ORDER
R. Jayaraman, Member (T)
1. Both the appeals are against the same order in original Mo. 86/Addl. Collr./1984 (F. No. VHt/10-33/Add. Collr./83) dated 17-1-1985.
2. The facts required for disposal of the appeals in so far as the two appellants are concerned can be briefly stated as below :
Acting on information, the Police Authorities of Morvi apprehended one truck No. GRW 1130 on 1-11-1983 on National Highway Road at Morvi. Two persons got down from the said truck and disappeared. However, the Police authorities have apprehended the driver of the truck Shri Gul Mohmed Mithakhan Notiar. On search of the truck by the Police officers, the truck was found to have been loaded with the 250 drums of poultry drugs additives consigned by M/s. M.J. International of Gandhidham to M/s. M.J. International, Bombay under receipt No. 2899 dated 31.10.1983 issued by New Gori Transport Co., Gandhidham. Underneath these drums, they also found 30 packages wrapped in gunny covers which contained 60 VCRs made in Japan valued at Rs. 12,00,000/-. The driver of the truck could not produce any document regarding the VCRs. Hence, they were placed under seizure. Thereafter, the Inspector of Customs, Rajkot took up the further investigations. During the investigation, it was revealed that M/s. M.J. International are having a unit at Kandla Free Trade Zone, where they manufacture various types of export goods. The goods under seizure covered by the lorry receipt were examined and sealed by the Customs authorities for export under A.R. 4 procedure, through Bombay Port. However, as regards VCRs which were found in the truck, they had indicated that they are not concerned with these VCRs, which appeared to have been subsequently taken in the lorry, after the said lorry left the Free Trade Zone. The other appellant, Shri Mohamadkhan N. Pathan was found to be the owner of the vehicle, as per the registration with the RTO. However, it was claimed by him that the said lorry was sold by him to Shri Gul Mohmed M. Notiar, the driver of the vehicle. A copy of the sale deed was also cited in the show cause notice. He disclaimed any knowledge of the smuggled VCR in the said lorry and he also indicated that he has no objection to the confiscation of the lorry, since he has already sold it to Shri Gul Mohmed Notiar. In the adjudication proceedings held by the Addl. Collector, he ordered absolute confiscation of 60 pcs. of VCRs. He has also ordered confiscation of 250 drums of poultry drugs additives under Section 119 of the Customs Act, but appropriated a sum of Rs. 55,000/- from the provisional bond executed at the time of provisional release of 250 drums towards redemption fine. He also ordered absolute confiscation of the truck GRW 1130 under Section 115(2) of the Customs Act. He imposed, inter alia, penalty of Rs. 50,000/- on Shri Mohamadkhan N. Pathan and Rs. 15,000/- on M/s. M.J. International. In the present appeals, we are only concerned with the order of confiscation relating to 250 drums of poultry drugs additives and appropriation of a sum of Rs. 55,000/- towards redemption fine and imposition of penalty of Rs. 15,000/-which is challenged by M/s. M.J. International and also the order imposing penalty of Rs. 50,000/- on the other appellant Shri Mohamadkhan N. Pathan.
3. Shri P.M. Dave the ld. advocate, appearing on behalf of the appellant Shri Mohamadkhan N. Pathan, mainly pleaded that though he does not dispute that the truck is standing in the name of Shri Mohamadkhan N. Pathan as per the RTO record, it was sold to Shri Gul Mohmed M. Notiar and a copy of the sale deed executed on 10 rupees stamp paper in favour of Shri Gul Mohamed M. Notiar was also found even at the time of interception of the lorry. The sale deed is dated 24-10-1983, whereas the seizure of the goods alongwith the truck was effected by the Police Officers on 1-11-1983. He also does not lay any claim over the lorry and he does not have any objection to the lorry being confiscated, since he has already sold the said lorry by getting part payment in cash. Even assuming that the lorry belongs to him and the claim of sale is not believable, there are no evidences to implicate him either by the driver or any other person to show that he has directed the driver to use the vehicle for transporting smuggled VCRs. Hence, the penalty imposed on him is not supported by any evidences and is therefore required to be set aside.
4. Shri R.K. Habbu, the ld. advocate on behalf of M/s. M.J. International has pleaded that in so far as 250 drums of poultry drugs additives are concerned, they are manufactured in their unit at Free Trade Zone and they were sent for export under AR. 4 procedure for export through Bombay. After examination of the goods and sealing by the Customs authorities, they were loaded in the lorry in the presence of Customs authorities and the lorry was sent out of the Free Trade Zone under supervision of the Customs. Hence, no nexus of the appellant with the smuggled VCRs can be alleged and they did not do any act of omission or commission rendering these 250 drums of poultry drugs additives, liable to confiscation even under Section 119 of the Customs Act. Hence, no penalty is imposable on them. Moreover, confiscation of these goods, which were transported under regular lorry receipt, after being loaded under Customs supervision, as goods used for concealing the smuggled VCRs, is also not sustainable. The Addl. Collector’s finding is that they are required to observe all the precautions to ensure that the goods are not used to conceal the contraband goods and they should have hired the truck of a reputed transport company to avoid such situation and on that ground the Addl. Collector has sustained the penal proceedings against them. He pleaded that neither the penalty nor the redemption fine are sustainable in the context of these findings; because of the fact that they have engaged the transport contractor Piyush Transport Co. for lifting the goods from their unit, who are the brokers for arranging the transport and no penalty has been imposed on these contractors. All the same, the Addl. Collector has imposed a penalty on the appellants for not ensuring the engagement of a reputed transport company.
5. Shri Mondal, the ld. SDR, on behalf of the Respondent, does not dispute the factual position pleaded by both the advocates. In so far as Shri Mohamadkhan is concerned, he contended that the sale deed and his version of having sold the lorry are make believe ones to escape from the clutches of law, if the lorry is intercepted with the contrabond goods. On this ground itself, his knowledge with regard to the utilisation of the lorry can be confirmed. He, however, fairly agrees that the driver of the lorry, who was apprehended with the goods has not implicated the appellants. All the same, he contends that the alleged claim of sale of lorry by the appellant is not carrying conviction. His knowledge about the vehicle being utilised for carrying smuggled goods cannot be ruled out. As against the argument of Shri Habbu, the ld. advocate, he pleads that though no evidence has been brought out to show the metis rea of the appellants M/s. M.J. International in so far as 250 drums of poultry drugs additives are concerned, these drums were used for camouflaging the smuggled VCRs and they are the goods used for concealing the goods. Hence, under Section 119, irrespective of mens rea or otherwise, such goods used for concealing are liable to confiscation.
6. After hearing both the sides, we find that the facts are not disputed. So far as Shri Mohamadkhan N. Pathan is concerned, the only evidence against him is that the lorry from which VCRs were recovered stands in his name being the registered owner. However, Shri Mohd. Khan Navobkhan Pathan, right from the beginning, has been contending that he has sold the vehicle to Shri Gul Mohmed Mithakhan Notiar, the driver. There is no averment from Shri Gul Mohmed denying purchase of the lorry. On the contrary, there is a copy of the sale deed on record, which has not been discredited by any evidences by the Department. The allegation of the sale deed being a make believe one remains on a presumption and not sustained by any valid evidence. In any case, when the appellant does not challenge the order of confiscation of the truck, we are led to believe that the truck has passed hands from him and hence, in that view, any nexus of the appellant Shri Mohamdkhan N. Pathan either with the lorry or with the goods transported therein cannot be held to have been established, in the absence of any averment by the driver of the truck implicating him. Benefit of doubt is required to be given to him. In this view, we set aside the penalty imposed on him.
7. In so far as the appellants M/s. M.J. International are concerned, it is not disputed that they sent 250 drums of poultry drugs additives from their unit at Kandla Free Trade Zone and these were sent after duly being examined by the Customs authorities. The lorry left the Free Trade Zone, which is under the Customs supervision, only with 250 drums. Hence, the VCRs could not have come to be placed in the lorry and these drums could not have been used for camouflaging those VCRs. In view of this undisputed factual position, it is evident that the loading of the VCRs under the declared goods covered by lorry receipt was done, much after the lorry left the Kandla Free Trade Zone. The appellants, M/s. M.J. International are found to be genuine despatcher of the goods and if some goods are illegally loaded on this vehicle by the Truck driver and re-arranged the goods so as to conceal the illegal goods, in our view such a case should not be visited with fine or penalty. Section 119 has to be viewed in the perspective of the facts of each case and cannot be applied in a routine or mechanical fashion. In this view, we set aside the fine of Rs. 55,000/- and also the penalty of Rs. 15,000/- imposed on M/s. M.J. International.
8. Consequential relief, to follow, wherever called for.