ORDER
G.R. Sharma, Member (T)
1. The Commissioner of Customs (Appeals) in the impugned order imposed “a penalty of Rs. 25.00 lakh on Shri Manohar Punjabi under Section 112(a) of the Customs Act, 1962, which has been proved to have been concerned in carrying and keeping 31 Fax machines which he knew or had reason to believe were liable to confiscation under Section 111 (d) of Customs Act, 1962”. Being aggrieved by this order, the appellant had filed the captioned appeal.
2. The facts briefly stated are that on receipt of information, Delhi Police searched the outhouse of Premises at 201, Sainik Farms, New Delhi on 22-4- 1989. They called the DRI Officers who associated in the search. Since the two outhouses which were searched were a part of the place occupied by the Counsellor of Uganda High Commission, he was requested to clarify whether the outhouses were in his occupation. The Counsellor denied to have any control over the outhouses and the outhouses were forced open. On search of one of the two rooms, Police recovered 462 kg. of Hashish. 31 Cartons containing 31 Canon Fax Machines were also recovered. The marks were “Fax 230 Canon Facsimile Trans Receiver Model H-1104” (Made in Japan). The value of the machines was estimated to be Rs. 46,50,000/-. Since there was no person to produce any documentary evidence in regard to lawful import the same was seized under Section 110 of the Customs Act in the reasonable belief that they were liable to confiscation. The Counsellor of the Uganda High Commission produced a copy of the Lease Deed and a letter dated 24-10-1988 addressed to GLSA Associates, through the Ministry of External Affairs.
3. Statement of Shri G.D. Mehta was recorded on 1-5-1989 in the office of Superintendent, Tihar Jail. Shri Mehta started that he did not have any property in his name except a Farm House, measuring one acre approximately at 201, Sainik Farms; that this plot was purchased by him in the name of GLSA Associates. He further stated that this land was purchased by him for Rs. 45,000/- approximately in the year 1981 or 1982; that he had sold the plot after completion of structure work to Mr. Ishwar Punjabi, but the title was not transferred; that the house at the plot standing in his name was constructed by Mr. Ishwar Punjabi; that the constructed house including the servants’ quarters were rented out to the Uganda High Commission by Mr. Ishwar Punjabi through his Son Shri Manohar Punjabi at a monthly rent of Rs. 8,000/-; that all the negotiations regarding the lease were made by Shri Ishwar Punjabi; that he had merely signed the lease deed at the request of Shri Ishwar Punjabi and Shri Manohar Punjabi who also used to realise the rent. When the letter dated 24-10-1998 was shown to Shri Mehta, he denied to have received any such letter and stated that the same might have been received by Shri Manohar Punjabi as the same was addressed to him at his address. On being shown the letter dated 25-11-1988 from the Counsellor to GLSA Accociates, Shri Mehta admitted to have received this letter and stated that he had informed Shri Ishwar Punjabi and Shri Manohar Punjabi accordingly. The letter dated 25-11-1988 was an intimation about termination of lease agreement. Shri Mehta stated that he had informed Shri Ishwar Punjabi and Shri Manohar Punjabi accordingly.
4. Statement of Shri Rajesh Kumar, Resident of C-l/79, Lajpat Nagar, New Delhi was recorded on 9-5-1989. He stated, inter alia, that he had been driving a Tempo for the last 9-10 years; that presently the Tempo was being driven by drivers; that his residence was situated opposite Modesto Corporation, the owner of which was Shri Ishwar Punjabi; that he had been transporting the goods for Shri Ishwar Punjabi; that Tempo No. DEL 6346 was being driven by Shri Pyarelal for the last 4 years.
5. Shri Pyarelal in his statement recorded on 9-5-1989, inter alia, stated that he was working as a Driver of the Tempo belonging to Shri Rajesh Kumar; that they were mainly transporting the goods of M/s. Modesto Corporation; that these goods contained wooden boxes, the contents of which were not known to him; that a peon, viz. Shri Harish used to accompany the goods; that he used to transport the goods mainly to Defence Colony, Chanakyapuri, Greater Kailash and Vasant Vihar etc; that he had been transporting old and used Air Conditioners, Refrigerators also; that he had transported and unloaded wooden boxes at 201 Sainik Farms at the instance of Shri Harish before August, 1988 also. He stated that in August, 1988, he transported some steel boxes from Greater Kailash to 201, Sainik Farms; that Ishwar Punjabi, his Son Manu (Manohar Punjabi) and his Servant were present at the time of loading these boxes; that Shri Harish accompanied him with the goods and Manu arrived there in his Maruti Van; that after reaching 201, Sainik Farms, Shri Harish unlocked the Servant’s room located in the house and the goods were kept in those room; that this time, Manu, who never used to be present at the time of loading and unloading of the goods, was present; that the Steel Boxes which were shown to him in the Police Station were the same Steel boxes transported by him from Greater Kailash to 201 Sainik Farms; that the Room at 201 Sainik Farms in which a well is located was shown to him by your officers and were the same room where the steel boxes were kept; that previously also he had unloaded wooden boxes at the same place several times.
6. Shri Bhagwan Das was working as a Chokidar at 201 Sainik Farms. His statement was also recorded on 11-5-1989, who stated that his brothers Shri Harish and Ghanshyam were working with Shri Ishwar Punjabi; that Shri Ishwar Punjabi had sent both his brothers to Jacky International, Dubai for service; that after that, Shri Ishwar Punjabi called him for service with him; that he started working as Chokidar at 201 Sainik Farms from 24th August, 1988; that in the month of September, 1988, a Tempo driven by Shri Pyarelal had brought 8 or 9 steel boxes to the house where the Diplomat was staying; that Shri Manohar Punjabi and Shri Harish accompanied that Tempo; that Shri Manohar Punjabi unlocked the Servant’s quarters near the well, kept the steel boxes in the room and locked it; that after 2 or 3 days, Shri Manohar Punjabi and Shri Harish brought seven wooden boxes in the same tempo and kept in the same room; that the room was unlocked and locked by Shri Manohar Punjabi; that after a week, Shri Manohar Punjabi came to the Farmhouse where the Diplomat was staying; that he unlocked the Servant’s Quarters and asked him to load a steel box in his Car; that he left with that box; that the boxes lying in the Ambedkar Nagar Police Station shown to him were the same boxes which were brought and kept by Shri Manohar Punjabi in the Servant’s Quarters at 201 Sainik Farms.
7. Shri Ishwar Punjabi, whose statement was recorded on 31-7-1989 in Tihar Jail, stated that he had his office at D-10, Defence Colony in the name and style of Modesto Corporation; that he was doing mail-order business since 1965-1966; that he was the sole Proprietor of the above mentioned firm; that his Son Shri Manohar Punjabi is an employee of the company; that he also had an office at Bombay at 303, Ch. Street Ground Floor No. 2, near Marine Line Church, Kalba Devi, Bombay; that the office in Bombay was looked after by Shri Girdhar Punjabi; that he did not know his where abouts since November, 1988; that House No. E-49, Lajpat Nagar – III was his property; that he was aware of the plots and bungalows situated at 201 Sainik Farms, Mehrauli.
8. In his further statement recorded on 2-8-1989, Shri Ishwar Punjabi stated that the plot at 201 Sainik Farms registered in the name of Shri G.D. Mehta was purchased by him on verbal understanding about 3-4 years ago; that he did not make any payment of Shri Mehta against that deal so far; that since the plot was not transferred in his name, the same remained registered in the name of Shri G.D. Mehta; that the constructed portion as well as the portion under construction had remained wider his control; that he was looking after the construction work through his Architect; that the constructed portion of the plot was first rented out to Liberian Embassy at a monthly rent of Rs. 800/-; that later on from 1-8-1988, that portion was rented out to the Uganda High Commission at a monthly rent of Rs. 8,000/-; that in both the cases, the negotiations and rent deals were finalised through them and Shri G.D. Mehta had only signed the deals because the property stood in his name; that he learnt about the recovery and seizure of Charas and Canon Fax machines through news papers; that he was shown the Panchnama dated 22-4-1989 about the recovery and seizure of 31 Fax machines valued at Rs. 46,50,000/- by the DRI Officers alongwith Charas which was reportedly seized by Police; that he was also informed that the Counsellor of Uganda High Commission had denied to have any control over the servant quarters and told that the possession of the Servant’s Quarters was not handed over to him; that the whole house, including the servant’s quarters, was handed over to the Uganda High Commission; that the letter dated 24-10-1988 about non-handing over of the servant’s quarters was never received by him; that the servant’s quarters were not locked by us; that after handing over the house to the Uganda High Commission they had no control; that he knew Shri Bhagwan Das, S/o Shri Tikam Chand, who was working with them as a Caretaker; that the facts mentioned in the statement of Shri Bhagwan Das were totally incorrect.
9. Shri Manohar Punjabi in his statement recorded on 3rd August, 1989 stated that his father was the sole proprietor of the firm known as Modesto Corporation; that he was a sales manager getting a salary of Rs. 2200/- per month; that he lived with his father, Shri Ishwar Punjabi at Lajpat Nagar, New Delhi; that he owned a Plot No. 201, Sainik Farms, New Delhi which has not been constructed as yet; that he knew that his father had purchased the plot belonging to Shri G.D. Mehta, but the plot still stood in the name of Shri G.D. Mehta; that the plot had two portions; that one portion was fully constructed and the other was under construction; that his father was taking care of the construction of the house; that the constructed portion was earlier rented out to the Liberian Embassy and from 1st August to the Uganda High Commission at a monthly rent of Rs. 8,000/-; that he knew all these things because he had singned the lease agreement as a witness; that the lease agreement was finalised by his father; that they had obtained the signature of Shri G.D. Mehta on the Lease Deed because the plot still stood in his name; that he had no control over the servant’s quarters from where Charas and fax machines were recovered; that the statement of the Counsellor of Uganda High Commission was not correct; that in one of these two room there was a well from where water supply was provided to the House; that if the room remained close, nobody could draw water. About the letter dated 24-10-1988, Shri Manohar Punjabi stated that the letter was never received; that he had no knowledge about Shri Harish working with Modesto Corporation. He also stated that he did not know Shri Bhagwan Das who is reported to be working as Caretaker of the house adjoining to the house of the Uganda High Commission. On being confronted with the statement dated 11-5-1989 of Shri Bhagwan Das about the visits of Shri Manohar Punjabi to Plot No. 201, Sainik Farms and operating the Servant’s quarters for keeping the Steel Boxes and also to the statement of Shri Pyarelal, Driver of the Tempo about the visits of Shri Manohar Punjabi and transporting the steel boxes from Greater Kailash to Plot No. 201, Sainik Farms he stated that Shri Bhagwan Das stated wrong things; that he never visited that place as stated by Shri Bhagwan Das; that he did not know Shri Pyarelal. However, after reading the statement of Shri Bhagwan Das, Shri Manohar Punjabi admitted that Shri Harish was Shri Bhagwan Das’s Brother and was visiting his father.
10. The premises at 12th Floor, Mittal Towers, Bombay, belonging to Smt. Asha Punjabi were searched on 2-12-1988 and 5 canon Fax machines alongwith some other documents were seized from there. The Fax machines seized from Bombay premises and those seized by the Officers of the DRI in New Delhi from Plot No. 201, Sainik Farms on 22-4-1989 appeared to be imported in the same consignment and in a single lot because the serial Nos. of the Fax machines were in a consecutive order. Accordingly, a show cause notice was issued to the appellants asking them to explain as to why the seized fax machines should not be confiscated and why penalty should not be im-posjed. Confiscation of the Fax Machines was adjudged under a separate order whereas the penalty proceedings started under a different order as was held in the adjudication order.
11. We have heard the submissions of Shri J.S. Agarwal, the ld. Advocate for the Appellants and Shri P.K. Jain, the ld. SDR for the respondent Commissioner.
12. It was argued for the appellants that decision in this case took 7 years; that the matter was heard by 4 adjudicating authorities without taking any decision; that the Hon’ble Bombay High Court in the case of Universal Generics Pvt. Ltd. v. Union of India [1993 (68) E.L.T. 27] held that ‘Department not permitted to complete adjudication proceedings for imposition of penalty on importer, if any, adjudication proceedings not having been completed for ten years and imposition of penalty after ten years not being just and fair.’ The ld. Counsel also pleaded that this view was again followed in the case of Nehawa Steel Traders v. Union of India [1993 (68) E.L.T. 721] by the Hon’ble High Court.
13. The ld. Counsel for the appellant referred to letters dated 24-10-1988 and 24-4-1989 and submitted that these letter indicate that some enquiries were conducted with Diplomat, but the report on the enquiry conducted was not made available to the Appellant. The Counsel also submitted that the leasedeed stated that the properties mentioned therein were in the possession of the Diplomat and since the properties were in the possession of the Diplomat, the question of their being under the custody of the Appellant does not arise. He referred to the impugned order and submitted that in the Order-in-Original there is no order on transport and custody and that the order speaks of noticee and not of noticees. The Counsel in support of his contentions that the adjudication order was set aside on the ground that the adjudication took a lot of time, he submitted that in the instant case, the case took a lot of time and the case was heard at different times by four different Collector/Commissioners and, therefore, the order deserved to be set aside. In support of his contention, he cited and relied upon the decision in the case of Bhagsons Paint Industries v. CCE [1996 (17) RLT 886]. Replying to this contention, the ld. DR submitted that the case cited by the Appellant was based on the decision of the Apex Court, but the facts in the two cases are distinguishible in as much as in the instant case it was a seizure of Hashish and Fax Machines. Since it was a case pertaining narcotic drugs also, therefore, the investigations took a lot of time and the case was adjudicated after considerable time. We agree with the contention of the ld. DR on this score and find that narcotic drugs cases take a lot of time for investigation. In this view of the matter, we hold that the present case is distinguishible.
(b) The appellant also cited and relied upon the decision of this Tribunal in the case of Himalaya Textile Dryers v. CCE, New Delhi [1995 (11) RLT 499]. In this case, readjudication was done after four years after its remand. In the instant case before us, we find that the case was not decided on remand and, therefore, the facts in the two cases are different. We agree with the contention of the Department that the delay in the instant case was because of the detailed investigations conducted in respect of smuggling of hashish. The Counsel cited the decision of the Hon’ble Bombay High Court in the case of Universal Generics Pvt. Limited v. Union of India [1993 (68) E.L.T. 27] which is also distinguishible.
(c) The Counsel for the Appellant also cited the decision of this Tribunal in the case of Coronation Litho Works v. CCE, Madurai [1994 (73) E.L.T. 683]. In this case, the Tribunal had held that quasi-judicial authorities are required to create confidence in the mind of the Litigant and maintain the same. In the instant case we find that there is nothing to prove that there was some bias against the Appellants in the mind of the adjudicating authority and hence the decision is distinguishible.
(d) The Appellants also referred to the decision of the Hon’ble Bombay High Court in the case of Oswal Woollen Mills Ltd. v. Union of India [1993 (67) E.L.T. 65], contending that there was discrimination against the appellant in as much as there is no nexus between the goods and the appellant. We have examined this issue and the facts available on record. We find that there is ample evidence in the form of statements of the Tempo Driver, the Watchman/Caretaker etc. On careful examination of the facts on record, we hold that there was nexus between the confiscated fax machines and the Appellant.
14. In reply to these contentions, the DR submitted that it was a case of out-right smuggling not only of Cannon Fax Machines but also of Hashish and thus it took a lot of time.
14(a) We have considered the rival submissions. We find that the time taken is to be examined in respect of the facts of each case. In the instant case, we find that there was delay as the case was proceedings slowly. But the case did not proceed faster in view of detailed investigations and, therefore, we hold that the time taken in this case was not so long as to warrant interference ¦ in the imposition of penalty as was held by the Honourable Bombay High Court in the case cited by the ld. Counsel for the appellant.
15. It was argued for the appellants that the premises from where fax machines were recovered was in the name of GLSA Associates, C/o Shri G.D. Mehta; that these premises including the outhouses from where the canon Fax machines were recovered was under the occupation of the Uganda High Commission; that the letter dated 24-10-1988 showing the complaint of Uganda High Commission that 2 rooms were permanently locked by the representative of M/s. GLSA Associates was never received by them that this letter was an after thought and was written perhaps subsequently after the seizure to get away from any complaints on this account; that no enquiries were conducted with the Counsellor of Uganda High Commission though the seizing officers knew that he was leaving the country shortly; that the well which provided water was in the room and if the room were locked or in the possession of Shri Iswar Punjabi or Shri Manohar Punjabi, no water can be drawn; that the statement of Shri Bhagwan Das has been relied upon regarding the visit of Shri Manohar Punjabi to the two room in Plot No. 201, Sainik Farms and storing some boxes and cartons, but no evidence has been placed on record to show that Shri Bhagwan Das was an employee of the Appellant; that the Serial number of the fax machines found in Bombay and those found in Plot No. 201, Sainik Farms being consecutive is no proof that the fax machines were illegally imported or belonged to the appellant. It was submitted by the Counsel for the Appellants that the Department has not been able to prove that the rooms from where the confiscated fax machines were recovered were in the occupation of the appellant.
16. Replying to the contentions of the Appellant, the ld. DR submitted that the statements of Shri Rajesh Kumar, Shri Pyarelal and Shri Bhagwan Das clearly show that the appellant was having control over the outhouses and was keeping the goods in these outhouses from time to time. The ld. DR also submitted that Shri G.D. Mehta had no control over the premises as had been admitted by the appellant himself. He submits that looking to all these facts and the statements of the persons referred to above, the premises were under the control of the appellants and the appellant had transported the boxes/car-. tons and kept them locked in the premises from where they were recovered.
17. On careful consideration of the submissions of both sides and the statements as reproduced in the preceding paragraphs, we note that the premises were leased out to the Uganda High Commission by the Appellants. We also note that the rents were being received by the Appellants. We note that Shri Bhagwan Das was in the employment of the Appellants. We also find that Shri Harish, brother of Shri Bhagwan Das was also working with the Appellants. We also note that Shri Pyarelal was driving the Tempo in which the goods were being carried. No evidence has been placed on record by the appellants to show that these people had any enemity with the Appellants so as to give statements incriminating the appellants. Looking to all the facts brought out by the various documents and statements of the witnesses, we hold that the premises from where the confiscated fax machines were recovered, were under the control of the Appellant.
18. It was pleaded for the Appellants that the Appellants had nothing to do with the Fax Machines confiscated. It was also pleaded that the Appellant was not concerned with the Fax Machines confiscated and that no evidence has been brought on record to prove that the Appellants had imported the fax machines illegally. It was argued that the fax machines were not notified goods and that for imposing penalty under Section 112, the Department has to prove the act of smuggling in which the person proceeded against was concerned. In support of this contention, the ld. Counsel for the Appellant referred to the decision of the Apex Court in the case of Collector C.E. v. D. Bhoormull and to the Tribunal’s decisions [1991 (52) E.L.T. 264], [1991 (52) E.L.T. 529], [1988 (35) E.L.T. 167] & [1983 (13) E.L.T. 1546 (S.C)].
19. Replying to the arguments of the Appellants the ld. DR submitted that the statements of Shri Bhagwan Das and Shri Pyarelal are important and relevant for this purpose, who, in their statements, stated that the Appellant had transported steel boxes and stored them in the premises at 201, Sainik Farms from where they were recovered. They also identified the boxes as being the same which were transported by the Appellant and kept in the outhouses of the premises at 201, Sainik Farms. Moreover, the same type of Fax Machines were recovered from the premises of the office of the Appellants in Bombay and the serial numbers of the machines recovered from Bombay were consecutive to the fax machines recovered from the outhouses of Plot No. 201, Sainik Farms. The ld. DR submitted that this squarely establishes the link between the 2 sets of machines being imported illegally. The fax machines, no doubt, were of foreign origin and, therefore, the onus was on the Appellant to prove that they were legally imported.
20. We have considered these rival submission. We note that the foreign markings on the goods is sufficient to prove that the goods have been imported, but at the same time, we have to see the facts of the case in its entirety – recovery of the goods and their co-relation with other goods. We note that the recovery of the fax machines at Bombay was admitted to be connected with the regular import through the Bill of Entry purported to have been filed with the Collector Customs, but the Collector Customs found that the machines were not relatable to the Bills of Entry filed with Collector Customs. Looking to all these facts, we are inclined to accept the contention of the ld. DR that the fax machines were illegally imported and the onus was on the Appellants to prove that they were legally imported after payment of duty which they did not do.
21. The ld. Counsel for the Appellants also argued that it was not correct to hold that after passing an adjudication order, a second order can be passed on the same Show Cause Notice, one for confiscation of goods and another for imposition of penalty. The ld. Counsel argued that it was a settled position of law that duality of the exercise of powers by two different authorities on the same set of facts should be minimised. In support of this contention, the ld. Counsel cited and relied upon the decision of this Tribunal in the case of D.C.W. Ltd. v. CCE [1988 (35) E.L.T. 167].
22. In reply, the ld. DR submitted that in the instant case, since personal hearing was not given to Shri G.D. Mehta, the adjudicating authority rightly held that penal proceedings can be decided after giving Shri G.D. Mehta an opportunity of presenting his case. 23. We note that in the instant case in adjudication, two actions can be taken, one was confiscation of the goods and second was imposition of penalty in terms of Show Cause Notice. It is nobody’s case that the Show Cause Notice did not contemplate imposition of penalty in addition to confiscation of the goods. Since the Show Cause Notice was very clear on this issue, while agreeing with findings of the Tribunal in the case cited and relied upon by the Appellants that such actions should be minimised, we note that in the instant case it was in the interest of justice to give opportunity to the appellants and, therefore, we hold that the legality of passing two orders – one for confiscation of goods and the other for imposition of penalty in the special circumstances of this case is sustainable.
24. The ld. Counsel for the Appellants also pleaded that the entire case was based on the statement of Shri G.D. Mehta ignoring the leasedeed, Police report, Patwari’s report, Ministry of External Affairs correspondence etc. It was also argued that the adjudicating authority held that ‘The relevant piece of evidence is the fact that G.D. Mehta was in judicial custody from 18-11-1988 onwards till 25-5-1989 and therefore it is reasonable to infer that he has not done or attempted to do anything’. It was argued that the adjudicating authority ignored the fact of identical circumstances in the case of Shri Ishwar Punjabi and Shri Manohar Punjabi who were in judicial custody since 18-11-1988 to 1-9-1989. The Counsel for the appellant, therefore, argued that on identical circumstances, the Collector took two different views and, therefore, prayed that the Collector’s findings may be quashed.
25. From the evidence on record, we note that the adjudicating authority has not relied only on the statement of Shri G.D. Mehta, but has relied on the statements of the Appellants, on the statement of Shri Pyarelal, Driver of the Tempo, on the statement of Shri Bhagwan Das, Caretaker/Chowkidar and thus it is incorrect to say that only Shri G.D. Mehta’s statement is the evidence against them. As indicated earlier, we have examined the lease Deed and the statement’s of various parties to the lease deed. Patwari’s Report is not relevant as the admitted position was that the premises at 201, Sainik Farms, New Delhi was sold by Shri G.D. Mehta of GLSA Associates to the Appellants. In so far as two different views on identical situations are concerned, we note that no evidence has come against Shri G.D. Mehta about his involvement in the import, transport and storage of the Fax Machines and, therefore, two different view have been taken after considering not only a single situation, but the facts of the entire case in their totality.
26. On the question of imposition of penalty, we note that the allegation against the Appellant was that he was concerned in carrying and keeping 31 Canon Fax Machines in contravention of Section lll(d) of the Customs Act, 1962. We note that the role of the Appellant in so far as carrying and keeping of the 31 Canon Fax Machines is concerned is clearly brought out by the evidences discussed above. We note that Shri Pyarelal, Shri Bhagwan Das and Shri Harish in their statements identified the boxes brought and kept in the premises from where fax machines were finally recovered & seized. Thus, both the allegations of carrying and keeping are proved. In so far as carrying is concerned, Shri Pyarelal, Driver of Tempo confirmed that he had transported the boxes and that the Appellant had kept these boxes in the premises from where they were eventually recovered. In this view of the matter, we hold that imposition of penalty was warranted. Having regard to all the facts and circumstances of the case, as discussed above, we note that the penalty of Rs. 25.00 Lakh is on the higher side. In the circumstances, the penalty is reduced to Rs. 10.00 Lakh (Rupees Ten Lakh only).
27. The impugned order is, therefore, modified to the extent stated above and the Appeal is disposed of accordingly.