Commissioner of Customs (Prev), Kolkata vs Azizur Rahaman

This appeal is directed against the impugned judgment and order of the Learned Tribunal dated 29th September, 2008 passed in Customs Appeal No. 295 of 2007 2009 (162) ECR 1 95 ). This appeal was admitted by this Court on the following substantial question of law;

Whether the Tribunal substantially erred in law in appreciating the true purport and meaning of Section 111 read with Section 123 of the Customs Act, 1962 in the background that the respondent has failed to produce any evidence regarding ownership of the goods?

The background of the case is as follows :

Acting on information, DRI Officers of Berhampur Murshidabad intercepted one truck being No. WB-57-4215 carrying 3030 kgs. of brass metal scrap valued at Rs. 3,03,000/- on 19-8-2004 at Nalhari Check Post after a long chase from Arodanga Village, Police Station-Raghunathgaunj along with three persons namely Joynal Abedin, carrier of the goods, one S.A. Mondal, the driver of the truck and one Adhirsta Bhaimali, cleaner of the vehicle. On interception of the said vehicles none of the above three persons could produce any document showing legal acquisition of the goods which were seized on reasonable belief of their illicit importation. The driver of the truck, Shri Soheb Ali Mondal in his statement stated that under the instruction of the owner of the truck he loaded the brass metal scrap which were of foreign ship scrap. The owner of the brass metal scrap were Aaji Pradhan, Montu Biswas, Ataur Rahaman and Latib Sheikh were all present at the time of loading of this truck. He further stated that when he was signaled to stop the truck he was frightened and fled and he stopped only after a long chase. He could not produce any documents relating to acquisition of brass scrap metals. He further stated that he had delivered the said goods twice to one Mr. Rajkumar of Manicktala, Kolkata but who in his statement denied of having received any such goods from him and also denied of having any business relationship with the four owners of the bras scrap metals.

The other co-accused also gave identical statement, corroborating the statement of the driver, and stated that metal scrap was loaded from Mahaldarpara to unload the same at M.K. Steel Godown, Manicktala, Kolkata owned by Rajkumar. The alleged owner stated that they are the owner of the seized goods, and the supplier of the seized goods was one Bangladeshi national Asraful Rahaman, who used to come to India (Mhaldarpara) after crossing the border.

Thereafter the showcause notice was issued to the said persons as to why seized brass metal scrap and carrier truck should not be confiscated u/s 111(b) and (d) and 115(2) of Customs Act, 1962 respectively and why penalty u/s 112 of the Customs Act, 1962 should not be imposed on them. On receipt of the notice they and all of them replied to the same denying and disputing the allegations and prayed for dropping the proceedings. The first authority adjudicated the case and passed an order dropping the proceeding. Being aggrieved by the said order of adjudication the department had filed an appeal and, on 28-6-2006 the appeal was heard.

After hearing the same the case was remanded back to the first authority for proper and reasoned order after taking into consideration of the documents adduced by the department and follow principles of natural justice. Thereafter the matter was reheard by the first authority and thence the first authority passed an order confiscating the seized goods of 3030 kgs. of metal scrap u/s 111(b) and (d) of Customs Act, 1962 and the seized truck No. WB-57-4215 u/s 115(2) of Customs Act, 1962 giving an option to redeem on payment of Redemption Fine of Rs. 20,000/-. Penalty was imposed on Shri Azizur Rahman u/s 112 of Customs Act, 1962 and separate personal penalty u/s 112 of Customs Act, 1962 was imposed on Shri Seajul Haque for Rs. 5,000/-, Shri Mantoo Biswas, Ataul Haque and Abdul Latib Rs. 10,000/-each Shri Joynal Abedin for Rs. 2000/- and Shri Saheb Ali Mondal for Rs. 1000/-and Shri Adhirsta Bhaimali for Rs. 500/-.

Being aggrieved by the adjudication order seven persons as aforesaid filed separate appeals. The Commissioner of Appeal after hearing the appellant and respondents upheld the order of adjudication and did not interfere with the same consequently the appeal was dismissed.

Being aggrieved by the said order of the appellate authority the respondent before us approached the Learned Tribunal, and the Learned Tribunal in its turn after hearing the same reversed the judgment and order of both the authorities.

We have heard the Learned Counsel Mr. Maity, who appearing for the appellant contends that both first authority and first appellate authority have proceeded on the basis on the confessional statement made by those persons who are recipient of notice and accepted the same to be admission. From their admission it was found that the goods were illegally imported from Bangladesh. Though the confessional statement was retracted later on, both the authorities have refused to accept such retraction on the point of law as laid down by the Supreme Court that subsequent retraction law should not be believed. He also supports the judgment and order of both the authorities contending that confessional statement cannot be equaled with the confessional statement done in a criminal trial. The confessional statements are made before DRI who is not police official. Therefore, the statement made before them cannot be said to be a confession before the appellate authority. Obviously, the burden lies upon the respondent to prove that the goods are of Indian origin and source of collection originates in India. It is worth to be mentioned that the accused persons could not produce any document. However, Learned Tribunal did not take notice of the factum of the aforesaid confessional statement made erroneously and shifted the burden on the department. In support of his submission he has referred to the decision relied on by the first adjudicating authority as well as the appellate authority. In addition thereto he has referred to a decision of the Supreme Court in the case of Chandmal and Another Vs. State of Rajasthan, .

Hence, as the burden is not discharged the presumption is that the goods are not imported. The contention is that though the goods are not notified nor prohibited, the goods are dutiable one. Therefore, Section 111 is not necessarily attracted. The show cause notice was not legally issued nor the order of adjudication was lawfully passed. The Learned Counsel for the respondent while supporting the judgment and order of the Learned Tribunal submits that the goods are not notified nor smuggled one. He submits that it is the burden of the department to prove the goods are of smuggling character and this smuggling character can be established from various documents namely export report prepared on the basis of the examination and if necessary chemical examination and also from other documents and receipts etc. If it is not proved rather if this burden is not discharged, then it shall be presumed that the goods are of Indian origin as those are available elsewhere. Therefore, Learned Tribunal has passed just, and right order.

In support of his contention on the principle of burden of proof the Learned Counsel for the respondent has relied on a decision of the Division Bench of this Court, in the case of Commr. of Customs (Prev.) Vs. Raj Kumar Jaiswal, ). In that judgment the Division Bench of this Court has noted amongst other that the statement made u/s 108 of the Act can be used against the persons from whom materials have been seized without any corroborative evidence, provided, such statement recorded after service of summons as required under the Act and that those are voluntary.

We have taken note of those submissions and we have gone through the impugned judgment and order of the Learned Tribunal. The point which has fallen for consideration is who is to discharge the burden on the facts and circumstances of the case. It appears from the record that first authority as well as the appellate authority has proceeded on the basis of confessional statement made by the driver and other co-accused. The confessional statement though plea of retraction being taken, has been accepted to be an admission of evidence. The statement clearly disclosed the fact of importation of the goods from Bangladesh. We think that in this situation the burden lies on the owner of the goods or the respondent to prove that the goods were not brought from Bangladesh and the same were of Indian origin, as the goods are admittedly dutiable goods. The learned Tribunal proceeded on different angle assuming as if there is no material to prove the goods were not imported lawfully. The Learned Tribunal did not consider the impact of the confessional statement nor examined whether the confessional statement in view of retraction can be accepted or not.

The Learned Tribunal should have decided the matter on the question of burden of proof and smuggling character of the goods upon examining the confessional statement made by the respective persons and further the retraction said to have been made. This aspect of the matter was not dealt with at all. The Division Bench of this Court in the case of Commissioner of Customs (Prev.), W.B. Kolkata v. Raj Kumar Jaiswal (supra) observed that the statements made u/s 108 of the Act can be taken against the persons from whom the materials have been seized without any corroborative evidence.

Both the authorities have accepted this statement but the Learned Tribunal did not examine this aspect as it appear from the judgment and order. Therefore, we think that reversal of the judgment and order of both authorities without consideration of the aforesaid points was not warranted hence it is not sustainable.

Accordingly, the judgment and order of the Learned Tribunal is set aside. We direct the Learned Tribunal to decide the matter afresh taking into consideration of the statements made by various persons and as accepted by two authorities and also to consider whether the retraction made by these persons by swearing affidavit can be believed and/or accepted or not, since such plea of retraction was not accepted by both the authorities below.

This matter may be heard out and imposed of finally within a period of a month form the date of communication of this order.

There will be no order as to costs.

Certified photostat copy of this order be made available to the parties, if applied for, upon compliance of all formalities.