TaxTMI 
TaxTMI 
TaxTMI 
2006 (4) TMI 159
X X X X Extracts X X X X
X X X X Extracts X X X X
.... import duty free fabrics of foreign-origin were stored in a godown of one Uma Chawla at 2, Hide Road, Kolkata-43 and pursuant to such information, the officers of the DRI visited the godown. The officers had requested Sri Subhas Chawla, the husband of the proprietor, to show the relevant documents showing payment of duties in respect of the goods stored at that time in the said godown. (b) From the physical verification of stocks and the godown record, seven different items of goods were found. (c) On being asked, Sri Subhas Chawla could not produce any document in support of those seven different items of goods and he said that the goods were deposited in his godown by Sri Man Singh, the proprietor of Man Singh Transport. On being asked by Sri Chawla, Sri Man Singh came to the godown and identified the goods. Man Singh admitted the fact that the goods were brought to the godown through his transport, but he also could not produce any document in support of the payment of duty. The goods were accordingly seized on reasonable belief that those were smuggled/imported without payment of duty. (d)&....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sp; A voluntary statement of Subhas Chawla, the husband of Uma Chawla, the proprietor of the godown, was also recorded under Section 108 of the Customs Act and in his statement he stated that the working of the firm was looked after both by himself and his wife and that the fabrics of foreign-origin found through search on 23rd August, 2002 from their godown were received by him by Man Singh and that apart from the three road-challans issued by the International Marketing, he did not have any other challan/bill of entry etc. He further stated that he did not know the name of the owner of the goods and the goods were seized after the measurement of the roles was written down. (g) The samples of the fabrics were sent to the Chemical Laboratory of Customs House, Kolkata and those were found to be non-notified items. (h) A voluntary statement by Samir Saha, was recorded under Section 108 of the Act and in the said statement he stated that he had the business of purchasing and selling of imported fabrics for the last eight months and that he generally used to sell the goods to v....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... us that the Tribunal committed a substantial error of law in totally overlooking the report of the Chemical Examination indicating that all the disputed items being Item Nos. 3 to 7 were notified goods in terms of Section 123 of the Act and thus, misapplied the principle of law that the onus lay upon the Revenue to prove that those are smuggled goods. According to Mr. Banerjee, it would appear from the Chemical Examiner's report that all the items of the goods contained synthetic fabric and as such, those are very much notified items in terms of Section 123 of the Act and once notified items are found from the godown of Subhas Chawla and Uma Chawla, there was no justification of allowing their appeals. 7. As regards Man Singh, the transporter, Mr. Banerjee contends that in his statement under Section 108 of the Act, he having admitted that he brought those items to the godown, the Commissioner of Customs rightly imposed personal penalty upon him for taking active part in concealing those notified items without any payment of duty and the Tribunal had no sensible cause of allowing the appeal filed by Man Singh. 8. As regards Samir Saha, Mr. Banerjee contends that it would appear ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Section 108 of the Act on the coercion of the Revenue Officials and as such, this Court should take no notice of the alleged statements. 11. Mr. Chowdhury further contends that it would appear from the Chemical Report that the Item No. 6 comprised of 51.4% by weight of polyamide (Nylon) Flock/Dust which means the balance of 48.6% was fabric comprised of polyester yarn and viscose. Synthetic yarn present there was only 87.6% of 48.6% of the fabric and 12.4% of 48.6% was viscose. The said fabric is, thus, mainly made of polyamide (Nylon) Flock/ Dust and Viscose and not of synthetic yarn and therefore, the item is not covered by the Notification issued under Section 123 of the Act, 1962. 12. As regards Item No. 7, according to Mr. Chowdhury, the test report confirmed that non-woven fabric is composed of polypropylene staple Fibres bonded together. According to him, the said item is not made of synthetic yarn and as such, does not fall within the expression "fabric made wholly or mainly of synthetic yarn" and thus, is not included in the notification issued under Section 123 of the Customs Act. 13. Mr. Chowdhury further contends that "yarn" and "fibres" are two distinct commodities....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., he cannot escape the liability of involvement in the act of concealing the smuggled goods and thus, the Tribunal committed substantial error of law in setting aside the personal penalty imposed upon Man Singh, the transporter. 18. As regards Sri Samir Saha, we find that so far the Item Nos. 3 to 5 are concerned, sufficient materials have not been placed by the Revenue to connect Sri Saha with those items and Sri Saha himself has also not claimed the ownership of those goods. It appears that statement of Man Singh, the transporter, on the question of ownership of the Item Nos. 3 to 5 is confusing. Moreover, simply on the basis of statement of Man Singh in this case, the Commissioner of Customs was not right in his approach in imposing personal penalty upon Sri Saha. It is now settled law that in order to impose personal penalty, either the items should be recovered from the person concerned or his link or involvement in the act of passing out or concealment of the smuggled goods must be proved. Moreover, we find substance in the contention of Mr. Chowdhury that if the statement of Man Singh is relied upon for the purpose of penalizing his client in respect of Item Nos. 3 to 5, th....