JUDGMENT
Bhaskar Bhattacharya, J.
1. This appeal under Section 130(1) of the Customs Act, 1962 (hereinafter referred to as the Act) is at the instance of the Commissioner of Customs (Preventive), West Bengal and is directed against the order dated 23rd September, 2003 passed by the learned Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata in Appeal No. CSM 147 of 2003 thereby setting aside the order of imposition of penalty of Rs. 1.50 lakh upon the Messers Planters Airways Limited and that of Rs. 15,000/- upon Shri Suresh Kumar Nyollywalla under the provision of Section 112(b) of the Act.
2. The facts giving rise to the filing of the present appeal may be summed up thus :
(a) The Director of Revenue Intelligence intercepted one truck belonging to a transport company named M/s. Planters Airways Limited when the same was on its way from Siliguri to Guahati and it was found to be loaded with some packages containing goods of foreign origin of miscellaneous nature, such as, cordless telephones, rechargeable emergencies lanterns, record players etc. Sri Sukhendu Bikash Bakshi, the representative of the transport company in his statement given on 10th October, 2001 stated that the consignments were booked for different destinations in the North Eastern States and those were booked in accordance with the declaration given by the consignors and on the basis of documents produced by them. He further stated that as a transporter they were not required to verify the contents at the time of booking of the consignments. The transport company, however, disclosed the names and addresses of all the consignors of the consignments.
(b) On the above basis, show-cause notices were issued to all the persons concerned proposing confiscation of the goods as also the truck involved, along with the imposition of personal penalties upon the various persons involved.
(c) Those show-cause notices were adjudicated by the Commissioner and he had imposed a personal penalty upon the appellant and had also confiscated the foreign made miscellaneous goods absolutely.
(d) In addition, the truck in question had also been confiscated with an option to the owner to redeem the same on payment of redemption fine of Rs. 50,000/-. The indigenous goods have also been confiscated on the ground that those were used to cover up the foreign made smuggled items with the option to the transport company to redeem those on payment of a redemption fine of Rs. 42,000/-.
(e) Being dissatisfied with the aforesaid order of confiscation and imposition of penalty, appeals were preferred before the Tribunal and by the order impugned herein, the said Tribunal has set aside the order passed by the authority below.
3. Being dissatisfied, the Revenue has come up with the present appeal.
4. Mr. Samaddar, the learned advocate appearing on behalf of the appellant has strenuously contended before us that the Tribunal acted illegally and with material irregularity in not only setting aside the penalty but also returning the goods in question to the transporter although the consignors were not coming forward to claim those articles. Mr. Samaddar contends that when the named consignors disclosed by the transporter are not taking the responsibility of the goods, the Tribunal erred in law in holding that the burden of proving the fact that the articles were smuggled goods had not been discharged. Mr. Samaddar further contends that as a transporter dealing with the business of transportation, it is its duty not only to verify the description of the items but also to see that the item sought to be transported is really owned by the consignor who booked the items and once it is found that the consignors were either fictitious persons or that they denied their liability, it is a fit case for confiscation and imposition of penalty upon the transporter. He, therefore, prays for setting aside the order impugned.
5. Mr. Pradip Kumar Das, the learned advocate appearing on behalf of the respondents has, however, opposed the aforesaid contentions of Mr. Samaddar and has contended that his client being a bona fide transporter had no liability, even if the goods were really smuggled goods. According to him, as a transporter his client had booked those articles for transportation at the request of the consignors and as such, it is the absolute responsibility of the Customs Authority to prove that those are smuggled goods and unless they prove specifically that those are smuggled goods, no order of either confiscation or imposition of penalty can be passed. At any rate, Mr. Das continues, the transporter cannot be penalised even if those items were smuggled.
6. Mr. Das next contends that the items confiscated herein being non-notified items in terms of Section 123 of the Act the Tribunal rightly set aside the imposition of penalty and confiscation. In support of such contention Mr Das relies upon the following decisions :
1. Commissioner. of Cus. (Prev.), W.B., Kolkata v. Sudhir Saha ;
2. Rajeev Kumar Aggarwal v. CEGAT reported in 1997 (94) E.L.T. 76 (Del.);
3. Santosh Gupta v. Union of India ;
4. Shanti Lal Mehta v. Union of India and Ors. reported in 1983 (14) E.L.T. 1715 (Del.);
5. Anil Kumar Pandey v. Commissioner of Customs, Shillong reported in 2006 (116) E.L.T. 642 (Tribunal);
6. Hindustan Bearing Corporation v. Collector of Customs
7. J.P. Bearing Co. v. Collector of Customs, Lucknow reported in 1999 (109) E.L.T. 538 (Tribunal).
8. Jupiter Exports v. Commissioner of Customs, Chennai .
9. State of Maharashtra v. Prithviraj Prokhraj Jain reported in 2000 (126) E.L.T. 180 (Bom.).
10. Mazda Chemicals v. Commissioner of Customs (Prev.), Ahmedabad .
11. Hindustan Wires Ltd. v. Commissioner of Customs (Prev.), Lucknow .
12. Extrusion v. Collector of Customs, Calcutta .
7. After hearing the learned Counsel for the parties and after going through the materials on record we find that two of the consignors have given statement to the effect that the goods in question had not been booked by them and somebody else had used the cash memo bearing their names without their knowledge. It further appears that the other seven of the consignors had been found to be non-existent and at the same time, nobody has come forward to claim the ownership of the goods. The Tribunal has accepted the contention of the respondents that mere failure of the transport company to make available the consignors of the goods before the Revenue cannot lead to the conclusion that those consignors do not exist. The Tribunal has also accepted the contention of transport company that it will be enough for a transporter to declare the contents of the packages booked based upon the declaration given by the consignors and there is neither any legal obligation on the part of the transport company nor is there any practical way for checking the contents of the packages booked by consignors. The Tribunal has further recorded that the Revenue had failed to prove that those goods were really smuggled and as such, the Tribunal not only set aside the order of confiscation and imposition of the penalty upon the transporter but also directed return of the confiscated articles including the truck to the transport company.
8. In the fact of the present case, we are of the view that the Revenue has discharged its burden of proving the fact that the articles were really smuggled goods and were hidden by some indigenous goods of Indian origin lest those goods are discovered by the appellant.
9. In our view, if a person carries on business of transportation, it is his duty to check up what items it is transporting. Merely because the consignor has given a particular description of the items sought to be transported, a transporter is not bound to accept that as correct. As a transporter, it has a primary duty to verify the items so that contraband articles are not passed out through it. The transporter must also be sure that the consignor is disclosing his genuine address and identity and that can be easily verified by either demanding production of voter identity card or other recognised identity cards such as, driving licence, Bank pass-book, ration card etc. and retaining a xerox copy thereof or accepting payment from such consignor for transportation through account payee cheque. It is true that in this case, the confiscated items were non-notified under Section 123 of the Act, but if we accept the contention of the learned advocate for the transoorter that his client had no liability at all to verify the contents, in such a case, even notified items may be illegally transported and in such a case, the transporter would take the selfsame plea that he had no liability in the matter even if the consignor is not traceable. If the alleged consignor declares his consignment as a box containing fruits and if it is ultimately found to be a coffin containing decomposed dead body of a man, the transporter cannot evade his liability by feigning ignorance of the contents. In the case before us, the declared consignors having been found to be fictitious persons and two of them although not fake but having denied their liability by not claiming the ownership of the goods, in our view, the Revenue has discharged the burden of proving that those are really smuggled goods when the transporter is even unable to place its clients, viz., the alleged consignors, for answer and the two named consignors denied having booked those articles. The fact that no body is taking responsibility of the goods, itself suggests that those are smuggled goods and thus, the appellant has discharged the burden of proving the fact that those are smuggled goods. Therefore, in this case there was no just reason for arriving at the conclusion that the appellant had failed to discharge the burden of proving that those were smuggled goods.
10. As regards the return of the confiscated articles, we are at a loss to find that the Tribunal has directed return of the articles to the transporter when the consignors named by the transporter are not taking its responsibility nor has anybody charged the transporter for non-delivery. In such a situation, there was no just ground for returning those articles to the transporter.
11. We reiterate that it is the duty of the transporter who regularly runs his business of transportation to verify the contents of the consignment and also the genuineness of names and addresses of the consignors and that is no difficult task now a days as pointed out by us above. Therefore, in this case it is well-established that the truck in question owned by transporter was used for smuggling of the foreign goods and the transporter cannot evade its responsibility for 12/204/4 abetting such crime.
12. We now propose to deal with the decisions cited by learned advocate for the respondents.
13. In the case of Commissioner of Customs (Prev.), W.B., Kolkata v. Sudhir Saha (supra), a Division Bench of this Court merely held that in case ol non-notified goods under Section 123 of the Act, the burden of proof cannot be shifted to the person from whom such goods were seized and it is for the department to prove the smuggled nature of the goods. There is no dispute with the aforesaid proposition of law but in a case where the department has stalled proceedings on the bona fide belief that the goods seized are smuggled goods and the declared owners are not coming forward even to put forward a claim of ownership of such goods and most of the declared owners are found to be fictitious persons, such burden is easily discharged once it is found that the goods were of foreign origin. In the case before us, nobody has asserted to be the owner of the goods and at the same time, nobody has also curiously accused the transporter of non-supply of the goods at the proper destination. Therefore, in this case, the onus has been discharged by the Revenue when the so-called owners are afraid of facing the revenue. The said decision is, therefore, of no assistance to Mr. Das.
14. In the case of Rajeev Kumar Aggarwal v. CEGAT (supra), the Delhi High Court was considering a case of seizure of ball bearings from Railway Authorities. On adjudication, the goods were found neither notified in the terms of the Customs Act nor was any evidence adduced by the department to prove that those have been smuggled into India. In such a case, it was held that once the Collector had concluded that there was no proof that the goods were smuggled goods, he had no jurisdiction to order confiscation of the goods since it was neither for the Collector nor for the Appellate Tribunal to go into the question of ownership of the goods and in such a situation, the goods ought to have been restored to the Railway Authorities to decide what was to be done.
15. In the case before us, we have already found that the real owners in connivance with the transporter tried to remove those smuggled goods from Siliguri to some other places. The ownership of the goods, no doubt, could not be proved but once the goods have been found to be smuggled in view of the non-traverse of the allegation levelled by the Revenue, the goods cannot be returned to the transporter as the act of the transporter had not been found to be bona fide. In the case of Rajeev Kumar Aggarwal (supra), the transporter was the Union of India through the Railway Authorities and as such, there was no allegation of connivance of the transporter with the real owner and in such a case, the Delhi High Court returned the goods to the transporter from whom those were seized particularly when the collector himself concluded that the goods were not smuggled.
16. In the case before us, once the real owners are not disclosing their identity in spite of their definite knowledge that the goods had not reached the destination and it has been established that the real owners booked the consignments in a fake name and we have found involvement of the transporter with the original owners, the goods cannot be returned to the transporter because such transporter itself does not know who the real owner is. We, thus, find that this decision is of no help to Mr Das’s client.
17. In the case of Santosh Gupta v. Union of India (supra) the Bombay High Court was dealing with a case of confiscation of goods where the owner produced two receipts under which she had purchased the goods in question. The person who passed the receipts unfortunately was not traceable but the owner of the studio on whose behalf the receipts were granted had been examined and he stated that he had not issued the receipts, but the material on record had shown that he had signed two receipts at the instance of one film producer, Mr Talwar by name and did not know for what purpose those receipts had been passed. In that case, the Court found that the department did no claim that the receipts were totally bogus and on preponderance of probabilities, it was found that the possessor had discharged the burden, if any, which lay upon her.
18. In the case before us, nobody is taking any responsibility as regards ownership of the goods though there are apparent disclosed owners; therefore, the principle laid down in the case of Santosh Gupta (supra), cannot have any application to the fact of the present case.
19. In the case of Shanti Lal Mehta v. Union of India and Ors. (supra), it was held that the restoration of the goods beyond time limit was illegal and that the burden is upon the Revenue to prove that the confiscated goods were smuggled goods. In that case, the burden was wrongly placed upon the possessor of the goods. In this case, we have already held that nobody has the courage to declare himself to be the owner of the goods and the possessor also feigned ignorance of the contents as well as genuineness of the identity of the consignor and such defence is disbelieved by us. Therefore, the said decision does not help the respondent in any way.
20. In the case of Anil Kumar Pandey v. Commissioner of Customs, Shillong (supra), the Tribunal was considering a case where the transporter challenged the order of confiscation though the owners of the goods did not lay any claim and in such a case, the Tribunal held that the transporter being the custodian of the goods had legal right to challenge the confiscation of the goods. In our view, in a case where the transporter is unable to produce the consignor who allegedly booked the item and at the same time nobody complained to the transporter alleging non-supply of the goods in question, once the goods have been prima facie proved to be of the foreign origin, the transporter has no right to challenge the order of confiscation and in the absence of his bona fide enquiry about the contents of the consigned goods as well as the proper identity of the alleged consignor in the transaction, the truck involved in the process of removing the goods is also liable to be confiscated and at the same time, he should be also personally penalised for helping the owner in transportation of smuggled goods. We, therefore, do not approve the principle laid down in the said decision.
21. In the case of Hindustan Bearing Corporation v. Collector of Customs (supra), the Tribunal was dealing with a case where the owner of the goods specifically disputed that the seized goods were smuggled ones and produced document in support of such claim and on a contested hearing, it was found that the Revenue could not prove those to be the smuggled goods. In the case before us, the transporter disclosed the names of bogus owners and nobody dared to claim the responsibility of the goods in question. Therefore, the principle laid down in the said decision cannot have any application to the fact of the present case.
22. In the case of J.P- Bearing Co. v. Commissioner of Customs, Lucknow, (supra), the Tribunal by relying upon the decision in the case of Hindustan Bearing Corporation (supra), held that the goods should be returned to the transporter, although nobody claimed ownership of the same. We do not approve the said decision and in our view, in a case where the transporter has not discharged its initial duty of checking the items and verifying the identity of the consignor and at the time of or after the seizer of the goods by the Revenue, those consignors did not come forward to assert their claim over those goods, the burden of proof that those are smuggled goods became lighter and in the absence of any counter claim by the owner of the goods, the goods cannot be returned back to the transporter when nobody has even charged the transporter for return of those goods. Such type of a case can be compared with one where after being chased by the Customs-people, the owner has escaped by leaving the goods in the street and in such a situation, the burden of proof upon the Revenue is negligible.
23. In the case of Jupiter Exports v. Commissioner of Customs, Chennai (supra), the question was whether dried garlic containing moisture content was classifiable under ITC sub-heading No. 071290.04. In such a case, it was held that the goods by virtue of classification, covered under Open General Licence (OGL) are not liable to confiscation under 111(d) of Customs Act, 1962 and hence, no redemption fine and penalty was imposable. In our view, in the case before us, the owner of the goods not having come forward raising any plea that it was not part of the smuggled goods, the transporter cannot take the brief of the owner of the goods. We have already found that the transporter could not bring the named consignors and at the same time, it is not even the case of the transporter that somebody has demanded return of the value of the goods for such confiscation. In such a situation, there is no scope of considering the question whether there has been violation of the Act when the owners of the goods are evading the process of law. We shall, in this case, presume that the real owners of the goods are afraid of facing the Revenue and at the same time, the transporter has not acted bona fide by not verifying the identity of the alleged consignors or the item of the goods. Therefore, the said decision cannot help the transporter in any way.
24. In the case of State of Maharastra v. Prithviraj Pokhraj Jain (supra), the Bombay High Court has reiterated the well settled principle that when the benefit of presumption under Section 123 of the Act is not available to the prosecution, the burden to prove that the goods are smuggled lies entirely on the prosecution and in the absence any direct evidence on record and circumstances brought on record by proving that the goods were smuggled, the prosecution had failed to prove that the goods were smuggled. It was further held that mere markings cannot be taken as proof of fact of foreign origin of goods as such markings and labels are only evidence of the nature of hearsay unless there is evidence to show that those markings are made by a particular company in the ordinary course of business. In the case before us, though the onus was upon the revenue, no body is coming forward to declare that he is the owner of the goods or that the goods are not smuggled; on the other hand, the so-called owners are hiding themselves in spite of notice and even are not claiming back the goods from the transporter through whom they allegedly booked those items for transportation. In such a case, no further evidence is necessary for proving that those goods are smuggled goods. The transporter in this case could get benefit of doubt if it had shown that the consignors were genuine and that it had verified the items. The transporter not having discharged those duties is not entitled to get the benefit of doubt. The said decision, thus, does not help the transporter in any way.
25. In the case of Mazda Chemicals v. Commissioner of Customs (Prev.), Ahmedabad (supra), it was held that the contraband goods and other goods if loaded in the same truck and the packages of contraband goods are kept at the bottom of the truck and covered by bags of soda ash, and the contraband goods are not concealed in the bags containing soda ash but found in separate packages, soda ash bags cannot be said to have been used for concealing the smuggled goods. In the case before us, it is the definite allegation that Indian goods were placed above the foreign made goods and those were smuggled goods. Be that as it may, we have already pointed out that transporter not having even checked the consignments cannot take the possible pleas available to the owner and in the absence of any defence taken by the owner of the goods, it should be presumed that those were really smuggled goods and Indian goods were used for concealing those foreign smuggled goods. In this case, no body is even coming forward to demand the return of the Indian goods.
26. In the case of Hindustan Wires Ltd. v. Commissioner of Customs (Prev.). Lucknow (supra), there was no nexus established between the owners of the coil in question and the owners of the smuggled goods and owners of the coils were not aware of the use of the goods for covering the smuggled yarn and in such a situation, the confiscation of goods allegedly used for concealment without the involvement of the owner was found to be not justified. In the case before us, neither the owner of the foreign goods nor that of Indian made goods which were used for concealing the foreign smuggled goods are showing their bravery to justify their claim and as such, in the absence of even claim of return of the goods by the owners, there is no scope of return of the goods to the transporter when the owners are not even demanding return from the transporter.
27. In the case of Extrusion v. Collector of Customs, Calcutta (supra), a Division Bencn of this Court held that in the matter of imposition of redemption fine and/or penalty, mens rea and/or conduct and/or attending extenuating circumstances are material and relevant. According to the Division Bench, to impose or inflict punishment on a person who is not guilty is against all the canons of natural justice and fair play and even otherwise, merely because the goods are liable to confiscation, it is not always necessary to impose a fine in lieu of confiscation. In the case before us, we are convinced that the transporter has not done its duty by verifying items of the goods declared by the consignors and has also not taken reasonable care to detect whether the consignors were disclosing their true identity and in such a case, once it is established that even the owners are not disclosing their identity to claim the confiscated goods nor are they charging the transporter for non-delivery, the conclusion is overwhelming that the transporter acted in connivance with the owners. We, thus, find that the principle laid down in the decision of Extrusion (supra), has no application to the facts of the present case.
28. Similarly, the provisions contained in 6 of the Carriers Act relied upon by Mr Das are of no avail to his client. The said provision is quoted below :
Liability for Non-scheduled Goods Section 6
6. In respect of what property liability of carrier not limited or affected by public notice. Carriers, with certain exceptions, may limit liability by special contract. -The liability of any common carrier for the loss of or damage to any property including container, pallet or similar article of transport used to consolidate goods delivered to him to be carried, not being of the description contained in the Schedule to this Act, shall not be deemed to be limited or affected by any public notice; but any such carrier, not being the owner of a railroad or tramroad constructed under the provisions of Act 22 of 1863 (to provide for taking land for works of public utility to be constructed by private persons or companies, and for regulating the construction and use of works on land so taken) may, by special contract, signed by the owner of such property so delivered as last aforesaid or by some person duly authorised in that behalf by such owner, limit his liability in respect of the same.
29. The plain reading of the aforesaid provision makes it clear that the liability of any common carrier for the loss of or damage to any property delivered to him to be carried should not be deemed to be limited or affected by any public notice but any such carrier not being owner of railroad or tramroad constructed under the provisions of Act 22 of 1863 may by special contract, signed by the owner of such property so delivered as aforesaid or by some persons duly authorised in that behalf by such owner, limit his liability in respect of the same. In the case before us, nobody has lodged claim before the carrier for damages although the goods had not reached its destination and this is not a case of loss or damage of any property in course of carriage but it is a case of confiscation by a revenue authority for violation of the Customs Act. Therefore, the said provision is irrelevant for the purpose of our discussion. We have already pointed out the duties of a carrier while transporting the goods and for not complying with those duties, a Court can reasonably infer mala fide on the part of the transporter or connivance with the owner in the matter of smuggling. The decisions cited by Mr. Das are, thus, of no assistance to his client.
30. In view of what have been stated above, we set aside the order of the Tribunal and direct not only confiscation of the goods and truck but also imposition of personal penalty upon the transporter with option to redeem the truck on the payment of money imposed by the original authority. We, however, find that no order of imposition of penalty should be imposed upon the two named consignors who denied their liability and it has not been established beyond doubt that they really concealed their identity before the transporter and are the real owners of the goods.
31. The appeal is, thus, allowed and the order passed by the tribunal is set aside to the extent indicated above.
32. In the facts and circumstances, there will be, however, no order as to costs.
Pravendu Narayan Sinha, J.
33. I agree.