CESTAT Delhi held that as appellant failed to produce document proving discharge of customs duty liability, it can easily be concluded that gold so procured has passed the customs area in concealed manner and accordingly the same is smuggled goods.
Facts- The officers of Directorate of Revenue (DRI) got the specific intelligence about two passengers, Deepak Batra and Shefali Batra to fly with Thai Airways from New Delhi to Bangkok with foreign currency valued at around Rs. 1 crore approximately by way of concealment of their baggage.
Post investigation and search operation, and also Based on statements, the incriminatory documents and gold recovered and the documents pertaining to several times travel details to Bangkok, Show Cause Notice No. 07/2017 dated 04.01.2018 was served upon the appellants proposing the confiscation of foreign currency recovered from Shri Deepak Batra and from residence of Shri Janki Dass Madan along with the Indian currency of Rs. 27.5 Lakhs and gold 195 grams recovered from the residence of later. Observing all the appellants to be the habitual offenders for exporting foreign currency and illegally importing gold with an intent to evade the payment customs duty that the penalty was also proposed on all of them u/s. 112(a), 112(b) and 114AA of the Customs Act, 1962.
The said proposal has been confirmed by the original adjudicating authority vide Order-in-Original No. 322/2018 dated 31.08.2018. The appeal thereof has been rejected vide Order-in-Appeal No. 4363-4365/2021-22 dated 07.04.2022. Being aggrieved the appellants are before this Tribunal.
Conclusion- The appellants could not produce any document about discharging their customs duty liability. Accordingly, its stands sufficiently proved that appellants have been procuring gold in sheer violation of the Customs Act and the gold so procured by them has passed the customs area in a concealed manner without payment of customs duty which is sufficient to hold that appellants were involved in smuggling of gold. On 05.07.2017, Shri Deepak Batra was intercepted at the international airport with concealed foreign currency in his baggage. The said currency was mentioned to be handed over to him by three of the appellants which stands proved from the document recovered from the premises of the appellants. Resultantly, irrespective, the currency/gold were not recovered from the customs area, the trading thereof is definitely in violation of the Customs Act and the goods are definitely the smuggled goods.
FULL TEXT OF THE CESTAT DELHI ORDER
Present order disposes of three appeals originating out of same show cause notice and being disposed of vide the same Order-in-Original and the same Order-in-Appeal. The facts in brief relevant for the present adjudication of these appeals are as follows:
1.1 The officers of Directorate of Revenue (herein after referred as DRI) got the specific intelligence about two passengers namely Shri Deepak Batra and Ms. Shefali Batra to fly with Thai Airways from New Delhi to Bangkok on 05.07.2017 at 23:30 Hours with foreign currency valued at around Rs. 1 crore approximately by way of concealment of their baggage. Based on the said information both of them were intercepted at IGI Airport, Terminal 3, New Delhi. On examination of their baggage foreign currencies of different denominations of total value of Rs.1,09,97,447/- was recovered from both the passengers. They both were enquired and the follow up searches were made on his residence on 06.07.2017. Statement of Shri Deepak Batra was recorded on 06.07.2017 under Section 108 of the Customs Act, 1962. He informed that Shri Janki Dass Madan, Shri Abheek Madan and Shri Ram Dass Madan all residents of C-161 EF, Street No.7, Majlis Park Azadapur, New Delhi had handed to him the said currency for purchasing gold in Bangkok. He acknowledged for doing the same for the last four years for Shri Ram Dass Madan.
1.2 He further stated that foreign currency used to be arranged by Shri Abheek Madan who along with Shri Ram Dass Madan used to sell the illegally imported gold. The profit used to be shared by three of the above named co-appellants and by Shri Deepak Batra. When he was taken to his residence along with the search warrant on 06.07.2017 itself except to the foreign currency as mentioned in the annexure to Panchanama dated 06.07.2017 drawn at the residence premises at A-60, 1st Floor, South Extension Part-1, New Delhi nothing else was recovered from his premises. However, Shri Deepak Batra could not produce any documentary evidence about licit possession of the said foreign currency. The statement of Ms. Shefali Batra was also recorded on 06.07.2017 itself. She admitted for visiting abroad with her husband Shri Deepak Batra, she also stated that she knew Shri Ram Dass Madan, however, as the maternal uncle of her husband. On the basis of the statement of Shri Deepak Batra and the follow up search of his residence that searches were made on the residences of three of the appellants on 06.07.2017 which resulted in recovery of some incriminating documents. 195 grams foreign origin gold, and Rs.27.5 Lakhs (INR) were also recovered from the residence of Shri Abheek Madan.
1.3 Pursuant thereto, statements of three of the appellants were recorded on 07.07.2017 under Section 108 of the Customs Act, Shri Ram Dass Madan admitted that he partly finance the gold smuggling and arranged foreign currency which was for purchase of gold at Bangkok and for bringing the same to India clandestinely for sale. He confirmed the statement of Shri Deepak Batra that he along with Ms. Janki Dass Madan, Shri Abheek Madan and Shri Deepak Batra is involved in the smuggling of foreign currency and gold. The documents recovered from his residence were the evidence for the smuggling of foreign currency and gold carried back and sold for profit in India.
1.4 Thereafter the statement of Shri Abheek Madan and Janki Dass Madan was got recorded under Section 108 of the Customs Act. He also admitted to the entire modus operandi deposed by Shri Ram Dass Madan in his statement and the involvement of all named in the said statement for smuggling of foreign currency and gold. Shri Janki Dass Madan specifically stated that Shri Abheek Madan is his nephew who used to provide foreign currency to Shri Deepak Batra and they are the four partners including himself Shri Abheek Madan, Shri Ram Dass Madan and Shri Deepak Batra who used to pool money in equal shares and the entire amount used to be converted into foreign currency and used to be handed over to Shri Deepak Batra who used to take such foreign currency illegally out of India for bringing gold into India illegally. The said gold used to be handed over to Shri Ram Dass Madan who used to sell it in Chandani Chowk and after deducting the expenses, the profit used to be shared among four of them. Three of them admitted, Shri Deepak Batra too, that on several earlier occasions they have visited Bangkok to execute the same modus operandi to smuggle gold and foreign currency. After recording these statements, the statement of Shri Amar Singh alias Punjabi, the driver of Shri Deepak Batra was also got recorded on 07.07.2017 who admitted to often receive parcels from Shri Ramdass Madan to be handed over to Shri Deepak Batra.
1.5 Based on these statements, the incriminatory documents and gold recovered and the documents pertaining to several times travel details to Bangkok, Show Cause Notice No. 07/2017 dated 04.01.2018 was served upon the appellants proposing the confiscation of foreign currency recovered from Shri Deepak Batra and from residence of Shri Janki Dass Madan along with the Indian currency of Rs. 27.5 Lakhs and gold 195 grams recovered from the residence of later. Observing all the appellants to be the habitual offenders for exporting foreign currency and illegally importing gold with an intent to evade the payment customs duty that the penalty was also proposed on all of them under Section 112(a), 112(b) and 114AA of the Customs Act, 1962. The said proposal has been confirmed by the original adjudicating authority vide Order-in-Original No. 322/2018 dated 31.08.2018. The appeal thereof has been rejected vide Order-in-Appeal No. 4363-4365/2021-22 dated 07.04.2022. Being aggrieved the appellants are before this Tribunal.
2. I have heard Shri Aakash Deep, learned Counsel for the appellants and Shri Mahesh Bhardwaj, Authorized Representative for the department.
3. It is submitted by the appellants that they have falsely been involved merely based on the statement given by Shri Deepak Batra and Shri Amar Punjabi. Despite the repeated requests, no opportunity to cross examine both of them was ever given to the appellants. The order under challenge is alleged to be illegal on this score itself. Reliance has been placed upon the decision of Hon’ble Bombay High Court in the case of Sameer Shah Vs. The Union of India & Anr. reported as 2022 (6) TMI 534 – Bombay High Court. It is further submitted that there is no corroboration on record to the statements made under Section 108 of the Customs Act. Statement of Shri Waseem and Shri Shafeeq who allegedly used to exchange the Indian currency and foreign currency for appellants, have wrongly been relied. Shri Shafeeq had already denied the allegations vide his letter dated 03.11.2017, 23.11.2017 and 22.12.2017 which has also been recorded in the show cause notice itself. It is further submitted that provisions of Section 113(d) cannot be invoked as the recovery of foreign currency/Indian currency and gold bars was done at the residential premises of the appellants and not with the limits of customs area. Attempt to improper export cannot be alleged in this case as goods confiscated were never within the customs area nor even within the premises of the port. Reliance has been placed on the decision of this Tribunal in the case of Md. Raju Husain Vs. Commissioner of Customs (Preventive) 2016 (331) ELT 595 (Tri-Kolkata) and Gudiseva Vasuki Vs. Commissioner of Central Excise and Service Tax, Hyderabad-II reported as 2018 (359) ELT 717 (Tri-Hyderabad)
3.1 It is further submitted that the goods recovered from the appellants premises were never seized on the allegations of being the proceeds of illegal imports, no seizure memo was ever issued as stands established from the Panchanama dated 06.07.2017, confiscation thereof is absolutely illegal. The currency recovered from the residential premises of the appellant is wrongly held to be the sale proceeds of smuggled goods. Any such reference is missing in the Panchanama dated 06.07.2017. In the given circumstances, there was no occassion for imposition of any penalty either under Section 112 or under Section 114 of the Act. With these submissions, the order of Commissioner (Appeals) is prayed to be set aside and the appeals herein are prayed to be allowed.
4. Department on the other hand has impressed upon the correctness of the order under challenge. It is submitted that all the appellants in their statements recorded under Section 108 of the Customs Act, 1962 have specifically admitted the entire modus operandi of illegally getting the foreign currency and for illegally importing gold from foreign countries to India being concealed in the baggage with the sole intent to evade the customs duty and for earning the better profits by selling the smuggled gold at the market prices. It is further mentioned that there has been the recovery of foreign currency from the residence of Ms. Janki Dass Madan as well. The recovery corroborates the admissions made by the appellants in their statements. The request for cross- examination of Shri Deepak Batra whose deposition was fully admitted by the appellants was rightly been denied by the adjudicating authority below. Impressing upon no infirmity in the order under challenge, appeals are prayed to be dismissed.
5. Having heard the rival contentions, perusing the entire records and including all the relied upon documents to the show cause notice, I observe and hold as follows:
The present case is based upon the statements recorded during investigation of the persons intercepted by DRI i.e. Shri Deepak Batra and Ms. Shefali Batra, his driver Amar Punjabi and the statements of the appellants. The basis of the adjudication have also been the Panchanamas about effecting recoveries from the baggage of Shri Deepak Batra and Ms. Shefali Batra and from the residences of the appellants which are three separate floors of one common property. Foremost perusal of the statements revealed that Shri Deepak Batra was the first to be recorded, he being intercepted at the time when he was boarding an international flight, based upon the specific intelligence against him about illegally carrying the foreign currency. Perusal of his statement reveals that he stated of being engaged in business of carrying miscellaneous items via air and selling the same in markets in Delhi for profit. He has specifically stated that he has no other business nor he has any IEC code for bringing goods in commercial quantity into India. He specifically stated that the currency as was recovered from his baggage as well as from his residence was received from one Shri Ram Dass Madan and Shri Abheek Madan who reside in Mazlis Park, Adarsh Nagar, New Delhi. The same used to be given to him to purchase gold from one Shri Yood in Sukhumvit, Bangkok. Shri Deepak Batra also stated that Shri Ram Dass Madan also used to accompany him, many often, for the delivery of foreign currency to the clients in Thailand. He individually also used to go using the similar modus operandi. Shri Abeek Madan, son of said Shri Ram Dass Madan, is stated to be equally involved in the strategy and they all communicate telephonically and even exchange WhatsApp messages to execute their plans. He denied his wife to have any information and knowledge for the said modus operandi.
6. I further observe that the printout of the WhatsApp chat were retrieved by the investigating team and were shown to Shri Deepak Batra who explained that those are about the expenses, which four of them (Shri Deepak Batra and three of the appellants) used to incur abroad. It was specifically stated that maintenance of said account of expenditure incurred during visits abroad was necessary to calculate the net profit after deducting the actual expenses because the profits used to be equally shared among four of them. The abbreviations of the said WhatsApp chats have duly been explained by Shri Deepak Batra to stand for personal expenses and profits. I further peruse that Shri Deepak Batra, when he was asked for the purchase bill of foreign currency and gold carried by him, he specifically stated that the entire purchase of foreign currency and gold was in cash. The profit was also used to be shared in cash and hence there are no cash memos or bills for those dealings. However, he had some bills and cash memos for purchase for food supplements. Hence, no document could at all be provided by Shri Deepak Batra about carrying foreign currency, except for the expenses incurred on flight, hotel tickets and visa charges. Based on the said statement that the statement of three of the appellants were recorded.
7. I observe that Shri Ram Dass Madam stated to have the business of fire crackers, however, because of various restriction it was not doing well hence he thought of venturing into trading of foreign currency and gold of foreign origin after he met Shri Deepak Batra through is son Abheek Madan. Three of them got assossiated and started getting gold from Bangkok and Singapore through Shri Deepak Batra and thereafter they used to sell the same in Kucha Mahajani, Delhi. He specifically stated that he along with his brother Shri Janki Dass Madan and his son Shri Abheek Madan were arranging the foreign currency from one Shri Shafeeq and Wasim residents of Matia Mahal, Chandni Chowk, New Delhi. The said currency used to be handed over to Shri Deepak Batra through his driver Shri Amar Singh alias Punjabi. Shri Deepak Batra used to carry said currency to Bangkok concealing the same in his baggage for purchasing the gold. Sometimes the money for purchasing the gold also used to be transferred through hawala transactions.
8. He futher admitted that he himself also had travelled around 11 times to Bangkok and Singapore in the last one and a half year and has brought gold along with him. Last time on 30.05.2017 he had brought 1.5 kg gold (15 gold bars of 100 grams each). The said gold was purchased with the help of Shri Yood, a local Bangkok resident from M/s. LCH Bullion Company Ltd, in Bangkok. He corroborated the recovery of a file vide Panchnama dated 06.07.2017 from his residence containing an invoice issued by M/s. LCH Bullion Company Ltd. in his name. He confirmed that the said invoice dated 29.05.2017 is about the above mentioned 1.5 kg of gold which he illegally brought into India on 13.05.2017. He stated about Shri Abheek Madan also to have travelled 15 times to Bangkok and Singapore in the last two years and about Shri Janki Dass Madan travelling almost 13 times during last four years. Shri Deepak Batra is stated to have travelled more than 50 times. Shri Abheek Madan is mentioned to have handled most of the affairs as that of coordinating with Shri Deepak Batra, Shri Shafeeq, Shri Waseem, Shri Amar Singh alias Punjabi and even with the foreign gold suppliers, arranging foreign currency, travelling and stay in Bangkok and Singapore.
9. The perusal of statements of Shri Abheek Madan and Shri Janki Dass Madan shows that they both have fully corroborated the above deposition of Shri Ram Dass Madan about visiting Bangkok and Singapore several times either alone or with Shri Deepak Batra with the purpose of bringing foreign currency and gold illegally so as to make the better profit to be shared among four of them. Shri Abheek Madan has gone to the extent of admitting that since September 2016 , they have smuggled around 12 to 13 Kgs of gold inside India and smuggled out foreign currency equivalent to INR 6 to 7 crores. He has clearly explained the modus operandi of illegally bringing gold and currency from Bangkok and Singapore while acknowledging that he was the mastermind for the said modus operandi and used to coordinate for four of the partners of the firm M/s. S.S. and Sons. From the Panchanama dated 06.07.2017 about search and seizure from the residential premises of the appellants, it is apparent that three of them reside at the same address however at the different floors thereof. The foreign currency as well as gold of 999.99 and 996.5 purity was recovered from the floor of Shri Janki Dass Madan along with certain diaries/files. The documents therein in the form of kacha parchis are admitted in corroboration to be the coded record for the illegal transaction being done by the partnership firm of the appellants.
10. The appellants have challenged the impugned Order-in-Appeal on two counts:
11. Opportunity to cross-examine Shri Deepak Batra and Shri Amar Punjabi was not given to the appellants.
12. The goods in question were not seized from the customs area.
13. With respect to the first ground of objection, as already discussed above, though case was made out based upon the statement of Shri Deepak Batra who was intercepted at International Airport while travelling to Bangkok. He had deposed the connivance of three of the appellants for illegally exporting/importing the foreign currency and gold. Pursuant to his statement, searches were conducted at the appellants’ premises and their statements were recorded. Three of the appellants, as already observed above, have in full corroboration acknowledged their involvement in the alleged illegal transactions. In several words and several ways three of them have confessed about being involved in the business of illicit trade of export and import of currency and gold. The case therefore is based upon the admissions of the appellants. The admissions have never been retracted by any of the appellants. As per Section 52 of the Indian Evidence Act, admissions need not to be proved. Once while making such admissions no part of the statement of Shri Deepak Batra has been objected or denied by any of the appellants. Rather there is a full corroboration to his deposition along with the acknowledgment. There remains no need for cross examination. The appellants have relied upon the decision of Md. Raju Hussain Vs. Commissioner of Customs (Preventive), Guwahati reported as 2016 (331) E.L.T. 595 (Tri.-Kol.), but the said decision is not applicable to the facts and circumstances of the present case. In Md. Raju Hussain (supra) case no inculpatory statement nor any valid document, suggesting intended visit of the appellant to Bangkok was recovered. This is not true for the present case as there are self incriminatory statements in the form of confessions on record. Those confessions stand duly corroborated from the documents recovered during search at the residences of the appellants. The foreign currency found in the baggage of Shri Deepak Batra stands corroborated on documents as were recovered during said search. Resultantly, I do not find any infirmity when opportunity of cross-examining Shri Deepak Batra has been denied to the appellants.
11.1 Coming to the second ground of objection, I observe that the gold in question has apparently not been recovered from the customs area but there is sufficient admission/confession of appellants themselves that they along with Shri Deepak Batra used to smuggle gold from one Shri Yood of LCH Bullion Company Ltd in Bangkok for making extra profit by selling the said gold in India but on the prevalent market price. Recovery of the documents of said M/s. LCH Bullion Company Ltd. from the residence of Shri Janki Dass is the sufficient corroboration to the fact that the gold has been brought from Bangkok. The appellants could not produce any document about discharging their customs duty liability. Accordingly, its stands sufficiently proved that appellants have been procuring gold in sheer violation of the Customs Act and the gold so procured by them has passed the customs area in a concealed manner without payment of customs duty which is sufficient to hold that appellants were involved in smuggling of gold. On 05.07.2017, Shri Deepak Batra was intercepted at the international airport with concealed foreign currency in his baggage. The said currency was mentioned to be handed over to him by three of the appellants which stands proved from the document recovered from the premises of the appellants. Resultantly, irrespective, the currency/gold were not recovered from the customs area, the trading thereof is definitely in violation of the Customs Act and the goods are definitely the smuggled goods.
12. In view of entire above discussion, I hold that there is no infirmity in the order under challenge while ordering absolute confiscation of foreign currency recovered from Shri Deepak Batra, Indian and foreign currency as recovered from the premises of Shri Janki Dass Madan and the confiscation of the gold recovered from the appellants along with the order of imposition of penalty upon three of the appellants along with Shri Deepak Batra. Order under challenge is accordingly upheld and three of the appeals stand dismissed.
[Order pronounced in the open Court on 19.05.2023]