan and others which have been brought out in detail in above paras. The defence taken by Sudhir Sharma has already been discussed above and in respect of 22.5,2000, the only additional submission ....
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....c;EUR¦" The findings in respect of Shri R.N. Zutshi are as follows: "R.N. Zutshi & V.K.Khurana 521 . R.N . Zutshi and V .K. Khurana are the departmental officers who have been made co-noticees on the allegation of connivance and abetment. The general evidence against them has already been analyzed in detail. On this date specifically, it is seen that Dil Agha spoke with R.N. Zutshi twice on his mobile phone and 6 times from his shop Tel. No. 3930733. It is very intriguing that these interactions took p1ace between 4.47 PM and 7.31 PM whereas the flight arrived at 4.32 PM. It is further seen that immediately after the arrival of flight, Olga K. who was the passenger spoke 4 times within a span of one hour from her mobile to R.N. ZutshiâEUR(tm)s mobile while RN. Zutshi was very much on duty. This coupled with ZutshiâEUR(tm)s confessional statement and other detailed records of his frequent interactions with various noticees clearly show that he was very deeply involved in this entire racket and I hold him liable for penal action under Section 112 of the Customs Act, 1962 for aiding and abetting the clearance of non-bona fide baggage of Olga K. and Nazira I. on 1....
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....cords of conversation would be a minor thing. All other arguments advanced by Zutshi have also been discussed in detail in the previous paragraphs. Under the circumstances, absolute and deep complicity of R.N. Zutshi in this entire drama is not in doubt. It is indeed very intriguing that even on 15th May, 2000 when the flight landed at 9.51 AM, R.N.Zutshi talked to Mamoor Khan 4 times before the arrival of the flight at 9.50 AM and 3 times after the arrival. A perusal of Table No.11 (page 136 of SCN) would also show that cellphone of Mamoor Khan was in vicinity of International Airport from 9.52 AM to 12:36PM. His entire role therefore, stands out very clearly and his complicity in the entire episode is fully established. I, therefore, hold that R.N. Zutshi is liable for penal action under Section 112 of the Customs Act, 1962 for his role in abetment, collusion and conspiracy and clearance of irregular baggage. ********************* **************** 500. The evidence against R.N. Zutshi is in the form of his inculpatory confessional statement as well as record of telephonic conversation has already been discussed in the foregoing paragraphs. It is a matter of record that R.N. Zu....
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....s minimal does not help his defence much and the acceptability of methodology adopted for working out quantity on those dates when declared quantities were far more than the manifested weight has already been discussed in foregoing paras. Keeping in view the entire circumstances of the case, evidence available and defence pleaded, I hold that the charges of connivance, abetment and conspiracy against TRK Reddy are proved and I hold him liable for penal action under Section 112 of the Customs Act, 1962. ********************* **************** 503. The show cause notice has made the allegation of connivance and abetment against Mamoor Khan and Sanak which need not be discussed again. The show cause notice has also levelled the charges of abetment and connivance against T.R.K. Reddy. The general evidence available against Reddy has already been discussed in foregoing paras. In addition, it is on the record that T.R.K. Reddy was in fact on duty on the date in question and had 8 telephonic conversations with Mamoor Khan from his Cell No. 981102318, once before the arrival of flight and 7 times after the flight was landed. T.R.K. Reddy has not clarified this aspect satisfactorily and i....
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....s a Khaas Admi and this role has also been described by R.N. Zutshi in his voluntary statement dated 17.1.2001. The evidentiary value of both these pieces of evidence has been discussed already in great detail. It has been clearly brought out in the show cause notice that on 28th August, 2000 huge quantities of textile was brought in after taking prior clearance from V.K. Khurana . It is corroborated by the fact that though Olga K. was carrying silk textiles valued at over Rs. 50 lakhs involving Customs duty of over Rs. 30 lakhs, she did not have any currency to pay duty on it nor there is anything to suggest that she had any arrangement or desire to pay this duty by arranging funds after arriva1. On the other hand, even on this particular date, there is documentary evidence to show interaction between V.K. Khurana on his Mobile No.9811028228 with Dil Agha, passengers Nazira. I. and Olga K. Though V.K. Khurana has disowned the ownership of the mobile number in question, this aspect has already been discussed and decided by me in para 440 above. When all these circumstances and evidences are seen in the totality, there is not even a slightest doubt that Khurana was actively in leagu....
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.... which are duly considered. The noticee Pradeep Rana requested for further time for making more submissions vide his letter dated 1st Feb., 2007. Even though six months have elapsed, no further submissions have been received on his behalf. 532. I now proceed to evaluate the evidence available against the noticee Pradeep Rana in the light of defence offered by him. It is a matter of record that Dil Agha has repeatedly named Pradeep Rana in his incriminating statement. I observe that statement of Dil Agha and R.N. Zutshi by itself might not really be enough to hold Pradeep Rana liable for penal action but as it happens, there is corroborative evidence in the form of frequent telephonic conversations between Pradeep Rana and Dil Agha. Pradeep Rana has not denied these conversations in his statement dated 23rd Jan, 2001 and 18th July, 2001 . He has tried to give justification for these calls which is far from convincing or acceptable. It is a matter of record that Olga K. and Nazira had arrived on 11/12th August, 2000 with 10 pieces of manifested baggage weighing 1,400 kgs which translated into 24,668 mtrs. However, they only declared 1,000 metres each on arrival and Pradeep Rana prep....
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....e his letter dated NIL received in the Office of the Comnissioner of Customs, New Custom House, New Delhi, on 17th March, 2005 . He made further written submissions at the time of hearing on 4th Jan.,2007. While denying the charges in toto, the main arguments advanced by the noticee were that he could not be said to have abetted irregular clearance in the light of order of Supreme Court in the case of Shriram Vs. UOI; that the statement of R.N. Zutshi on the basis of which the charges were made had been retracted by Zutshi; that Shahlo on the relevant date had no excess baggage as conveyed by Krygystan Airlines vide their letter dated 26th April, 2001 which was imputed to be carrying 1,220 kgs. of baggage; that the methodology adopted for working out the meterage and value of textiles supposedly brought by Shahlo A. was not correct. The noticee was granted personal hearing on 4th Jan., 2007wherein it was contended that: (i) Offence committed by Customs officers during discharge of their official duties ought to be dealt with in accordance with the provisions of Section 136 of the Customs Act, 1962 (ii) Disembarkation Card had not been made available (iii) The passenger manifest ....
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.... Shahlo A. did not figure in the passenger manifest of Flight No.545 whereas another passenger Nazira I. had cleared 800 mtrs. of textile after adjudication vide A.O. No. 20317. On perusal of manifest dated 15th May, 2000 of Flight No. K2545 from Bishkek to Delhi, I find that the name of Shahlo is mentioned at Sl.No.44, though it is written in a manner that surname has been written first. The plea taken by the noticee is, therefore, not valid. 464. 1 have examined the additional arguments of Yashpal in respect of 15th May, 2000. He has conveniently taken a stand that he was posted on Baggage X-ray Belt but has not been able to cite any reason which could justify his speaking with Mamoor Khan at 9.52 AM and 12.32 PM. As already discussed, Mamoor Khan with his cellphone was present at the International Airport during this time. In the light of various pieces of evidence discussed in paragraph above and after taking into account additional arguments in defence as well as evidence on 15.5.2000, I have no hesitation in holding that the charges of connivance, abetment and conspiracy stand proved against Yashpal and that he is liable for penal action under Section 1 12 of the Customs Act....
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....f non-bonafide baggage. Though the quantification/ measurement of baggage in the first instance is the duty of Baggage Officer, which in this case was V.K. Khurana, it does not absolve the Supdt. of his responsibility. In fact, when a passenger reports to Red Channel counter, he first makes a declaration to the Supdt. who deputes one of the Inspectors working under him to examine the baggage. In this case, at the time of declaration, the fact that Olga K. was a frequent passenger would have immediately come to the notice of Ajay Yadav. Under these circumstances, it was expected of him to ensure that the baggage of Olga K. was examined in minute detail which obviously was not done. This is a major lapse on his part which gives rise to the presumption of abetment and connivance. No valid or acceptable explanation has comeforth on behalf of Ajay Yadav as to how the baggage of a regular carrier could escape proper examination, inventorisation and adjudication of only 800 mtrs. out of the total of 26,958.60 mtrs. This major lapse/omission coupled with the statement of R.N. Zutshi form sufficient basis for arriving at the conclusion of abetment and collusion on the part of Ajay Yadav and....
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....ne consignment was seized in August 2000, are meritless. Questions of law (a) and (c) as framed are answered against the appellants and in favour of the revenue. Re Question (b): Violation of principles of natural justice due to denial of cross examination 36. All the appellants had argued that the Commissioner erred in his findings inasmuch, as, no opportunity was given to them to cross examine any of the witnesses' whose depositions were relied upon. The Commissioner stated that several appellants had sought for cross examination of R.N. Zutshi and of Sh. U.K. Mishra, SIO of DRI. The Commissioner held that: ".... all the documents on which reliance has been placed in making the allegations against different noticees have been supplied to them. In this case, I find that if the request for cross-examination is acceded to, then the proceedings will have to continue for a long period of time. The SCN was issued as early as in 21.8.2001 and over 6 years have elapsed since the proceedings began. Under the circumstances, prolonging it as a result of numerous requests of cross examination would not only hurt the interest of justice but also the interest of noticees themselves. The....
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....statements were to be used during the proceedings that had been put to them in the SCNs. Furthermore, they had also not given any convincing or reasonable explanation for the phone calls received from Mamoor Khan, Dil Agha, Olga, etc. In the circumstances, the findings of the lower authorities that they were not prejudiced, and that principles of natural justice were not violated, cannot be interfered with. Question No. (d) Did the CESTAT err in its findings regarding the method adopted in arriving at the average weight to assess liability and the absence of essential documents like the passenger declarations 38. All the appellants had objected to the methodology adopted by the Commissioner to arrive at the weight, for the purpose of calculating penalty. The Commissioner observed that the weight declared for the material varied drastically in the several consignments. He adopted a method of averaging, as is evident from the following discussion: "400.......................The Show Cause Notice proposes weight metre ratio of 17.62 i.e. 17.62 metres per kg. whereas the noticees have advanced the argument that it was purely based on presumptions and guess work and therefore not fai....
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....rlines and the metres assessed in AOs relating to 19.6.2000 brings forth that even on this date voluminous baggage of silk fabrics containing different varieties was brought in by Olga Kozireva, Isamu KM, Merkulova, Shakista. K. and Vetchinkina T. As against the total weight 2333 kgs as per records of Airlines and as detailed in para 74 of the notice, the total meters assessed in AOs are seen to be 45,600 mtrs which seem consistent, logical and reliable. The average metres per kg i.e. weight metre ratio here works out to 19.54. As detailed in para 74(d) of the notice, in respect of Merkulova and Shakista K, 424 kgs of a variety of silk fabrics were assessed to 7000 mtrs on 19.6.2000 producing average of 16.50 mtrs per kg. It is fairly comparable to a variety of silk fabrics having 16.79 mtrs per kg and 45.7 gsm brought in on 28.8.2000. Similarly, 229 kgs of a variety of silk fabrics relating to Olga Kozireva were assessed to 5000 mtrs. leading to average of 21.83 metres per kg. This average is again rationally comparable to another variety of silk fabrics with 36 gsm having average of 21.81 mtrs per kg brought in on 28.8.2000. A conjoint study of the baggage weights on 19.6.2000 an....
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....ed a baggage weight of 1220 kgs on each of the three occasions on the basis of the lowest manifested weight when single MMV Canter was used instead of proposing some higher average figure. For two other dates, i.e. 17.7.2000 and 21.8.2000 when the manifested/reported weights were 1235 kgs and 1000 kgs respectively, two trucks - MMV canter of 3750 kgs capacity were used for goods transportation. On 28.8.2000 when the baggage weight was 4211.7 kgs, the internal record of transporter and other evidence on record showed that two MMV canters of 3750 kgs capacity were hired. An inference was drawn from this instance that when the baggage weight was touching 2000 kgs or beyond it, one MMV Canter of 3350 kgs was preferred to Tata 407 of 2200 kgs capacity. On 28.8.2000, to carry 4211.7 kgs, two trucks of 3750 kgs capacity were hired and they reached Airport but could not be used due to seizure. It was, therefore, concluded that on each of the dates, the weight of the baggage was around 4000 kgs when two trucks of 3750 kgs capacity were hired on each occasion. The investigation calculated the baggage weight on the lowest and safest side as 2364 kgs on 17.7.2000 and 1914 kgs on 21.8.2000 and ....
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....dual passenger under the passenger manifest and in fact it can be a very legitimate and conclusive way of ascertaining whether a passenger carried any excess baggage booked on a particular date or not. It does not get invalidated simply because it does not tally with Customs Form No.70." Dealing with the weight determined by multiplying 1.9144 on certain occasions, the Commissioner noted that on 28.08.2000, the total excess baggage booked in the name of Olga K. was 2,200 Kgs. which on actual weighment was found to be 4,211.70 Kgs. The internal inquiry conducted by the Airlines, found that their staff at Bishkek and other places were hand in glove with passengers in recording lesser excess weight of baggage than actual in return of illegal gratification from passengers and that several officials of Krygystan Airlines in Bishkek were sacked because of their involvement in not recording the weight of excess baggage to benefit the passengers. These facts were confirmed by the statement of Krygystan Airlines Manager, Shri H.S. Dugal recorded on 3.8.2001 that: "We have taken the matter up with H.Q. and as informed earlier to Customs vide our letter dated 27.12.2000, this matter has been....