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C.M. Ponnusamy Nadar Vs. Collector of Customs and Central - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(5)LC2064Tri(Chennai)
AppellantC.M. Ponnusamy Nadar
RespondentCollector of Customs and Central
Excerpt:
.....admitting purchase of smuggled snail tongues (nahanam). a part of the consignment of the smuggled 'nahanam' was also despatched by appellant under fictitious label as 'kungilium' for which no satisfactory explanation is offered.even the theory of the appellant that he purchased the same through rajamanickam & co. has been proved false.5. i have carefully considered the submissions of the parties herein.noohu, the sri lankan national, from whom indian currency of rs. 49,950/- was seized, in his statement dated 2-12-1981, has given the details as to how he came to possess such a substantial amount of indian currency. noohu has clearly admitted the money to be the sale proceeds of smuggled 'nahanam' and has also pointed out and identified to the authorities the appellant's.....
Judgment:
1. This is an appeal against the order of the Additional Collector of Customs, Madurai, referred to supra, imposing a redemption fine of Rs. 7,500/-on the appellant under Section 125 of the Customs Act, 1962 in lieu of confiscation of 120 kgs. of'nahanam'under Section 11 l(d) of the Customs Act, 1962 read with Section 3(2) of Imports and Exports (Control) Act, 1947, besides a penalty of Rs. 2,000/- under Section 112 of the Act.

2. On information, the Superintendent of Central Excise, Central Intelligence Unit, Madurai, with his staff conducted a raid on 1-12-1981 at about 1 P.M. in room No. 20, at Gurny Lodge, Madurai, and recovered Indian currency of Rs. 49,950/- and two incriminating documents from one Noohu, Sri Lankan national with whom there were two other occupants also in the room. Examination and investigation revealed that the currency seized represented the sale proceeds of 'nahanam' of Ceylonese origin, smuggled into India. The said Noohy led the authorities to the appellant's business premises (CM. Ponnusamy Nadar and Bros., 266, East Masi Street, Madurai). The authorities consequently searched the appellant's aforesaid business premises in the presence of the appellant, his sons and independent witnesses and recovered 40 kgs. of snail tongues, packed in double gunny bag kept concealed in the midst of the bundles of country drugs stored in the back side of the business premises. Investigation revealed that out of a total quantity of 144 kgs. of snail tongues purchased by the appellant from Sri Lankan national, a quantity of 100 kgs. was despatched in two gunny bags of 50 kgs. each to one P.N. Rajan and Co., Madras, through Radha Transport, Madurai. under a false and fictitious description label "kungilium". It is in these circumstances, proceedings were instituted against the appellant which ultimately culminated in the impugned order now appealed against.

(1) The inculpatory statement recorded from the appellant cannot be relied upon in view of the earliest retraction of the same on 5-12-1981 telegraphically immediately after the appellant came out on bail and later on 7-12-1981 by a petition to the Collector of Central Excise, Madurai.

(2) The goods under seizure not being a notified item and the statutory presumption under Section 123 of the Act not being available to the Department, the burden is on the Department to prove that the goods under seizure are of foreign origin and that they were smuggled ones. The Department has failed to discharge the onus.

(3) The appellant cannot be called upon to account for the possession of snail tongues which are also available in India.

(4) Reliance cannot be placed on the statements recorded from Noohu since the same was not true and voluntary.

The learned Counsel also relied on certain authorities which I shall advert to at the relevant place.

4. The learned SDR submitted that Noohu, after examination, pointed out the business premises of the appellant wherefrom snail tongues under concealment were recovered. Apart from it, the appellant himself gave an inculpatory statement before the authorities admitting purchase of smuggled snail tongues (nahanam). A part of the consignment of the smuggled 'nahanam' was also despatched by appellant under fictitious label as 'kungilium' for which no satisfactory explanation is offered.

Even the theory of the appellant that he purchased the same through Rajamanickam & Co. has been proved false.

5. I have carefully considered the submissions of the parties herein.

Noohu, the Sri Lankan national, from whom Indian currency of Rs. 49,950/- was seized, in his statement dated 2-12-1981, has given the details as to how he came to possess such a substantial amount of Indian currency. Noohu has clearly admitted the money to be the sale proceeds of smuggled 'nahanam' and has also pointed out and identified to the authorities the appellant's business premises as the place where he disposed of the goods for consideration. This statement of Noohu implicating the appellant is entitled to consideration. It should be noted in this context that even a telegraphic retraction was subsequently retracted by Noohu himself in his deposition dated 11-12-1981 admitting the fact that he never sent any telegram retracting his earlier stand but merely obliged the appellant by putting his signature on some white paper which should have been used for purposes of retraction. Immediately on seizure the appellant also has given a statement on 3-12-1981 corroborating the statement of Noohu that he purchased the smuggled 'nahanam'. Though the appellant retracted his confessional statement immediately after release on bail by means of a telegram on 5-12-1981 and later by a detailed petition to the Collector on 7-12-1981, it does not stand to reason as to why the appellant did not choose to make any complaint to the Judicial Magistrate at the time of remand. Having regard to the dictum that official acts are correctly and regularly performed, coupled with the absence of complaint by the appellant of threat and coercion by the Central Excise authorities before the Magistrate, I am not inclined to attach much weight to the retraction of the appellant. It should be noted in this context that a part of the consignment was sought to be despatched under a fictitious name 'kungilium'. The only explanation offered by the appellant is that his employees had erroneously despatched two bags of "nahanam" instead of two bags of 'kungilium' and this explanation is far from convincing. It is no doubt true that the goods under seizure are not notified item under Section 123 of the Customs Act and the burden is on the Department to prove the foreign origin as well as the smuggled nature of the "nahanam" under seizure.

5. The learned Counsel for the appellant drew my attention to the Division Bench ruling reported in AIR 1960 Assam 150 in the case of Satyendra Kumar Pal and another. Collector of Central Excise and Land Customs, Shillong, the ratio decidendi of which is that the Department should prove the foreign origin and smuggled nature of the goods in respect of non-notified items. Nobody can quarrel with this axiomatic proposition of law. The learned Counsel also relied on a ruling reported in AIR 1969 Andhra Pradesh 139 in the case of Shah Hastimal Heeraji, Kurnool v. Assistant Collector of Central Excise, Anantapur and Ors. and contended that mere failure to account for the possession of goods would not prove the goods to be smuggled ones. The ruling reported in AIR 1965 Calcutta 248 in the case of Kanungo & Co. v.Collector of Customs and Ors. was also relied upon by the learned Counsel for the appellant to contend that even if the documents relating to the purchase of the goods under seizure are found to be fictitious, that would not absolve the Department to prove the foreign origin of the goods.

6. The principles embedded in the above decisions do not admit of any controversy and the only question for consideration is whether in the facts and circumstances of this case the Department has discharged the onus cast on it under law. The above rulings would not be applicable to the facts of this appeal because in the instant case the Department did not rest its case exclusively on the failure of the appellant to account for the goods or on the falsity of the defence version, but took the same as one of the circumstances against the appellant. It is equally settled proposition of law that even in a situation where the presumption under Section 123 in favour of the Department is not available, the onus Cast on the departement to prove the foreign origin and the smuggled nature of the goods can be discharged from various circumstances as well. In the instant case, the appellant came forward with a definite version that he purchased the goods under seizure from C.M.K. Rajamanickam & Co. and when Raja-manickam was examined, he stated that he in turn purchased the goods from M/s. S.S. Ajmeer Sheriff and S.P. Mohideen Abdul Khader, both of whom have in their respective statements denied supply of any "nahanam" to Rajamanickam.

Therefore, the investigation by the Department has clearly established that the appellant's plea of purchase of 'nahanam' through Rajamanickam is false. It is open to the Department to take advantage of the falsity of the defence version and rely on it as one of the circumstances against him. The statement of Noohu implicating the appellant, corroborated by the inculpatory statement of the appellant himself, coupled with the circumstance where the appellant chose to despatch part of the consignment to Madras under fictitious label 'kungilium' and the falsity of the appellant's version relating to the purchase of the 'nahanam' under seizure, would all cumulatively prove and establish that the goods under seizure have been smuggled into India from Sri Lanka and as such are liable for confiscation. Indeed in the ruling reported in AIR 1965 Calcutta 248 referred to supra, it is held that "the onus might be shifted when customs authorities would give some prima facie evidence of illicit importation of the watches". I, therefore, find that the impugned order appealed against is clearly sustainable in law and the appeal is liable to be dismissed. But taking into consideration the facts and circumstances of this case, I feel that interests of justice would be met if the redemption fine is reduced from Rs. 7,500/- to Rs. 5,000/- (Rupees five thousand only) and consequently, the penalty also from Rs. 2,000/- to Rs. 1,000/-(Rupees one thousand only). Except for the above modifications, the appeal is otherwise dismissed.


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