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Customs, Excise and Gold Tribunal – Delhi
Shri Lakhjit Singh Bindra And Ors. vs Commissioner Of Customs on 30 October, 2000
Equivalent citations: 2000 (72) ECC 761
Bench: J Balasundaram, S T G.R.


Jyoti Balasundaram, Member (J)

1. The above appeals arise out of the order of the Commissioner of Customs, New Delhi who has ordered confiscation of foreign liquor, food stuffs and cosmetics seized from the godown of M/s. B.T. Agencies Pvt. Ltd.; from the lobby outside the bonded warehouse in the basement of the premises of M/s. B.T. Agencies and from the residence of Shri S.S. Bindra, Managing Director of M/s. B.T. Agencies on 13.2.98, with option to redeem the same on payment of fine of Rs. 10 lakhs and imposed penalties as under on the following persons:

M/s. B.T. Agencies Rs. 5 lakhs
Shri S.S. Bindra, M.D. Rs. 3 lakhs
Shri Lakhjit Singh Bindra Rs. 50,000
Shri A.K. Sharma, Employee Rs. 50,000
Shri P.K. Jain, Employee Rs. 50,000
Shri Assad Moin Khan Rs. 50,000

2. The brief facts of the case are that on 13.2.98, the Customs Preventive officers searched the residence of Shri S.S. Bindra, Managing Director-of M/s. B.T. Agencies Pvt. Ltd and recovered and seized foreign liquor such as Scotch Whisky, wine, beer valued at Rs. 1,68,750 as Shri Bindra could not produce any evidence showing the lawful acquisition/possession/import of these goods. The office of M/s. B.T. Agencies was also searched and foreign liquor, food stuff and cosmetics valued at Rs. 7,51,404 were recovered from a secret vault in the office behind the wooden almirah stocked with stationery. Similar goods valued at Rs. 4,05,080 were recovered from outside the bonded warehouse in the basement of the premises of M/s. B.T. Agencies.

3. Shri S.S. Bindra admitted in his statement recorded under Section 108 of the Customs Act, 1962 that the goods recovered from the office premises, were cleared against Green Bill of entry for diplomats but were, diverted for sale in the open market; that Shri Pradeep Kumar Jain and Shri Assad Moin Khan used to bring customers to purchase these goods for which no bill or boucher was issued; payments were made in cash; that the goods recovered from his house were goods cleared on indent of diplomats and diverted from the bonded warehouse. Shri Pradeep Kumar Jain stated that he used to procure orders from Embassies for liquor, cosmetics etc. that he used to send Exemption Certificate alongwith the transport permit to the Ministry of External Affairs for passing the goods; that after getting the goods cleared from the Customs bonded house, goods were diverted to domestic market and only transport permit used to be sent to the Embassy. That diplomats used to sign transport permits in token of having received the goods; that he used to take the Indian currency equivalent of the foreign currency from Shri Bindra and deliver the Indian rupees to the diplomats. He also stated that Shri Assad Moin Khan used to sell the goods to Shri Viramani, Manjit Singh Bains and 2 others. Shri Ashok Kumar Sharma corroborated the statement of Shri Pradeep Kumar Jain in respect of clearance of goods for diplomats and diversion for sale to open market. The Department also recorded the statement of three purchasers who stated that they had purchased foreign liquor etc. from Shri Pradeep Kumar Jain.

4. Accordingly a show cause notice was issued to all the persons concerned proposing confiscation of seized goods and imposition of penalty. The Adjudicating Authority rejected the defence of the noticees; confiscated the goods with option to redeem and also imposed various amounts of penalties on different persons, as set out above. Hence these appeals.

5. We have heard both the sides and perused the records. The plea of the appellants is that the goods valued at Rs. 7,51,404 found in the office premises of M/s. B.T. Agencies belong to the Afghanistan Embassy which had kept the goods with M/s. B.T. Agencies because of Ramzan which was over at the end of January 1998 and the Embassy further requested M/s. B.T. Agencies to keep the goods for 15 more days as Nimaz-E-Janaza of Earthquake victims was on 13.2.98 and the Embassy was going to remove the goods next day or immediately thereafter.

6. We find that no Green Bill of entry was produced to verify whether these goods had actually been cleared for Afghanistan Embassy. There is only a letter dated 17.2.98 from the Embassy which is not sufficient to correlate the goods seized with the goods stated to have been earlier cleared to the Afghanistan Embassy but brought back into the premises of M/s. B.T. Agencies for reasons stated above. Further the manner in which the goods were stored viz. in secret vault also does not lend credence to the stand of the appellants as there was no need to conceal the goods if M/s. B.T. Agencies was acting bonafide for storing the goods on behalf of Afghanistan Embassy. We therefore, reject the defence in respect of these goods.

7. Regarding the goods from the residence of Shri S.S. Bindra, the plea of the appellants is that these belonged to Ambassador of Cuba who had kept the goods with M/s. B.T. Agencies as she was going to Nepal and after returning from Nepal, she requested that the goods be brought to the residence of Shri S.S. Bindra from where she would collect them, as her residence was close to Shri S.S. Bindra’s residence. We find that in this case also no Green Bill of entry has been produced to correlate the seized goods with goods purported to have been cleared for the Cuban Ambassador. We therefore, reject the appellants defence in respect of these goods.

8. Regarding the goods valued at Rs. 4,05,080, the contention of the appellants is that these goods were cleared from the Customs on 11.2.98 a period of 48 hours was available for delivery to the diplomats and the time for delivery had not expired when the goods were seized. This submission is based upon the arguments of the Customs Prosecutor before the Additional Sessions Judge in the case, under Section 135 of the Customs Act and upon the transport permit for goods cleared from the bonded warehouse.

9. We have perused the bail order dated 7.3.98 passed by the Assistant Sessions Judge, New Delhi and find that the Court has recorded a finding in para 9 of the order that the goods were cleared from the bonded warehouse on 11.2.98 and according to the Department, these ought to have been delivered to the Afghanistan and Russian Embassies by 12 noon of 13.2.98 but were detained at 1.30 p.m. on that day. Therefore, we accept the submissions of the appellants in respect of these goods and set aside their confiscation.

10. The goods have been confiscated under the provisions of Section 111 (d)(j) and (o) of the Customs Act, 1962. The Commissioner has held that the provisions of Rule 4 of the Foreign Privileged Persons (Regulation of Customs Privileges) Rules, 1957 have been contravened since the goods were diverted for sale in the domestic market without obtaining the requisite permission of the CBEC within the stipulated period. She has also held that Rule 3(1)(d) of the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993 issued in exercise of the power conferred by Section 3 read with Section 4 of Foreign Trade (Development and Regulation) Act, 1992 has been contravened, since goods imported without payment of duty and without import licence, have not reached the privileged persons i.e. diplomats. We agree with these findings in view of the fact that the appellants have not established that the goods seized from the office premises of M/s B.T. Agencies and seized from the residence of Shri S.S. Bindra were cleared for use of diplomats, were returned by Embassies for safe custody by M/s. B.T. Agencies. The statement of the noticees also clearly brings out the charge against the appellants. They have not succeeded in establishing that the statements were recorded under duress or coercion and therefore, the statements are voluntary in nature and can be relied upon against them. However, we agree with the appellants that the provisions of Section 111 (d) are not attracted–Section 111 (d) covers goods which are imported or attempted to be imported contrary to any prohibition imposed by the Customs Act or any other law for the time being in force. The goods in question were validly imported (without payment of duty) for the purpose of clearance to priviledged persons. Hence they cannot be said to have been imported contrary to any prohibition. Section 111 (j) covers dutiable or prohibited goods ramoved or attempted to be removed from a Customs area or a warehouse without the permission of the Proper Officer or contrary to the terms of such permission. However, do not see any force in the submissions of the appellants that the provisions of Section 111(j) are not attracted in this case. Section 111 (j) is applicable since the dutiable goods were removed contrary to the terms of the permission of the proper officer who granted permission for clearance to diplomats but goods were not delivered to the diplomats and instead were diverted for sale in the local market. Similarly Section 111 (o) contravention is clearly brought out since the goods were exempt from duty subject to the condition that they were cleared to diplomats and this condition was not fulfilled since the goods were not so cleared and further the non-observance of this condition was sanctioned by the Proper Officer.

11. In the result, we uphold confiscation of goods valued at Rs. 1,68,750 and Rs. 7,51,404 (total value Rs. 9,20,154) with option to redeem on payment of a fine of Rs. 2 lakhs. We set aside the confiscation of goods valued at Rs. 4,05.080. Penalty on Shri Lakhjit Singh is set aside in the absence of any role played by him. Penalties on the other appellants are reduced as under:

1. M/s. B.T. Agencies Rs. 2 lakh

2. Shri S.S. Bindra Rs. 1 lakh

3. Shri Ashok Kumar Sharma Rs. 10,000

4. Shri Pradeep Kumar Jain Rs. 10,000

5. Shri Assad Moin Khan Rs. 10,000

The appeals are disposed of in the above terms.

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