) Smt, Meera Devi vs Commissioner Of Customs (Prev.) Patna

(ARISING OUT OF ORDER-IN-APPEAL NO. 01-CUS/CC/MUZ/denovo/2013 DATED 17.05.2011 PASSED BY COMMISSIONER OF Customs (Preventive), Patna.)

FOR APPROVAL AND SIGNATURES OF

SHRI H.K.THAKUR, HONBLE TECHNICAL MEMBER

1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not ?

3. Whether Their Lordships wish to see the fair copy : of the Order? 4. Whether Order is to be circulated to the Departmental : Authorities?

1) Smt, Meera Devi 2) Shri Ashok Kumar Sharma 3) Shri Ashok Kumar Dev 4) Shri Ajay Kumar Singh APPLICANT(S) VERSUS COMMISSIONER OF Customs (prev.) Patna ...RESPONDENT (S)

APPEARANCE:

SHRI N.K. CHOWDHURY, ADVOCATE FOR THE APPELLANTS

SHRI S.P.Pal, Appraiser (AR) FOR THE REVENUE.

CORAM:

SHRI H.K.THAKUR, HONBLE TECHNICAL MEMBER

Date of Hearing: 18.09.2015 Date of Decision:

ORDER NO.FO/A/75590-75593/15

Per Shri H.K.Thakur

These appeals have been filed by the appellants against OIO No. 01-CUS/CC/MUZ/DENovo/2013 dt. 17/05/2013 passed by Commissioner customs (prev) and issued on 28/05/2013. Under this OIO dt 17/05/2013 Adjudicating Authority confiscated trucks of the appellants and gave the owners option to redeem the same on payment of redemption of Rs. 1,65,000/- each. A penalty of Rs. 3,25,000/- was also imposed upon each appellant by the Adjudication authority in remand proceedings ordered by an earlier order dt 04/01/13 of the bench.

2.Sh. N.K choudhary (Advocate) appearing on behalf of the appellants argued that on the basis of a secret information on 23/3/2001 the officers of customs Preventive Division, Muzaffarpur took a position at Jhaphan and saw a truck coming from Sitamarhi side at 07.15 AM. After getting signal driver of the truck stopped the vehicle but fled from the site. Thereafter three more trucks.

Were also stopped by the officers but they also fled away taking the benefit of heavy traffic. That all the four trucks, bearing registration No. BR-52-6079, BR-1GA-2573 HR- 38K6374 & that BR-1GA 1298 were found to be loaded with garlic. That on checking in the presence of independent witness all the four truck were found to contain Chinese garlic bearing marks as sun-king & Sun Power. That these trucks alongwith Garlic were brought to Divisional office of customs Muzzafarpur. That value of garlic was ascertained to be Rs. 13,17,500/- and the value of each truck was ascertained to be Rs. 10,50,000/- That during the course of search some extra number plates having different registration numbers were also found. That the entire quantity of Chinese origin garlic was seized on a reasonable belief that the same is of Smuggled nature and all the four vehicles were also seized.

2.1 That summons were issued to the persons whose names were mentioned in the manifest / Invoices accompanying the consignments but these persons were found to be either not existing or could not be located. One person Sh. Rakesh Tiwari of Sitamarhi was also apprehended & arrested but only on subsequent interrogation he also refused to claim the seized goods & the trucks. Investigations were also extended to several District Transport officers from where the registration Numbers seem to have been obtained but identity of the truck owners could not be ascertained by the Revenue till the issue of first show cause notice dt. 24.08.09 as the period of six months from the date of seizure was expiring.

2.2 That sample of the seized garlic were sent to Deputy Director Regional Plant Quarantine station, Salt Lake city Kolkata and on testing were found to be infected with Embellisia allii, a quarantine pathogen & were suggested for destruction. That the entire quantity of 52700 Kgs of seized garlic was destroyed on the bank of River. Buddi, Gandak at Sikandarpur, MuZaffarpur.

2.3. That after the issue of first show cause notice on 24/08/2009, the identity of the real owners of the truck established on the basis of reporters from District Transport officers to whom letters were issued by the investigation. That statements of all the four truck owners/Authorized person were recorded, during which they disowned the garlic of Chinese origin and also stated that their drivers have undertaken the clandestine activity without their knowledge. That addresses of these drivers were also given but the addresses were either found to be in correct or incomplete.

2.4. That a corrigendum dt 16/04/10 was issued to the first SCM dt 27/08/2009 and the same were adjudicated under OIO No. 9/CUS/CC/MZP/10 dt 21/12/10 by confiscating the said trucks and by imposing penalties upon all the four truck owners. That option to redeem the confiscated trucks was also given. That all the four appellants herein filed appeals before this bench and this bench vides order No. A-892-895/Kol/2012 dt 05/10/2012 issued on 04/01/13, remanded the case to the Adjudicating authority to decide the case afresh after giving a copy of show cause notice dt 24/08/2009 to the appellants. That in the remand proceedings after observing the principles of natural justice, Adjudicating authority passed OIO No. 01/CUS/CC/MUZ/DENovo/2013 dt 17/05/2013 confiscating the trucks & giving on option to the owners to redeem the same after paying Rs 1,65,000/- each as reduction fine. That a penalty of Rs. 3, 25,000/- each was also imposed upon the appellants.

2.5. Learned Advocate appearing on behalf of the appellants further argued that all the trucks of the appellants had gone to Shur Shand (sitamarhi)on 3/3/09 as per para-7 of their Common written reply dt 09/05/2013 made before the adjudicating authority. That on the return journey the drivers, without the knowledge of the owners, have undertaken an illegal activity for which the owners can not be held responsible. It was his case that the details of addresses available with the appellants were intimated to the investigation. Learned Advocate relied upon the following important case laws to argue that vehicles can not be confiscated & penalties can not be imposed upon his clients as they had no knowledge of the activities undertaken by their drivers:-

(i) Manjeet Singh VS CC New Delhi [2001(127)ELT 153(Tri. Del.)]

(ii) CC(P) Kolkata Vs Md. Abdul Salam [2005 (186)ELT 2931(Tri. Kolkata)]

(iii) Munna Vs CC Lucknow [2003(157)ELT 348 (Tri-Del.)]

(iv) Bombay Bangalore Freight carriers PVT LTD VS CCE, N. Delhi [2004(163) ELT 213 (Tri. Del)]

(v) Nalakath spices Trading Co. Vs CC. cochin[2007(213)ELT 283(Tri, Bang)]

(vi) CC (sea) Chennai VS CESTAT Chennai [2009(246) ELT 121 (mad.)]

(vii) Vikram logistics Vs & maritime service Pvt Ltd CC Mysore [2014(301) ELT 497 (Tri. Bang)]

(viii) CC Lucknow Vs Balwinder Singh [2010(255) ELT 514(All.)]

(ix) CC (P) W,B, Calcutta Vs Durgarmal Mohata [2006(200)ELT 522 (Cal)]

(x) CC (P) West Bengal Vs Omprakash & others [2010 (01) LCX 0050] 2.6. Learned Advocate argued that the provision of penalties imposed is not specifically mentioned in the show cause notice for this he relied upon the following.

(i) CCE Madurai VS Ferrer India Ltd [204 (313) ELT 3(Mad.)] (ii) Noble Moulds Pvt Ltd Vs CCE [2010 (259) ELT 338 (Del.)]

3. Sh. S.P Pal, Appraiser (AR) appearing on behalf of the Revenue argued, during hearing as well as through written submissions dated 05/10/15, that circumstantial evidences available on record clearly convey that all the four appellants were well aware of the foreign origin of the seized garlic. That no valid document of licit import was available at the time of seizure of goods. Learned AR made the bench go through paras- 4.05, 4.06, 4.07, & 4.08 of the OIO dt 17.05.2013 to argue that all the appellants had implied knowledge of the Smuggled nature of seized goods. It was thus his case that confiscation of vehicles their redemption and imposition of penalties have been correctly made by the Adjudicating authority. Learned AR also argued that charges of imposition of penalties under Sec 112 of the Customs Act 1962 upon the appellants notices was specifically made under corrigendum dt 16/4/2010 issued to the appellants under C No. viii (10) 413- CUS /Seiz/Muz/ 08-09-073-79. That the ingredients of Section-112 have been discussed in Para-4.09 of the OIO. Learned AR relied upon the case law of S. Jamal Vs CC (AIR) Chennai [2014(307) ELT-269 Mad)].

4. Heard both sides and perused the case records. The only issue required to be decided in these proceedings is whether appellants had prior knowledge of the Smuggled nature of the seized garlic of Chinese origin. It is the case of the appellants that the drivers have done the clandestine activity of transportation of garlic of foreign origin without their knowledge and that their trucks can not be confiscated under Sec-115 and no penalty can be imposed upon them under Sec-112 of the Customs Act 1962. On the other hand case of the Revenue is that circumstantial evidences suggest the knowledge of the owners of the drivers as such an activity can not be dared by the drivers of their own. It is observed from the case records that appellants have denied to have prior knowledge of the smuggled nature of seized garlic of Chinese origin. For confiscation of vehicle knowledge of the owner of the vehicle or the person in charge of the vehicles is required as per Sec  115 of the Custom Act 1962, reproduced below:-

Section 115 (2):- Any conveyance or animal used as a means of transport in the smuggling of any goods or in the carriage of any smuggled goods shall be liable to confiscation, unless the owner of the conveyance or animal, proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any and the person in charge of the conveyance or animal. [Emphasis supplied]

4.1. It is observed from the case records that use of vehicles for transporting garlic of Chinese origin is established for which no claimant has come forward and even the drivers also had no document of licit import of the seized garlic. Drivers of the vehicles definitely had knowledge of the contraband and smuggled nature of garlic. That is why the drivers ran away and never came forward during investigation. There is thus nothing irregular regarding confiscation of said vehicles & their release on payment of redemption fine. No interference is therefore called for regarding confiscation / redemption of vehicles order passed by the Adjudicating authority.

5. So for as imposition of penalties upon the appellants is concerned though no Section has been quoted in the order portion by the adjudicating authority but Sec 112 (b) of the Customs Act 1962 has been discussed in Para- 4.09 of the OIO dt 17/05/2013. It has been rightly observed by the Adjudicating authority that correct residential details of the drivers were not maintained by the owners when they were giving vehicles valued more than Rs. 10 lakh to the drivers. In the era of mobile phones it is not expected that owners of the truck will not keep a watch on the movement of his vehicle when they are declaring that strict monitoring was being done by them. A copy of the driving license, Voter ID etc is always kept by an employer to check the identify & authenticity of their employees. Availability of duplicate number plates from the trucks further gives an impression that the said vehicles were being used for clandestine transportation of goods. All these activities and duplicate number plates can not be believed to have been done by the drivers alone without the knowledge of the owners. No registration papers or driving license copies were found in the vehicles. For more than six months from the date of seizure & interception none of the owners made any attempt to locate their trucks when the same were in the possession of the department. Only after the owners were traced out with the help of reports from DTOs did the appellants came forward to claim provisional release of vehicles. All the above evidences discussed in the order of the Adjudicating authority clearly suggest the knowledge of the owners regarding smuggled nature of Chinese garlic. The case laws relied upon by the appellants will not further their case as in those cases the knowledge of the drivers/owners, regarding smuggled nature of goods was not existing, which is not the case in the factual matrix of the present appeals. Accordingly, order passed by the Adjudicating authority is well reasoned/justified and no interference is called for in the adjudication order.

6. In view of the above observations appeals filed by the appellants are dismissed by upholding the order in original dt 17/05/2013.

(Pronounced in the court on ..)

(H.K. THAKUR)

TECHNICAL MEMBER

Tushar kumar