1. The show cause notice issued by the Government of India under Section 131 (3) of the Customs Act, 1962 (hereinafter referred to as the 'Act'), as it stood at the relevant time, against the order of the Central Board of Excise and Customs referred to supra, stands transferred to the Tribunal in terms of Section 131B of the Act. The Additional Collector of Central Excise and Customs, Madurai by order No. 48/81 dated 27.5.81 absolutely confiscated 55,600 nos. of Y.K.K.zip fasteners of Japanese origin under Section 111(d) of the Act read with Section 3(2) of the Import and Export (Control) Act, 1947, imposed a fine of Rs. 10,000/- in lieu of confiscation of car MDO 5022 under Section 125, besides imposition of a penalty of Rs. 10,000/- each on respondents Mittalal and Parasmal, Rs. 5,000/- on respondent Ramdoss alias Kannan and Rs. 1,000/- on Ganesa Thevar under Section 112 of the Act, against which the respondents herein preferred an appeal before the Central Board of Excise and Customs which reversed the same as against which the Government of India initiated suo moto proceedings in Revision by issue of a show cause notice which, as stated above, has come up before us for disposal as an appeal.
2. On 12.11.1979, the Superintendent of Central Excise, Customs Preventive, Madurai, located three packages suspected to contain contraband goods at Madurai Radha Transport at No. 55, North Avani Moola Street, and enquiry revealed that a total number of five packages were received by the said Transport Company from the shop of M/s. Sha Nainmal Jutajee Jain belonging to respondents Parasmal and Mittalal on the night of 11.11.79 and out of the five packages two packages were subsequently removed by them on 12.11.79. The authorities thereafter contacted Parasmal and Mittalal and ascertained on enquiry from them that the two packages removed were kept in the shop of M/s. Sayee Lakshmi Stores, at No. 77, East Avani Moola Street. It is in these circumstances the authorities inspected all the five packages which were found to contain YKK zip fasteners of foreign origin; the two packages contained 14,050 zip fasteners, valued at Rs. 28,100/- while the other three packages contained 23,550 zip fasteners valued at Rs. 47,100/-. The zip fasteners were seized on' a reasonable belief that they were smuggled into the country, under mahazar as per law attested by witnesses. On 14.11.79 respondent Mittalal gave a statement that the zip fasteners under seizure were acquired through one broker Rajaram on the night of 11.11.79 who transported the same in an Ambassador car bearing registration No. MDO 5022 and the goods were smuggled from Sri Lanka. Mittalal stated that on his informing his brother Parasmal who was at Madras enroute to Indore, he cancelled his ticket and returned back to Madurai meanwhile instructing his brother Mittalal to deposit the zip fasteners under seizure in M/s. Madurai Radha Transport.
Parasmal in his statement given before the authorities on 14.11.79 corroborated the version of his brother Mittalal. Respondent Ramdoss alias Kannan was on investigation found to be the driver of the car MDO 5022 and the car was traced at M/s. King Auto Works, Madurai and a search of the premises of King Auto Works in the presence of Ramdoss resulted in the recovery and seizure of 18,000 zip fasteners of foreign origin kept concealed under the chassis of an old vehicle kept there and the zips were valued at Rs. 36,000/-. Ramdoss admitted that the zip fasteners seized from King Auto Works belonged to him and were smuggled into the country. After further' investigation and enquiry, proceedings were instituted against the respondents herein which ultimately resulted in the order of the Board referred to supra exonerating them of the charges levelled against them as against which the Government of India initiated suo moto proceedings in revision.
3. The learned Senior Departmental Representative submitted that the finding of the Board under the impugned order that the invoice relied upon by Parasmal and Mittalal for the purchase of the zip fasteners under seizure "cannot be treated as not genuine" is erroneous. It was urged that the Board has erred in not considering the fact of non-production of the invoice by the respondents for an inordinately long period of 3^ days, much less has the Board considered the question as to whether the invoice is relatable to the goods under seizure. The impugned order of the Board was assailed as cryptic without considering the various pieces of evidence and circumstances against the respondents. The learned S.D.R. further urged that the Board has not considered and appreciated the incriminating statements of respondents Mittalal, Parasmal, Ramdoss and Ors., and the Board's finding exonerating respondent Ramdoss on grounds of benefit of doubt was also assailed as incorrect and unsupported by reasoning or discussion of the evidence.
4. The learned counsel for respondents Parasmal and Mittalal submitted that 37800 zip fasteners were purchased by them on 9.11.79 from M/s.
Shankerjee Moolchand of Madras under invoice No. 851 dated 9.11.79 and as Naresh Trading Company of Hyderabad desired to purchase 37,600 pieces of YKK zip fasteners of 8" and wanted the goods to be sent by lorry transport, Mittalal instructed his employees to pack the same in five cartons and sent them to lorry booking office of T.V.S. for ownard despatch to Hyderabad and as two bundles were returned by that transport company on the ground that they were improperly packed they were brought back for repacking; there was a heavy downpour with the result two packages were taken to the shop of M/s. Sayee Lakshmi Stores and three packages to Radha Transport Company on the way to save damage by rains. The learned counsel for the respondents contended that the zip fasteners are not notified items under the Act and they were also not banned items under the Import Trade Control Policy during 1977-78 and 1978-79 and in such circumstances the onus lies on the Department to establish that the goods under seizure are smuggled ones. He also urged that Ganesa Thevar, the alleged landing agent who received the goods under seizure from Sivanandam of Sri Lanka, was not screened or secured. It was urged that though the statements recorded from Mittalal and Parasmal are inculpatory in nature, they are not entitled to any weight in view of the sub-sequent retraction. He further added that the statements were recorded under threat and coercion and were not true and voluntary. The learned counsel contended that the statements of Mittalal and Parasmal could not be true and voluntary, since though they have been recorded by two different officers, the language employed is almost identical. It was further contended that no reliance on the evidence of attesting witnesses to the statements viz. Pandiyan and Guruswamy could be placed since Pandiyan and Gurusamy are stock and obliging witnesses having respectively witnessed 15 and 18 statements recorded by the officers.
5. The learned counsel for respondent Ramdoss submitted that the inculpatory statement recorded from Ramdoss was under coercion and since the same was retracted it should be excluded from consideration and the learned counsel in other respects adopted the submissions made on behalf of respondents Mittalal and Parasmal.
6. We have carefully considered the submissions made before us. The fact that 37,600 zip fasteners of foreign origin under seizure belonged to respondents Mittalal and Parasmal is admitted by them. The explanation offered by them is that they were purchased from M/s.
Shankarjee Moolchand at Madras on 9.11.79 under invoice No. 851 dated 9.11.79 and were brought by Parasmal to Madurai on the morning of 12.11.79 by Pandyan Express. But this purchase invoice on which reliance is placed by the Respondents 1 admittedly was produced before the authorities only on 19.12.79 after a lapse of about 36 days of seizure. If really the zip fasteners under seizure had been purchased on credit basis as contended by them and covered by a credit invoice, it does not stand to reason as to why such a very important and vital piece of evidence which would vindicate the innocence of respondents Mittalal and Parasmal did not see the light of day for such an inordinately long interval of 36 days. No explanation at all has been offered by the learned counsel for respondents in this regard except that there was a threat of Parasmal and Mittalal being hauled up under the provisions of COFEPOSA. This explanation coming as it does for the first time before us in also totally unfounded on facts because nowhere in the record has it ever been stated by any of them that they thought it prudent to withhold the production of a vital document in their favour which undoubtedly would exonerate them of a charge of being concerned in the act of smuggling merely on the basis of a threat of their being hauled up under COFEPOSA held out to them by the authorities. This aspect of the matter, as has been very rightly contended by the learned SDR, has not been adverted to at all, much less considered and appreciated by the Board under the impugned order.
A scrutiny of the statement given in his own hand by respondent Ramdoss dated 15.11.79 reveals that the zip fasteners under seizure were transported by him on 11.11.79 in his car MDO 5022 to the shop of M/s.
Sha Nainmal Jutajee Jain belonging to respondents Parasmal and Mittalal and examination of Ramdoss led to the authorities locating the car MDO 5022 at King Auto Works and also to a further recovery of 18,000 zip fasteners of foreign origin kept concealed in two bundles under the basis of an old car kept there for repairs. This statement of Ramdoss is not retracted till after he gave a reply to the show cause notice on 5.10.80. Paul Raj has in his statement dated 15.11.79 corroborated the version of Ramdoss as having accompanied him in the transport of the zip fasteners under seizure in car MDO 5022. Rajaram in his statement dated 14.11.79 has admitted about finalising the deal with reference to the zip fasteners under seizure for a brokerage. On a perusal of the above statements which, as we have stated earlier, were retracted very belatedly for which no explanation has been offered, we are satisfied that they are true and voluntary and the statements clearly establish that the zip fasteners were smuggled into India and Mittalal and Parasmal purchased them knowing them to be smuggled ones. In this context it would be relevant to consider the circumstances under which Parasmal and Mittalal claimed to have sent the zip fasteners to the lorry booking office. In the reply to the show cause notice sent by Mittalal through his counsel dated 27.8.80 it is stated that the transport company refused to book two packages as they were in a damaged condition due to rain and they were brought back for purposes of repacking to their shop where they were repacked and then again sent through rikshawman Rannanathan to the transport company and the rikshawman had kept the two packages at shop No. 77, Sayee Lakshmi Stores because of rain. In the appeal to the Central Board of Excise and Customs dated 14.8.81 by the respondents Mittalal and Parasmal, it is stated "two packages which were to be brought back to the shop, were left in the premises of Sayee Lakshmi Stores as the rickshawman found a group of Excise officials present in the shop in the evening on 12.11.79". The above two versions are vitally at variance with each other and we are at a loss to understand as to why there is such a vital discrepancy in this regard. If the two packages which were sent for onward booking to Hyderabad to the lorry office were returned on grounds of defective packing, it does not stand to reason as to why the rickshawman should take them to an entirely different place viz; Sayee Lakshmi Stores, merely on seeing a group of Excise officials in the shop of Parasmal and Mittalal. The only inference that could be deduced from this is that the rickshawman himself knew about the contraband nature of the article he was carrying and that is why the presence of the Excise authorities had deterred him from bringing the packages over to the shop of Mittalal and Parasmal and more so, impelled him to screen them in a different place viz. Sayee Lakshmi Stores. Even in Sayee Lakshmi Stores, the two bundles, as evidenced by the mahazar dated 12.11.79 were kept in the back in the midst of mosaic articles.
The goods were sent to Naresh Trading Company on the basis of an order of that company's representative, whose name is not known to him, and without receipt of any money. Both Parasmal and Mittalal had given statements which are inculpatory in nature and the main criticism that was levelled against the voluntary nature of the same was that though they were written by two different officers the language is identical.
The statement recorded from them on 14.11.79 was retracted only on 19.12.79 and the reasons for such a belated retraction, are not convincing in the context and circumstances of the case. The language identify in the two statements was explained by the learned SDR that Superintendent Kulandai was overseeing the recording and the statements, though not recorded simultaneously but being recorded in quick succession, Kulandai being a common man, commonness in language cannot be said to be either unnatural or a serious infirmity to hold that the statements are not voluntary. In this connection the learned SDR drew our attention to the second statement of Parasmal dated 28.2.80 which contains version in favour of Parasmal which would not be the case if the Department were to extract a statement against his will and the case of the Department for that matter is not rested merely on the statements of Mittalal and Parasmal. We, therefore, hold that the above facts and circumstances clearly establish that Mittalal and Parasmal purchased the smuggled zip fasteners under seizure.
7. So far as respondent Ramdoss is concerned, his statement was not retracted for a long time and the statement itself contains factual details which by no stretch of reasoning can be characterised' as the figment of the authorities' imagination. Apart from it, the statement of Ramdoss is amply corroborated by the statements of Paul Raj, Rajaram and other circumstances such as recovery of zip fasteners from King Auto Works.
8. So far as Ganesa Thevar is concerned, no one appeared on his behalf and the materials on record clearly implicate him as one concerned with the smuggled zip fasteners.
9. On consideration of the entire material available on record, we are of the opinion that the Board in the impugned order has neither adverted to nor considered the relevant materials on record and referred to by us herein and has misdirected itself by holding that the invoice produced belatedly by Parasmal and Mittalal cannot -be treated as not genuine. For the reasons stated above we hold that the impugned order of the Board is liable to be set aside and accordingly we set aside the same and uphold the order of the Additional Collector of Central Excise and Customs, Madurai as regards confiscation of the goods under seizure. However, bearing in mind that the goods under seizure were not notified items under the Act and in keeping in view the licensing policy of the Government in relation to the same at the relevant time, we feel interests of justice would be met if the respondents are given an option to redeem the same on payment of a fine in lieu of confiscation. Accordingly we direct that of the goods under confiscation a quantity of 3,76,000 zips be permitted to be redeemed on payment of a fine of Rs. 15,000/- (Rupees fifteen thousand only) under Section 125 of the Act. So far as the penalty imposed on respondent Parasmal is concerned, inasmuch as he was away from Madurai at the time when the goods were received into his shop, we are inclined to give him the benefit of doubt and set aside the penalty imposed on him. Since the respondent Ganesa Thevar, the landing agent and main source of supply of the contraband goods, has been let off with a nominal penalty of Rs. 1,000/-, we feel there is justification to reduce the quantum of penalty on respondent Mittalal and accordingly we reduce the same to Rs. 1,500/- (Rupees one thousand five hundred only). There will be no interference with regard to the penalties imposed on respondents Ramdoss alias Kannan and Ganesa Thevar. There being no appeal from Rajaram even to the Board, the order of the Additional Collector imposing a penalty of Rs. l,000/- on Rajaram would stand. There will be no modification in respect of the car MDO 5022 or of the balance quantity of the zips under confiscation. Ordered accordingly.