$~6 to 12.
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CUSAA Nos. 3/2012, 4/2012, 5/2012, 6/2012, 7/2012,
8/2012 & 9/2012
NITESH KUMAR KEDIA .. Appellant in CUSAA No. 3/2012
GOPAL DOKANIA .. Appellant in CUSAA No. 4/2012
ARUN DOKANIA .. Appellant in CUSAA No. 5/2012
SANJEEV JAIN .. Appellant in CUSAA No. 6/2012
ANUDEEP SINGH .. Appellant in CUSAA No. 7/2012
ANUP SINGH .. Appellant in CUSAA No. 8/2012
MAHENDER JAIN .. Appellant in CUSAA No. 9/2012
Through Mr. Shailendra Bhardwaj & Ms.
Aroma S. Bhardwaj, Advocates.
versus
COMMISSIONER OF CUSTOMS IMPORT & GENERAL
..... Respondent
Through Mr. Kamal Nighawan, Sr.
Standing Counsel & Mr. Jitender Kumar
& Sumeet Gaur, Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE R.V.EASWAR
ORDER
% 25.04.2012 Having heard learned counsel for the parties in these seven appeals, we are inclined to frame the following substantial question of law:
"Whether the order dated 25th January, 2011 passed by the Customs, Excise and Service Tax Appellate Tribunal in the case of the CUSAA No. 3/2012+ connected matters Page 1 of 11 appellants meets and deals with the contentions raised by the parties as required and mandated by law?"
2. We have heard learned counsel for the parties on the aforesaid question and proceed to dictate our decision.
3. The seven appellants are traders based in Chandni Chowk, Delhi and are trading in silk and unstitched cloth etc.
4. By an Order-in-Original dated 27th September, 2007 passed by the Commissioner of Customs, penalty of Rs.5 lacs each was imposed on them under Section 112(b) of the Customs Act, 1962 (Act, for short). He held that they were trading and dealing with Chinese silk cloth which had been illegally imported into India and was liable for confiscation. The Chinese silk cloth was, as per the Order-in-Original, illegally imported into India by Olga Kozireva, Nazira, Shakista and Shahlo A etc. Customs duty was not paid on the said import because of connivance and abetment by the customs officers. The illegal imported Chinese silk cloth was thereafter sold by Mamoor Khan, Dil Agha, Abdul Qahar and Dilbar, who are Afghan nationals, to the appellants.
5. The tribunal in impugned order has given the following reasons for dismissing the seven appeals:- CUSAA No. 3/2012+ connected matters Page 2 of 11
"27. Finding of the learned Adjudicating Authority and our observations were precisely depicted by us in Para 5.1 and 5.2 of this order hereinbefore. In the course of hearing no evidence were led to demonstrate that all the 7 (seven) trader appellants were strangers to the proceeding. Rather, they established their intimacy with the smuggling racket and proved their deal in the smuggled goods. Statement recorded from them as well as smuggling racket unmistakably disclosed their identity and destination of the offending goods arrived at the IGI Airport and cleared making evasion of customs duty. Other than the arguments, no logical reasons could be shown to us to infer dissociation of the trader appellants from the charge. When the proof of transport of the offending goods established destination thereof and disposal of the offending goods by trader appellant there remained no doubt to bring these appellants to charge. Thus all their appeals being devoid of merit are dismissed."
6. The aforesaid paragraph refers to paragraphs 5.1 and 5.2 of the appellate order. The said paragraphs for the sake of convenience are also reproduced below:-
"ADJUDICATION OBSERVATIONS AND FINDINGS AGAINST TRADER APPELLANTS 5.1 So far as the following appeals of the Traders are concerned, ld. Adjudicating Authority dealt their cases in Para 546 to 548 of the order of Adjudication:-
APPEALS FILED BY TRADERS AGAINST ORDER OF CUSAA No. 3/2012+ connected matters Page 3 of 11 ADJUDIATION 1 Mahendra C- Appearance Appearance Jain 11/2008 for for Assessee Revenue 2 Anudeep C- Mr. Mr. Sumit Singh 12/2008 Shailendra Kumar Bhardwaj 3 Gopal C- -do- -do-
Dokania 13/2008
4 Anup C- -do- -do-
Singh 15/2008
5 Nitesh C- -do- -do-
Kumar 16/2008
Kedia
6 Sanjeev C- -do- -do-
Jain 17/2008
7 Arun C- -do- -do-
Kokania 18/2008
Show cause notices were issued to
trader appellants dealing with textiles operating in Chandni Chowk, Nai Sarak & Model Town areas alleging that they were involved knowingly in acquiring, possessing, dealing or selling of smuggled silk textiles rendering such goods liable to penal action under Section 112(b) of the Customs Act, 1962. The evidence against them was analysed in adjudication as under:-
(1) Abdul Qahar, an Afghan National, testified in his statement dated 30.11.2000 that he used to buy silk textiles from the traders who are in appeal in the present batch of appeals and was carrying the same to Afghanistan through Kuttar Exports. One of the Appellants, Anudeep Singh admitted in his statement dated 8.12.2000 that he purchased imported silk fabrics from one Afghan, who introduced himself as Khan. (2) All the appellants were in touch with Mamoor CUSAA No. 3/2012+ connected matters Page 4 of 11 Khan on telephone.
(3) Gopal Prasad Dokania in his statement dated 5th Jan, 2001 admitted that he knew Mamoor Khan and that he purchased silk fabrics from him.
(4) Nitish Kedia in his statement recorded on 5th Jan, 2001 admitted that he knew Mamoor Khan but he denied that he had purchased silk fabrics from him.
(5) Anup Singh in his statement dated 1st June, 2001 admitted that he knew Mamoor Khan and Dil Agha but did not deal with them for purchase of silk fabrics.
(6) Mahender Jain in his statements dated 19th Jan. 2001 & 1st Feb., 2001 admitted that he knew Mamoor Khan but denied to had any dealing related to silk fabrics.
5.2 Testimony of Adbul Qahar suggested that the trader appellants were aware of the illegal activities of Ms. Olga K. and her associates. Examination and evaluation of the telephonic contacts exhibited by Table No. 10 & 11 to SCN threw light on such aspect. They were regularly in touch with Mamoor Khan and Dil Agha on their Mobile No. 9811135921 and 9811065897 respectively. Number of calls exchanged were indeed very large and ran into hundred of calls, as evident from Table No. 10 to SCN. The appellants did not deny such contacts but admitted dealing with Khan for purchase of silk textiles. The significance of Table No. 11 to SCN was that these traders were in touch with Mamoor Khan, Dil Agha and passengers on the date when they actually arrived in India with their heavy baggage. For example, when Ms. Olga K. and Shakista K. arrived by HY-151 at 12.51 PM on 27th Feb., 2000, 7 telephonic conversations took place between Sanjeev Jain and Mamoor Khan between 11.06 AM and 5.43 PM. Mamoor Khan also spoke to CUSAA No. 3/2012+ connected matters Page 5 of 11 Anoop Khem Singh at 11.30 AM. On the same date, Mamoor Khan and Nitish Kedia contacted twice with each other whereas Mahender Jain and Mamoor Khan spoke thrice. Again Mamoor Khan also contacted Anudeep Singh at least once on this day. The next visit of Shahlo A. was on 10th April, 2000 at 9.19 AM and on the same date telephonic conversation between Mamoor Khan on one hand and Mahender Jain, Anudeep Singh, Gopal Dokania and Nitish Kedia on the other was made. These were mere illustrations while huge contact details were on record. The Table shows that whenever passengers came with heavy baggage to IGI Airport at Delhi, frequent exchange of calls took place between Mamoor Khan and Dil Agha on one hand and all the trader appellants on the other. None of the trader appellants could rule out their role in trading with offending goods. Corroborative evidence lent credence to the testimony of Abdul Qahar and on the basis of that, mens rea was established to impute the appellant traders to charge.
Circumstantial evidence were sufficient to impute the traders to charge who had knowledge of the illegal import of silk textiles rendering such goods liable to confiscation under Section 111 of the Customs Act, 1962. So also the appellant traders were liable to penal action under Section 112(b) of the Act for their conscious involvement and possession/sale, purchase of the offending goods."
7. A reading of paragraphs 5.1 and 5.2 would show that they merely reproduce the contents of the show cause notice and reference is made to testimonies/statements and other CUSAA No. 3/2012+ connected matters Page 6 of 11 contentions recorded therein.
8. Paragraph 27 is the only paragraph which specifically deals with and refers to the allegations and records the findings of the tribunal both on facts and law. Second sentence in the said paragraph states that during the course of hearing before the tribunal, no evidence was led by the seven appellant traders to demonstrate that they were strangers to the proceedings. Learned counsel for the appellants has accepted and admitted that they were not strangers to the proceedings as they had dealt with and sold Chinese silk. The seven appellants also admit and accept that they knew Mamoor Khan, Dil Agha, Abdul Qahar and Dilbar. However, their contention is that they did not know that the aforesaid persons were dealing with smuggled goods or were dealing with goods, which had been clandestinely imported into India without payment of customs duty or by mis- declaration. The contention of the appellants, which is strenuously urged, therefore, is that penalty under the said Section can be imposed only if the appellants, traders had knowledge or reason to believe that the goods in question, i.e., Chinese silk, was liable to be confiscated. The next sentence in paragraph 27 refers to the intimacy of the appellants with the CUSAA No. 3/2012+ connected matters Page 7 of 11 smuggling racket and it is observed that this proves their dealing with the smuggled goods. The aforesaid sentence does not carry forward and is merely a statement or an inference, which does not discuss the material and evidence against the appellants. The tribunal thereafter has mentioned and recorded that the statements made by the seven appellants as well as the smuggling racket disclose their identity and destination of the offending goods. The statements of the seven appellants have not been referred and or specifically examined in paragraph 27 or any other portion of the impugned order.
9. There is no other discussion in the impugned order relating to defence or the contention of the seven appellants. In this regard, we may mention that in paragraph 17, the tribunal has recorded that both sides were heard extensively on various occasions and their contention/submissions were recorded in the open court on the dates of hearings and copy of the same were provided to the parties. The contentions raised by the seven appellants as recorded by the tribunal at the time of hearing have been enclosed as annexures to the present appeals. The examination and scrutiny of the said annexures would reveal that hearings had taken place on 27th August, 2009 CUSAA No. 3/2012+ connected matters Page 8 of 11 and various contentions and issues were raised by the appellants, e.g., in the case of Mahender Jain it was submitted that his statement under Section 108 of the Act does not bring out or support the Revenue's allegation; does not show his involvement in the smuggled goods; these was no presumption that Mahender Jain knew or had reason to believe that he was dealing with smuggled goods or goods which were liable to be forfeited etc. Reference was also made to the order in original and it was contended that it does not show conscious involvement of the said appellant. The statement of Abdul Qahar was referred and it was submitted that the said statement also does not show his involvement. Even in the statement under Section 164 of the Code of Criminal Procedure, Abdul Qahar had not implicated the said appellant. In the statement of Wali recorded under Section 164 Cr.P.C., there was no whisper of the nexus of the said appellant with the offence alleged. Reference was made to the first statement of Dil Agha wherein no allegation was against Mahender Jain but subsequently Dil Agha had mentioned Mahender Jain's name. It was submitted that in the statement of Mahender Singh under Section 108, no question was put to him whether he was involved or had dealt CUSAA No. 3/2012+ connected matters Page 9 of 11 with Dil Agha. Our attention is also drawn to separate and different contentions raised in the case of Sumeet Kumar, Anudeep Singh, Gopal Dokania, Nitesh Kumar Kedia, Sanjeev Jain and Arun Dokania. It is pointed out that in the case of Sanjeev Jain no statement was recorded under Section 108 of the Act.
10. We have examined the contentions and issues which were raised by the appellants and have been noticed by the tribunal itself in the record of proceedings. We have also examined the written submissions which were filed by the appellants before the tribunal and have been placed on record. We do not think the tribunal was right in disposing of the appeal by recording the reasons given in paragraph 27, which according to us do not specifically deal and examine the contentions and issues raised. The order is virtually a non- speaking order and does not meet the requirements of law, what is mandated and required to be discussed and examined by the first appellate authority which is also the final fact finding authority. The contentions and issues raised by the appellants on facts and law have to be specifically examined, dealt with and considered. A speaking and reasoned order is required to be CUSAA No. 3/2012+ connected matters Page 10 of 11 passed after referring to the evidence and material relied upon by the parties. We find that the appellate order passed by the tribunal in the present case does not meet the prescribed and legal parameters. Accordingly, we answer the question of law mentioned above in negative, i.e., in favour of the appellants and against the Revenue. We pass an order of remit and the tribunal will re-hear the arguments and thereafter pass a reasoned and speaking order as is mandated and required in law.
11. To cut short the delay, it is directed that the appellants will appear before the tribunal on 17th May, 2012 at 11 a.m., when a date of hearing will be fixed.
10. We may observe that we have not specifically referred to merits of the case of the appellants and the Revenue in the present appeals least it causes prejudice to the parties and influences the tribunal one way or the other.
The appeals are disposed off. No order as to costs.
SANJIV KHANNA, J.
R.V. EASWAR, J.
APRIL 25, 2012/ VKR CUSAA No. 3/2012+ connected matters Page 11 of 11