Commissioner Of Customs, (Import), ... vs Smt. Louis Premalatha

(Arising out of Order-in-Original No. 8615/2009 dated 25.2.2009 passed by the Commissioner of Customs (Seaport  Import), Chennai)

Commissioner of Customs, (Import), Chennai Appellant

Vs.

1. Smt. Louis Premalatha 2. M/s. Fast Forward 3. M/s. Caravel Shipping Services Pte. Ltd. Respondents

Appeal Nos. C/113, 114, 115/2009

(Arising out of Order-in-Original No. 8585/2009 dated 18.2.2009 passed by the Commissioner of Customs (Seaport  Import), Chennai)

Commissioner of Customs, (Import), Chennai Appellant

Vs.

4. M/s. Caravel Shipping Services Pte. Ltd.

5. Thameem Shipping Services

6. Shri Thameem Ansari Respondents

Appearance

Ms. Indira Sisupal, AC (AR) for the Appellant Shri Derrick Sam, Advocate, for Respondents 3 & 4 Ms. Sridevi, Advocate for Respondents 1, 2, 5 & 6

CORAM

Honble Shri D.N. Panda, Judicial Member

Date of Hearing / Decision: 30.09.2015

Final Order Nos. 41472-41477 / 2015 Revenue came in appeal against the respondents noted against each appeal as tabulated below and such appeals are against Adjudication order No. 8585/2009 dated 18.2.2009 and 8615/2009 dated 25.2.2009:-

S. No. Order-in-Original No. & Date Appeal No. Respondent

1.

8585/2009 dated 18.2.2009 C/113/2009 M/s. Caravel Shipping Services Pte. Ltd.

2. 8585/2009 dated 18.2.2009 C/114/2009 M/s. Thameem Shipping Services

3. 8585/2009 dated 18.2.2009 C/115/2009 Shri Thameem Ansari

4. 8615/2009 dated 25.2.2009 C/110/2009 Smt. Louis Premalatha

5. 8615/2009 dated 25.2.2009 C/111/2009 M/s.Fast Forward

6. 8615/2009 dated 25.2.2009 C/112/2009 M/s. Caravel Shipping Services Pte. Ltd.

2.1 Two containers viz., TTNU 3803555 (which was subject matter of investigation made on 16.6.2008 and adjudicated vide order No. 8585/2009 dated 18.2.2009) and Container No. TTNU 2633834 (which was subject matter of investigation made on 30.6.2008 and adjudicated vide order No. 8615/2009 dated 25.2.2009), came to India from the Port Kalang of Malaysia within a gap of 14 days containing certain goods therein not declared to customs. Those were unaccompanied baggage.

2.2 It came to the knowledge of investigation that both the containers contained 148 packages each of household goods weighing 2900 kgs. respectively. The goods in Container No. TTNU 3803555 was consigned by one Zahir Hussain from Port Kalang in Malaysia to a consignee named Khader Nainar Jummak Khan of No. 11, Keela Pallivasal Street, Illayankudi PO and Taluk, Sivaganga Dist. - 630702 and the goods in container No. TTNU 2633834 was consigned by one Fakir Mohamed from the same port to the consignee Arunachalam Muthukrishnan of No. 3/58, Melappatu PO, Aranthangi, Melappatu Taluk, Pudukottai Dist. - 674616.

3.1 When physical inventory of the container No. TTNU 3803555 was taken as against 148 packages of house hold goods declared, 269 undeclared packages were recovered therefrom. Thus there was excess of 121 packages in the container. When thorough investigation was made, the excess packages were found to have contained certain food items, toiletries and electronic goods as well as automobile parts. 5 biscuit tins were also there. Such tins contained 766 packets of cubic zirconium of 2,76,490 pieces valued at Rs.1,26,17,100/- by the Jewellery Appraiser of Customs House. All such goods were seized being unclaimed and confiscated not being declared.

3.2 The consignee Khader Nainar Jummak Khan claimed his personal effects pleading his innocence about undeclared goods. His personal effects were not seized but handed over to him. Investigation found that one Zahir Hussain from Malaysia who was stated to be friend of the consignee had consigned the declared as well as the undeclared excess baggages to India. According to adjudicating authority the statement recorded from the consignee revealed that he was not at all consciously involved in the excess baggage consigned. Only when investigation was made and inventory of the goods in the container No. TTNU 3803555 was taken, that revealed excess baggages therein and such goods concealed Zirconia in the biscuit tin recovered from the container.

3.3 When Manager of M/s. Carvel Shipping Services Pvt. Ltd. was examined, nothing incriminating statement came out from him imputing him to the allegation of involvement in the smuggling. Therefore, such concern was kept out of adjudication.

3.4 Investigation examined Shri Riyas the representative of the consignee Khader Nainar Jummak Khan and no incriminating material against the consignee was found.

3.5 When one K. Thameem Ansari, CHA (in Appeal No. C/115/2009) was examined, he revealed the same story as that was revealed by the consignee of goods Khader Nainar Jummak Khan. He stated that he was given to understand that his 148 packages have come in that container which are to be cleared to customs. Service charge of Rs.3,500/- was paid to him for clearance. According to adjudicating authority, no incriminating material came from Thameem Ansari to show that he was mastermind behind the export. According to that authority no deliberate suppression nor fraud was committed by Thameem Ansari against customs in respect of smuggling of zirconia into India. Even the search of the premises of the consignee Khader Nainar Jummak Khan did not reveal any incriminating material.

3.6 On the aforesaid background, the Order-in-Original No. 8585/2009 dated 18.2.2009 was passed and adjudication resulted in confiscation of cubic zirconium stones and seizure of the consumer goods as well as biscuit tins. There was no proceeding at all initiated against M/s. Caravel Shipping Services Pvt. Ltd. in the adjudication nor show cause notice was issued to that concern. Therefore, Revenues grievance is that M/s. Caravel Shipping Services Pvt. Ltd. should be impleaded in the appeal as Respondent although there was no proceeding against M/s. Carvel Shipping Services Pvt. Ltd. in adjudication.

4.1 So far as adjudication made in adjudication order No. 8615/2009 dated 25.2.2009 is concerned the background of the case is that 148 packages declaring to be personal effects were consigned by one Shri Fakir Mohamed from Malaysia to India in container No. TTNU 2633834 in the name of a consignee Arunachalam Muthukrishnan. The declaration became false when investigation was made into the container on 30.6.2008. Investigation found that there were 358 packages in the container and two packages were biscuit tins concealing 725 packets containing 3,42,100 cubic zirconium valued at Rs.1,54,76,000/- by the Jewellery Appraiser of Customs. This racket operated in similar manner which was involved in adjudication order No. 8585/2009 dated 18.2.2009.

4.2 The story revealed by the passenger consignee above was that one Fakir Mohamed being his friend in Malaysia was asked by him to send back his (consignees) personal effects in 148 packages when he left Malaysia. Investigation did not bring out any other aspect when they examined him on 1.7.2008. He simply pleaded his innocence and the burden was left to the investigation to prove the identity of the mastermind.

5.1 M/s. Caravel Shipping Services is impleaded by Revenue as respondent in appeal No. C/112/2009 arose out of adjudication order No. 8615/2009 dated 25.2.2009 and in appeal C/113/2009 arose out of adjudication order No. 8585/2009dated 18.2.2009. Its further grievance is that the freight forwarder, the CHA Thameem Ansari (involved in Order-in-Original No. 8585/2009) brought out his acquaintance with Khader Nainar Jummak Khan. But he only revealed that he was concerned with the clearance of 148 packages of Khader Nainar Jummak Khan and nothing more could be revealed from his statement. Investigation should have probed the matter extensively. Revenues further grievance is that Thameen Ansari, CHA was a necessary party to the proceeding but no penalty was imposed on him nor on his firm M/s. Thameem Shipping Services even though adjudication resulted in confiscation of 6,18,590 (2,76,490 + 3,42,100) pieces of cub zirconia stones as well as other consumer goods and such stones were hidden inside the biscuit tins.

5.2 Departments further contention is that M/s. Caravel Shipping Services Pte. Ltd. although was involved in the smuggling of Cubic Zirconia came from Malaysia being concealed in biscuit tins in both the containers, neither show cause notice was issued to that concern nor that concern was made a party to adjudication proceeding for penal action.

5.3 So far as the appeals of Revenue against M/s. Fast Forward CHA and Smt. R. Louis Premalatha representative of that concern is concerned, Revenue submitted that when Smt. Premalatha, CHA firm M/s. Fast Forward was examined on 1.7.2008 she pleaded innocence. Investigation could not bring out any material against CHA about the consignment of cubic zericonia in container No. TTNU 3803555. They failed in their duty.

5.4 Revenue prays that there should be penalty on all these respondents that is M/s. Caravel Shipping Services Pvt. Ltd., Thameem Ansari, M/s. Thameem Shipping Services, Fast Forward as well as Smt. Louis Premalatha.

6. Respondents represented by their advocates only pleaded innocence. On behalf of M/s. Caravel Shipping Services it was argued that this respondent not being issued show cause notice cannot be impleaded as respondent in appeal of Revenue.

7.1 Heard both sides and found that the adjudicating authority was also show cause notice issuing authority. He has exonerated all the respondents from penal consequence of law finding no complicity of them with the smuggling racket.

7.2 Revenue not only failed to produce investigation record today, but also failed to produce the statements recorded from different persons under section 108 of Customs Act, 1962 for scrutiny.

7.3 It is surprising that even reading of para 8 of the show cause notice does not reveal any incriminating evidence against M/s. Carvel Shipping Services Pvt. Ltd. Therefore, in absence of justifiable ground by Revenue in its appeal, it is very difficult at this stage to implead M/s. Carvel Shipping Services Pvt. Ltd. as respondent. Therefore, Revenues appeal against M/s. Carvel Shipping Services Pvt. Ltd. is dismissed. But it does not mean to say that there was no smuggling racket operated to occasion export of the smuggled zirconia into India from Malaysia by a premeditated design.

7.4 It is certainly a truth that there was a smuggling racket operated to bring cubic zirconium into India. It is also shocking to note that there was a total failure of investigation to conduct proper investigation in India and overseas. Spirit and intent of section 11 of the Customs Act, 1962 was burried causing prejudice to the interest of customs without bringing the members of smuggling racket to the fold of law. When the investigating authority as well as adjudicating authority failed in their duty to bring necessary parties to the fold of law, it is not possible at appellate stage to implead them and press them to undergo trial. M/s. Caravel Shipping Services Pte. Ltd. was neither issued show cause notice nor was adjudicated. There appears lapse on the part of adjudicating authority to keep this concern out of purview of adjudication. No efforts were made by investigation to identify the members of the smuggling racket.

7.5 It is painful to note that the manner in which investigation was made and show cause notice was issued that granted bonus to the smuggling racket. Customs area being a sensitive place it is not expected from customs officers to act to the detriment of Revenue as well as the nation. Investigation was conducted very casually to keep the racket away from scrutiny of law. Authority failed to conduct overseas enquiry against the racket and no thorough investigation was made into the affairs of CHA, freight forwarder as well as the consignee and there was only pretence to justice by investigation following an empty formality to pass a superfluous adjudication order.

7.6 No doubt there was confiscation. But that is merely a consolation to this country when the racket and mastermind behind that remained in mystery and unidentified. Facts and circumstances of the cases suggest that there was premeditated design to cause subterfuge to Revenue. It is high time to arrest smuggling, without encouraging that to perpetuate. Therefore, it is left to the Department to take up this matter with Directorate General of Vigilance to do the needful as he may consider appropriate.

8. With the aforesaid observations, all the appeals of Revenue are dismissed.

(Dictated and pronounced in open court)

(D.N. Panda) Judicial Member

Rex

10