Delhi High Court
Mahender Jain vs The Commissioner Of Customs ... on 20 March, 2015
$~5 to 11
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: March 20,2015
+ CUSAA 24/2014
MAHENDER JAIN ..... Appellant
versus
THE COMMISSIONER OF CUSTOMS (IMPORT AND
GENERAL) ..... Respondent
+ CUSAA 25/2014
GOPAL DOKANIA ..... Appellant
versus
THE COMMISSIONER OF CUSTOMS ( IMPORT
ANDGENERAL) ..... Respondent
+ CUSAA 26/2014
ANUP SINGH ..... Appellant
versus
THE COMMISSIONER OF CUSTOMS (IMPORT AND
GENERAL), ..... Respondent
+ CUSAA 27/2014
ARUN DOKANIA ..... Appellant
versus
THE COMMISSIONER OF CUSTOMS (IMPORT AND
GENERAL), ..... Respondent
+ CUSAA 28/2014
SANJEEV JAIN ..... Appellant
versus
THE COMMISSIONER OF CUSTOMS (IMPORT AND
GENERAL) ..... Respondent
+ CUSAA 29/2014
NITESH KUMAR KEDIA ..... Appellant
versus
THE COMMISSIONER OF CUSTOMS (IMPORT AND
GENERAL), ..... Respondent
+ CUSAA 30/2014
ANUDEEP SINGH ..... Appellant
versus
THE COMMISSIONER OF CUSTOMS (IMPORT AND
GENERAL) ..... Respondent
Presence : Mr. Shailendra Bhardwaj and Mrs. Aroma S Bhardwaj, Advs.
for the appellant
Mr. Satish Kumar, sr. standing counsel for the respondent
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.K.GAUBA
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
1. In these appeals the grievance articulated is in respect of order dated
22.10.2013. It appears that the previous order of the Customs, Excise and
Service Tax Appellate Tribunal (hereinafter referred to as "CESTAT")
dated 25.11.2011 was set aside (to the extent of the appeals filed by these
assessees) in CUSAA No.8/2011 and connected cases on 25.4.2012.
2. The Court had directed re-examination of the contentions and issues
urged by the present appellants holding that the reasoning contained in para
27 of the CESTAT's order was insufficient. In these circumstances the
CESTAT considered the contentions urged on behalf of the present
appellants. There was a divergence of opinion between the two members of
CESTAT which led to a reference to a third member. The third member
agreed with the view of the member who held that the appeals required
dismissal. The CESTAT's majority orders modified the direction vis-à-vis
penalty reducing it from `5 lakhs to `2.20 lakhs in each case.
3. On 28.8.2000 Olga Kozireva, a Uzbek National, was intercepted at
Delhi airport, attending to smuggle a large quantity of prohibited Chinese
silk. Her statement under Section 108 led the agencies unraveling a network
of smuggling which had in the past managed to ensure that similar large
quantities of article were smuggled in on several occasions. During the
course of investigation statements of those suspected, including Olga
Kozireva and other foreign nationals Dil Agha, Mamoor Khan, Nazira,
Valichko were recorded. They were of diverse nationalities i.e. from
Kazakhistan and Afghanistan. On the basis of these statements, the
statements of certain custom officers too were recorded. The investigations
led the summoning of call details from various service providers; besides,
the statements of transporters and shopkeepers in Chandni Chowk and other
places were recorded eventually on 9.1.2000. Eventually, show cause
notices were inter alia issued on 23.8.2001 to the present appellants-all of
them are textile traders in Chandni Chowk. The statements of these
appellants too had been recorded in the course of investigations. The
appellants replied denying various allegations.
4. After considering the submissions of the parties-which included those
on behalf of present appellants/traders, the adjudicating Commissioner on
27.9.2007 imposed penalty upon each of them to the tune of `5 lakhs.
Whilst doing so, the Commissioner in a 317 page order on 27.9.2007
exhaustively analysed the materials available in respect of each noticee.
The noticees as mentioned earlier were not only the offenders i.e. smugglers
of the prohibited articles, but also those part of the conspiracy, such as
customs officers and the receivers/traders. The Commissioner discussed the
statements, the call detail records in respect of each of the noticees and in
his adjudication order, made a detailed analysis in charts and tables for the
sake of convenience to link the role of each of the noticees. Some noticees
were exonerated whereas in respect of the others guilt was established. The
findings in respect of the present appellants were summarized as follows :
"546. The show cause notice has also been issued to 8 persons
(Noticee No. 26 to 33) alleging that these noticees were
involved in knowingly acquiring, possession, dealing or selling
of smuggled silk textiles rendering them liable for penal action
under Section 112(b) of the Customs Act, 1962. These 8
persons are, namely, Nitish Kedia @ Bunty, Anup Singh, Khem
Singh, Arun Dokania, Gopal Dokania, Mahender Jain, Sanjiv
Jain & Anudeep Singh, all traders of textiles operating in
Chandni Chowk, Nai Sarak & Model Town areas. The evidence
against these noticees is analyzed as below:
(i) Abdul Qahar, an Afghan National, who used to buy
silk textiles from them and carrying it to Afghanistan
has testified in his statement dated 30.11.2000 against
the traders named above. One of the noticees, Anudeep
Singh has admitted in his statement dated 8.12.2000
that he purchased imported silk fabrics from one
Afghan, who introduced himself as Khan.
(ii) All of these noticees have also been in touch with
Mamoor Khan on telephone.
(iii) Gopal Prasad Dokania in his statement dated 5th
Jan., 2001 has admitted that he knew Mamoor Khan
and that he purchased silk fabrics from him.
(iv) Nitish Kedia in his statement recorded on 5th Jan.,
2001 has admitted knowing Mamoor Khan but he
denied that he had purchased silk fabrics from Mamoor
Khan.
(v) Anup Singh in his statement dated 15th June, 2001
admitted knowing Mamoor Khan and Dil Agha but did
not deal with it in purchasing of silk fabrics.
(vi) Mahender Jain in his statements dated 19th Jan.,
2001 & 1st Feb., 2001 admitted to knowing Mamoor
Khan but denied having any dealing related to silk
fabrics. Statement of Khem Singh was also recorded but
no material facts emerged from him.
547. When we proceed to evaluate the above evidence, I find
that Abdul Qahar has stated that he was purchasing silk fabrics
from most of the above noticees which was exported to
Afghanistan through Kultar Exports. However, most of the
noticees while admitting to knowing Mamoor Khan and having
some small dealing with him but have denied any knowledge
about the passenger like Olga K., or smuggled nature of the
imported goods. A perusal of Section 112(b) of the Customs
Act, 1962 lays down that possession, removal, keeping, selling,
purchasing etc. of imported goods is punishable under Section
112(b) only if the person dealing with such goods knows or has
reason to believe that such goods are liable for confiscation
under Section 111 of the Act ibid.
548. A perusal of above provision shows that the crux of the
matter is whether the noticee had the knowledge that he is
involved in possessing, removing, keeping, selling, purchasing,
etc. of imported goods that are liable for confiscation under
Section 111 of the Customs Act, 1962. The traders have
explicity denied that they had any knowledge in this regard.
However, on the other hand, the testimony of Abdul Qahar who
was one of the points of contact for delivery of contraband silk
textiles brought in by Olga K. and her group to these traders is
clear and unambiguous that the traders were aware of the
illegal activities of Olga K. and her associates.
Let us now examine whether any evidence exist to support this
testimony of Abdul Qahar. In this regard, the examination and
evaluation of the telephonic conversation records as available
in the Table No.10 & 11 may shed some light on the situation.
For example, it can be seen that all the 8 noticees were
regularly in touch with Mamoor Khan and Dil Agha on their
Mobile No.9811135921 and 9811065897 respectively. The
number of calls exchanged is indeed very large and runs into
hundred of calls, if taken together as evident from Table No.10.
The noticees have not denied these telephonic conversations
and they have indeed in many cases even accepted dealing with
Khan for purchase of silk textiles. The significance of Table
No.11 which shows that these traders were in touch with
Mamoor Khan, Dil Agha and passengers on the date when they
actually arrived in India with their heavy baggage. For
example, when Olga K. and Shakista K. arrived by HY-151 at
12.51 PM on 27th Feb., 2000, 7 conversations took place
between Sanjeev Jain and Mamoor Khan between 11.06 AM
and 5.43 PM. Mamoor Khan also spoke to Anoop Khem Singh
at 11.30 AM. On the same date, Mamoor Khan and Nitish
Kedia spoke twice with each whereas Mahender Jain and
Mamoor Khan spoke thrice. Again Mamoor Khan also spoke to
Anudeep Singh atleast once on ·this day. The next ·visit of
Shahlo A. is shown on 10th April, 2000 at 9.19 AM and on the
same date the records of telephonic conversation between
Mamoor Khan on one hand and Mahender Jain, Anudeep
Singh, Gopal Dokania and Nitish Kedia are also well
documented. This list is only illustrative in nature and if all
details are reproduced, it would be quite exhaustive. A careful
perusal of this table shows that every time passengers came
with heavy baggage to IGI Airport at Delhi, frequent exchange
of calls took place between Mamoor Khan and Dil Agha on one
hand and all the traders who are noticees on the other. None of
the traders have offered any valid explanation of this uncanny
coincidence of timing. In my opinion, this evidence lend
coorboration (sic) and credence to the testimony of Abdul
Qahar and on the basis of this evidence, the element of
knowledge regarding the nature of goods can be easily imputed
to these noticees. It is true that the evidence in the form of
sale/purchase and other documents is not available;
circumstantial evidence is adequate to impute knowledge of the
illegal character of import of silk textiles which rendered them
liable for confiscation under Section 111 of the Customs Act,
1962. Under the circumstances, I hold that Noticees No. 26 to
33 are liable for penal action under Section 112(b) for having
knowingly involved themselves in possession/sale, purchase
etc. and the goods which they had knowledge, were liable to
confiscation under Section 111 of the Customs Act. 1962."
5. The appellants' grievance in respect of this order was considered by
the Tribunal in its remand order. The member judicial Shri D N Panda after
noticing the different categories of noticees who had approached the
CESTAT and the nature of evidence against each one of them, was of the
opinion that the Commissioner's order could not be faulted for the reason
that the present appellants were not afforded the right of cross-examination
of the witnesses who deposed against them; secondly, it concluded that the
statements of such witnesses, considered together with the other material
available in the form of details linking them with those involved in the
smuggling racket were sufficient to establish their guilt. The relevant
findings in this regard - which are similar, if not identical, are extracted
below :
"12.5 Revenue led cogent evidence against the deals of the
appellant which remained un-rebutted except technical pleas
raised on flimsy grounds. Evidence gathered by Revenue were
not more piece of papers but well founded and stand to reason.
Even statement recorded from Dil Agha whowas produced
before Metropolitan Magistrate on 16.07.2001 self speak
appellant's active role in abetment of disposal of the smuggled
goods knowing character thereof. He could not go out of the
mess of smuggling racket having frequent telephonic contacts
with them before and after of smuggled goods into India. His
proximity to the offence was so nearer he could not remain far
from the deal. He failed to state the reason why such contacts
were made by him and why racketeer contacted him by phone.
12.6 It would be appreciated that no would prefer to make
unwanted calls by his mobile to a stranger unless he knows the
person to whom he called frequently shall fulfill his object.
There was nothing presumption nor suspicion against the
appellant by learned Adjudicating Authority to deal him under
law. The appellant had thorough knowledge of the identity of
the persons with whom he dealt and contacted him as per Table
10 and 11 of the Adjudication order. He was quite aware of the
smuggling character of the goods supplied to him by Mamoor
Khan. The appellant and his brother were in conversation with
Mamoor Khan 259 times of call made and received from April
2000 till 28.8.2000. But he refused to identify the mobile
numbers.
12.7 It is not necessary that investigation should ask the
appellant leading question to defeat object of the Investigation
meant to bring the offender to the fold of law. What that was
relevant for the investigation were put to discover truth and
make the case of ·investigation successful. Appellant's plea that
other traders were not brought to the charge under law has no
basis in view of the law laid down by Hon'ble High Court of
Delhi in the case of Rajiv Kumar Sharrna V. CCe, Adjudication
- 2012 (276) ELT 321 (DEL) holding that negative equality
cannot be pleaded as a defence to any action which is in
accord with law and justified. It was also held in that judgment
that when the reason why telephonic conversation took place
remained unexplained that does establish and corroborate a
close relationship between: the parties to the calls. The
appellant failed to lead any cog.ent reason why calls were
made as appearing in Table 10 and 11 of the impugned orders.
12.8 The term "concerned" appearing in Section 112 of the
Act has been explained by Apex Court in the case of
Sachidananda Banerji V. Sitaram Agarwala - 1999 (110) ELT
292 (SC) laying down the law that this term is to be given wide
interpretation and even if a person has no physical connection
with the smuggled goods, he is liable if h€ is interested or"
consciously takes any steps to promote smuggling. In the
present case the appellant promoted, smuggling acquiring and
selling the smuggled goods consciously knowing origin of the
goods and the oblique motive. It has also been laid down in the
case of Bhagvvan Swarup and Others V. State of Maharashtra
-AIR 1965 SC 682 that an agreement between the conspirator
need not be directly provide the offence of conspiration which
can be established by either direct or circumstantial evidence.
There were reasonable grounds in the case of investigation to
appreciate malafide of the appellant being in association with
the smuggling racket and being familiar with the offending
goods. As has been held in the case of Radha Kishan Bhatia v.
UOI- 2004 (178) ELT 8 (SC) that it is immaterial what
meaning be attributed to the word 'concerned'. It can have the
meaning 'interested' and it may also have the meaning
"interested" and it may also have the meaning „involved‟ or
„engaged‟ or „mixed up‟.
12.9 Appellant's interest in the smuggled goods could not be
ruled out when credible statements of Abdul Qahar, Wali and
Dil Agha recorded by investigation discovered truth of the
deals. Their statements remained unrebutted, unwarranting
their cross-examination following the ratio laid down in the
case of Surjeet Singh Chbabra v. UOI - 1997 (89) ELT 646
(SC.). Similarly, as has been held in the case of K. T. M. S.
Mohammed and Others UOI - 1992 sec (3) 178 that merely
because a statement is retracted that· cannot be said to be
involuntary or unlawfully extracted. It is for the maker thereof
who alleges inducement, threat and promise etc to establish
that such improper means has been adapted to.
12.10 Appellant lost his right to gain from the plea of
retraction of statement by Abdul Qahar when truth of ill deal
was established by Investigation. It has been held in the case of
Naresh Sukhwani V. UOI - 1996 (83) ELT 258 (SC) that the
statement of a person in the status of co-accused obtained u/s
108 of the Customs Act, 1962 forms material evidence. When
Department has appraised the appellant of the results of
investigation as also the evidence on record which militates
against the appellant, burden of proof shifted to the appellant
from investigation which does not get discharged if the
appellant is not able to meet the inference arising therefrom
following the ratio laid down in the case of Kanungo &
Company V. CC- 1983 (13) ELT 1486 (SC). Similarly
investigation was not required to prove its case with
mathematical precision or accuracy and need not be required
to prove every link in the chain as has been held in the case of
CC. V. Bhoormul-AIR 1974 Sc 859. Accordingly failure of the
appellant to come out with clean hands implicated him to
charges rightly leveled against him in adjudication.
12.11 Penalty against the appellant was imposed under section
112(b) of the Act. If any person acquires possession of or in
any way is concerned in carrying, removing, depositing,
harboring, 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
of the Act, he is charged by that section. In the present case
conscious knowledge of the trader appellant about character
and nature of the goods illicitly imported and his deal theron
was established by the seller racketeers. His ill will and deal
satisfied essential ingredients of section 112 (b) of the Act. The
appellant was aware of the origin and destination of goods
demonstrating his intimacy with the racketeers by telephone
contacts before and after arrival of the smuggled goods in
India which come to record from Table 10 and 11 of show
cause notice. Positive act of the appellant making conscious
breach of law brought him to penal consequence of law.
Perfect proof with mathematical precision, in this imperfect
world seldom exists. Preponderance of probability was in favor
of Revenue to hold the appellant guilty."
6. The other member, Sh. Rakesh Kumar was of the opinion that given
the statutory mandate of Section 111, the revenue had to necessarily prove
that each of the appellants knew that they were dealing in smuggling goods-
an element which according to him had not been established in the facts of
the case. The said learned Member was also of the opinion that the call
details ipso facto could not be sufficient to prove culpability. In view of this
divergence of opinion, the matter was referred for the opinion of the third
member. Sh. Sahib Singh in his order - extracted in para 32 of the common
order in this case - noticed the statements of Abdul Qahar, Mamoor Khan,
Dil Agha, Valichko and in the light of the statements made by some of the
present appellants agreed with the order of Sh. D N Panda. As a
consequence, the order of the Commissioner was upheld with a modification
i.e. reduction of penalty from `5 lakhs to `2.2 lakhs.
7. The learned counsel urged that this Court should take note of the fact
that CESTAT ignored the material circumstance that a cross-examination
was denied to the appellants in respect of statements of witnesses who had
deposed against them and (b) that the materials relied upon by them, on
taking a cumulative view, could not lead to necessary proof of culpability.
8. Learned counsel submitted that in respect of the appellants the
statements of witness Abdul Qahar was generic in the sense that he only
mentioned that Olga Kozireva entrusted him with certain Chinese silk which
used to be delivered to the traders; the appellants cannot be implicated based
on this. Moreover, submitted counsel, amongst the appellants, the
statements of Anoop Singh and Late Khem Singh admitted knowledge of
and conversations with the foreign nationals. However, as far as others i.e.
the other appellants were concerned, there was not a shred of evidence
against them.
9. This Court notices that in the main case Sudhir Sharma V. UOI
CUSAA No.29/2011 the appeals of the custom officers who were aggrieved
by the fact that they were not afforded the right to cross-examine the foreign
nationals and had also contended that telephone records ipso facto could not
establish their guilt among other arguments were rejected in the common
judgment dated 27.02.2015. Those reasons also apply with equal force in
the present appeals. The Court in the judgment had relied upon various
rulings of the Supreme Court to conclude that the questions of law urged
had to be answered against the appellants and in favour of the revenue.
10. In these appeals, we notice that the question of law sought to be urged
is with regard to findings of evidence. The order of the Commissioner - as
well as the CESTAT in each of the case of the appellants before us, has
noted exhaustively the dates and time when the conversation between the
appellants and the foreign nationals took place. The appellants argued that
such conversations ipso facto cannot lead to any inference, much less
adverse inference, of guilt. At the same time, the proximity of these
conversations with the timing of the flights which landed at the relevant
time, containing the consignments and commodities of prohibited items is a
matter of record. Furthermore, the statement of Abdul Qahar, said to be
generic, is a piece of evidence which weighs in against the appellants. That
the appellants were traders in Chandni Chowk area who legitimately dealt in
silk no doubt is a circumstance which has to be borne in mind. However,
we notice that when confronted with the telephone numbers, either there
was denial or refusal to answer the queries of the investigators. In these
circumstances, given the nature of the materials which were otherwise
established, painstakingly collected evidence such as movement of trucks
etc. and the statement of transporters of certain commodities, it cannot be
said that the findings of guilt recorded by the Commissioner against the
appellants were given in the absence of sufficient evidence.
11. For the above reasons this Court is of the opinion that no substantial
question of law arises. The appeals are accordingly dismissed.
S. RAVINDRA BHAT
(JUDGE)
R.K.GAUBA
(JUDGE)
MARCH 20, 2015
vld
