Commissioner of Customs vs Ujjair

@DELETEUPPERDATA

This first appeal from order under Section 130 of the Customs Act, 1962 arises out of an order dated 12-7-2005 passed by the Customs, Excise & Services Tax Appellate Tribunal (CESTAT), New Delhi, whereby the appeal has been allowed and the order passed by the Joint Commissioner Customs, Lucknow has been set aside. In brief, the facts are that on the basis of telephonic information, the Superintendent of Customs Department along with his preventive party intercepted and checked the suspected truck bearing registration No. U.P.40-B/8014 which was coming from Bahraich. The truck was found loaded with old iron scrap. On being asked the driver and cleaner of the truck produced Bill No. 19, dated 25-7-2001 issued by M/s. Khan scrap traders Rupaidiha Road Nanpara in favour of M/s. Om traders Kanpur covering with G.R. No. 262 issued by National Transport Agency, Nanpara against 7471 kg. of old iron scrap. On further interrogation, copper scrap contained in plastic bags was also found loaded on the truck. The truck was brought to Lakhimpur along with witness, where the loaded truck was weighed and the iron scrap was unloaded in the office. For further verification M/s. Gohania Engineering Works Dhudhwa Park Palia was shown the copper scrap who also opined that as per knowledge the copper cable wire was not being used by any establishment in the area. He further opined that as per his knowledge the copper scrap was of foreign origin. On the basis of reasonable belief that the said copper scrap was being imported into India from Nepal the three accused, namely, Baijnath, Ahsan (driver of the truck) and Rizwan Ahmad (cleaner of the truck) were arrested under Section 104 of Customs Act, 1962. The truck was also seized. The seized truck was hired by Idris of Behraich from Mihipurwa Jungle to Kanpur on payment of Rs. 3,200/-. At the time of loading of the truck, Ahsan and Idris were accompanied by Rizwan, Baijnath, Pitamber Seth and Idris. On the basis of material, a show cause notice was issued to the respondents in this appeal to which they submitted reply, but since their reply was not found satisfactory an order was passed by the Joint Commissioner Customs, Lucknow whereby iron and copper scrap were confiscated and a penalty of Rs. 75,000/- each was imposed on Pitamber Lal and Mohd Ujair while a penalty of Rs. 8,000/- each was imposed on Baijnath and Rizwan Ahmad. The involvement remaining persons was not found as such they were exonerated.

Feeling aggrieved by the order of the Joint Commissioner Customs, Lucknow, the respondents herein filed an appeal before CESTAT, New Delhi and the learned Tribunal while setting aside the order passed by the Joint Commissioner Customs, allowed the appeal on finding that there was no evidence to effect that the confiscated goods were of foreign origin and as such confiscation and imposition of penalty could not be sustained. The Commissioner of Customs being aggrieved by the order of the Appellant Tribunal has filed the instant appeal under Section 130 of the Customs Act.

We have heard Sri Sunil Sharma, learned counsel for the appellant and Sri S.M.K. Chaudhary, learned Senior Advocate assisted by Sri D.R. Mishra and have perused the impugned order and judgment.

Learned counsel for the appellant has assailed the order passed by the appellate Tribunal mainly on the ground that the learned Appellate Tribunal has not taken into consideration the statement of the respondents recorded during investigation. The learned counsel has drawn our attention towards the order passed by the Joint Commissioner Customs, Lucknow in which it has been mentioned that one of the respondents, namely, Mohd. Ujair, the proprietor of M/s. Khan Scrap Traders Nanpara whose statement was recorded under Section 108 of the Customs Act has stated that the truck had to make two rounds of Kanpur same day and that is why he prepared two bills number 18 and 19 both dated 25-7-2001. Since he had to go out of station, he instructed his Munshi that on return of the truck after first round, the second bill be given after loading the iron scrap, whereas another respondent Mohd. Fareed, who is the owner of the truck, in his statement told that the driver of the truck Ahsan informed him on phone on 25-7-2001 itself that a consignment of Kanpur was available for Rs. 2,200/- and thereupon he instructed the driver to undertake the trip with proper documents, but admittedly, the driver did not perform the second trip. Thus, two bills were deliberately prepared to cover up the illegal transportation of copper scrap.

Learned counsel for the appellant has further submitted that the learned Appellate Tribunal while passing the impugned order did not take into consideration, the perversity in the statements so recorded which prima facie suggest that the iron and copper scrap were illegally being transported without any valid documents.

Sri S.M.K. Chaudhary, learned Senior Advocate appearing on behalf of the respondents has, on the other hand, submitted that the order of the Joint Commissioner Customs was in respect of all the six respondents and all of them had separately preferred the appeals before the Appellate Tribunal. However, the Appellate Tribunal decided all the appeals by a common judgment. He further submits that the learned Appellate Tribunal has taken into consideration the entire material on record and has recorded a definite finding that there was no evidence to the effect that the copper scrap was of foreign origin or the iron and copper scrap was being illegally transported. There was sufficient documentary evidence on record to show that M/s. Khan Scrap Traders sold the goods to M/s. Om Traders Kanpur and the correctness of the bill was accepted by M/s. K.K. Export, Aligarh from whom goods were purchased.

After hearing learned counsel for the parties and upon perusal of the material on record, we find that the learned Appellate Tribunal has failed to take into consideration the statement of Mohd. Ujair recorded under Section 108 of the Customs Act and the statement of Mohd. Fareed the owner of the truck from which it was established that the bills were subsequently prepared in order to cover up the illegal transportation of the copper scrap and the opinion expressed by M/s. Gohania Engineering Works, Kheri was merely an opinion was not definite and is on presumption.

In the aforesaid circumstances, we find that the impugned order cannot be allowed to stand and is liable to be set aside and the matter be remitted to the Appellate Tribunal for decision afresh with the direction that the appeal be decided afresh in the light of the evidence on record and the observations made in this judgment. We accordingly allow the appeal and set aside the order passed by the CESTAT dated 11-3-2004 and direct the Appellate Tribunal to restore the appeal to the original number and decide afresh after giving the opportunity of hearing to both the parties. Since the matter is quite old, we expect that the hearing of appeal shall be expedited by the learned Tribunal.