Case Law Details
Maa Lilori Bhander Vs Commr. of Customs (Preventive) (CESTAT Kolkata)
CESTAT Kolkata held that appellant duly produced documentary evidences like GST invoice, E-way bill and consignment notes. Accordingly, once Appellant has provided documentary evidence, the burden of proving that the goods are of a foreign origin falls on the Department.
Facts- In the present case vide seizure case dated 26.09.2019, Officers from Siliguri (P & I) Branch, had seized 7,000 Kgs of Black Pepper collectively valued at Rs.49,00,000/- from one Vehicle. The said vehicle was transporting Black Pepper from Aizol to Jharkhand along with some other goods.
M/s. Maa Lilori Bhander had claimed ownership of 3,000 kgs. For the balance 4,000 kgs M/s. Maa Mathurasini Bhander have come forward as owners. After investigation and due process, Show Cause Notice was issued to Maa Lilori Bhander and Maa Mathurasini Bhander and others. There were some other notices on account of penalty proposed on other noticees.
After due process, the Adjudicating Authority confiscated the seized 7,000 kgs Black Pepper valued at Rs. 49,000,00/-. He imposed a penalty of Rs. 3,00,000/- on Bikash Kumar Khandhway, Proprietor of M/s. Maa Mathurasini Bhander. A penalty of Rs. 2,25,000/- was imposed on Shri Kishore Kumar Gupta proprietor of Jai Maa Lilori Bhander . The Adjudicating Authority ordered confiscation of carrier vehicle AS19A6756 valued at 5 lakh giving an option to redeem the same on payment of redemption fine of Rs.1,50,000/-. Penalties were imposed on other noticees as well. Aggrieved by the impugned OIO, Maa Mathurisini Bhander and Maa Lilori Bhander have filed present Appeals.
Conclusion- Held that the Appellant has produced the Invoice copies as well as the E-Way- Bills and the other relevant banking transactions details to prove that the goods have been properly procured by them from A Z Enterprises. The documentary evidence shown like GST Invoice, E-way Bill and Consignment Notes were available right at the time of Seizure and Department has not brought in any evidence to the effect that these are not legal documents. Once the Appellant is able to provide such documentary evidence, the burden of proving that the goods are of a foreign origin falls on the Department, which has not been done by them in the present case.
In view of the foregoing the confiscation of 7000 kgs of Black Pepper is set aside along with penalties imposed on the Appellants and the Appeals are allowed with consequential relief.
FULL TEXT OF THE CESTAT KOLKATA ORDER
In the present case vide seizure case dated 26.09.2019, Officers from Siliguri (P & I) Branch, had seized 7,000 Kgs of Black Pepper collectively valued at Rs.49,00,000/- from one Vehicle bearing Registration No. AS-19A-6756. The said vehicle was transporting Black Pepper from Aizol to Jharkhand along with some other goods. A Seizure Memo was prepared along with inventory list on 26/09/2019. The Black Pepper was valued at Rs.49,00,000/- by taking the rate per Kg as Rs.700/- per Kg. Miscellaneous Items found were valued at Rs.1,33,000/-. The Tata Truck having Registration No. AS19A6756 was valued at Rs. 5,00,000/-. The total value was taken at Rs.55,33,000/-. M/s. Maa Lilori Bhander had claimed ownership of 3,000 kgs. For the balance 4,000 kgs M/s. Maa Mathurasini Bhander have come forward as owners. After investigation and due process, Show Cause Notice was issued to Maa Lilori Bhander and Maa Mathurasini Bhander and others. There were some other notices on account of penalty proposed on other noticees. After due process, the Adjudicating Authority confiscated the seized 7,000 kgs Black Pepper valued at Rs. 49,000,00/-. He imposed a penalty of Rs. 3,00,000/- on Bikash Kumar Khandhway, Proprietor of M/s. Maa Mathurasini Bhander. A penalty of Rs. 2,25,000/- was imposed on Shri Kishore Kumar Gupta proprietor of Jai Maa Lilori Bhander . The Adjudicating Authority ordered confiscation of carrier vehicle AS19A6756 valued at 5 lakh giving an option to redeem the same on payment of redemption fine of Rs.1,50,000/-. Penalties were imposed on other noticees as well. Aggrieved by the impugned OIO, Maa Mathurisini Bhander and Maa Lilori Bhander have filed present Appeals.
2. The Ld. Advocate appearing on behalf of the both these Appellants make the following submission:-
In respect of Maa Lilori Bhander, the consignment of 3,000 Kgs of Black Pepper is covered by GST Invoice No. 59 dated 13/09/2019 issued by M/s. A. Z. Enterprises. E-Way Bill No. 821069157658 dated 19/09/2019 was issued by the vendor. The goods were the cleared under Consignment Note No.5013461203 dated 13/09/2019. In respect of 4,000 Kgs Black Pepper claimed by M/s. Maa Mathurasini Bhander, the same is supported by GST Invoice No. 58 dated 13/09/2019 issued by A. Z. Enterprises and for which E- Way Bill No. 871069156915 dated 19/09/2019 has been issued. This consignment is covered by Consignment Note No. 5013461202 dated 13.09.2019. For these Invoice, the payments have been made by both the Appellants respectively by way of banking transactions on 13/09/2019. He submits that the goods in question were purchased legally in the normal course of business on payment of the relevant amount to the vendor who has issued proper GST Invoice as well as E-Way Bill. The Consignments were bought at Aizawl, Mizoram and they were being transported to Jharkhand and after more than 3 or 4 days of travel, the seizure was effected on 26/09/2019 at Siliguri which cannot be treated as border State to arise any suspicion that the goods were of foreign origin.
3. He points out that the seizure inventory list made on 26/9/2019 does not specify as to what kind of reasonable doubt was in the minds of the officials who have seized the consignment and the vehicle. He submits that the recorded statements of various persons are not in terms of Section 108 of Customs Act, 1962 and hence, the same are not admissible as piece of evidence. He cites the case law of Hi Tech Abrasives Ltd. Vs. CCE & Customs, Raipur, 2018 (362) E. L. T. 961 (Chhattisgarh), wherein it has been held that if any statement has been recorded under Section 14 of CEA, 1944, the same is required to be reiterated before the Adjudicating Authority and the person should allowed to be cross examined in terms of Section 9B (1) of the Central Excise Act, 1944. Punjab and Haryana High Court on similar issue in the case of Ambika International Vs. Union of India 2018 (361) E. L. T. 90 (P & H) has held that if any statement is recorded by the Gazetted Officer in terms of Section 14, the same is required to be reiterated by the person recording statement in terms of Section 9B (1). He also relied on the case law of Ratan Kumar Saha Vs. Commr. of Customs, Patna 2021 (375) E. L. T. 435 (Tri.-Kolkata) on the issue that if the goods were not seized somewhere near the Border, it cannot be assumed that they are of foreign origin. He submits that no enquiry was conducted by the Inquiring Authority so as to substantiate their claim of foreign origin qua seized goods, specifically the Black Pepper in the present case.
4. He submits that it is an admitted fact that even under the enquiry and investigation, it has come to the knowledge of the Department that 1300 kgs of Black Pepper has been proved to have been procured locally by the vendor. Therefore, he pleads that the entire case has been framed on assumptions and presumptions, and then the case is liable to be dismissed on merits.
5. The Learned, AR submits that the goods were seized by the officials and a proper Panchnama was drawn and the Seizure Report was prepared as some of the packages had foreign markings. The official seizing had reasonable belief that these were goods of foreign origin. Statements have been recorded from various persons who have very clearly told that they have not procured these goods in the local market and they have not sold to A. Z. Enterprises. All these go on to show that the goods were of foreign origin and the same were being smuggled into India by the present Appellants. The documents like Invoice, E-Way Bill etc. were only created to show as to give a color that they were local materials.
6. Heard both sides.
7. Admittedly, the Consignment of 7,000 kgs of Black Pepper were being transported under proper GST Invoices, E-Way Bills and under proper Consignment Notes. The seizure also was affected, not in any border area, but after traveling for three to four days from the place of origin i.e. Mizoram. The Appellant has demonstrated that all the transactions were carried through proper banking channels. The Seizure Report has provided the two witnesses. From the signatures, it looks as if they were not well educated, there is no detail of their address. I have also gone through the six Recorded Statements of various persons. These statements nowhere specify that the persons giving the statement were made aware of the fact that they were giving the statements in terms of Section 108 of Customs Act 1962. Their statements are general in nature to the effect that they had given their Aadhar Card to someone for usage. It does not specify that they were aware of foreign origin goods and the value of the goods. Their statement does not say that knowingly or unknowingly they were dealing with goods of foreign origin. The Recorded Statements on their own fail to corroborate the Department’s case. When any statement is recorded under Section 108, it has been clarified by the High Court that when a person who has earlier given the statement before the Gazetted Officer should reiterate the same before the Adjudicating Authority in terms of Section 138B(1). Then only the Adjudicating Authority should admit the same as an evidence. After admitting as an evidence, he should allow these persons to be crossed-examined by the other party. In the present case, the statement itself was not recorded under Section 108. The Hon’ble Chhattisgarh High Court in the case of Hi Tech Abrasives Ltd. Vs. CCE & Customs, Raipur, 2018 (362) E. L. T. 961 (Chhattisgarh) has held as under:-
9.4 The legislative scheme, therefore, is to ensure that the statement of any person which has been recorded during search and seizure operations would become relevant only when such person is examined by the adjudicating authority followed by the opinion of the adjudicating authority then the statement should be admitted.
The said provision in the statute book seems to have been made to serve the statutory purpose of ensuring that the assessee are not subjected to demand, penalty interest on the basis of certain admissions recorded during investigation which may have been obtained under the police power of the Investigating authorities by coercion or undue influence.
[emphasis supplied]
8. The Punjab and Haryana high court in the case of Ambika International Vs. Union of India 2018 (361) E. L. T. 90 (P & H) has had as under:-
17. As already noticed herein above, sub-section (1) of Section 9D sets out the circumstances in which a statement, made and signed before a gazetted Central Excise Officer, shall be relevant for the purpose of proving the truth of the facts contained therein. If these circumstances are absent, the statement, which has been made during inquiry/investigation, before a gazetted Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein. In other words, in the absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement, recorded before a gazetted Central Excise Officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1).
18. The consequence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the statement, recorded during investigation in Central Excise, as evidence of the truth of the facts contained in the said statement, it has to be held that the adjudicating authority has relied on irrelevant material. Such reliance would, therefore, be vitiated in law and on facts.
[emphasis supplied]
9. This Hon’ble Tribunal in the case of Ratan Kumar Saha Vs. Commr. of Customs, Patna-2021 (375) E. L. T. 435 (Tri.-Kolkata) has held as under:-
xxx I also find that the statement was taken from Md. Minatullah Ansari (Appellant No. 2), who in his statement accepted paying Rs. 30,00,000/- (Rupees Thirty Lakhs only) as an advance towards purchase of gold ornaments. I do not find any rebuttal evidence on the statements of Appellant No. 1 and Shri Ratan Lal Soni of Shri Balaji Impex and also Md. Minatullah Ansari (Appellant No. 2). Their statements were also supported by documentary evidence. Before adjudication, the documents and statements were verified by the Department and the entire goods and currencies were provisionally released on being satisfied about genuineness of the documents and ownership of the goods. The Adjudicating Authority confiscated the goods wholly on the basis of assumption and presumption inferring some circumstantial evidence ignoring documentary evidence. He also did not consider the absence of evidence as to the sale proceeds of smuggled goods and confiscated the Indian and Nepali currencies in spite of having explanation for the same. Doubt expressed in respect of the documents was also not based on legally tenable observations. xxx
10. In the present case, as the statements have not been recorded in the terms of Section 108 nor the procedure specified under Section 138B(1) have been followed. This shows that the procedures were not properly followed and conditions as specified by the Chhattisgarh and Punjab and Haryana High Court in the above judgment have not been fulfilled.
11. On the other hand, the Appellant has produced the Invoice copies as well as the E-Way- Bills and the other relevant banking transactions details to prove that the goods have been properly procured by them from A Z Enterprises. The documentary evidence shown like GST Invoice, E-way Bill and Consignment Notes were available right at the time of Seizure and Department has not brought in any evidence to the effect that these are not legal documents. Once the Appellant is able to provide such documentary evidence, the burden of proving that the goods are of a foreign origin falls on the Department, which has not been done by them in the present case.
12. In view of the foregoing the confiscation of 7000 kgs of Black Pepper is set aside along with penalties imposed on the Appellants and the Appeals are allowed with consequential relief.
(Pronounced in open Court on 27/03/2023.)
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