TaxTMI 
TaxTMI 
2024 (12) TMI 171
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.... goods on fine of Rs 60000/- (Rupees Sixty Thousand only) alongwith applicable duty and charges, to its lawful owner against the confiscation of the said goods. The battery scrap has already been released provisionally on furnishing of a cash security of Rs 1,70,000/- (Rupees One Lakh Seventy Thousand only). I, therefore, order for appropriation of Rs. 60000/- against the fine out of the cash security of Rs 170000/- and duty and charges may be appropriated from the remaining amount of cash security of Rs 110000/-; ii. I order for confiscation of the said seized vehicle, Registration No. HR 38 0 9185 valued at Rs. 10,00,000/- used in transportation of the aforesaid seized battery scrap under section 115(2) of the Customs Act, 1962. However, I give an option under section 125 of the Customs Act, 1962, to redeem the vehicle on fine of Rs 50000/- (Rupees Fifty Thousand only) to its lawful owner against the confiscation of the said vehicle. The vehicle has already been released provisionally on furnishing of a cash security of Rs 50,000/- Rupees Fifty Thousand only). I therefore order to appropriate this cash security against the proposed confiscation. iii. I impose Pe....
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.... Ravi Sharma has been arranged. • He along with the Shri Girish Pandey and Shri Santosh Gupta boarded the truck and went to Indo Nepal border, where Shri Girish Pandey and Shri Santosh Gupta bought the battery scrap loaded in a tractor trolley which was then loaded in the truck. • He was told by Shri Girish Pandey and Shri Santosh Gupta to reach at the shop of Sahu Traders and that the documents for transport of these goods will be arranged there. • Next day i.e. on 24.02.2016 at about 1200 Hrs Shri Santosh Gupta provided him the documents (invoice) of M/s Pandey Traders Thoothibari covering the good i.e. used battery scrap loaded in the truck. • Thereafter he along with other left for Amroha in the truck. 2.5 Fourth person in the truck identified himself as Shri Mohd Arif S/o Shri Chote and stated that he is agent of Shri Mohd Sakir, Proprietor of Turkey Metal Industries Amroha. He stated that he is transporting the Foreign/ Third Country Origin battery scrap from Thoothibari to Amroha as per the directions of Shri Sakir and that he was present at the time of loading of said scrap brought from Nepal on a tractor trolley in the....
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....osed upon him under section 112 of the of the Customs Act, 1962. 25. Now, therefore, Shri Ravi Sharma (Noticee No. 1), Shri Dharmendra Kumar Alia Banty Sharma (Noticee No. 2), Shri Ehsar Ali (Noticee No. 3), Shri Mohd Arif (Noticee No. 4), Shri Santosh Kumar Gupta (Noticee No. 6) and Shri Mohd. Sakir (Noticee No. 8) ar hereby called upon to show cause to the Additional Commissioner, Customs(P) Hqrs, 5th floor, Kendriya Bahawan, Sector-H, Aliganj, Lucknow- 226024 within 30 days from the date of receipt of this show Cause Notice as to why penalty should not be imposed upon each of them under section 112 of the of the Customs Ac, 1962." 2.9 The show cause notice was adjudicated as per the Order-in-Original referred in para 1 above. Aggrieved appellant filed the appeal before the First appellate authority which has been disposed as per the impugned order. 2.10 Aggrieved appellants have filed this appeal. 3.1 We have heard Shri Anuj Agarwal Advocate for the appellants and Shri Santosh Kumar Authorized Representative for the revenue. 3.2 Arguing for the appellant learned Counsel submits that- • appellant have taken a categorical stand that the goods in t....
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....1) was aware about the contraband nature of the scrap loaded on his truck. Therefore, there is no ground to impose penalty on Appellant-1. The penalty imposed on Appellant-1 is set aside. Rest of the order is sustainable." 4.3 Order-in-Original records the following findings:- 29. The main issue before me to be decided in this case is whether the seized battery scrap has been smuggled from Nepal into India through off routes, whether the seized vehicle was used in transportation of the smuggled goods in India and whether the noticees 1 to 8 are involved in the smuggling. 29. ... 30. I find that in all the replies dated 06.12.2016 the defence on behalf of all the eight Noticees has emphasized on following points:- a. The seized battery scrap was not smuggled b. It was purchased by vendors c. It was owned by Shri Girish Pandey of M/s Pandey Traders, Thoonthibari d. It was loaded from the shop/godown of M/s Pandey Traders, Thoonthibari. e. Record of purchase of battery scrap is not maintained by M/s Pandey Traders, Thoonthibari f. Seized battery scrap was accompanied with invoice. g. The drive....
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....aged by their employer Shri Shakir. The vehicle was also managed by their employer Shri Shakir. All the four noticees, No. 1, 2, 3 and 4 have admitted that they were not well literate and can only make their signatures therefore their statements were written by someone else and they signed it after listening it and understanding it. Shri Girish Pandey (Noticee No. 5) has accepted in his statements dated 27.02.16 and 29.03.16 that he is owner of the seized scrap; he deals in battery scrap; he sells the battery scrap to M's Turkey Metal Industries, Amroha; he maintains no record of purchase and sale of battery scrap; he has sold 28 MT of battery scrap to M/s Turkey Metal Industries, Amroha; he has issued invoice No. 07 dated 24.02.16 to M/s Turkey Metal Industries, Amroha in respect of seized goods; the seized goods may contain foreign origin battery scrap. Shri Santosh Gupta (Noticee No. 6) stated in his statement dated 27.02.16 that he deals in scrap. Shri Ramkumar Khandelwal (Noticee No. 7) has accepted in his statement ated 02.03.16 that the seized goods were loaded on the vehicle on his directions. The freight also was negotiated by him. ....
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...." 32.3 I find that Hon'ble CESTAT Mumbai in case of P.B. Nair C&F Pvt, Ltd. Versus Commissioner of Customs (General), Mumbai, 2015 (318) E.L.T. 437 (Tri. - Mumbai) has held that the proceedings under section 108 of the Customs Act, 1962 is a judicial proceeding and if any retraction of the confession has to be made, the same should be made before the same authority who originally recorded the statement. The relevant para is reproduced as under:- "5.5 It has been argued that in the inquiry proceedings conducted in Aptil, 2011, Shri Dhamale and Mr. Menon had deposed during their cross-examination that they had given statements admitting their involvement of the commissions and omissions before the DRI under duress and threat and therefore, these statements cannot be taken at face value. This argument is not valid for more than one reason. The proceedings under Section 108 of the Customs Act is a judicial proceeding and if any retraction of the confession has to be made, the same should be made before the same authority who originally recorded the statement. In Zaki Ishrati v. Commissioner of Customs & Central Excise, Kanpur [2013 (291)_E.L.T. 161 (All.)|, the ho....
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....Khandelwal (Noticee No. 7) has accepted in his statement dated 02.03.16 that the seized goods were loaded on the vehicle on his directions and the freight also was negotiated by him. 34. I find that Shri Shakir (Noticee No. 8) was summoned vide letter dated 25.02.2016 and 06.04.2016 to tender his statement u/s 108 of the Act but neither the letters returned nor Shri Mohd Sakir turned up. It is clear that he has deliberately not availed the opportunity provided to him by the department considering natural justice. This shows that he has nothing to offer in his defence, 34.1 Shri Girish Pandey (Noticee No. 5 and Proprietor of M/s Pandey Traders, Thoonthibari, Mahrajganj) has mentioned in his reply dated 06.12.16 to the SCN that battery scrap is not an item of section 123 of Customs Act therefore burden of proof is on the department. In this regard it is to mention that the seized scrap is prohibited in nature when smuggled from Nepal and otherwise it is restricted. I observe a number of contradictions in the defence replies dated 06.12.16 submitted by the advocate on behalf of all the eight noticees which are as under- a. Shri Ehsan Ali (Noticee No....
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....e No.3 & Noticee No.4 u/s 108 of the Customs Act,1962, are acceptable as evidence in the instant case and Noticee No.1, Noticee No.2, Noticee No.3 & Noticee No.4 have confessed to the effeet that the said seized battery scrap has been smuggled into India from Nepal Therefore, in view of foregoing paras, applying the ratio of judgement passed by the Apex Court in case of CC vs D. Bhoormull 1983 (13)ELT 1546(SC), wherein It was held "Department is not required to prove its case with mathematical precision, but what is required is the establishment of such a degree of probability that a prudent man may on its basis believe in the existence of facts in the issue....prosecution is not obliged to prove as part of its primary burden lhe facts which are especially within the knowledge of accused. Since smuggling is done secretly, il s impossible for preventive department to unravel every link of the process. .....It is for him(accused)to explain or establish those facts within his peculiar knowledge , failing which the prosecution will be entitled to take advantage of the presumption of facts arising against him, in discharging its burden of proof. .......... Deptt. Would be deeme....
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....ection 112 of the Customs Act 1962; Form revelations made by the noticees No 1 to 4 in the Panchnama and in their respective statements under Section 108 of the Act it is evident that Shri Santosh Kumar Gupta (Noticee No. 6), was actively & knowingly involved in smuggling, sale and transportation of Foreign Origin/Third Country Origin Battery Scrap. He is, therefore, liable for Penalty under Section 112 of the Customs Act 1962; Shri Ram Kumar Khandelwal (Noticee No. 7), Owner of the vehicle, has managed the transportation of smuggled Foreign Origin/Third Country Origin Battery Scrap knowingly, from Indo-Nepal border to Amroha for monetary gain. He is, therefore, liable for Penalty under Section 112 of the Customs Act 1962; Shri Mohd Sakir (Noticee No. 8) Prop. of M/s Turkey Metal Industries falled to appear beforethe Customs Authorities despite of several Summons. He deliberately not joined the departmental proceedings to conceal the facts. Form revelations made by the noticees No 1 to 4 in the Panchnama and in their respective statements under Section 108 of the Act it is evident that Shri Mohd Sakir, was knowingly involved in purchase and transportation....
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.... in his earlier rented house till he constructed the present house and shifted his residence and thereafter he brought to his house and concealed the same in his compound; and other details elaboration of which is not material. The question then is : whether it was influenced by threat of implicating his wife in the crime which is the sole basis for the claim that it was obtained by threat by PW-2 and PW-5? In that behalf, the High Court has held that it could not be considered to be induced by threat that his wife will be implicated in the crime and accordingly disbelieved his plea. It is seen that admittedly after the appellant gave his statement, he was produced before the Magistrate though no complaint was filed and was released on bail. He did not complain to the Magistrate that Ex. P-4 statement was given under inducement, threat or duress. It was raised only subsequently making accusations against PW-5, the Inspector of Customs. Therefore, obviously it was only an afterthought. The High Court, therefore, rightly has not given any weightage to the same. It is true that the Magistrate has given various reasons for disbelieving the evidence of PW-3, the panch witness who had al....
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....n contending that reliance on the statements of those witnesses without opportunity to cross-examine them, was violative of the principle of natural justice. The High Court had dismissed the writ petition. In that context, it was held that his retracted confession within six days from the date of the confession was not before a Police Officer. The Custom Officers are not police officers. Therefore, it was held that "the confession, though retracted, is an admission and binds the petitioner. So there is no need to call Panch witnesses for examination and cross-examination by the petitioner". As noted, the object of the Act is to prevent large-scale smuggling of precious metals and other dutiable goods and to facilitate detection and confiscation of smuggled goods into, or out of the country. The contraventions and offences under the Act are committed in an organised manner under absolute secrecy. They are white-collar crimes upsetting the economy of the country. Detection and confiscation of the smuggled goods are aimed to check the escapement and avoidance of customs duty and to prevent perpetration thereof. In an appropriate case when the authority thought it expedient to have the....
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....sional statement of the appellant, Ex. P-4 to be a voluntary one and that it could form the basis for conviction. The Magistrate had dwelt upon the controversy, no doubt on appreciation of the evidence but not in proper or right perspective. Therefore, it is not necessary for the learned Judge of the High Court to wade through every reasoning and give his reasons for his disagreement with the conclusion reached by the Magistrate. On relevant aspects, the learned Judge has dwelt upon in detail and recorded the disagreement with the Magistrate and reached his conclusions. Therefore, there is no illegality in the approach adopted by the learned Judge. We hold that the learned Judge was right in his findings that the prosecution has proved the case based upon the confession of the appellant given in Ex. P-4 under Section 108 of the Evidence Act and the evidence of PWs 2, 3 and 5. The prosecution proved the case beyond doubt and the High Court has committed no error of law." 4.6 On the basis of the objective evaluation of the evidences the authorities below have arrived at the conclusion that the impugned goods are smuggled goods smuggled through unauthorized routes from Nepal. Appel....
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....to return their used batteries only to the dealers or deliver at designated collection centers; and (c) addresses of dealers and designated collection centers. (ix) use the international recycling sign on the Batteries; (x) buy recycled lead only from registered recyclers; and bring to the notice of the State Board or the Ministry of Environment & Forests any violation by the dealers. (xii) ensure that the new batteries shall be sold only to the registered dealers. Notes. - The assemblers and reconditioners are excluded from the purview of responsibilities as specified in sub-clauses (iv), (vii), (ix) and (xii).]" 4.8 Rule 7 specifically provides for responsibilities of dealer, and the same are reproduced as follows:- "7. RESPONSIBILITIES OF DEALER.- It shall be the responsibility of a dealer to- (i) ensure that the used batteries are collected back as per the Schedule against new batteries sold; (ii) give appropriate discount for every used battery returned by the consumer; (iii) ensure that used batteries collected back are of similar type and specifications as that of the new ba....
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....or inspection; (v) mark 'Recycled' on lead recovered by reprocessing; and (vi) Create public awareness through advertisements, publications, posters or others with regard to the following- (a) hazards of lead; and (b) obligation of consumers to return used batteries only to the registered dealers or deliver at the designated collection centers. " 4.10 In terms of above rules the used batteries are not freely traded in the market. They to be collected back by the manufacturer, dealer or importer at the time of sale of new batteries and thereafter transported to recyclers in the manner prescribed. The entire story made by the appellant to the effect that he has procured these batteries scrap from the local market, goes contrary to the specific provisions of these rules and hence cannot be relied upon. If that is so, the entire defense of the appellant fails. 4.11 None of the co-noticees whose statement have been relied upon by the lower authorities are in appeal before the CESTAT. The statements of the of the co-noticee relied in the proceedings were retracted only in the defence reply filed by them to the show cause notice, and adjudicating authority....