ORDER
S.S. Sekhon, Member (T)
1. Two trucks were intercepted by the officers of DRI on 19-3-90 which were found to be loaded with Brass Scrap in gunny bags which on detailed examination revealed that there were 811 Nos. of Silver Metal Pieces totally weighing 1876.100 kgs. concealed, amongst brass scrap. Inquiries made by the officers revealed that the brass was imported and cleared through Bombay docks on Bill of Entry No. 469/88 dated 2-6-1990 which was cleared on 15-3-1990 and was delivered to a godown at Phoenix Mills Warehouse as per the instructions of the importers i.e. M/s. Harish Metind Pvt. Ltd. Jamnagar; inquiries further revealed that the gunny bags were packed at this warehouse at Phoenix Mills and the trucks were on their way to Mathura where the silver and the brass scrap were to be delivered to certain parties. A show cause notice was issued to various parties and vide the impugned order, the Commissioner (P) Bombay found that the silver seized was liable for penalty and Shri Harish Peshawaria of M/s. Harish Metind Pvt. Ltd. and Bharat Dattani were liable for penalty under Section 112(a)(i) and 112(b)(i) of Customs Act, 1962.
2. The present appeal is filed Bharat Dattani of Jamnagar against the imposition of penalty on him. Shri S.V. Keshvani Advocate appeared for the appellant and Shri K.M. Patwari for the Revenue and after considering the material and the submissions made. We find that
(a) Commissioner has found as follows :
I have considered the evidence on record in this case including the submissions made at the time of personal hearing and the cross-examination. The charge against M/s. Harish Metind Pvt. Ltd. and Shri Harish Peshwaria, Director of the said firm is that in conspiracy with other persons they imported a consignment of brass scrap with silver concealed in it in violation of Section 111 and 119 of the Customs Act, 1962 thereby rendering the silver liable to confiscation under Section 111(d) of the Customs Act, 1962 and themselves liable to penalty in terms of Section 112 of the Customs Act, 1962. Shri Sonavane, consultant appeared for hearing twice on behalf of M/s. Harish Metind and Shri Harish Peshwaria. However at the concluding hearing, he did not appear for personal hearing. He also did not appear for personal hearing. He also did not make any request for adjournment nor has he filed any further written submissions. Therefore, case in respect of M/s. Har-ish Metind and Harish Peshawaria is being decided on the basis of evidence on record including the written submissions made by Shri Sonavane earlier. The undisputed fact in this case is that the consignment of brass imported by M/s. Harish Metind had 1870.100 kgs. of silver concealed in an ingenious manner so as to make its detection difficult at a casual glance. In his statements, Shri Harish Peshwaria denied knowledge of concealment of silver in the consignment. In his statement initially Bharat Dattani had also stated that Harish Peshawaria did not have knowledge that the brass consignment contained silver. Only at the adjudicating stage, during personal hearing it was submitted by the advocate of Shri Bharat Dattani, Shri Wazifdar that Harish Peshawaria had indented the consignment, that he knows the party in Dubai who exported the silver; that it is he who had arranged for its sale to parties in Mathura. The circumstances in this case clearly point out an accusing finger on Harish Peshwaria of M/s. Harish Metind. No person sitting abroad will send silver to India if an order for brass scrap has been placed with him. Silver is far more expensive than brass scrap and obviously in normal course of trade the exporter would expect full value of the silver sent by him to India. The consignment of brass scrap containing silver has been imported by Harish Peshwaria of M/s. Harish Metind. It is improbable to believe that he will receive silver when he had placed on order only for brass scrap. That the consignment had silver in it was known to Harish Peshawaria of M/s. Harish Metind is also clear from the fact that after the clearance of consignment, he did not want it to be brought to Jamnagar where brass scrap had many utilities. He wanted it to be delivered in Mathura. When clearing agents raised objection, he made arrangements for its storage in Bombay, its repacking in gunny bags, its transportation to Mathura, payment of octroi, coverage of the consignment by two invoices and cover of even Sales Tax form. These elaborate precautions and efforts were made by Harish Peshawaria not for the brass scrap, which had not used in Mathura and which ought to have been used in his factory as Jamnagar is a big centre for use of brass scrap but because the consignment contained silver for which he found ready buyers in Mathura. There is also evidence on record that Harish Peshawaria not only corresponded with the foreign suppliers, but had also met their representatives in Bombay. Therefore, Harish Peshawaria cannot plead that he was not aware of the actual contents of the consignment imported by him.
As per the evidence before me, all actions in respect of this consignment, directions, instructions were issued by Harish Peshawaria namely placing of the order, its import, its clearance payment of the duty, its storage in Bombay in a godown, its repacking, its transportation to Mathura, payment of octroi, its coverage by Sales Tax Form etc. Therefore, the position which emerges is that Harish Peshawaria of M/s. Harish Metind imported consignment of brass scrap which had substantial quantity of silver, without a valid import licence. He also made arrangements for its storage, transportation, disposal etc. By his above actions he had rendered the silver liable for confiscation under Section 111(d) of the Customs Act. The brass scrap which was used for concealing silver has been rendered liable for confiscation under Section 119 of the Customs Act, 1962. The entire consignment, including the brass scrap used for concealing silver, has already been ordered to be absolutely confiscated under Section 111(d)/119 of the Customs Act, 1962. Even if it could be argued that Harish Peshawaria did not have specific knowledge that the consignment contained silver concealed in, it cannot be denied that he has imported a valid licence which would render the consignment liable for confiscation under Section 111 (d) and Harish Peshawaria would render himself liable to penalty under Section 112(a) (i) notwithstanding the element of knowledge on his part. Even if it were to be assumed for the sake of argument that he had no specific knowledge that silver has been concealed in the consignment, it is necessary to keep in mind that silver is an article notified under Section 123 of the Customs Act, whereby burden of proof is on the person from whose custody, possession or control it was seized. The burden of legitimate acquisition and import of silver has not been discharged by Harish Peshawaria. On the contrary there is strong evidence, including circumstantial evidence, against Harish Peshawaria that he was knowingly concerned in carrying, removing, keeping and disposing of silver which had been imported concealed in the consignment of brass scrap. I therefore, hold that Harish Peshawaria of M/s. Harish Metind has rendered himself liable to penalty under both the sub-section namely 112(a) as well as 112(b) of the Customs Act, 1962.
Shri Bharat Dattani, in his statement had initially admitted before the Customs officers that he had knowledge that the consignment contained silver and he had offered to clear it through Customs. This has not been refuted by him. The statement made by him has also not been retracted. During very elaborate personal hearings in which Bharat Dattani himself remained present, neither he nor his advocate, denied that he (Bharat Dattani) had knowledge that the consignment contained silver. The main thrust of the arguments of the learned advocate had been that Bharat Dattani acted as representative of Harish Peshawaria, who was the financer for the consignment and that his role was to get the consignment cleared for which he was to get some remuneration, the learned advocate mentioned that the main beneficiary of the smuggling activity was to be Harish Peshawaria and not Bharat Dattani, For this he relied upon elaborate documentary evidence including Harish’s instructions to the CHA, his instruction for storage, repacking, transportation of the consignment. The learned advocate also relied upon a bank statement of Harish Peshawaria and G. Shroff from the Corporation Bank of Jamnagar. The entries in the bank account clearly establish that the finance for the two consignments i.e. the impugned consignment as well as one consignment prior to it had been arranged by Harish Peshawaria by taking money from G. Shroff. I, therefore, find merit in the submission of Shri Wazifdar that there is no evidence that Bharat Dattani had made arrangements for financing the impugned consignment. Therefore even though he had admitted earlier that he had financed the impugned consignment, in view of the submissions before me at the time of personal hearing and in view of elaborate documentary evidence produced before me, I accept the submissions of the advocate that Bharat Dattani was not concerned with financing of the impugned consignment. However this does not absolve Bharat Dattani of his liability for penalty under the Customs Act, 1962.
There has been no denial before me and it is on record from the mouth of Bharat Dattani himself that he had knowledge that the consignment imported contained silver. It is also an admitted and undisputed fact that Bharat Dattani made arrangements for clearance, its storage, its repacking, and also its transportation. May be all these actions were done by Bharat Dattani on the instructions of Harish Pesha-waria. But that again does not come to the rescue of Bharat Dattani so far as his penal liability is concerned. It was Bharat Dattani who had made arrangements for import of the consignment. He was to get around Rs. 50,000/- for this job. It is immaterial whether the money was to be given by Harish Peshawaria or by another particular person. He was therefore willing actor in this sordid drama. The circumstantial evidence in this case clearly establishes the liability of Bharat Dattani for penal action under Section 112 of the Customs Act. Bharat Dattani did not know, according to his advocate, the distinction between brass and copper. He is not a businessman, he is not an expert in either manufacture or dealing or trading in brass. He became a representative of Harish Peshawaria for import of consignments and its clearance. He had no knowledge of the Customs Regulations and he did not know the C.H.A. Bharat Dattani stayed in posh hotel like President Hotel. He made trips to Dubai before as well as immediately after loading of this consignment into the truck and making arrangements for its transportation leaving behind documents with his uncle. There could be no purpose of his hurried trip to Dubai except in connection with this consignment. He was to receive Rs. 50,000/- or so from the supplier for this smuggled consignment. His explanation that he went to Dubai initially to convince the exporter to send the consignment to Harish Peshawaria since the exporter, having come to know of his (Harish Peshawaria’s) shady deals was reluctant to send the consignment, establishes his nexus and role in the smuggling of this consignments. Bharat Dattani has neither the status nor the business acumen nor the means to convince or to intercede on behalf of Harish Peshawaria with the foreign suppliers to send him silver unless he had vital stakes involved in it. Therefore, his actions are not at all consistent with the explanation namely that he was a representative of Harish Peshawaria for the limited purpose of clearance of the consignment. In any case, the undisputed and admitted position is that he had knowledge that the consignment contained silver and in conscious disregard of the law, he concerned himself with the clearance, storage, packing, transporting and disposal of the said contraband silver. That Bharat Dattani had knowledge of import of contraband silver is further supported by documentary evidence namely his own statements which are corroborated by the statement of his uncle, Chandulal Dattani. There is also documentary evidence of his connection with the consignment and his knowledge of silver i.e. the diary which he left behind with his uncle and which was recovered from the premises of his uncle by DRI officers. The diary contained telephone number of Asif of Aalia General Trading who were the shipper of the consignment in this case. Bharat Dattani has, therefore, by his actions rendered the goods liable to confiscation under Sections 111(d) and 119 and himself liable to penalty under Section 112(a) as well as Section 112(b) of the Customs Act, 1962.
(b) From the above it would appear, that once the entire responsibility for the import of silver in the consignment of brass scrap has been found and fastened on Harish Peshawaria by the Commissioner and he proceeds to determine that Bharat Dattani was not concerned with financing of the impugned consignment by accepting the plea. Then the subsequent findings, regarding the liability for penalty on Bharat Dattani under Section 112(a) and 112 (b) of the Customs Act, 1962 for having rendered the goods liable to confiscation is in conflict. The material he relies upon for this purpose to bring in knowledge as part of Bharat Dattani is Bharat Dattani’s statement and circumstantial evidence viz., his stay in Posh Hotels like President Hotel. The trip to Dubai, payment of Rs. 50,000/- to be received not from Harish Pesha-waria but someone else i.e. supplier of silver. The negotiations at Dubai which led to a conclusion that Bharat Dattani was not a mere representative of Harish for clearance of consignment, but had knowledge that the consignment contained silver and he in conscious as disregard of the law, concerned himself with clearance, storage, packing, transporting and disposal of silver corroboration of Chandulal Dattani finding diary and telephone numbers.
(c) Since the adjudicator has basically arrived at his findings on the basis of statements of Bharat Dattani. It was for him to first come to a finding and thereafter given cause to the finding in that the statements were voluntary admission made. Supreme Court in the case of K.I. Pavunny [1997 (90) E.L.T. 241 (S.C.)] have held :
“25. It would thus be seen that there is no prohibition under the Evidence Act to rely upon the retracted confession to prove the prosecution case or to make the same basis for conviction of the accused. The practice and prudence require that the Court could examine the evidence adduced by the prosecution to find out whether there are any other facts and circumstances to corroborate the retracted confession. It is not necessary that there should be corroboration from independent evidence adduced by the prosecution to corroborate each detail contained in the confessional statement. The Court is required to examine whether the confessional statement is voluntary; in other words, whether it was not obtained by threat, duress or promise. If the Court is satisfied from the evidence that it was voluntary, then it is required to examine whether the statement is true”
There is no finding in the impugned order about the examinations of statements required as above. Therefore the matter is required to be remanded back to the Commissioner for re-evaluation of the facts and redetermine the matter after examining and coming to a finding and regarding the confession in the statement, more so when ld. Advocate Keshwani has pointed out that the conduct of the investigating officer a witness from DRI, stipulating “DRI DEPARTMENT AS NOT RELYING UPON THE SAID SEIZED DOCUMENTS FROM SHRI PESHAWARIA TO THESE PROCEEDINGS” and therefore the documents were not brought, is no reason to deny access of these documents to Shri Bharat Dattani and his lawyers to effectively put up defence. Documents not relied by prosecution, but recorded or/and in possession of department, can be vital to defence and if sought, have to be supplied.
3. This appeal is therefore allowed as remand, the order is therefore set aside and remanded back to the adjudicator to allow the cross examination of the Investigating officer, after allowing the inspection of seized documents by/on behalf of Bharat Dattani, he should thereafter hear the appellant and decide the matter as per law.
