TaxTMI 
TaxTMI 
2005 (7) TMI 250
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....s and one silver "thakia" (lump) recovered and seized from the melting unit of M/s. Ram Avatar Naresh Kumar, 49/62 Bagla Building, Naya Ganj, Kanpur weighing 223.230 Kgs. and valued at Rs. 14,77,829.50 paise, under Section 111(d) read with Section 120 of the said Act. The Commissioner also confiscated the cast/mould (Sancha) used for melting/cashing silver slabs, etc. seized from the refinery unit of M/s. Ram Avatar Naresh Kumar, under Sections 118 and 119 of the said Act. The Maruti van and the Maruti Gypsy were also confiscated under Section 115(2) of the said Act. The Commissioner imposed personal penalties under Section 112(b) of the said Act on eight persons including the appellants of these five appeals. The appellant Ashish Kumar Chaurasia, alias Pappu Doodhwala (Appeal No. C/376/99) and the appellant, Ram Avatar Singhal (Appeal No. C/30/2000) were imposed penalty of Rs. 2.5 crores each while penalties of Rs. 5 lacs each was imposed on Ram Kishore Mishra who had accompanied in the Maruti van (Appeal No. C/381/99), and Jagdish Shankar Trivedi who had accompanied in the Maruti Gypsy, (Appeal No. C/360/99) and Rs. 50 lacs on Dilip Kumar Singhal, partner and nephew of Ram Avatar....
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.... in the presence of two independent witnesses as Ashish Kumar Chaurasia was not present at that time. Om Prakash, disclosed in the presence of two independent witnesses, that Ashish Kumar Chaurasia (Appeal No. C/376/99) regularly visited the dairy along with his labourers and concealed something in the ground which he sometimes took out and carried in his car. Om Prakash showed that spot in the premises of the dairy where Ashish Kumar Chaurasia alias Pappu had concealed the same. The officers got the earth dug up at the place shown by Om Prakash in the presence of two panch witnesses and after digging a trench of about four feet, they recovered 75 silver ingots (silies) individually wrapped in jute packing. Further search of the premises resulted in the recovery of four more silver ingots which were kept concealed under a gunny bag near the wall, opposite to the trench which was dug up. A few of the recovered silver ingots which were unpacked were prima facie found bearing marks of foreign origin like, "Jhonson and Matthey Refiners London 999", and appeared to be liable to be confiscated under Section 111 of the said Act. The goods were transported to the headquarters at Kanpur alo....
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.... assayed by the approved assayer were found to be of the purity of .999, weighing 222.230 Kgs. and of the value of Rs. 14,77,829/-. These were also seized under Section 110 of the said Act the panchnama drawn on 18-12-1992. 2.3 On the same day i.e. 18-12-1992, another vehicle, Maruti Gypsy bearing registration No. UP-78F/5344 carrying contraband silver bricks was intercepted at 4.30 PM near Lal Kuan Chungi, Naka, GT Road flyover near Ghaziabad, by the officers of the DRI and 25 bricks of silver were recovered. This vehicle was driven by Ram Kumar Kashyap and Jagdish Shankar Trivedi alias 'Jijaji' was travelling in it. The vehicle was taken to the DRI office, IP Estate, New Delhi along with the driver and the said occupant and recovery proceedings took place in the presence of two panch witnesses. On enquiry by the officers of the DRI, the driver of the vehicle gave his name as Ram Kumar Kashyap of Kanpur and the other person as Jagdish Shanker Trivedi of Kanpur. On searching the said Maruti Gypsy, an iron plate was noticed in the rear seat. On removing the iron plate, 25 silver slabs, wrapped in jute bags, were recovered from the specially designed cavity in the Maruti Gyp....
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....e was sought to be placed, alleging that the persons named above including the appellants were liable to penal action under Section 112, and that the seized goods were liable to be confiscated and penalty was liable to be imposed on the persons named therein including these appellants, under the provisions of the said Act. The show cause notice was issued on 8-6-1993. 2.5 The service of the show cause notice issued under Section 124 of the said Act was ensured by sending through registered post as well as by personal service and also by adopting the procedure of pasting the show cause notice at the main door of the premises as provided under the said Act as recorded in the impugned order. The noticees were required to file their replies within 30 days and to indicate whether they desired to be heard in person. 2.6 The appellant Ashish Kumar Chaurasia (Appeal No. C/376/1999) who filed his reply on 11-10-1993 contested the show cause notice contending that he had no concern whatsoever with the silver seized from his doodh-ki-dairy, or the silver seized from any of the two vehicles. According to him, the show cause notice failed to take note of the telegram dated 21-12-92 sent by th....
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....were retracted jointly with Ram Avatar Singhal and Ram Bilas Mandal on 21-12-1993 when they were produced before the Chief Judicial Magistrate. It was contended that the retracted statements had no evidentiary value because they were not corroborated by any independent evidence and that it is a well settled law that confession of co-accused has no evidentiary value unless the facts are otherwise borne out by independent evidence. 2.9 Ram Bilas Mandal (driver of Maruti van), in his reply dated 1-12-1993 contended that he was an illiterate person and was only a driver and his statement was taken by the officer under pressure. According to him, he was not connected in any manner with the seized silver and had no knowledge that taking of silver to Delhi was wrong. According to him, the silver was kept in the cavity of the Maruti van because of fear of its theft and that he had not committed any offence. 2.10 Om Prakash, employee of Ashish Kumar Chaurasia, in his defence reply dated 21-7-1993 submitted through his consultant, categorically stated that the show cause notice did not attribute any specific activity to him and thus the notice was vague, ambiguous and unspecific. Therefore....
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....ved in the conduct of the business of the firm. Acccording to him, Ram Avatar Singhal (who was his uncle and partner) would not have done anything wrong. He stated that he did not wake up Ram Kumar Kashyap nor helped him in loading of silver in the Maruti Gypsy and that the statement of Ram Kumar Kashyap to this effect appeared to have been recorded under duress. According to him, there was no evidence linking him with the seized silver and the proceedings were required to be dropped. He also requested for personal hearing. 2.14 Alok Kumar Chaurasia and Ansh Kumar Chaurasia had also filed their defence replies dated 19-7-1993 through their counsel expressing that they were not concerned with the seized silver and contending that though the doodh-ki-dairy was jointly owned by them and their brother Ashish Kumar Chaurasia, there was no material to show any nexus between these two noticees and the activities alleged to have taken place at the dairy premises. According to them, the show cause notice was vague and no specific activity was attributed to them and, therefore, no action was called for. 3. The learned Commissioner after considering all the material on record in detail and ....
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....plied by Narendra Kumar of Rohtak which were converted into silver bricks for subsequent sale, holding that it was only an after-thought to shift the ownership of the seized silver without any support of evidence. It was observed that that there was no reason why any person of Rohtak would supply such a large quantity of silver ornaments to a person in Kanpur for melting, recasting and subsequent sale at Delhi which was very close to Rohtak. Moreover, neither any claim was filed by Narendra Kumar in respect of the silver nor was any evidence furnished by Ram Avatar Singhal to show that the silver ornaments were given to him by Narendra Kumar of Rohtak. It was, therefore, held that the said 14 silver slabs and one silver 'thakia' were liable to be confiscated under Section 111(d) read with Section 120 of the said Act. As regards the 25 silver slabs valued at Rs. 24,90,425/- recovered from the Maruti Gypsy, the learned Commissioner holding that they were not claimed by the driver, Ram Kumar Kashyap nor by Jagdish Shanker Trivedi, the occupant of the Maruti Gypsy or Ram Avatar Singhal who sent these silver slabs from Kanpur to Delhi and that the purity of silver was confirmed ....
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....dicial custody in jail, on 18-12-1992, 19-12-1992, 20-12-92 and 3-1-1993 and the question of coercion or duress could not be believed and, that the retractions would appear to be an after thought. Moreover, there was consistency in the statements initially given by different persons. As regards Ram Avatar Singhal, the learned Commissioner held that he was the owner of the refinery of M/s. Ram Avatar Naresh Kumar engaged in the melting and reshaping of foreign marked silver at the behest of Ashish Kumar Chaurasia and it was evident from the various statements of his own and the statement of Ram Kishore Mishra, Ram Bilas Mandal, Jagdish Shanker Trivedi and Ram Kumar Kashyap that a kind of arrangement was made between him and Ashish Kumar Chaurasia alias Pappu doodhwala for melting of silver in his refinery which he used to be sent to Delhi for disposal. He had admitted that the foreign marked silver bricks for melting purposes and sale was supplied by Ashish Kumar Chaurasia. As regards Ram Kumar Mishra (a friend of Ram Avatar Singhal) who was apprehended on 18-12-1992 with 25 silver slabs concealed in the cavity of the Maruti van, it was held that he was in knowledge of transporting ....
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....in the impugned order in respect of the seized goods. 5.1 The learned counsel placed reliance on the following decisions in support of his contentions : (a) The decision of the Supreme Court in Union of India v. G.T.C. Industries reported in 2003 (153) E.L.T. 244 (S.C.) was cited for the proposition that finding could not be recorded by relying upon the oral submissions made by a co-noticee at the hearing without any supporting material on record, providing due opportunity to meet the same. Though this decision was relied upon for the contention that denial of an opportunity to cross-examine the witnesses vitiated the impugned order, it appears to us that no such proposition is laid down in this decision. In para 15 of the judgment the Supreme Court noted that no statement was made by Mr. Salio before the adjudicating authority and what was referred to as a statement was nothing but his oral submissions made at the hearing. In this background it was held in para 16 of the judgment that an adverse finding could not have been recorded against the GTC by relying upon the oral submissions made by a co-noticee at the hearing without any supporting material on record, providing due op....
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....ion of the Tribunal in Jaswinder Singh v. Collector of Customs reported in 1996 (83) E.L.T. 175 was cited for the proposition that statement of co-noticee or co-accused without any independent corroboration cannot form the basis of formation of a charge of involvement in smuggling activity. It was held that the findings of non-appearance in response to summons cannot be a factor or criteria in determining the guilty conduct of the appellant. (g) The decision of the Supreme Court in Arya Abushan Bhandar v. Union of India reported in 2002 (143) E.L.T. 25 (S.C.) was cited to point out that where the panch witness was not produced for cross-examination though asked for, it was held that there was a breach of natural justice. (h) The decision of the Tribunal in Balbir Steel (P) Ltd. v. Commissioner of Central Excise, Kanpur reported in 1999 (114) E.L.T. 561 was cited to point out that the duty of Revenue did not end merely by issuing summons to the persons on whose statements it relied and that the Revenue ought to produce them for cross-examination, otherwise the statements could not be relied upon for the purpose of adjudication under the Central Excise Act. (i) Reliance was als....
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....being recorded under coercion or their statement being involuntary statements. He also submitted that the statements made before the customs officers during the course of the enquiry were relevant even in any proceedings other than the proceedings before any court, in view of the provisions of Section 138B(2) and, therefore, the learned Commissioner rightly relied upon the statements. He submitted that the statements of the appellants implicating themselves and each other and also the appellant Ashish Kumar Chaurasia were amply corroborated by the nature of recoveries of contraband silver made from various places in the presence of the independent witnesses and the reports of the approved assayers. He also submitted that there was no specific mention of right to cross-examination made in Section 124 of the said Act and the appellants were only entitled to a reasonable opportunity of being heard in the matter under clause (c) thereof, which was duly given to them during the proceedings. He further argued that the department never denied an opportunity of hearing to these appellants and the appellant Ashish Kumar Chaurasia had in fact cross-examined two officers on 19-6-1995. He subm....
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....ered was not in the possession of Ashish Kumar Chaurasia. He also submitted that the appellant Ashish Kumar Chaurasia who was seeking cross-examination of the witnesses had not remained present on several occasions on the dates fixed for hearing and as noted by the learned Commissioner, fourteen opportunities of personal hearing were given during the period 5-2-94 to 16-11-1998 and the desired persons were also called for cross-examination. But, adjournments were sought on one or the other grounds and irrelevant enquiries were raised resulting in delay of the adjudication proceedings. 6.1 The learned authorised representative placed reliance on the following decisions in support of his contention : (a) The decision of the Supreme Court in Kanungo & Co. v. Collector of Customs, Calcutta and others reported in 1983 (13) E.L.T. 1486 (S.C.) was cited for the proposition that principles of natural justices do not require that where the show cause notice set out all the material on which the customs authorities had relied and it was for the appellant to give a suitable explanation, persons who had given information should be examined in the presence of the appellants or should be allo....
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....co-notices in a position where he might have to incriminate himself by giving evidence. (g) The decision of this Tribunal in Fortune Impex v. Commissioner of Customs, Calcutta reported in 2001 (138) E.L.T. 556 (Kol.) was cited for the proposition that it is not required that in each and every case cross-examination should necessarily be allowed. 7. We first take up the contention that there was denial of principles of natural justice by not offering the witnesses for cross-examination by the appellant Ashish Kumar Chaurasia, despite his request that all witnesses should be examined. We have already noted that the appellant, Ashish Kumar Chaurasia had cross-examined two officers on 19-6-1995. It also transpires that summons were sent to Ram Avatar Singhal, Ram Kumar Mishra and Ram Bilas Mandal (driver), Jagdish Shanker Trivedi and Dilip Kumar Singhal, who refused to be cross-examined on the ground that they cannot be compelled to give incriminating evidence against themselves in view of their fundamental right guaranted by Article 20(3) of the Constitution under which no person accused of any offence shall be compelled to be a witness against himself. Section 124(c) which provide....
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....Lal case (supra) was also referred in paragraph 18 of the judgment and it was held to be laying down the proposition that cross-examination of the witnesses (in the matter under the Sea Customs Act) was not comprehended. Referring to all these decisions, the Court held, that a proceedee was not entitled to cross-examination of any witnesses under Section 124 of the said Act which lays down the extent of applicability of the principles of natural justice and under which a proceedee was not entitled to cross-examine any witnesses (para 11). Thus in view of the decisions of the Hon'ble Supreme Court in Kanungo & Co., Ashutosh Ghosh and of the Calcutta High Court, in the above two decisions, it is abundantly clear that a noticee cannot claim a right to cross-examine under Section 124 of the said Act. 7.2 In the present case, however, ample opportunities were given to Ashish Kumar Chaurasia and other appellants to deal with the material which was sought to be relied on against them by referring it in the show cause notice. We have no reason to doubt the statement made in the impugned order that as many as fourteen opportunities of personal hearing were given from 5-2-1994 to 16-11-....
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....y was made from the premises of the petitioner, held that the confession made by the petitioner was binding on him and, therefore, failure to give him the opportunity to cross-examine the witnesses was not violative of principles of natural justice. In para 3 of Hon'ble the Supreme Court judgment held : "3. It is true that the petitioner had confessed that he purchased the gold and had brought it. He admitted that he purchased the gold and converted it as a Kara. In this situation, bringing the gold without permission of the authority is in contravention of the Customs Act and also FERA. When the petitioner seeks for cross-examination of the witnesses who have said that the recovery was made from the petitioner, necessarily an opportunity requires to be given for the cross-examination of the witnesses as regards the place at which recovery was made. Since the dispute concerns the confiscation of the jewellery, whether at conveyor belt or at the green channel, perhaps the witnesses were required to be called. But in view of confession made by him, it binds him and, therefore, in the facts and circumstances of this case the failure to give him the opportunity to cross-examine t....
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....ces issued to them, and they sent their replies to the show cause notices. Some of the appellants were represented by consultants. The appellants remained absent on various dates resulting delay in the proceedings. Statements of the two drivers of the vehicles from which contraband silver was recovered, the employee of the appellant Ashish Kumar Chaurasia and the statements of the persons who were travelling in the vehicles for taking the contraband silver to Delhi as also the statements of Ram Avatar Singhal, and the statements of independent persons before whom seizures were made clearly establish that all the appellants were persons concerned with prohibited silver and were liable to imposition of penalty under Section 112 of the said Act. In such a situation insistence for cross-examining one of them can be purely strategic with a view to raise a contention of violation of principles of natural justice. In almost all the cases such persons dealing in contraband would refuse to be cross-examined on the ground that they are accused of an offence and, had a fundamental right against testimonial compulsion under Article 20(3), and thereby create a situation where each one of them, ....
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....at he would bring. Ram Avatar Singhal agreed to do so. Thereafter the appellant Ashish Kumar Chaurasia, as agreed, used to bring silver ingots of foreign make for getting them melted in his refinery for which Ram Avatar Singhal was paid at the rate of Rs. 50/- per kg. He then admitted that after melting such ingots, he used to send them for sale in his vehicles through his driver, Ram Bilas Mandal and Jagdish Shanker Trivedi alias Jijaji of his friend (Ram Kishore Mishra). He then admitted that he had melted 58 to 60 foreign marked contraband silver ingots and sent them to Delhi. He further stated that Ashish Kumar Chaurasia used to conceal the smuggled silver ingots in his dairy farm at Kishori Ka Chata, Pony Road, Shuklaganj, Unnao. He also stated that his friend, appellant Ram Kishore Mishra, who was a small time jeweller was sent by him to Delhi for selling the silver slabs and was paid Rs. 1000/- per trip. He admitted that on the mornings, of 18-12-1992, he had sent Ram Kishore Mishra with his driver Ram Bilas Mandal in his vehicle bearing No. MP-09-H/2648 with 25 silver slabs which were made by him by melting the foreign marked silver ingots in his refinery/factory. He had co....
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....r Chaurasia pointed out the spot in the dairy farm of Ashish Kumar Chaurasia which was dug up and from where 79 ingots of silver of foreign make were recovered. They had also recorded the statement of Om Prakash that Ashish Kumar Chaurasia had concealed something in that portion of the dairy. It is clear that at that time, there was nothing to indicate that the said portion was let out on rent to Ram Avatar Singhal. Ram Avatar Singhal had denied of having been let out any portion of the dairy farm. The appellant Ashish Kumar Chaurasia has tried to clinch the issue by referring to some suit filed by his brother mentioning that a part of the dairy farm was given on the rent of Rs. 200/- to Ram Avatar Singhal. In that suit, a prayer was sought in the Civil Court for removal of some wall which was erected. No certified copy of the plaint was produced. It appears that though that suit came to be decided ex parte much later, there was no attempt made to bring the fact of any rented portion being misused by Ram Avatar Singhal on the record of the proceedings. If there was any element of truth in the defence sought to be put up by Ashish Kumar Chaurasia that the silver ingots were recovere....