TaxTMI 
TaxTMI 
2023 (5) TMI 1340
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....n, Kanpur, (U.P.) and 4. Shri Bhagwan Sharma, S/o Shri Patram, A- 24, Gavde, Uttam Nagar, New Delhi alleging that they had contravened the provisions of Notification No. 09/96-Cus dated 22,01 1996 issued under Section 11 of the Customs Act, 1962 read with Section 3(2) of the Foreign Trade (Development & Regulation) Act, 1992 (hereinafter referred to as the FTDR, 1992) and Section 7(,c) of the Customs Act, 1962 in as much as they were found indulging in illegal import of 15,732 Kg. cut betel nut of third country origin packed in 207 bags valued at Rs. 12,58,560/- loaded on Tata truck bearing registration no. HR38M-8767 valued at Rs. 7,50,000/- and collectively valued at Rs. 20,08,560/- without any legal and valid documents through unauthorized route. 2. Officers of Hqrs. Preventive Branch of the Patna Customs (P) Commissionerate received a secret and specific information on 10 11.2011 that a consignment of betel nut of third country origin (TCO) had been brought illegally from Nepal through off-routes into India and a part of that consignment i.e. 207 bags of illegally imported betel nut is being transported on a truck bearing Registration No.HR-38M/8767 via Kishanganj, whi....
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....ould not succeed, 5. Shri Jay Karan (Noticee No.3) in .his statement recorded under Sect& 107 and Section 108 of the Customs Act, 1962 on 11.11.2011 stated that he was working as Khalasi of the said vehicle and was present at the time of loading of the consignment of 207 bags of betel nuts from Falakata, Silliguri. He also stated that the intercepted smuggled betel nuts were loaded on the truck as per the direction of Noticee no. 4. 6. The goods were examined in detail in presence of two independent witnesses and it was found that a total of 207 bags containing cut betel nuts, spherical in shape and smaller in size were loaded on the truck. This corroborated the specific information that the betel nuts were of third country origin The net weight of the betel nuts was found to be 15,732 kgs. and its value was ascertained at Rs. 12,58,560/-. It is pertinent to mention that Kishanganj is located very close to the Indo-Nepal border having porous and easily passable off-routes through which betel nuts of third country origin were frequently smuggled into India. It is also a fact that betel nuts from third countries are imported in Nepal and the quantities imported are ....
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....e process violated the provisions of Section 174 & Section 175 of the Indian Penal Code, 1860. 10. Ownership verification of the seized vehicle was done through the District TransportOfficer, Faridabad, who vide his letter No. 250 dated 28.12.2011 confirmed that the registered owner of the seized vehicle bearing Registration No. HR 38M/8767 was Sri Bhagwan Sharma, S/o Shri Patram, 17/6, Mathura Road, Faridabad with present address as A-24, Gavde, Uttam Nagar, New Delhi. 11 . A Writ Petition CWJC No 317of 2012 was filed by M/s. Yamuna Trading Company and Shri Bhagwan Sharma (Noticee no.4) before the Hon'ble High Court of Judicature at Patna on the grounds that the seizure was mala-fide, illegal and beyond jurisdiction as it was made on the basis of confessional statement of the driver and Khalasi, which was actually never given. The writ also inter-alia stated that- (i) M/s, Yamuna Trading Company situated in Natun Para, P.O Dhupguri, Dist.Jalpaiguri, West Bengal was a registered dealer of betel nuts under the West Bengal Value Added Tax Rules and is authorized to deal in whole sale and retail trade of betel nuts (supari) and spices. ....
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.... the traders of betel nut (Supari). The Secretary of the said Samiti stated that Shri Rajesh Singh, Proprietor of M/s Yamuna Trading Company was not a member of their Samiti and in his knowledge no Rajesh Singh was working as a betel nut trader. The investigating team also went to Rabindranagar at Dhupguri where Shri Anshu Deb Guha, S/o Late Mahindra Nath Guha, R/o- Rabindranagar, Dhupguri, Jalpaiguri stated that he had rented his barren land to Shri Rajesh Singh for trading in betel nuts and spices at the rent of Rs. 2,000/- per month but Shri Rajesh Singh never made any construction on this land and the land was still barren. He also submitted a tenancy agreement reached between the two for the same. 14. The follow-up investigation in respect of the consignee at New Delhi, as mentioned in the Writ petition, was also conducted through the Deputy Commissioner. Central Excise, New Delhi, who vide his office letter C.No. IV(HQR.Prev)12/01/SST/2012/98 dated 23-01-2012 reported that the address of the consignee M/S Shree Shubh Traders was incorrect, as the owner of the premises at given address stated on record that he had not rented the said accommodation to the said consigne....
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....as made to the Branch Manager, Bank of India, Dhupguri Branch vide letter dated 03.02.12 to furnish the details about the financial transactions through the Bank Alc no. 435320110000069, which Shri Rajesh Singh has claimed to be the official Account of the firm in the petition filed before the Hontble High Court. The details furnished by the Branch Manager vide his R'ef. no. DHUPISBI/11-12 dated 10 02.2012 showed that during the entire period between May, 2011 and Feb. 2012 the balance amount has never been more that Rs. 5000/- and there had been no financial transactions since the opening of the Bank Account.This clearly indicates that the Noticee No. 1 has been engaged in smuggling of Betel nuts for whom it was not possible to make payment to the suppliers (who are actually in Nepal) by Account transfer from his Bank Account. In this way, it is apparent that the transaction was being financed through black money for which no book keeping of the financial transaction was maintained. 19. The Sales Tax Return of Noticee No. 1 only showed turnover of Rs. 1,15.450/- over a period of six months and the Sales Tax Department confirmed that he had not filed the Sales Tax Retu....
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.... Delhi. Thereafter, a team headed by Assistant Commissioner, Customs (Prey.) Hqrs., Preventive Branch, Patna rushed to N.H. 31 at Kishangani. The team located the said vehicle at about 05.00 A.M. of 11,11,2011 and intercepted it after a hot chase. On examination, the vehicle was found loaded with betel nuts of third country origin weighing 15,732 Kgs. valued at Rs. 12,58,560/-, The driver of the vehicle (Noticee No. 2) did not produce any documents related with the transport of the consignment and had also disclosed that the betel nuts were of foreign origin brought from Nepal. Hence, on bonafide belief that the betel nuts weighing 15,732 kgs were smuggled in nature it was seized along with the vehicle valued at Rs. 7,50,000/- on 11.11.2011 at 7.30 hrs, under Section 110 of the Customs Act, 1962 in the presence of two independent witnesses. (ii) It is observed that Noticee No 2 in his statement recorded on 11.11.2011 under Section 108 of the Customs Act, 1962 admitted that the seized goods were brought from Nepal into India through off-routes of Indo-Nepal Border and he was present at the time of loading of the seized goods on the seized vehicle on 10.11.2011. This and tha....
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....rbesganj found the office premises of M/s Laxmi Roadways Company-transport agency owned by Noticee No.4 and the carrier of the seized goods at Jhankar More, Bardhwan Road, Siliguri to be closed. They gathered that the said premises belonged to one Md.Nazir Khan, resident of Jyoti Nagar Colony, Bardhwan Road, Siliguri, who showed a tenancy agreement made between him and one Shri Nand Kishore Indoria, S/o Late Ghasi Ram Indoria, Ganga Nagar S.M.C. Ward No.V, P.O. + P.S.- Siliguri,Dargeeling. Md.Nazir Kham in his voluntary statement given before the officers of Forbesganj Customs (P) stated that he was owner of the shop but had rented it to Shri Nand Kishore Indoria on monthly rent of Rs.1200/-. He further stated that Shri Nand Kishore Indoria was originally a Munshi at a Kirana Store and that he had never opened a shop and only a board displaying Laxmi last three months. The said Mr. Indoria was not found at his residence when the :n.vestigatino team reached there. This establishes that the premises at given address \, as being used by the Noticee no. 4 as a cover up only. (vi) It is further observed that the Forbesganj Customs investigating team could not locate the office ....
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....irm obtained from the Sales Tax Office showed no sale or purchase before 01.07.2011 and after 10.11.2011 and even during the period for which the Stock Register was submitted i.e. 01,07.2011 to 10.11.2011 (the date on which the betel nuts were seized) the firm had shown very minuscule quantity of betel nuts as sold during this period, it is difficult to comprehend as to how such a huge quantity of betel nuts was being stored without any facility of a godown, it is indicative of the fact that the Stock Register was fabricated as an afterthought and in fact no such purchase was made during that period and the seized betel nuts were of foreign origin and smuggled in nature. (ix) It is observed that the follow-up investigation in respect of the consignee at New Delhi, i.e., M/s. Shree Shubh Traders, Tilak Bazar as mentioned in the Writ petition, was also conducted through Shri B. Mohan, Deputy. Commissioner(AE), Central Excise, New Delhi, who has reported vide letter C.No. IV(Hqrs. Prey) 12/01/SST/2012/98 dated 23.01.2012 that the address of the consignee MIS Shree Shubh Traders was incorrect, as the owner of the premis'es at given address stated on record that he had not ....
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.... is a place situated in Bihar and not in West Bengal. Also, the Form 1 submitted by the firm under Rule 8 of the Central Sales Tax (West Bengal). Rules,1958 submitted before the Sales Tax Authority Nil Return. It may well be inferred that the Sales Tax Registration is just a prop./façade for camouflaging smuggling of betel nuts. (xiv) It is further observed that the seized goods were loaded near Kishanganj which has been specified as an area vulnerable to smuggling under Section 11H of the Customs Act, 1962. Kishanganj is very close to the Indo Nepal border, and has porous and easily passable off-routes through which betel nut of third country origin were smuggled into India. (xv) It is further observed from the details of receipts received from the Sales Tax Officer, Jalpaiguri issued in the name of farmers from whom the betel nuts were claimed to have been purchased by M/s Yamuna Trading Company, that it merely stat dame of persons only and that it did not show any address or other verifiable details through which it could be confirmed that the said purchase actually took place. Moreover, it is a known fact that farmer sell l unprocessed raw betel nuts wh....
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....ed appearing before the investigation and did not co-operate with the investigation in spite of three summons issued to him. Noticees No.2 & 3 have also stated in their respective statements recorded under Section 107 and Section 108 of the Customs Act, 1962 on 11.11.2011 that the seized goods was loaded at the behest of the owner of the vehicle, Shri Bhagwan Sharma (Noticee No.4) and Sri Rajesh Singh (Noticee No.1). Noticee No. 2 & 3 in their statement dated 11.11.2011, have also admitted that the said goods were brought from Nepal into India through off-routes of Indo Nepal Border by way of smuggling. Further, the investigation has brought out the fact that the firm of Noticee No.1 and Noticee No.4 were non-existent at the given address and that the consignment of the seized goods was also found to be fictitious. The investigation conducted with the Sales Tax authorities and with cooperative/ Marketing Committee has revealed that the firm was fictitious and was not capable of carrying out business on such a large scale. (xx) It is clear from the discussion made above that the seized goods i.e. 15,732 kgs. betel nuts of third country origin packed in 207 bags valued at Rs....
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....nal hearing. This indicates that he was involved in the act of smuggling of the alleged third country betel nut. (xxiv) It has already been held above that the seized goods loaded on the seized vehicle were contraband in nature and were liable for confiscation under Section 111 (b) and 111 (d) of the Customs Act,1962. As the seized goods were loaded on the seized vehicle in conscious knowledge of the owner as wel as persons in charge of vehicle, it is held that the seized vehicle i.e. truck bearing Registration No.HR-38M/8767 valued at Rs.7,50,000/- is liable for confiscation under Section 115 (2) of the Customs Act,1962. (xxv) In view of the discussions made above, it is established that Noticee No. 1,2,3 and 4 have connived in close co-operation and consciously carried out the act of smuggling of the seized goods of third country origin betel nuts. Knowing very well that the goods and vehicle are liable to confiscation under Section 111 (b) & 115 (2) respectively of the Customs Act, 1962 and they were liable to penal action under Section 112 (b) of the Customs Act, 1962. Accordingly, it is held that Noticees No.1,2,3 & 4 are liable for penalty under Section 112 ....