Delhi High Court
Sudhir Sharma vs The Commissioner Of Customs on 27 February, 2015
Author: S.Ravindra Bhat
$~28 to 35
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 15.09.2014
Pronounced on: 27.02.2015
+ CUS.A.A.29/2011, C.M. APPL.11198/2011
SUDHIR SHARMA ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.32/2011, C.M. APPL.13036/2011
R.N. ZUTSHI ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.33/2011, C.M. APPL.13070/2011
AJAY YADAV ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.34/2011, C.M. APPL.14101/2011
YASH PAL ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.35/2011, C.M. APPL.14197/2011
V.K. KHURANA ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.36/2011, C.M. APPL.14199/2011
T.R.K. REDDY ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
+ CUS.A.A.37/2011, C.M. APPL.14201/2011
PRADEEP RANA ....Appellant
versus
THE COMMISSIONER OF CUSTOMS ..... Respondent
CUS.A.A.29/11 and connected matters Page 1
+ CUS.A.A.38/2011, C.M. APPL.14913/2011
ANIL MADAN ....Appellant
versus
UNION OF INDIA AND ANOTHER ..... Respondents
Through: : Sh. Ashok Bhan, Sr. Advocate with Ms.
Prem Lata Bansal, Sr. Advocate, Sh. Arindam
Mukherjee and Sh. Sumit. K. Batra, Advocates, for
petitioners in Item Nos. 28 to 30.
Sh. Sunil Kumar, Sh. Prem Ranjan Kumar and Sh.
Sumit Purohit, Advocates, in Item Nos. 31, 32 and
35.
Sh. Rahul Kaushik and Ms. Bhuvneshwari Pathak,
Advocates, for CBEC.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE VIPIN SANGHI
MR. JUSTICE S. RAVINDRA BHAT
%
1. These appeals have been preferred against a common order
of the Customs, Excise and Service Tax Appellate Tribunal
(hereafter "CESTAT") dated 25.01.2011. The impugned order had
dealt with a batch of 35 appeals - some of them dealt with the
present appellants. The appellants are hereafter referred to by their
names for the sake of convenience. The appeals had arisen out of
common adjudication order dated 01.10.2007 by the Commissioner
of Customs (hereafter referred to as the "Commissioner").
2. The following questions of law are sought to be urged by the
appellants:
(a) Whether the findings in the impugned order with regard to
CUS.A.A.29/11 and connected matters Page 2
abetment by the appellants are justified in law;
(b) Did the CESTAT fall into an error of law in upholding the
findings based on denial of natural justice, especially the refusal to
grant cross-examination to the appellants;
(c) Whether the findings based upon mobile phone records and
confessional statements of some individuals, notably the
co-noticees, is sustainable in law, in the circumstances of the case,
in the absence of any other corroborative material;
(d) Did the CESTAT err in its findings regarding the method
adopted in arriving at the average weight to assess liability, and the
absence of essential documents like the passenger declarations.
Facts of the case:
3. On 28.08.2000, a foreign national Olga Kozireva tried to
illegally import and smuggle into India, a quantity of 81160 yards
(74212 meters) of silk textiles without declaring them, as was
required of her under Section 77 of the Customs Act, 1962
(hereafter called the "Act"). She had landed at the Indira Gandhi
International Airport (IGIA) after travelling on a Kyrgyzstan
Airlines flight. This incident led to investigations. Olga Kozireva
was detained and subsequently, her statement was recorded under
Section 108 of the Customs Act. This led to further investigations
during the course of which Abdul Qahar, an Afghan national,
several others as well as employees of Kyrgyzstan Airlines were
asked to reply to Show Cause Notices (SCNs). The SCNs were
issued to one Dil Agha, Mamoor Khan, Sanaf Sana, Naseem, V.K.
Khurana and Nazira. Abdul Qahar, the Afghan national, in his
statement dated 30.11.2000, confirmed to knowing Olga Kozireva;
CUS.A.A.29/11 and connected matters Page 3
he identified her. He confirmed that she had, on previous
occasions, exported goods of Chinese origin to him. He also
revealed the mobile telephone numbers of certain individuals.
4. On the basis of statements of several individuals (notably Dil
Agha, Olga, Sandeep Bhatia (dated 13-12-2000) Virender
Sehrawat (dated 08-01-2001) and Ajay Sharma (dated 23.12.2000),
all security representatives of United Airlines India) - including
those of the appellants, the investigations by the Department of
Revenue Intelligence (DRI) found that between 24.07.1997 and
24.08.2000, Olga Kozireva had travelled in and out of India on 24
occasions. Out of these, on 19 occasions, she was cleared through
"Red Channel" and allowed to proceed after spot adjudication and
payment of redemption fine and duty. On the other five instances,
she walked through the "Green Channel". Besides the statement of
Olga Kozireva, those of R.N. Zutshi, one of the appellants, was
recorded. This statement of R.N. Zutshi mentioned the role of the
other appellants, i.e. Ajay Yadav, Yashpal, V.K. Khurana, T.K.R.
Reddy, Pradeep Rana and Anil Madan. In addition, Dil Agha's
statement was recorded on 11.07.2001, which also sought to
implicate R.N. Zutshi, V.K. Khurana, T.K.R. Reddy and Pradeep
Rana.
5. On 23.08.2001, the Commissioner issued SCNs to all
individuals, including the present appellants- who were working as
officers in various capacities in the Customs Department. The
allegations against the appellants inter alia centred around their
complicity in the smuggling of huge quantities of silk textiles on
24 occasions. Based upon the quantity sought to be smuggled into
CUS.A.A.29/11 and connected matters Page 4
India, on 28.08.2000 by Olga, the Commissioner deduced, on the
basis of an averaging exercise, that the unseized extent of silk
textiles was to the tune of 4,21,245 metres, which would have
weighed 26,485 kgs and that the Customs Duty evaded was to the
extent of `1,75,78,322/-. The SCN relied upon the following table,
which spelt out such details - the table is extracted below:
"175. The quantity of silk textiles imported computed on the above
basis vis a vis the quantity of textiles assessed on relevant dates
prior to 28.8.2000, showed that substantial silk textiles escaped
assessment resulting in the evasion of customs duty. The details are
presented below:
Date Wt. in Mtr. Mtr Unasses Value of Custo Person who
Kg of of sed mtr unassess ms evaded duty
silk textile of silk ed mtr duty
textile assess textiles of silk evade
impor ed textiles d
ted
A B C D E F G H
(impu Bx As C-D in Ex 61.2
ted on 17.62 per mtrs Rs.68 % of
5 recor in Rs. F in
dates) d Rs.
availa
ble
1 17.1 757 13338 2000 11338 771007 51965 OK, NI, SK
2.98 .34 9
2 17.9 258 4545. 0 4546 309125 18918 OK
.99 96 5
3 1 / 1264 22271 0 22272 1514474 92685 SK
2.2. .68 8
00
4 27.2 1530 26958 800 26159 1778783 10886 OK, SK
.00 .60 16
5 10.4 1220 21496 800 20696 1407353 86130 SA
.00 .40 1
6 17.4 135 2378. 250 2129 144752 88588 OK
.00 70
CUS.A.A.29/11 and connected matters Page 5
7a 23.4 197 3471. 425 3046 207138 12676 OK
.00 14 8
7b 23.4 163 2872. 400 2472 168100 10287 NI
.00 06 7
7c 23.4 225 3964. 400 3565 242386 14834 SA
.00 50 0
8a 8.5. 520 9162. 3100 6062 412243 25229 OK
00 40 3
8b 8.5. 520 9162. 3100 6062 412243 25229 IKM
00 40 3
9 15.5 1500 26430 800 25630 1742840 10666 SA
.00 .00 18
10 22.5 1220 21496 3200 18296 1244155 76142 OK, NI, SA
.00 .40 3
11 12.6 2000 35240 4400 30840 2097120 12834 OK, V
.00 .00 37
12 1.7. 590 10395 2176 8220 558946 34207 OK
00 .80 5
13 3 / 820 14448 0 14448 982491 60128 OK
4.7. .40 5
00
14 10.7 1220 21496 0 21496 1461755 89459 OK
.00 ..40 4
15 17.7 2364 41653 9000 32654 2220450 13589 NI
.00 .68 16
16 24.7 1500 26430 800 25630 1742840 10666 ML
.00 .00 18
17a 27.7 140 2466. 0 2467 167742 10265 OK
.00 80 8
17b 27.7 340 5990. 0 5991 407374 24931 NI
.00 80 3
18 31.7 1620 28544 2350 26194 1781219 10901 OK
.00 .40 06
19a 1.8. 370 6519. 1100 5419 368519 22553 OK
00 40 4
19b 1.8. 320 5638. 0 5638 383411 23464 NI
00 40 8
20a 4.8. 280 4933. 0 4934 335485 20531 OK
00 60 7
20b 4.8. 378 6660. 620 6040 410744 25137 NI
00 36 6
21 11 / 1400 24668 2000 22668 1541424 94335 OK, NI
12.8 .00 1
.00
22 14.8 1220 21496 3000 18496 1257755 76974 ML
CUS.A.A.29/11 and connected matters Page 6
.00 .40 6
23 18.8 500 8810. 2400 6410 435880 26675 NI
.00 00 9
24 21.8 1914 33724 2300 31425 2136878 13077 ML
.00 .68 69
2648 466 45421 42124 28644 1757832
5 665. 5 640 2
70
Notes: OK -Olga, NI-Nazira, SK-Shakista, SA-Shahlo, IKM-Isamu
KM, V-Velichko, ML-Merkulova; Duty for 17.12.98 @ 67.4%:
Weight does not include normal baggage weight with
co-passenger(s); Benefit of 'textile'metres assessed in respect of
all the group passengers, extended: imputed weight of 1220 k on
10.4.00, 8.5.00 and 14.8.00; impuged weight of 2364 kg instead of
reported 1235 kg on 17.7.00 and of 1914 kg instead of reported
1000 kg on 21.8.00; Merkulova Liubov arrived on 14.8.00 hence
14.8.00 weight imputation made in ML's name; all
figures/calculations are rounded off."
6. In response, all the appellants resisted the SCNs. It was
contended that the reliance placed upon the mobile phone call
records was insufficient to render any findings and that it was
unsafe to rely upon them, as it would be inconclusive in
establishing the allegations. The statement of R.N. Zutshi could
not, in the absence of any corroborative evidence or material, lead
to a finding of abetment as alleged; that in the absence of
passengers' manifest and properly secured documents, no evidence
of their involvement had been led and that at best the materials in
some of their cases were conjectural and entirely speculative. It
was also argued that the involvement in previous incidents alleged
against Olga could not be based on sketchy surmises, not premised
on any material or corroborative evidence but entirely upon
suspicion. Furthermore, it was submitted that the appellants acted
CUS.A.A.29/11 and connected matters Page 7
bona fide and were not in the normal line of their duties and
functions expected to go into the matter as was alleged.
7. The Commissioner, after considering the appellants' defenses
as well as those of the other respondents to the SCNs, by his order
in original proceeded to drop the SCN against 19 individuals, out
of 35 individuals. That order, however, proceeded to impose
penalty under Section 112 of the Customs Act for different
amounts - in respect of different periods in respect of each of the
appellants. These fines ranged between `75,000/- and `3,00,000/-.
8. Aggrieved, the appellants approached the CESTAT by filing
appeals under Section 128 of the Customs Act, being Custom
Appeals, C-775/2007 - Sudhir Sharma; C-776/2007 - Ajay Yadav;
C-01/2008 - Yashpal; C-04/2008 - T.R.K. Reddy and C-07/2008 -
Anil Madan; C-19/2008 - R.N. Zutshi and C-48/2008 - V.K.
Khurana. The CESTAT considered the submissions of each of the
appellants and after analyzing the evidence considered by the
Commissioner, concluded that there was sufficient circumstantial
evidence on the record to establish complicity of the appellants in
the smuggling incident which resulted in evasion of Customs Duty.
The CESTAT held that even though the conversations were not
recorded, none of the appellants could explain why they were in
fact in contact with Dil Agha on the dates confronted to them in
the course of the adjudication proceedings. The CESTAT was also
of the opinion that having regard to the standard of proof required
in civil proceedings, i.e. preponderance of evidence, the
allegations leveled had in fact been established. Its observations in
this regard are to be found in paras 19.7 to 19.13. The observations
CUS.A.A.29/11 and connected matters Page 8
were in the context of findings with respect to the pleadings to the
reversal of the adjudication order as regards 14 customs officials.
They apply equally to the case of the appellants.
9. Dealing with the complaint of denial of cross-examination,
the CESTAT held as follows:
"XXXXXX XXXXXX XXXXXX
18.9 Though it cannot be denied that the right of
cross-examination in any quasi-judicial proceeding is a
valuable right given to the noticee as these proceedings may
have adverse consequences, at the same time under certain
circumstances, this right of cross-examination can be taken
away. Hon'ble High Court of Bombay while dealing with the
similar issue in the case of Gyan Chand Sant Lal Jain v. UOI
reported in 2001 (136) ELT 9 (Bom) and taking into
consideration the applicability of concept of principles of
natural justice in that regard quoted para 76 of Halsbury's
Law of England, Vol. I (4th Edition) which reads thus:-
"Natural justice does not impose on administrative
and domestic tribunals a duty to observe all the
technical rules of evidence applicable to
proceedings before courts of law. Members of
tribunals may be entitled to draw on their
specialized or local knowledge of the type of, issue
before them in order to supplement as well as
evaluate evidence to find facts by inquisitorial
methods, and inspections and to obtain information
from other persons; but it will generally be a
denial of justice to fail to disclose to a party
specific material relevant to the decision if he is
thereby deprived of any opportunity of comment on
it."[Emphasis supplied]
The Hon'ble High Court observed thus:-
"In other words, it seems to be a fairly
CUS.A.A.29/11 and connected matters Page 9
settled position in law that it is not necessary that
persons whose statements have been previously
recorded must be examined in the presence of the
party against whom such previous statements are
intended to be used. The rules of natural justice do
require that their previous statements must be
made available to the party against whom they
were intended to be used and such party must be
given a fair opportunity to explain the same or
comment on them. What would amount to fair
opportunity would depend upon the facts and
circumstances of each case...."[Emphasis
supplied]
18.10 The Apex Court in Surjeet Singh Chhabra v.
UOI, reported in 1997 (89) E.L.T. 646 (SC) held that
Customs Officials are not police officers and admission
made before them though retracted binds the deponent.
In view of voluntary statements recorded and such
statements not retracted did not warrant cross
examination when other circumstantial provided
reliable basis corroborating the statements. When
nothing surfaced that the witnesses had any enmity with
appellants, those were not liable to be discarded nor
required to be put to cross-examination. Relying upon
the decision of the Apex Court in Surjeet Singh Chhabra
case (supra) this Tribunal in Jagdish Shanker Trivedi v.
Commissioner of Customs, Kanpur - 2006 (194) ELT
290 (Tri-Del) held that admission made by an assessee
binds him and, therefore, failure to give him the
opportunity to cross-examine the witnesses was not
violative of principles of natural justice. It was
specifically held that "principles of natural justice do
not require that in matters like this, persons who had
given information should be allowed to be
cross-examined by the co-noticees on the statements
made before the customs authorities. If
cross-examination is to be allowed as a matter of right
then in all cases of conspiracy and joint dealings
between the co-noticees in the commission of the
CUS.A.A.29/11 and connected matters Page 10
offences in connection with the contraband goods, they
can bring about a situation of failure of natural justice
by a joint strategic efforts such co-noticees by each one
refusing to be cross-examined by resorting to Article
20(3) of the Constitution and simultaneously claiming
cross-examination of the other co-noticees." It is not a
matter of right for any assessee to contend that the
statements of witnesses should be discarded."
Contention of the appellants
10. It was argued, by Ms. Premlata Bansal and Mr. Ashok Bhan,
Senior Advocates, Mr. Balbir Singh and the other learned
counsel, that penalty under Section 112 of the Customs Act could
not have possibly been imposed against the appellants. It was
urged that no attempt was to justify the penalty and that under
Section 112 penalty can be levied only if the person is in actual
possession of the goods and has knowledge that they are liable to
confiscation under Section 111. It was argued that the goods in the
present case, having been cleared after payment of redemption fine
by the importer, had no co-relation to any of the appellants. The
orders of redemption based on spot assessment had attained
finality. In the circumstances, the penalty of fine leviable under the
Act could not be imposed upon someone who had nothing to do
with the importation or exportation of goods.
11. It was argued that there is no record to show that the goods
in question were imported in contravention of the Act. Therefore,
the question of levying penalty did not arise. Further, for levying
penalty under Clause (d) of Section 111, the fact that the possessor
CUS.A.A.29/11 and connected matters Page 11
has knowledge of the goods being liable for confiscation under
Section 111 has to be proved. In the instant case no such
knowledge was proved. Importantly, it was argued that the
phraseology in Section 112 - which was ultimately used in the
present case- presupposed the existence of the goods. In the
present case, the goods had been cleared. Section 112(a) is
attracted on showing that all the ingredients of that provision are
satisfied. One such ingredient is that the prejudicial act or
omission must be such which would render such goods liable to
confiscation under Section 111. Thus liability of the impugned
goods to confiscation is a pre-requisite to action under Section 112
(a). In such a situation it is incumbent that the impugned goods are
not only liable to confiscation, but the persons are also called upon
to show cause against the proposal for confiscation. In the absence
of this essential requirement the entire proceedings in the present
cases were vitiated.
12. The appellants urged that some passengers against whom
Customs Duty evasion was confirmed, were not served SCN;
consequently the charge of abetment, collusion and conspiracy
could not be leveled and proved against them. It was argued that
the findings of the Commissioner and the CESTAT that the
requirements of Section 153 of the Customs Act, 1962 were met
with are erroneous. The appellants relied on the decision reported
as Collector of Central Excise vs. Electrolyfic Foils Ltd 1997 (9)
ELT-543 (SC).
13. Learned counsel attacked the order of the Commissioner-
and the order of CESTAT, stating that they were both based on
CUS.A.A.29/11 and connected matters Page 12
presumption of quantities of silk. Counsel submitted that the
previous clearances had become final; the derived value, based on
average price and average weight, was a method unknown to law,
and adopted by the Commissioner; the CESTAT ought not to have
affirmed those findings.
14. It was contended that the owner of baggage was under a duty
to declare its contents, under Section 77. The lower authorities,
submitted counsel, made no attempt to fix this responsibility on the
owner and did not even secure authenticated copies of the
passenger manifest and the baggage loaded on to the aircraft- even
in the case of the luggage alleged to have been smuggled on
28.08.2000. In these circumstances, there could have been no
culpability attributed to the appellants. Their roles were not
defined and the findings in regard to violation of provisions of the
Act, leading to imposition of penalties were wholly unjustified.
15. It was argued next that CESTAT went purely by surmises
and conjectures in returning adverse findings against the appellants
and imposing penalties upon them. All the learned counsel argued
that the absence of any substantive evidence, in the form of
passenger manifests in original, documentary proof regarding the
complicity of the appellants with Olga and her accomplices'
smuggling activities and absence of any seized material, coupled
with the finality attained by previous spot assessment orders,
meant that the Customs authorities had no evidence to go by.
Merely because some appellants were present at the time when
some of the previous spot assessments were made could not lead
CUS.A.A.29/11 and connected matters Page 13
the adjudicating authority, or CESTAT, to hold that they had been
complicit in any wrong doing. The broad brushing nature of
allegations seeking to implicate the appellants failed to assign any
distinctive role to each of them. In fact, some of them were never
implicated in confessional statements, like in the case of Sudhir
Sharma. In the case of others, such as Shri R.N. Zutshi, the official
had and could have had no role to play, considering that he was in
the Protocol and Ceremonial Wing of Customs in the airport. His
confessional statement could, in the absence of any corroborative
material, not have been used to penalize him.
16. It is argued that what is alleged is the acts of omission,
which amount to abetment. To establish the charges, the
department had to rely on reliable, cogent legal evidence. No
presumption in this respect can be raised on basis of any
circumstance even if the same might appear to be suspicious and
explanation given for such circumstance is not believed or is not
considered satisfactory. The charge of abetment in the form alleged
in the SCN is vague. It was argued that the appellants had pointed
out in replies to the SCN that the act committed to constitute
abetment had to be particularly stated, or else it was impossible to
give an effective rebuttal. This was essentially required so as to
afford adequate opportunity of defense to be given. No
particular/specific act constituting abetment was however, spelt
out. Reliance was placed on the judgments of the Supreme Court in
State of U.P. Vs Mohd. Sharif, AIR 1982 SC 937, and Sawai Singh
Vs State of Rajasthan, AIR 1986, SC 795. It had been observed
CUS.A.A.29/11 and connected matters Page 14
that the specific charges are to be framed in clearest terms and
with full particularity.
17. Besides, learned counsel submitted that the CESTAT failed
to appreciate the fact that whenever an adjudication proposal is put
up, the practice is that the goods brought by the passenger are
subjected to detailed examination by the Inspector of Customs.
These goods are valued and if found to be mis-declared, or not
declared as per commercial quantity, the details are incorporated in
a printed format meant for adjudication by the competent authority.
The Superintendent on duty countersigns the proposals and
forwards the same for further adjudication. It is not conceivable for
the appellants, who are not party to above proposals to aid or abet
the said passenger without implicating the Inspector and
Superintendent, who had examined the goods and processed the
proposal for adjudication. Thus, the fact that the appellants were
not involved in processing the proposal is significant. This escaped
the notice of the CESTAT altogether.
18. It was argued that the uncorroborated admission of some
charged official - which stood retracted later, could not have been
the material used to arrive at adverse findings. In this context,
reliance was placed on the judgment reported as Vinod Solanki Vs.
U.O.I, JT 2009 (1) SC 1 to the following effect:
"22. It is a trite law that evidences brought on record by way
of confession which stood retracted must be substantially
corroborated by other independent and cogent evidences,
which would lend adequate assurance to the court that it
may seek to rely thereupon."
CUS.A.A.29/11 and connected matters Page 15
Reliance is also placed on the decision in Pon Adithan v. Deputy
Director, Narcotics Control Bureau Madras 1999 (6) SCC 01. It
was argued that Shri R.N. Zutshi's statement contains only
vague allegations casting adverse reflections upon the conduct
of the Appellants, which was not the subject matter of the SCN
as distinguished from the specific allegations in Table 14 of the
SCN. It was reiterated that the allegations in R.N. Zutshi's
statement were neither true nor voluntary and are not
corroborated by independent sources on any material point
vis-a-vis the Appellants. It was submitted that R.N. Zutshi
retracted his statement at the earliest opportunity i.e. on
19.01.2001 but the other appellants were not confronted with
R.N. Zutshi to confirm the truth of his statement.
Notwithstanding the controversy regarding retraction of R.N.
Zutshi, no evidentiary value can be attached to his statement
vis-a-vis the charge against the other appellants.
19. Highlighting that the charge against the appellants is
abetment/for assisting the passenger in removal of goods
without payment of duty, it is argued that goods were removed
from the gate and it is the function and duty of the gate officer
to ensure that goods removed are duly covered under duty
paying documents. All the gate officers denied unauthorized
removal of any goods- a fact accepted by the department as the
gate officers were not charged in the SCN. There was no
allegation that the other appellants, on duty elsewhere- in some
cases at the Red Channel counter- had abandoned such duties
CUS.A.A.29/11 and connected matters Page 16
and gone to the gate to help in removal of goods without
payment of duty. Further, because there was no allegation that
although excess quantity was brought before the appellants at
the Red Channel counter, but papers for adjudication were
put up by suppressing the quantity of textile actually brought
in, counsel submitted that the inferences drawn by the
adjudicating authority, and affirmed by CESTAT, were
unjustified. It was further argued that the principle of
preponderance of probability enunciated in the Commissioner's
order could not absolve the Customs department of its
responsibility to provide the basic material to enable the
appellants to base their defense upon. As such, the charge of
abetment was unsustainable.
Contentions of the Customs Department
20. Mr. Rahul Kaushik, learned counsel for the Customs
Department urged that the concurrent findings of the Commissioner
and the CESTAT should not be interfered with. It was submitted that
every argument argued on behalf of the appellants concerned with
finding of fact. Pointing out that the adjudicating authority, i.e. the
Commissioner's order is based upon an intensive and meticulous
analysis of the facts, learned counsel highlighted that a painstaking
effort linking the various appellants with the smuggling racket which
had successfully evaded Customs Duty for nearly two years, had been
analysed in respect of each date and in respect of each of the
appellants.
CUS.A.A.29/11 and connected matters Page 17
21. With respect to the issue of the reliance placed upon
confessional statements, in the absence of other material, learned
counsel submitted that there are several decisions highlighting that
Revenue, especially, the Customs proceedings do not involve concerns
which are to be addressed in criminal proceedings that involved
fundamental freedoms and personal liberties. Reliance was placed
upon Naresh v. UOI 1996 (83) ELT 258 (SC); K.I. Pavunni v. Asst.
Collector 1997 (90) ELT 241 (SC) and KTMS Mohammad v. UOI AIR
1992 SC 1831. It was argued that whilst in criminal proceedings, the
law insists upon the prosecution proving its case beyond reasonable
doubt - which is the highest threshold of proof, in quasi-judicial
proceedings that involve evasion of tax law or evasion of Customs
Duty, the lower threshold of proof - preponderance of probabilities - is
to be followed by the adjudicating authorities, learned counsel
submitted that a retracted confession is not per se inadmissible or
irrelevant in customs proceedings and can always be used as a
corroborative evidence to record adverse findings.
22. It was next argued that weight metre scale adopted by the
Commissioner was rationally explained. Mr. Rahul Kaushik, learned
counsel stated that the smuggled goods were not available for
examination and that there was lack of material evidence to show
correlation between weights of various varieties of silk brought on
various dates and the respective weight metre ratio. The
Commissioner had to go by the record of concerned airlines which
showed excess baggage weight in kilos whereas the AOs showed them
in metres. In these circumstances, taking into consideration
CUS.A.A.29/11 and connected matters Page 18
manipulation of quantities of silk fabrics, and the suppression and
misdeclarations of the passengers involved which were rampant, the
Commissioner adopted the most reasonable and logical methodology
to arrive at approximation of metre-wise quantity by deducing them
from the package weight reported by the airlines. It was submitted that
the weight metre ratios were indicated in Table 3 of the notice except
in the case of two dates, i.e. 19.06.2000 and 28.08.2000 which
appeared to be rational whereas for the quantities reported for all other
dates appeared to be eccentric. The Commissioner observed that one
kilo of silk fabric reportedly varied between 0.52 metres and 7.28
metres. Such wide variations were excluded and, therefore, the various
ratios indicated from the materials available in respect of the quantities
of 19.06.2000 and 28.08.2000 were taken into consideration. The
Commissioner pertinently had noted as follows:
"402. The above weight-metres ratios need to be
understood in the right perspective. Indubitably, except for
the dates 19.6.2000 and 28.8.2000 all the remaining ratios,
being illogical, are out of place. I therefore focus on the
position on these two dates. As regards 28.8.2000, the
goods - silk fabrics in six varieties based on gsm [grams
per square metre] i.e. 36, 50.1, 45.7, 52.1, 69 and 73.5 gsm
are available. The requisite details of these goods i.e.
variety-wise total weight in kgs, total metres, average
metres per kg and all other relevant information as
exhibited by table 2, 3 and 4 are also available. In this
context, I find that the proposed weight metre ratio of 17.62
has been computed on the average basis of the above
elements of the silk fabrics physically available as on date.
On the other side, a perusal of the weight exhibited by the
Airlines and the metres assessed in AOs relating to
19.6.2000 brings forth that even on this date voluminous
baggage of silk fabrics containing different varieties was
CUS.A.A.29/11 and connected matters Page 19
brought in by Olga Kozireva, Isamu KM, Merkulova,
Shakista. K. and Vetchinkina T. As against the total weight
2333 kgs as per records of Airlines and as detailed in para
74 of the notice, the total meters assessed in AOs are seen
to be 45,600 mtrs which seem consistent, logical and
reliable. The average metres per kg i.e. weight metre ratio
here works out to 19.54. As detailed in para 74(d) of the
notice, in respect of Merkulova and Shakista K, 424 kgs of
a variety of silk fabrics were assessed to 7000 mtrs on
19.6.2000 producing average of 16.50 mtrs per kg. It is
fairly comparable to a variety of silk fabrics having 16.79
mtrs per kg and 45.7 gsm brought in on 28.8.2000.
Similarly, 229 kgs of a variety of silk fabrics relating to
Olga Kozireva were assessed to 5000 mtrs. leading to
average of 21.83 metres per kg. This average is again
rationally comparable to another variety of silk fabrics
with 36 gms having average of 21.81 mtrs per kg brought
in on 28.8.2000. A conjoint study of the baggage weights
on 19.6.2000 and 28.8.2000 as reported by Airlines
through manifests or letters and the metres assessed by
customs leads me to positive finding that these metres are
reliable and rationally co-relatable to the
manifested/reported weights of baggage brought in by the
relevant passengers. Having regard to the Test Reports of
CRCL on all the six varieties of silk fabrics seized on
28.8.2000, market enquiries conducted thereon,
availability of the goods and the wider details thereof as
summarized in the above said Tables, I find the weight
metres ratio of 17.62, which is duly supported by the above
varieties of silk fabrics brought on 19.6.2000, as more
authentic, reliable and legally maintainable for the purpose
of ascertainment of metres per kg for previous clearances."
23. Mr. Kaushik, learned counsel also submitted that the
adjudicating Commissioner also dealt with the issue of computation of
baggage weight on the basis of vehicle capacity, i.e. the truck or trucks
engaged for transportation on five dates when the airlines record
manifest showed insignificant baggage weight, but commercial trucks
CUS.A.A.29/11 and connected matters Page 20
were used by relevant passenger or their groups. It was submitted that
these were based upon objective materials in the form of correlation of
statements of transporters and the confessional statements. Likewise,
the evaluation of silk textiles had a uniform rate - considering the
wide variation in the declarations, i.e. `40 at the last end per metre and
`100 per metre. Thus, the weighted average value of `68 per metre
was reasonable under the circumstances.
24. It was submitted next that the complaint of violation of natural
justice on account of reliance placed upon confessional statements of
third parties, who were not cross-examined, cannot be a ground to
vitiate the proceedings. It was submitted that the SCN was issued on
21.08.2001. Despite the pendency of proceedings for more than five
years, request for cross-examination was made at the fag end of
hearing. Learned counsel relied upon the judgment reported as
Kanungo & Co. v. Collector of Customs Calcutta 1983 (13) ELT 1486.
Similarly, it was submitted that the argument with respect to absence
of service of SCN upon several persons such as Olga, Nazira etc. is
meritless. Learned counsel relied upon Section 153 and relied upon
the findings of the Commissioner that even though personal notice
could not be effected on those individuals, the requirement of law with
respect of constructive notice had been complied with and that since
such individuals left the country fully aware of the possible probable
consequences, the appellants cannot take advantage of such
technicality.
25. Learned counsel submitted that the statements of R.N. Zutshi
and Dil Agha defined the role of most of the appellants, i.e. V.K.
CUS.A.A.29/11 and connected matters Page 21
Khurana and T.K.R. Reddy. In the case of Sudhir Sharma and R.N.
Zutshi, the statement of Dil Agha dated 11.07.2001 was adverse to
them. Likewise, phone record established the link between these two
individuals on the one hand and Dil Agha, Mammoor Khan and others
involved in the smuggling racket. It was submitted that the same
reasoning applied in the case of T.K.R. Reddy, Pradeep Rana and V.K.
Khurana. Learned counsel also invited the attention of this Court to
the various tables set out in the adjudication order, set out in the SCN
and later in the adjudication order which linked the telephone numbers
of the appellant with those of the foreign nationals and others, i.e.
Olga, Dil Agha, Mammor Khan, Nazira, Shalu etc. Some of the
appellants even admitted knowledge of their acquaintanceship with
Mamoor Khan or the others who placed calls or received them.
However, either their explanations were not forthcoming or were
unconvincing. These, submitted learned counsel, were sufficient
materials to establish the culpability of the appellants.
Analysis and Conclusions
26. Before analyzing the merits of the rival contentions, it would be
convenient to set out the materials which formed the basis of fixing
responsibility and imposing penalty upon the appellants. A tabular
statement disclosing the foundation of each appellant's liability-
whether implicated in the statement of anyone else, phone call details,
etc. is set out below:
CUS.A.A.29/11 and connected matters Page 22
Sl. Name Penalt Implicat If calls made Phone
No. of y ed with any other Numbers
Impos non-Customs
Appella ed by whom individual
nt involved and if
(`lakh so, who
s)
1. Sudhir 4.75 Yes, Yes, to Mamoor 9811240981;
Sharma R.N. Khan (95 calls) 1
Zutshi with Dil Agha 9810175926;
and 7 with 9811022679
Shaloo (Total
103). 6518658
(landline)
2. R. N. 12 Yes, Dil Yes, 98 calls (62 9810136977;
Zutshi Agha Mamoor Khan
and 28 Dil Agha) 63222294
(landline)
3. Ajay 2.5 Yes,
Yadav R.N.
Zutshi
4. V.K. 7.0 R.N.Zuts Yes 49 calls (39 9811028228
Khurana hi with Dil Agha
and 5 with 5815626
Dil Agha Mamoor Khan) (landline)
5. Yashpal 6.0 R.N. Yes, 37 calls (34 9810196092
Zutshi Mamoor Khan, 1
Dil Agha, 2 7259289
Shaloo) (landline)
6. T.K.R. 10.0 R.N.Zuts Yes 123 calls (all 9811102138
Reddy hi with Mamoor
Khan) 5513999
Dil Agha (landline)
7. Pradeep 4.5 Dil Agha Yes, 19 calls- all
Rana with Dil Agha
CUS.A.A.29/11 and connected matters Page 23
8. Anil 2.5 R.N.
Madan Zutshi
27. The customs authorities' apparent routine check of Olga
Kozireva's (a Kyrgiz national) baggage, on 28.08.2000 and
discovery of her illegal importation and smuggling into India, a
quantity of 81160 yards (74212 meters) of silk textiles without the
necessary declaration, her detention and subsequent statement
under Section 108 of the Customs Act triggered the entire
investigations. The investigations were carried out by the
Directorate of Revenue Intelligence (DRI) . The conspiracy
unearthed showed that an Afghan National, Mamoor Khan,
frequented and stayed at Sameer Guest House in Ballimaran, Delhi.
The investigating agency also obtained a photograph of Mamoor Khan
from FRRO. One Pawan Kumar, driver of Sehrawat Goods Carrier in
his statements dated 17/18.12.2000, and 22.12.2000 identified
Mamoor's photograph, to say that he was involved in import and
transportation of silk fabrics by Uzbeki ladies from IGI Airport.
Pawan Kumar had personal knowledge because he was actively
involved in transportation of baggage brought in by Uzbeki ladies.
Mamoor Khan's stay at Sameer Guest House in Ballimaran, Delhi was
also confirmed by Abdul Qayum, Manager, Sameer Guest House who
identified that Mobile No.9811254485 belonged to Mamoor Khan. In
his statement he identified the photo of Mamoor Khan. Abdul Qayum
disclosed other details regarding involvement of Mamoor Khan. This
was confirmed by Ajay Dhiman, Traffic Supervisor, Kyrgyzstan
CUS.A.A.29/11 and connected matters Page 24
Airlines in his statements dated 26/27.12.2000, 30.12.2000 and
01.02.2001; he also identified Mobile No.9811135982 as belonging to
Mamoor Khan. Mamoor's involvement in illegal import of Chinese
silk fabrics was also corroborated by Purshottam Lal Tandon in his
statement dated 30-12-2000; he too confirmed that Mobile
No.9811135921 belonged to Mamoor. This received further
corroboration by Pradeep Singh Dhamija in his voluntary statement
dated 03.01.2001. M/s Arun Kumar Dokania, Gopal Prasad Dokania,
Nitish Kumar Kedia, Anudeep Singh and Mahender Jain, dealers in
the Chinese silk fabrics imported by Uzbeki women also confirmed
the involvement of Mamoor Khan in their statements of 05.01.2001. It
was, therefore, apparent that Mamoor Khan's involvement in the
conspiracy was as a key player, if not its ring leader. However, he
could not be caught. Several other witnesses confirmed his
involvement in smuggling of silk textiles independently. He was
regularly in touch with various officers of Customs, passengers like
Olga K., Nazira, Shahlo etc. and buyers of silk textiles, very
frequently. Table No.11 (in the Order in original) clearly shows that
Tel.No.9811135921 belonging or used by Mamoor Khan was
generally found in the vicinity of the IGI Airport on the dates when
flights carrying passengers like Olga K., Shahlo, Shahkista arrived at
IGI Airport. One Dil Agha was also arrested; his statements were
recorded. This led to discovery of a marked increase in frequency of
telephonic interactions between the numbers of Mamoor Khan, Dil
Agha, the passengers entering with the goods, and those of Customs
officers, especially the appellants accused of connivance -around the
time when the flights were being cleared. This evidence pointed to a
CUS.A.A.29/11 and connected matters Page 25
pattern disclosing Mamoor Khan's pivotal role in this complex and
massive network of smuggling operations. He was regularly in contact
with other key players in this web of conspiracy. Mamoor Khan's
corroboration would have led to conclusive proof; yet the customs
authorities concluded that whatever emerged, through statements of
various individuals and materials was substantial and crucially-
un-rebutted, to conclude that the appellants were in fact accomplices
and conspirators in smuggling silk textiles. The materials gathered and
statements recorded during investigation led to SCNs to the appellants,
the passengers involved, other individuals like Dil Agha, traders, etc.
Re. Question Nos (a) and (c)
(a) Whether the findings in the impugned order with regard to
abetment by the appellants is justified in law;
(c) Whether the findings based upon mobile phone records and
confessional statements of one party are sustainable in law in the
circumstances of the case in the absence of any other
corroborative material.
28. These questions are inter-related and are taken together. The
main argument of the appellants was that the Commissioner and later,
CESTAT could not have concluded that they had abetted in the alleged
smuggling operations, given that Mamoor Khan was not caught and
there was no corroboration on his part. Their supporting argument also
appears to be that the absence of the non official abetters (such as
Olga, Nazira, Shakista, Dil Agha etc.) in the SCN has prejudiced them,
vitiating the findings.
29. Section 112 of the Customs Act, which penalizes, inter alia,
abetment, reads as follows:
CUS.A.A.29/11 and connected matters Page 26
"112 Penalty for improper importation of goods, etc.
--Any person,--
(a) who, in relation to any goods, does or omits to do
any act which act or omission would render such goods
liable to confiscation under section 111, or abets the
doing or omission of such an act, or
(b) who acquires possession of or is in any way
concerned in carrying, removing, depositing,
harbouring, keeping, concealing, selling or purchasing,
or in any other manner dealing with any goods which
he knows or has reason to believe are liable to
confiscation under section 111, shall be liable,--
(i) in the case of goods in respect of which any
prohibition is in force under this Act or any other law
for the time being in force, to a penalty not exceeding
the value of the goods or five thousand rupees,
whichever is the greater;
(ii) in the case of dutiable goods, other than prohibited
goods, to a penalty not exceeding the duty sought to be
evaded on such goods or five thousand rupees,
whichever is the greater;
(iii) in the case of goods in respect of which the value
stated in the entry made under this Act or in the case of
baggage, in the declaration made under section 77 (in
either case hereafter in this section referred to as the
declared value) is higher than the value thereof, to a
penalty not exceeding the difference between the
declared value and the value thereof or five thousand
rupees, whichever is the greater;
(iv) in the case of goods falling both under clauses (i)
and (iii), to a penalty not exceeding the value of the
goods or the difference between the declared value and
the value thereof or five thousand rupees, whichever is
the highest;
(v) in the case of goods falling both under clauses (ii)
CUS.A.A.29/11 and connected matters Page 27
and (iii), to a penalty not exceeding the duty sought to
be evaded on such goods or the difference between the
declared value and the value thereof or five thousand
rupees, whichever is the highest."
The principal contention was that what was seized was only the
quantities of goods from Olga on a particular day, i.e 28.08.2000.
Those goods were available for assessment, seizure, consfiscation
and penalty proceedings. If and only if, the role of the appellants
or any of them was available in respect of such consignment only
and none else, could the Customs authorities have concluded that
they had abetted the activities. However, such was not the position;
statements of R.N. Zutshi, Dil Agha, Olga, and several other
individuals were relied on in respect of entirely different
transactions allegedly amounting to smuggling - on several
previous dates. Those quantities of silk were not seized. On the
contrary, they were assessed and wherever found to be excess
baggage, differential duty was even recovered; in other cases, they
were never even seized, since the declarations as to value were
accepted. In the circumstances, the conclusion of the appellant's
complicity as abettors was unfounded in law.
30. The Court here observes that the SCN and findings of the
Adjudicating authority have plainly brought out through various
connecting strands of materials the interconnection between those
involved in the smuggling and the present appellants. Apart from
Mamoor Khan, the role of Dil Agha was highlighted; he figured time
and again on various dates when the textiles were brought in. R.N.
Zutshi's voluntary statement dated 17.01.2001 identified Dil Agha as
CUS.A.A.29/11 and connected matters Page 28
having introduced himself as Mamoor Khan's brother and with effect
from the last week of July, 2000 he had been in touch with R.N. Zutshi
(as a substitute of Mamoor). R.N. Zutshi confirmed that Mobile
No.9811065987 and landline No.3930733 belonged to him (Dil Agha)
and that after August, 2000, Dil Agha used No.9811158376. This
statement corroborated the statement of Dil Agha recorded on
23.05.2001. Dil Agha's unsigned statement was duly supported by two
independent witnesses. It established a close connection between
Mamoor Khan and Dil Agha on one hand, and regular passengers (or
couriers) such as Olga K, Gulia etc. on the other. Dil Agha's
association with Mamoor was also confirmed by Abdul Qayum,
Manager of Sameer Guest House, Ballimaran, Delhi in his statement-
dated 20.12.2000. Dil Agha's further statements were recorded on
11/12.07.2001, and 25.07.2001 where he gave detailed description of
his involvement as well those of others, viz Sadullah, Zanjir Khan and
Sanak etc. Importantly, he spoke about involvement of the Customs
officers and his money dealings with them. Dil Agha's role was also
confirmed by others such as Pawan Kumar (driver of Sehrawat Goods
Carrier), Abdul Qayum, Manager, Sameer Guest House, Ajay Dhiman,
Traffic Supervisor, Krygyzstan Airlines, Pradeep Singh Dhamija,
Gopal Prasad Dokania, Nitish Kumar Kedia and Anudeep Singh in
their statements under Section 108 of the Customs Act, 1962 on
various dates. Most of these confirmed the mobile and landline
telephone numbers of Dil Agha. The evaluation of these materials led
to the adjudicating orders' conclusion that Dil Agha was an important
player in smuggling silk fabrics through Uzbeki women and that the
charges made against him for conniving, abetting and conspiring were
CUS.A.A.29/11 and connected matters Page 29
established.
31. The conclusions of the Customs adjudicating Commissioner did
not rest on the various statements recorded under Section 108 only. A
very crucial element which lent corroboration to those statements were
the call detail records. In this regard, the Commissioner significantly
held as follows:
"378. Mr. R.N. Zutshi has not stated in his retraction that
any physical force was employed or that he was threatened
with any physical harm if he refused to do the bidding of his
alleged tormentors. Considering his long experience and
other relevant circumstances, I hold that this letter
regarding retraction is nothing more than an after thought
and I hold that the statement tendered by Mr. R.N. Zutshi is
voluntary and given by his free consent. The Judgment in
the case law of Aher Raja Khima vs. State of Saurashtra
reported as AIR 1956 SC 217 [V 43C 45 MAR] cited by him,
is therefore, not relevant. .
xxxxx xxxxx
xxxx
5. Print out of telephone calls
390. In making the allegation of illegal clearance and
connivance, the DRI has relied extensively on the print outs
of telephone calls made by various noticees amongst each
other. The details of these telephone calls are contained in
Tables No.7,8,9,10 & 11 of the show cause notice. These
tables have been constructed on the basis of print outs
obtained from various service providers and the evidence
used in the show cause notice is that passengers like Olga
K. and others, several Customs officers posted at Airpoort
and facilitators like Dil Agha, Mamoor Khan were regularly
in touch with one another during the relevant period. The
question before me is as to what is the value of these details
as evidence of existence of conspiracy and co-relation
amongst various players in this game.
391. At the outset, I observe that the details contained in
CUS.A.A.29/11 and connected matters Page 30
the print outs and consolidated in these 5 tables are not in
the nature of transcript of the conversation that might have
taken place amongst the concerned parties. It only
indicates that telephone calls were made and received
during these periods. What actually was said during these
telephone calls is not known. Making or receiving of
telephone calls by itself is a very harmless activity.
However, it acquires certain sinister dimensions if it takes
place between known carriers of commercial goods and Air
Customs Officers on regular basis, especially if the timing is
such that the passenger is arriving by a flight on a
particular occasion when the officer concerned also
happens to be on duty. If the circumstances surrounding
such telephonic exchange are suggestive of possible
connivance and the frequency and timing of the calls further
enhances such a suspicion, then it does give rise to the
possibility of existence of an unholy nexus. In the absence
of transcript or details of what happened during these
telephone contacts, such calls by themselves do not
constitute an evidence which itself is enough to prove the
existence of conspiracy. At the most, they can be used to
buttress the force of other pieces of evidence that might
independently exist. Again, it would make a lot of
difference if a particular noticee is said to be only on the
receiving end of the calls as against another situation where
the calls might have been made by both sides. While a
person 'A' may have no control over who calls him at what
time can plausibly contend that he cannot be held
responsible for anyone making unsolicited calls to his
telephone, the situation becomes quite different if 'A' was
frequently returning the calls made to him and their
conversation often lasted for several minutes....
xxxxx xxxxx
xxxx
394. Significantly, none of the officers named in the
above para have been issued show cause notice on the
ground that the only evidence against them was in the form
of telephonic conversation. Clearly, the investigators
subscribe to the philosophy that telephonic conversation
CUS.A.A.29/11 and connected matters Page 31
alone in the absence of corroborative evidence is not
enough to fasten the liability of abetment and connivance."
Later, it was held as follows:
"419B. While analysing the evidence against the noticees
charged with abetment, I have kept in mind the above
definition of abetment. Broadly speaking, the illegal
consequences that took place are the alleged clearances of
commercial clearances of silk fabrics without declaration
and payment of duty leading to the violation of provisions of
Customs Act, 1962. The intention and knowledge of co-
noticees has been inferred on the basis of circumstances of
the situation. For example, if a co- noticee has been in touch
with people like Mamoor Khan, Dil Agha or the passengers
who wascharged with import of huge quantity of
commercial baggage on regular basis it might be possible
to impute the knowledge and intention of such co-noticees.
Similarly, commonality of interest with the passengers has
to be seen in the context of allegations of illegal
gratification. Generally speaking, huge quantities of
commercial goods would be brought in by passengers in an
organized manner only if they have a prior commitment or
understanding with some people who can help them in
clearance of such goods and such a situation undoubtedly
falls within the parameters of abetment, collusion and
conspiracy. In the context of the present case, it can be
manifested in several ways -for example, preparation of
adjudication proposal means only for a small fraction of the
baggage actually carried by the passenger. Turning a blind
eye and huge quantities being carried by the passengers and
allowing them to pass through Green Channel, improper
inventorization, gratification and valuation of goods
brought by them and so on, the acts of omission and
commission are illustrative in character, no exhaustive list
of such illegal acts or omission can be made. While
analyzing the role of co- noticees in abetment, the above
parameters have been applied to the overall facts of the
given situation."
CUS.A.A.29/11 and connected matters Page 32
32. The absence of goods or the fact that in earlier instances they
had been cleared without dispute, or even after payment of differential
duty, in the opinion of the Court do not constitute impediments to a
SCN and proceedings on the question of abetment of any of the
appellants. In all such instances where a conspiracy (that has achieved
its objective) is unearthed, the articles - especially in the form of
goods would be no longer available. However, that would in no
manner absolve the culpability of those involved, especially those who
play key roles in the fulfillment of such conspiracies. The fact that
differential duties were paid on particular dates and the record of entry
of those involved in the smuggling racket, precisely constitute the
evidence which both corroborates and establishes the allegations. In
this context, the court notices the judgment of the Supreme Court in
Lal Singh v State of Gujarat 2001 (3) SCC 221:
"Many facts pertaining to such activities remain in personal
knowledge of the person concerned. Hence, in case of
conspiracy and particularly such activities, better evidence
than acts and statements including that of co-conspirators
in pursuance of the conspiracy is hardly available. In such
cases, when there is confessional statement it is not
necessary for the prosecution to establish each and every
link as confessional statement gets corroboration from the
link which is proved by the prosecution. In any case, the law
requires establishment of such a degree of probability that a
prudent man may on its basis, believe in the existence of the
facts in issue."
Likewise, in State of Maharashtra v. Bharat Chaganlal
Raghani (2001) 9 SCC 1 the Supreme Court held that:
"58. .... There is no denial of the fact that the judicial
confessions made are usually retracted. Retracted
CUS.A.A.29/11 and connected matters Page 33
confessions are good confessions if held to have been made
voluntarily and in accordance with the provisions of law....
Corroboration of the confessional statement is not a rule of
law but a rule of prudence. Whether in a given case
corroboration is sufficient would depend upon the facts and
circumstances of that case..."
In Wariyam Singh v. State of U.P. (1995) 6 SCC 458 and S.N.
Dube v. N.B. Bhoir and Ors (2000) 2 SCC 254, the Supreme Court
relied upon the confession made by an accused for conviction so
long as there was corroboration. The Court held that the allegation
of the confession being fabricated was without any basis and the
confession could be taken into account while recording the
conviction.
33. The Court is conscious that the above decisions were in the
context of evidence which was received in regular trials during the
course of criminal proceedings. Here, however, the printout details
of the calls made between those accused of smuggling, such as Dil
Agha, Olga established the allegations of conspiracy and abetment.
The statement of transporters, smuggled goods traders, those
frequently seeing some of them like the manager of Sameer Guest
house, lent further support to the statements of R.N. Zutshi (though
retracted later) and Dil Agha. Last but not the least, the previous
records maintained in the Airport also confirmed the stories of Olga
and Dil Agha about the frequency of visits and that on several
occasions differential duty was paid; the corroboration of quantities
was likewise founded on scrutiny of the records.
34. It would be worthwhile to also notice the essential findings
rendered by the Commissioner, who went into a detailed analysis of
CUS.A.A.29/11 and connected matters Page 34
the evidence- which included the statements of R.N. Zutshi, Dil
Agha, Olga, etc. He also compared the passenger manifests of the
different dates involved, the duty roster of various Customs officers,
the declarations made on those dates by those alleged to have
participated in the smuggling racket, the notings made by the
appellants in respect of the declaration and the phone call records
relative to the appellants, Dil Agha, Mamoor Khan, Olga, Nazira,
Shaloo, etc. Relevant extracts of the findings- which were both date
wise, and in respect of each noticee who participated in the
smuggling on the relevant date are as follows. The findings in
respect of Sudhir Sharma are as follows:
"445A. Now, I proceed to analyze (sic) the role of Sudhir
Sharma in the matter. It has been stated by Zutshi in his
statement dated 17th Jan, 2001 that Sudhir Sharma used to
negotiate and decide the money to be charged from Mamoor
Khan. It has also been brought out in the show cause notice
in Table No.7 that Sudhir Sharma exchanged at least 103
calls with various co-noticees out of which 95 calls were
with Mamoor Khan from the period 01.10.1999 to
31.3.2000, 1 with Dil Agha and 7 with Shaloo A. between
16.3.2000 to 12.6.2000. It is pertinent to mention here that
on 10th April, 2000 which is the date in question, Sudhir
Sharma talked to Mamoor Khan 6 times between 10.26 AM
and 11.17 AM whereas the flight had arrived at 9.90 AM.
The written defence dated 3rd Dec,2004 and additional
submissions dated 2 Jan.,2007 have been considered by me
in detail. The allegation of abetment and collusion has been
denied on different grounds, the main one being that no
statement of passenger Shalo. A. had been recorded; that
the noticee did not know any person by the name Mamoor
Khan or Dil Agha; that the statement of Dil Agha is not
corroborated by any independent evidence. He has also
questioned the methodology adopted for working quantity
CUS.A.A.29/11 and connected matters Page 35
and value of goods and the fact that goods were indeed
textiles. At the time of personal hearing held on 21st Jan,
2007, the noticee, interalia, contended that show cause
notice had not been served on the main noticee and hence,
no proceedings could be initiated against the abettor. He
placed reliance on the judgment of Teksons Vs AC Customs,
CCE Vs Sita Electronics, CCE Vs. Electrolites Foils. He
also contended the argument of pooled baggage on the basis
of U.O. Note of D.C. (Vigilance). He has further submitted
that adjudication proceedings in the present case were
initiated by Mr. Rajender, ACO and not by him.
446. 1 have considered the evidence on record as well as the
statement of the noticee. The issue regarding description,
quantity and value of the baggage brought in have already
been considered and decided by me in paras above. So far
as the defence argument of pooled baggage is concerned,
the same has been discussed in detail in paras above. The
noticee Sudhir Sharma has been explicitly named by R.N.
Zutshi in his statement dated 17.1.2000 and the record of his
telephonic conversation with Mamoor Khan is detailed in
Table No7. However, I find that the noticee officer has not
given any explanation of his frequent interaction with
people like Mamoor Khan, Dil Agha and Shalo A. It is quite
intriguing that one hour after the arrival of flight on the
said date, the noticee spoke to Mamoor Khan on 6
occasions. This fact has neither been denied nor rebutted.
The noticee has denied knowing Mamoor Khan but has
given no explanation or justification of his interaction,
especially during the period when the flight was being
cleared. Under these circumstances, it cannot be said that
the statement of Zutshi and others are not supported by
corroborative evidence. The date and timing of the
telephone calls matches with what has been stated by Zutshi
and corroborates the allegation of connivance, abetment,
collusion and conspiracy. I, therefore, hold that the charges
leveled against Sudhir Sharma are established and he is
liable for penal action under Section 112 of the Customs
Act, 1962.
CUS.A.A.29/11 and connected matters Page 36
*********************
****************
484. The main evidences against Sudhir Sharma are in the
form of Zutshi's statement and his numerous telephonic
interaction with Mamoor Khan and others which have been
brought out in detail in above paras. The defence taken by
Sudhir Sharma has already been discussed above and in
respect of 22.5,2000, the only additional submission of
Sudhir Sharma is that the A.O. on the subject was prepared
by Bishan Chand, ACO and not by him.
485. Apart from the plethora of evidences discussed above, I
further observe that on 22.5.2000, Sudhir Sharma was very
much on duty when the Flight No. K2545 arrived and there
are 5 phone calls between Mamoor Khan and Sudhir
Sharma's mobile telephone at 8.51 AM,9.31 AM, 10.57 AM,
11.11 AM and 4.24 PM. The general evaluation of evidence
coupled with the specific timing of these calls which has not
been explained by the noticee leads me to inescapable
conclusion that there ¡s enough evidence in the form of R.N.
Zutshi's statement corroborated by independent evidence in
the form of phone records to hold Sudhir Sharma liable for
penal action under Section 112 of the Customs Act, 1962
under charges of abetment, connivance and conspiracy.
*********************
****************
494. The general evidence against Sudhir Sharma is in the
form of statement of R.N. Zutshi dated 17th Jan., 2001 and
the records of his 103 calls with Mamoor Khan and Dil
Agha etc. It has been pointed out in the show cause notice
that Sudhir Sharma was on duty at the Airport. The
telephone records further show that there were 4 telephone
conversations between Sudhir Sharma and Mamoor Khan
after the arrival of flight. While the general defence
submitted by Sudhir Sharma has already been discussed
hereinabove, specifically with regard to 1st July, 2000, it was
CUS.A.A.29/11 and connected matters Page 37
submitted by the noticee that the adjudication proposal in
respect of Nazira on the said date was put up by Mr.
Rajinder, ACO and not by the noticee.
495. 1 have examined the defence of the noticee with due
care. It is true that the adjudication proposal with regard to
the main noticee Olga K. and abettor Nazira I. was put up
by some other officer. However, the noticee has made no
effort to explain 4 interactions that took place between him
and Mamoor Khan after the arrival of the flight. The details
contained in Table No. 11 on page 138 of show cause
notice also shows that during the period of interaction,
Mamoor Khan's mobile was located at the Airport Terminal
No.2. Thus, the allegation that Sudhir Sharma conspired
and abetted in clearance of baggage that was not declared
finds credence and is proved making him liable for penal
action under Section 112 of the Customs Act, 1962..."
The findings in respect of Shri R.N. Zutshi are as follows:
"R.N. Zutshi & V.K.Khurana
521 . R.N . Zutshi and V .K. Khurana are the departmental
officers who have been made co-noticees on the allegation
of connivance and abetment. The general evidence against
them has already been analyzed in detail. On this date
specifically, it is seen that Dil Agha spoke with R.N. Zutshi
twice on his mobile phone and 6 times from his shop Tel. No.
3930733. It is very intriguing that these interactions took
p1ace between 4.47 PM and 7.31 PM whereas the flight
arrived at 4.32 PM. It is further seen that immediately after
the arrival of flight, Olga K. who was the passenger spoke 4
times within a span of one hour from her mobile to R.N.
Zutshi's mobile while RN. Zutshi was very much on duty.
This coupled with Zutshi's confessional statement and other
detailed records of his frequent interactions with various
noticees clearly show that he was very deeply involved in
this entire racket and I hold him liable for penal action
under Section 112 of the Customs Act, 1962 for aiding and
CUS.A.A.29/11 and connected matters Page 38
abetting the clearance of non-bona fide baggage of Olga K.
and Nazira I. on 1st August, 2000.
522. V.K. Khurana is another noticee in this regard. I find
that in addition to the evidence of his involvement and R.N.
Zutshi's confessional statement and details of his frequent
telephone interactions with other noticees like Dil Agha,
Mamoor Khan etc., V.K. Khurana who was on night duty
spoke to Dil Agha on this date also. Further, it is seen that
AO. No. 21727 wherein Olga K declared 1,100 mtrs. of silk
textiles has been prepared by V.K. Khurana, lnspector. This
clearly shows that Olga K. was still at the Airport when V.K.
Khurana reported for night duty. It has already been shown
that there was a telephonic contact between him and Olga K
around that time. Olga K. was a frequent and regular
traveler better known as a carrier of commercial baggage
and V.K..Khurana was no stranger to this fact. Khurana In
AO records the fact that she had not declared any dutiable
articles and was diverted to Red Channel, Still, neither did
he inventorize her entire baggage nor the total quantity
brought was put up for assessment or adjudication. This
specific evidence along with other general issues analyzed
already leaves me in no doubt about the involvement of V.K.
Khurana in abetment and connivance in clearance of
baggage of Olga K. Accordingly, I hold him liable for penal
action under Section 112 of the Customs Act, 1962.
*********************
****************
462. 1 have carefully considered the entire gamut of
evidences against R.N. Zutshi. and his responses thereto. So
far as the validity of his statement as evidence is concerned,
the same has been discussed very minutely and in great
detail hereinabove. It has also been analyzed why the plea
of supposed retraction was meaningless and that how such a
retraction does not negate the evidentiary value of the
statement. Though in case of Zutshi himself, his statement
being totally inculpatory might be enough to draw an
adverse conclusion against him; there is further
CUS.A.A.29/11 and connected matters Page 39
corroborative evidence in the form of his interaction with
people like Mamoor Khan, Dil Agha, Olga K. & Shahlo A.
Zutshi has not denied this interaction either in his statement
or in his written reply or at the time of personal hearing.
His only plea is that the contents of conversation are not
known. But in the light of his admission coupled with
admitted and strong evidence of frequent interaction,
non-availability of records of conversation would be a
minor thing. All other arguments advanced by Zutshi have
also been discussed in detail in the previous paragraphs.
Under the circumstances, absolute and deep complicity of
R.N. Zutshi in this entire drama is not in doubt. It is indeed
very intriguing that even on 15th May, 2000 when the flight
landed at 9.51 AM, R.N.Zutshi talked to Mamoor Khan 4
times before the arrival of the flight at 9.50 AM and 3 times
after the arrival. A perusal of Table No.11 (page 136 of
SCN) would also show that cellphone of Mamoor Khan was
in vicinity of International Airport from 9.52 AM to
12:36PM. His entire role therefore, stands out very clearly
and his complicity in the entire episode is fully established.
I, therefore, hold that R.N. Zutshi is liable for penal action
under Section 112 of the Customs Act, 1962 for his role in
abetment, collusion and conspiracy and clearance of
irregular baggage.
*********************
****************
500. The evidence against R.N. Zutshi is in the form of his
inculpatory confessional statement as well as record of
telephonic conversation has already been discussed in the
foregoing paragraphs. It is a matter of record that R.N.
Zutshi was on duty at the relevant time. It is further seen
that R.N. Zutshi had as many as 11 telephonic conversations
with Mamoor Khan - 5 times before the arrival of flight and
6 times after the arrival of flight. This aspect has not been
explained by Zutshi either in his written defence or during
the course of personal hearing but the strong evidence
available on record inescapably points towards his
complicity in the entire affair. I, therefore, hold that R.N.
CUS.A.A.29/11 and connected matters Page 40
Zutshi is liable for penal action under Section 112 of the
Customs Act, 1962 for having aided and abetted in irregular
clearance of commercial baggage of Olga K. on 10th
Ju1y,2000 . "
The findings in respect of Shri. T.R.K. Reddy are as follows:
482. The allegations against TRK Reddy regarding irregular
clearance of commercial baggage are primarily based upon
the statement of R.N Zutshi and Dil Agha. There is also
evidence of extensive interaction between Reddy and
Mamoor Khan on telephone. All these details have already
been discussed in the above paras while discussing the
chain of events that happened on 27th Feb., 2001. The
genera1 argument taken in reply of TRK Reddy have also
been discussed above. However, regarding 22nd May, 2000,
the noticee has taken an additional defence that the
manifested weight on this particular date with regard to the
noticee was very minimal and that the quantity of textile
brought in had been computed by taking into account the
kind of vehicle used for transport of goods.
483. 1 have carefully considered the evidence available
against the noticee as well as their submissions in defence.
He was admittedly in touch with Mamoor Khan on regular
basis and this fact very strongly corroborates what has been
stated by R.N. Zutshi in his voluntary statement dated 17th
Jan., 2001. Even on 22nd May, 2000 there was a telephone
contact between Mamoor Khan and TRK Reddy at 7.59 AM
on 5513999 of TR.K Reddy. The flight arrived at 9.22 AM
and TRK Reddy who was on duty spoke with Mamoor Khan
again on 6 different occasions i.e. 9.14 AM; 09.15 AM,
09.41 AM; 10.54 AM; 4.19 PM and 4.25 PM as listed on
page 173 of the show cause notice. The above facts which
have been discussed in great detail in foregoing paras
clearly establish the complicity of Reddy in clearance of
baggage in league with Mamoor Khan and the passengers.
So far as his argument that the manifested weight on
22.5.2000 was minimal does not help his defence much and
CUS.A.A.29/11 and connected matters Page 41
the acceptability of methodology adopted for working out
quantity on those dates when declared quantities were far
more than the manifested weight has already been discussed
in foregoing paras. Keeping in view the entire
circumstances of the case, evidence available and defence
pleaded, I hold that the charges of connivance, abetment
and conspiracy against TRK Reddy are proved and I hold
him liable for penal action under Section 112 of the
Customs Act, 1962.
*********************
****************
503. The show cause notice has made the allegation of
connivance and abetment against Mamoor Khan and Sanak
which need not be discussed again. The show cause notice
has also levelled the charges of abetment and connivance
against T.R.K. Reddy. The general evidence available
against Reddy has already been discussed in foregoing
paras. In addition, it is on the record that T.R.K. Reddy was
in fact on duty on the date in question and had 8 telephonic
conversations with Mamoor Khan from his Cell No.
981102318, once before the arrival of flight and 7 times
after the flight was landed. T.R.K. Reddy has not clarified
this aspect satisfactorily and it further strengthens the
evidence of conspiracy available against him. Under the
circumstances, I hold that the allegations of connivance,
abetment and conspiracy against T.R.K. Reddy are
established for 17.7.2000.
*********************
****************
505. The deep involvement of T.R.K. Reddy on the basis of
statement of R.N. Zutshi duly corroborated by independent
evidence in the form of record of telephonic conversation
has been analyzed in detail. In addition, it is found that on
24.7.2000, T.R.K. Reddy was on duty and he has spoken
with Dil Agha once in the morning from his residential
telephone and 5 times during the day from his mobile
CUS.A.A.29/11 and connected matters Page 42
telephone. Similarly, the evidence in the form of
confessional statement of R.N. Zutshi duly corroborated by
record of telephonic conversation has already been
analyzed. On the relevant date, R.N. Zutshi was also on duty
and there were as many as 11 telephonic conversations
between Zutshi and Dil Agha on the telephone numbers
belonging to Mamoor Khan. I am, therefore, not in any
doubt that both the noticees have rendered themselves liable
for penal action under Section 112 of the Customs Act, 1962
for conniving and abetting in the clearance of commercial
baggage of Merkulova L ."
The findings against Mr. V.K. Khurana are as follows:
"526. The show cause notice has named V K. Khurana as a
co-noticee. The evidence against V.K. Khurana is in the
form of inulpatory statement of R.N. Zutshi, records of
telephonic conversation with Mamoor Khan, Dil Agha, Olga
K. etc. at different points of times has already been
discussed. On 'this date particularly, there is evidence to
show that DilAgha with his mobile phone No, 9811065897
was present at the Airport Terminal No.2 from 4.45 PM to
7.52 PM and spoke with V.K. Khurana who was on duty on
4 different occasions during this period. In addition to
strong evidence already on record, the time and nature of
these phone calls which have not been explained by V.K.
Khurana in his reply clearly leads to the conclusion that the
allegation of abetment and connivance is duly proved
against V.K. Khurana rendering him liable for penal action
under Section 112 of the Act ibid.
*********************
****************
555. The evidence of complicity and collusion against
V.K.Khurana is both substantial as well as strong. VK.
Khurana has been specifically named by Dil Agha as a
Khaas Admi and this role has also been described by R.N.
Zutshi in his voluntary statement dated 17.1.2001. The
evidentiary value of both these pieces of evidence has been
discussed already in great detail. It has been clearly brought
CUS.A.A.29/11 and connected matters Page 43
out in the show cause notice that on 28th August, 2000 huge
quantities of textile was brought in after taking prior
clearance from V.K. Khurana . It is corroborated by the fact
that though Olga K. was carrying silk textiles valued at over
Rs.50 lakhs involving Customs duty of over Rs.30 lakhs, she
did not have any currency to pay duty on it nor there is
anything to suggest that she had any arrangement or desire
to pay this duty by arranging funds after arriva1. On the
other hand, even on this particular date, there is
documentary evidence to show interaction between V.K.
Khurana on his Mobile No.9811028228 with Dil Agha,
passengers Nazira. I. and Olga K. Though V.K. Khurana
has disowned the ownership of the mobile number in
question, this aspect has already been discussed and
decided by me in para 440 above. When all these
circumstances and evidences are seen in the totality, there is
not even a slightest doubt that Khurana was actively in
league with Olga K, Dil Agha and Nazira I. and, they had
his prior word and commitment to carry out this scandalous
clearance without declartion and payment of duty. In the
light of findings above, I hold VK. Khurana liable for penal
action under Section 112A of Customs Act, 1962 for his role
in abetting and colluding with Olga. K., Nazira I; and Dil
Aghá. ."
The findings recorded against Pradeep Rana are as follows:
"531. The allegation of abetment and connivance has been
made against Preventive Officer Pradeep Rana, primarily
on the basis of statement dated 17.1.2001 of R.N. Zutshi and
dated 11.7.2001 tendered by Dil Agha under Section 108 of
the Customs Act, 1962 as also his frequent telephonic
conversations with Dil Agha. I find that in his statement
referred above, Dil Agha had pointedly mentioned the name
of Pradeep Rana as an important (khas) conduit of Mamoor
Khan along with, Zutshi and Reddy. R.N. Zutshi has accused
Pradep Rana of negotiations of money to be charged from
Mamoor Khan and carried out its distribution among
baggage officers. I have gone through the contents of Table
CUS.A.A.29/11 and connected matters Page 44
No.7 of show cause notice and I find that there were 19
telephonic interactions between telephone admittedly
belonging to Pradeep Rana and Dil Agha between 7th July,
2000 and 28th August, 2000. The allegation of bribery has
been further reiterated by Dil Agha in his statement dated
25.7.2001. The DRI have also brought out on page 56 to 58
certain instances wherein he has prepared the adjudication
proposal on different dates indicating lesser quantity of
textiles than what was actually manifested and brought in by
the passengers. I have examined the written defence dated
19th Sept., 2006 filed on behalf of the noticee. The main
argument raised in defence is that in respect of 3 dates when
Pradeep Rana is accused of abetment, no goods were
seized; that the details in Table No. 11 do not indicate of the
conversations took place during the alleged telephone calls;
that there is no evidence that goods were silk fabrics; that
the quantification had not been carried out correctly; that
the reliance on Manifest for working out quantity was not
accurate; that the value was not correctly determined. The
Advocate of the noticee, A.K. Bhasin appeared for personal
hearing on 12th Jan 2007 and in addition to the oral
averments also submitted 13 additional points for
consideration in writing which are duly considered. The
noticee Pradeep Rana requested for further time for making
more submissions vide his letter dated 1st Feb., 2007. Even
though six months have elapsed, no further submissions
have been received on his behalf.
532. Ï now proceed to evaluate the evidence available
against the noticee Pradeep Rana in the light of defence
offered by him. It is a matter of record that Dil Agha has
repeatedly named Pradeep Rana in his incriminating
statement. I observe that statement of Dil Agha and R.N.
Zutshi by itself might not really be enough to hold Pradeep
Rana liable for penal action but as it happens, there is
corroborative evidence in the form of frequent telephonic
conversations between Pradeep Rana and Dil Agha.
Pradeep Rana has not denied these conversations in his
statement dated 23rd Jan, 2001 and 18th July, 2001 . He has
tried to give justification for these calls which is far from
CUS.A.A.29/11 and connected matters Page 45
convincing or acceptable. It is a matter of record that Olga
K. and Nazira had arrived on 11/12th August, 2000 with 10
pieces of manifested baggage weighing 1,400 kgs which
translated into 24,668 mtrs. However, they only declared
1,000 metres each on arrival and Pradeep Rana prepared
the adjudication proposal in respect of Olga K. vide A.O.
No. 18407 dated 12th August, 2000. It is a matter of record
that Olga K. was a frequent passenger. Once she has
reported to his counter, it is obvious that Pradeep Rana
should have taken extra care to make sure that she brings
out her entire baggage to the table and then it is examined
in minute detail. Such a thing obviously did not happen. I
have observed elsewhere in this order that this lapse by
itself has not been recognized in the show cause notice as
amounting to abetment and connivance. However, what
distinguishes the action of Pradeep Rana from others is the
fact that on these different dates, there were as many as 4
telephone interactions between Tel. No 9811065897of Dil
Agha and No. 9811112245 of Pradeep Rana. While the flight
No. HY-429, arrived at 3.39 AM, the telephonic contact took
place at 1.36 AM, 4.44 AM, 4.46 AM and 8.59 AM while
Pradeep Rana was on duty and was handling the
adjudication proposal in respect of Olga K. Keeping in view
the totality of the circumstances and the timing of calls
exchanged between Dil Agha and Pradeep Rena on one
hand and Dil Agha and Olga K. on the other hand (at 3.39
AM, 4.42AM, 4.54 AM, 5.42AM, 6.47 AM & 7.10 AM, I
observe that this is not a simple case of ineptitute or
carelessness but of active connivance and abetment which
lead to preparation of such an adjudication proposal. This
altogether with the statement of Dil Agha and frequent
exchange of telephonic calls with Dil Agua leads to me to
unavoidable conclusion that the charge of abetment,
conapiracy, and connivance is proved against Pradeep
Rana and he is liable for penal action under Section 112 of
the Customs Act, 1962."
Likewise, the findings regarding Yashpal were as follows:
"447. The charges of collusion, abetment and conspiracy
CUS.A.A.29/11 and connected matters Page 46
against Yashpal is proposed to be established on the basis of
following two pieces of evidence:
(a) R .N. Zutshi in his statement dated 17th July 2001 has
described that Yashpal used to speak to Protocol
Superintendents and Officers regarding smooth clearance of
the textiles brought in on behalf of Mamoor Khan.
(b) The computer print outs show that between 1.4.2000 to
25.7.2000, Yashpal spoke to Mamoor Khan 34 times on
telephone while once he was found to be in contact with Dil
Agha and twice with Shahlo A.
448. The noticee has filed his written reply vide his letter
dated NIL received in the Office of the Comnissioner of
Customs, New Custom House, New Delhi, on 17th March,
2005 . He made further written submissions at the time of
hearing on 4th Jan.,2007. While denying the charges in toto,
the main arguments advanced by the noticee were that he
could not be said to have abetted irregular clearance in the
light of order of Supreme Court in the case of Shriram Vs.
UOI; that the statement of R.N. Zutshi on the basis of which
the charges were made had been retracted by Zutshi; that
Shahlo on the relevant date had no excess baggage as
conveyed by Krygystan Airlines vide their letter dated 26th
April, 2001 which was imputed to be carrying 1,220 kgs. of
baggage; that the methodology adopted for working out the
meterage and value of textiles supposedly brought by Shahlo
A. was not correct. The noticee was granted personal
hearing on 4th Jan., 2007wherein it was contended that:
(i) Offence committed by Customs officers during discharge
of their official duties ought to be dealt with in accordance
with the provisions of Section 136 of the Customs Act, 1962
(ii) Disembarkation Card had not been made
available
(iii) The passenger manifest submitted by the Airlines did
not contain details retarding baggage carried by passenger
(iii) That on 10 April, 2000, the noticee was posted on Hand
X-Ray Machine (EXL Right Side) as is evident from the copy
CUS.A.A.29/11 and connected matters Page 47
of duty Róster produced by him.
449. I have examined the evidence against the noticee as
well as the argument advanced by him in defence. I find that
Zutshi had categorically named him in his statement dated
17 Jan., 2001 and the issue regarding retraction of the same
has already been discussed in paras above. I further find
that in his entire defence, the noticee has not given any
reasonab1e or plausible explanation regarding frequent
telephonic conversation with Mamoor Khán. In his
statement recorded on 19.1.2001, he has not challenged the
fact that he was in touch with the telephone numbers which
were found to be belonging to Mamoor Khan, DilAgha and
Shahlo A. He tried to explain this as conversation with an
informer which is not a plausible explanation under the
circumstances of the case. No suitable defence has come
forth either in writing at the time of personal hearing. So far
as his argument that his case should be dealt with under
Section 136 of the Customs Act, 1962 is concerned,
conspiring to clear commercial baggage while causing loss
to exchequer by no stretch of imagination could be said to
be a part of the Official duties of Customs officers. The
provisions of Section 136 are attracted only where the
offence is committed during discharge of official duties. This
provision of the case laws cited, therefore, has no
application in the present case. The other arguments of the
noticee have already been dealt with in foregoing paras.
450. In the light of circumstances of the case and evidence
as discussed above, I hold that charges of abetment,
collusion and conspiracy against Yashpal are established
and he is liable for penal action under Section 112 of the
Customs Act, 1962.
*********************
****************
463. So far as the evidence against Yashpal is concerned,
what is discussed above with regard to 10th April, 2000
holds good for this date also. In addition to the general
arguments taken in defence, for this particular date, Yashpal
CUS.A.A.29/11 and connected matters Page 48
has taken a plea that he was on duty on Baggage X-ray of
Belt No.6 and he has placed reliance on Duty Roster
available as RUD No.E42. He further contended that the
name of Shahlo A. did not figure in the passenger manifest
of Flight No.545 whereas another passenger Nazira I. had
cleared 800 mtrs. of textile after adjudication vide A.O. No.
20317. On perusal of manifest dated 15th May, 2000 of
Flight No. K2545 from Bishkek to Delhi, I find that the
name of Shahlo is mentioned at Sl.No.44, though it is
written in a manner that surname has been written first. The
plea taken by the noticee is, therefore, not valid.
464. 1 have examined the additional arguments of Yashpal
in respect of 15th May, 2000. He has conveniently taken a
stand that he was posted on Baggage X-ray Belt but has not
been able to cite any reason which could justify his speaking
with Mamoor Khan at 9.52 AM and 12.32 PM. As already
discussed, Mamoor Khan with his cellphone was present at
the International Airport during this time. In the light of
various pieces of evidence discussed in paragraph above
and after taking into account additional arguments in
defence as well as evidence on 15.5.2000, I have no
hesitation in holding that the charges of connivance,
abetment and conspiracy stand proved against Yashpal and
that he is liable for penal action under Section 1 12 of the
Customs Act, 1962."
The findings against Ajay Yadav are as follows:
"441. The charge of abetment against Ajay Yadav has been
made on the basis of statement tendered by R.N. Zutshi. In
his statement dated 17.1.2001, Zutshi has stated that Ajay
Yadav was involved in the negotiating and deciding the
money to be charged from Mamoor Khan and also in the
distribution of the same amongst the baggage officers in
different shifts. Further evidence is in the form of A.O. No.
17730 dated 27.2.2000 in which Olga K. was allowed to
clear her baggage by adjudicatating 800 mtrs,, though she
was carrying baggage weighing 1530 kgs. which works
CUS.A.A.29/11 and connected matters Page 49
out to 26,958.60 mtrs. The defence offered by the notice is
primarily on the same lines as done by V.K. Khurana and
various aspects of the same have been anaylized in the
preceding paragraphs. The noticee appeared for personal
hearing on 20th Dec., 2006 along with his Advocate R.L.
Lamba and in addition to the written submissions, he took
the plea that the statement of R.N . Zutshi had been
retracted; that the disembarkation card had not been made
available; that the passenger manifest as given in the
Customs Manual as Customs SI. No.70 did not have the
column for description/quantity of baggage. He also
requested for cross examination of 20 persons. All these
aspects have been commented upon and analyzed elsewhere.
442. On analyzing the evidence available against Ajay
Yadav vis-à-vis defence offered by him, I find that the
primary evidence is in the form of statement of R.N. Zutshi. I
further observe that there is no allegation against Ajay
Yadav that he was in touch with any other noticee like Dil
Agha, Mamoor Khan, Olga K., Nazira I. etc. on mobile or
landline telephone. There is no charge that he spoke to
concerned passengers on the their arrival . There is,
however, the issue of forwarding the adjudication proposal
prepared by VK. Khurana to the shift Dy. Commissioner.
Ajay Yadav in his statement dated 16th Feb., 2001 has
admitted having handled this adjudication proposal but in
his defence, he has stated that the job of examination and
determination of quantity/value of baggage was performed
by V.K. Khurana and he had only forwarded the
adjudication proposal to the shift Dy. Commissioner.
443 It is, thus seen that apart from the statement of Zutshi,
there is this AO which points towards complicity of Ajay
Yadav in the clearance of non-bonafide baggage. Though
the quantification/ measurement of baggage in the first
instance is the duty of Baggage Officer, which in this case
was V.K. Khurana, it does not absolve the Supdt. of his
responsibility. In fact, when a passenger reports to Red
Channel counter, he first makes a declaration to the Supdt.
who deputes one of the Inspectors working under him to
CUS.A.A.29/11 and connected matters Page 50
examine the baggage. In this case, at the time of
declaration, the fact that Olga K. was a frequent passenger
would have immediately come to the notice of Ajay Yadav.
Under these circumstances, it was expected of him to ensure
that the baggage of Olga K. was examined in minute detail
which obviously was not done. This is a major lapse on his
part which gives rise to the presumption of abetment and
connivance. No valid or acceptable explanation has
comeforth on behalf of Ajay Yadav as to how the baggage of
a regular carrier could escape proper examination,
inventorisation and adjudication of only 800 mtrs. out of the
total of 26,958.60 mtrs. This major lapse/omission coupled
with the statement of R.N. Zutshi form sufficient basis for
arriving at the conclusion of abetment and collusion on the
part of Ajay Yadav and I hold him liable for penal action
under Section 112(a) of the Customs Act,1962. "
The findings against the last appellant, Anil Madan, are as follows:
"508..................The show cause notice has also named Anil
Madan and Vinod Kumar (Kain) and Kamal Suman, Air
Çustoms Officers as a co-noticee for abetment. It has been
mentioned in Table No. 13 (page 157 of show cause notice)
that Anil Madan was named by RN Zutshi for participating
and negotiating the money to be charged from Mamoor
Khan during the period July, 2000. Zutshi has also alleged
that Anil Madan distributed the shares of baggage officers
in April to July, 2000. Further evidence against Anil Madan
is in the form of AO No.14262 wherein passenger
Merculova was allowed to clear her baggage after
adjudication of only 800 mtrs. of textiles, though shé had
come in with 14 pieces of baggage weighing 1,500 kgs.
which translated into 26,430 mtrs.
509. In his defence, Anil Madan has not denied dealing with
this adjudication. I find that he has confirmed in his
voluntary statement dated 6.2.2001 that he was on duty on
24.7.2000 an AO No. 14262 which accounted for only 800
metres of baggage brought by Merkulova though she was
actually carrying 26430 mtrs. had been put up by BC
CUS.A.A.29/11 and connected matters Page 51
Gogna through him. One look at the passport of Merculova
would be enough for any Customs officer to conclude that
she was a regular and non-bona fìde passenger. There is
documentary evidence that she was on this day was
carrying 1,500 kgs. of excess baggage but Anil Madan has
failed in his duty to ensure proper inventorisation of her
baggage. This coupled with the statement of R.N. Zutshi is
adequate to conclude that there was an element of
connivance in clearance of such heavy baggage and I hold
the noticee liable for penal action under Section 112 (a) of
the Customs Act, 1962...."
35. In the light of the above discussion, it is apparent that the
Commissioner did not go by only the statement of R.N. Zutshi to
hold the other appellants guilty; he had a lot of other corroborative
materials to support his findings. It is, therefore, held that the
Appellants' submissions that the charge of abetment could not have
been made against them for past transactions in the absence of the
goods, or that many of them were not involved or present at the
Airport when the actual lone consignment was seized in August
2000, are meritless. Questions of law (a) and (c) as framed are
answered against the appellants and in favour of the revenue.
Re Question (b): Violation of principles of natural justice due to denial
of cross examination
36. All the appellants had argued that the Commissioner erred in his
findings inasmuch, as, no opportunity was given to them to cross
examine any of the witnesses' whose depositions were relied upon.
The Commissioner stated that several appellants had sought for cross
examination of R.N. Zutshi and of Sh. U.K. Mishra, SIO of DRI. The
CUS.A.A.29/11 and connected matters Page 52
Commissioner held that:
"... all the documents on which reliance has been placed in
making the allegations against different noticees have been
supplied to them. In this case, I find that if the request for
cross-examination is acceded to, then the proceedings will
have to continue for a long period of time. The SCN was
issued as early as in 21.8.2001 and over 6 years have
elapsed since the proceedings began. Under the
circumstances, prolonging it as a result of numerous
requests of cross examination would not only hurt the
interest of justice but also the interest of noticees
themselves. The decision of the Hon'ble SC in the case of
Kanungo and Co. V. Collector of Customs, Calcutta
reported as 1983 (13) ELT 1486 (SC) covers the issue under
consideration. In the latest case of Jagdish Shankar Trivedi
v. CC, Kanpur, the Principal Bench of CESTAT at New
Delhi has also relied upon this judgment and ruled that
cross examination cannot be claimed as a matter of right
under Section 124 of Customs Act. Once the material relied
upon against the noticees referred in the SCN have been
provided, denial of cross examination is not violative of the
principles of natural justice."
In Kanungo (supra) the Supreme Court, through a three judge Bench
decision held that:
"The complaint of the appellant now is that all the persons
from whom enquiries were alleged to have been made by the
authorities should have been produced to enable it to
cross-examine them. In our-opinion, the principles of
natural justice do not require that in matters like this the
persons who have given information should be examined in
the presence of the appellant or should be allowed to be
cross-examined by them on the statements made before the
Customs Authorities. Accordingly we hold that there is no
force in the third contention of the appellant."
A similar view had been expressed earlier in Issardas Daulat Ram and
ors. v. The Union of India & Ors. [1962] Supp. (1) S.C.R. 355. It was
CUS.A.A.29/11 and connected matters Page 53
also followed in Collector of Customs, Madras & Ors, vs.
D.Bhoormul (1974) 2 SCC 544.
37. Bhoormul (supra) is also authority for the view that the law
does not insist upon an impossible threshold of proof to establish
allegations in Customs proceedings and that if on probabilities the
statutory authorities can establish evasion, the legal standards are
adequately met with. Here, each of the appellants were implicated for
their complicity not on the basis of solitary evidence only, such as
confessional statement of R.N. Zutshi, but also other materials: phone
call records during the various past occasions when the passenger
couriers had landed; the presence and role of the concerned appellants
in helping the clearance of consignments, corroboration through
statement of others, etc. The chain of circumstances to prove the
allegations they had to answer, therefore, had been explained. The
appellants, significantly did not seek cross examination for over 5
years, though they were aware that the statements were to be used
during the proceedings that had been put to them in the SCNs.
Furthermore, they had also not given any convincing or reasonable
explanation for the phone calls received from Mamoor Khan, Dil
Agha, Olga, etc. In the circumstances, the findings of the lower
authorities that they were not prejudiced, and that principles of natural
justice were not violated, cannot be interfered with.
Question No. (d) Did the CESTAT err in its findings regarding the
method adopted in arriving at the average weight to assess
liability and the absence of essential documents like the passenger
declarations
38. All the appellants had objected to the methodology adopted by
CUS.A.A.29/11 and connected matters Page 54
the Commissioner to arrive at the weight, for the purpose of
calculating penalty. The Commissioner observed that the weight
declared for the material varied drastically in the several
consignments. He adopted a method of averaging, as is evident from
the following discussion:
"400.......................The Show Cause Notice proposes weight
metre ratio of 17.62 i.e. 17.62 metres per kg. whereas the
noticees have advanced the argument that it was purely
based on presumptions and guess work and therefore not
fair and reasonable. It may be noted that this dispute has
arisen due to the fact that firstly, the goods are not available
for examination and secondly there is no material evidence
on record to show the correlation between the weight of
various qualities of the silk fabrics brought in on different
dates and the respective meters per kg. thereof except the
record of Airlines showing only the excess baggage weight
in Kgs. and AOs showing only the meters and not the Kgs.
In view of the foregoing position, although the accurate
meters of silk fabrics can in no way be ascertained but we
can reach the proximity thereof. Under the circumstances,
where manipulations of quantities of silk fabrics,
suppressions and misdeclarations, both weight wise and
meter-wise, have been alleged to be rampant during the
material period, I consider it important to devise the most
adaptable and logical methodology to arrive at the
approximation of meter-wise quantity deducing the same
from the baggage weights reported by Airlines.
401. On study of weight-metre ratios presented by
various AOs and encapsulated in Table-3 of the notice, I
note that except the two ratios i.e. 19.54 and 17.62 in
respect of 19.6.2000 and 28.8.2000, the other ratios are
immensely eccentric, irrational and unbelievable. It is
inconvincible that one k.g. of any quality of silk fabrics can
contain just 0.52 mtrs or 1.42 mtrs or 2.2 mtrs. All such
ratios range between absurd 0.52 mtrs to 7.28 mtrs per kg.
These ratios thus have to be excluded from consideration.
CUS.A.A.29/11 and connected matters Page 55
402. The above weight-metres ratios need to be
understood in the right perspective. Indubitably, except for
the dates 19.6.2000 and 28.8.2000, all the remaining ratios,
being illogical, are out of place. I therefore focus on the
position on these two dates. As regards 28.8.2000, the goods
- silk fabrics in six varieties based on gsm [grams per
square metre] i.e. 36, 50.1, 45.7, 52.1, 69 and 73.5 gsm are
available. The requisite details of these goods i.e.
variety-wise total weight in kgs, total metres, average
metres per kg and all other relevant information as
exhibited by table 2, 3 and 4 are also available. In this
context, I find that the proposed weight metre ratio of 17.62
has been computed on the average basis of the above
elements of the silk fabrics physically available as on date.
On the other side, a perusal of the weight exhibited by the
Airlines and the metres assessed in AOs relating to
19.6.2000 brings forth that even on this date voluminous
baggage of silk fabrics containing different varieties was
brought in by Olga Kozireva, Isamu KM, Merkulova,
Shakista. K. and Vetchinkina T. As against the total weight
2333 kgs as per records of Airlines and as detailed in para
74 of the notice, the total meters assessed in AOs are seen to
be 45,600 mtrs which seem consistent, logical and reliable.
The average metres per kg i.e. weight metre ratio here
works out to 19.54. As detailed in para 74(d) of the notice,
in respect of Merkulova and Shakista K, 424 kgs of a variety
of silk fabrics were assessed to 7000 mtrs on 19.6.2000
producing average of 16.50 mtrs per kg. It is fairly
comparable to a variety of silk fabrics having 16.79 mtrs
per kg and 45.7 gsm brought in on 28.8.2000. Similarly, 229
kgs of a variety of silk fabrics relating to Olga Kozireva
were assessed to 5000 mtrs. leading to average of 21.83
metres per kg. This average is again rationally comparable
to another variety of silk fabrics with 36 gsm having
average of 21.81 mtrs per kg brought in on 28.8.2000. A
conjoint study of the baggage weights on 19.6.2000 and
28.8.2000 as reported by Airlines through manifests or
letters and the metres assessed by customs leads me to
positive finding that these metres are reliable and rationally
co-relatable to the manifested/reported weights of baggage
CUS.A.A.29/11 and connected matters Page 56
brought in by the relevant passengers. Having regard to the
Test Reports of CRCL on all the six varieties of silk fabrics
seized on 28.8.2000, market enquiries conducted thereon,
availability of the goods and the wider details thereof as
summarized in the above said Tables, I find the weight
metres ratio of 17.62, which is duly supported by the above
varieties of silk fabrics brought on 19.6.2000, as more
authentic, reliable and legally maintainable for the purpose
of ascertainment of metres per kg for previous clearances.
403. In view of the reasons stated hereinabove, I come to
the conclusion that contentions canvassed by the noticees on
weight metre ratio are devoid of substance and thus not
sustainable. I accept the proposed ratio of 17.62 as the true
representative weight - metre ratio fairly and squarely
applicable to the unassessed silk fabrics brought in on 24
occasions during 17.8.97 to 21.8.2000."
As is evident from the above extract, the weights per metre varied in
past instances from 16.79 metre per kg; 16.50 mtrs per kg; 19.54
metre per kg, to 21.81 metre per kg and 21.83 metre per kg.
39. This Court also notices that the Commissioner did not rely only
on the weight metre ratio, but also considered another criterion: the
baggage weight on the basis of vehicle capacity on five dates. For this
purpose, he took up the issue date-wise, noticing that on 10.04.2000,
22.05.2000 and 14.08.2000, the baggage weight of group passengers,
as reported by Airlines was 'Zero' but an MMV Canter with 3750 kg
capacity of a transporter was used on all the three occasions. On
several occasions, the group passengers had hired commercial vehicle
of lower capacity, i.e. Tata 407 with loading capacity of 2200 kgs
when the baggage weight was not that substantial. The passengers had
then chosen to go in for higher capacity vehicle each time. It was held
that there was no other reason for hiring a commercial vehicle MMV
CUS.A.A.29/11 and connected matters Page 57
Canter of 3750 kgs instead of Tata 407 of 2200 kgs except to carry
such volume and weight of baggage as could not be carried in lower
capacity vehicle but was accommodable in a higher capacity vehicle.
The Commissioner proposed a baggage weight of 1220 kgs on each of
the three occasions on the basis of the lowest manifested weight when
single MMV Canter was used instead of proposing some higher
average figure. For two other dates, i.e. 17.7.2000 and 21.8.2000 when
the manifested/reported weights were 1235 kgs and 1000 kgs
respectively, two trucks - MMV canter of 3750 kgs capacity were
used for goods transportation. On 28.8.2000 when the baggage weight
was 4211.7 kgs, the internal record of transporter and other evidence
on record showed that two MMV canters of 3750 kgs capacity were
hired. An inference was drawn from this instance that when the
baggage weight was touching 2000 kgs or beyond it, one MMV
Canter of 3350 kgs was preferred to Tata 407 of 2200 kgs capacity. On
28.8.2000, to carry 4211.7 kgs, two trucks of 3750 kgs capacity were
hired and they reached Airport but could not be used due to seizure. It
was, therefore, concluded that on each of the dates, the weight of the
baggage was around 4000 kgs when two trucks of 3750 kgs capacity
were hired on each occasion. The investigation calculated the baggage
weight on the lowest and safest side as 2364 kgs on 17.7.2000 and
1914 kgs on 21.8.2000 and proposed the same for assessment. The
weights were proportionately worked out on the basis of the ratio of
actual weight and recorded weight as on 28.8.2000 i.e. 1.9144 times
the recorded weight. Here the figure of 2364 kgs was computed by
multiplying the recorded weight of 1235 kgs by 1.9144 and the figure
of 1914 kgs has been worked out by multiplying the recorded weight
CUS.A.A.29/11 and connected matters Page 58
of 1000 kgs by 1.9144. This clearly shows application of mind to the
material available. The CESTAT too had occasion to consider these
findings. Besides stating that the figures were arbitrarily worked out,
the appellants were unable to show any intrinsic inaccuracy, given that
the past transactions were noticed; wherever the Green Channel was
used, the Commissioner endeavored to co-relate the quantities brought
in clandestinely with the truck weight relative to that date. The Court
does not find any infirmity with this approach warranting interference
with a pure finding of fact.
40. Furthermore, the Court notices that the DRI, during
investigations, had obtained passenger manifest copies from
Krygystan Airlines to determine the quantity of silk fabrics brought in
on different dates, by various passengers. Many noticees had
questioned this, alleging firstly that Customs Form Serial No.70 in
Customs Manual does not indicate any column requiring disclosure of
the number of packages or weight of baggage carried by a passenger;
secondly that a copy of passenger manifest relied upon by DRI was
not made available to the Customs officers at the time of clearance. It
was argued that as to what was the quantity or description of goods
brought in by a passenger, the manifest relied upon by the DRI could
not be inferred. The Commissioner dealt with this aspect in paras
396-397 of his order. Noticing that while the form did not require
disclosure, he stated that -
"A passenger manifest is created in several formats and
filed with different agencies by the Airlines depending upon
what are the requirements indicated by that particular
authority. If the Airlines copy of the passenger manifest
CUS.A.A.29/11 and connected matters Page 59
does have the details of number of packages and weight of
baggage booked by each passenger, it does not become
wrong or invalid simply because these details are not
required under Customs Form No.70. It is obviously a
pre-existing system in the Airlines to record the number and
weight of packages booked by individual passenger under
the passenger manifest and in fact it can be a very
legitimate and conclusive way of ascertaining whether a
passenger carried any excess baggage booked on a
particular date or not. It does not get invalidated simply
because it does not tally with Customs Form No.70."
Dealing with the weight determined by multiplying 1.9144 on certain
occasions, the Commissioner noted that on 28.08.2000, the total
excess baggage booked in the name of Olga K. was 2,200 Kgs. which
on actual weighment was found to be 4,211.70 Kgs. The internal
inquiry conducted by the Airlines, found that their staff at Bishkek and
other places were hand in glove with passengers in recording lesser
excess weight of baggage than actual in return of illegal gratification
from passengers and that several officials of Krygystan Airlines in
Bishkek were sacked because of their involvement in not recording the
weight of excess baggage to benefit the passengers. These facts were
confirmed by the statement of Krygystan Airlines Manager, Shri H.S.
Dugal recorded on 3.8.2001 that: "We have taken the matter up with
H.Q. and as informed earlier to Customs vide our letter dated
27.12.2000, this matter has been investigated and services of staff
responsible including that of Mr. Dusheev, Head of Manas Airport,
has been suspended." The Commissioner therefore held that there
was no infirmity in arriving at the actual weight of excess baggage
brought in, based upon the position of 28.8.2000 and its application
for part clearances, based upon practical logic. Acknowledging a
CUS.A.A.29/11 and connected matters Page 60
margin for accuracy, it was held that since the issue concerned past
clearances for which no other documents were available, it was held
that it is a reasonable and acceptable methodology and the results
thereof cannot be far from truth, though they cannot be absolutely
exact. Again, we see no infirmity or question of law with this
approach, warranting interference.
41. As far as the question of non-service of notice upon the main
culprits is concerned, the Commissioner rendered his findings in Para
418, holding that some of those foreign nationals could not be
personally served; yet notice was issued and published in a known
manner. The Appellants were, however issued notice; there was clear
evidence of their culpability. Therefore, the Customs authorities were
entitled to proceed and impose the penalties and make adverse orders.
42. In view of the above findings, this Court holds that the appeals
are liable to fail; they are accordingly dismissed, without any order as
to costs.
S. RAVINDRA BHAT
(JUDGE)
VIPIN SANGHI
(JUDGE)
FEBRUARY 27, 2015
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