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Sohan Lal Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1992)(59)ELT431TriDel
AppellantSohan Lal
RespondentCollector of Customs
Excerpt:
.....by the appellant in the appeal is that the adjudicating authority has relied upon the statement of shri rajesh suneja, brother-in-law of the appellant in coming to the conclusion that 20 video cassettes recorders, 27 video cassettes and 545 un-recorded video cassettes valued at rs. 3.84 lakhs seized from premises no. b-38, nizamuddin west, a flat taken in rent by sh. sohan lal, were meant for disposal at his shop only. the shop is known as m/s. jordan electronics and is located at shop no. 257 palika bazar, new delhi. it is claimed that the statement of shri rajesh suneja that the aforesaid premises were actually hired by the appellant and he (shri rajesh suneja) signed on the dotted line is the only evidence available against the appellant and, this being the uncorroborated testimony of.....
Judgment:
1. This appeal is directed against the order of the Additional Collector of Customs, New Delhi, ordering confiscation of 7 video cassette sets along with 7 remote controls and 3 empty cartons of video cassette recorders Model NV 300, collectively valued at Rs. 4,200/- under Sec. 111(d) and Sec. 111(p) of the Customs Act, 1962 and imposing a penalty of Rs. 50,000/- (Rupees Fifty Thousand only) on the appellant under Section 112 ibid. The ground taken by the appellant in the appeal is that the adjudicating authority has relied upon the statement of Shri Rajesh Suneja, brother-in-law of the appellant in coming to the conclusion that 20 video cassettes recorders, 27 video cassettes and 545 un-recorded video cassettes valued at Rs. 3.84 lakhs seized from premises No. B-38, Nizamuddin West, a flat taken in rent by Sh. Sohan Lal, were meant for disposal at his shop only. The shop is known as M/s. Jordan Electronics and is located at Shop No. 257 Palika Bazar, New Delhi. It is claimed that the statement of Shri Rajesh Suneja that the aforesaid premises were actually hired by the appellant and he (Shri Rajesh Suneja) signed on the dotted line is the only evidence available against the appellant and, this being the uncorroborated testimony of a co-accused, cannot form the basis for imposing penalty on the appellant. Reliance for this purpose has been placed on the judgment of the Supreme Court in the case of Haricharan Kurmi v. State of Bihar [AIR 1964 SC 1184] in which it was held that the confession of a co-accused cannot be treated as substantive evidence and can be pressed into service only when the Court is inclined to accept other evidences and feels the necessity of seeking for an assurance in support of its conclusion deductible from the said evidence.

2. Briefly stated the facts are that certain searches were simultaneously made by the officers of the Directorate of Revenue Intelligence, New Delhi in pursuance of a specific information on the following premises:- 3. The search of the first premises, which was the residence of the appellant, resulted in recovery of 7 video cassette sets, each set consisting of video cassette (National 300 along with a remote control) of Japan origin valued at Rs. 4200/-, 3 empty cartons of VCR Model NV 300 and Indian currency amounting to Rs. 50,000/- and some documents.

The search of B-38, Nizamuddin West, rented out in the name of Shri Rajesh Suneja, brother-in-law of the appellant, resulted in recovery of 20 VCRs, one colour TV, 27 video tapes and 545 video cassettes and audio/video recording wires of foreign origin, collectively valued at Rs. 3.84 lakhs. The search of 21/9 Pant Nagar, Jung Pura, also resulted in recovery of 55 blank and 70 recorded video cassettes. From the shop of M/s. Jordan Electronics, in which the appellant alongwith his other brothers-in-law is a partner, one VCP Akai and 4 video cassettes of foreign origin, collectively valued at Rs. 7,800/- were recovered.

Since the goods were of foreign origin and no evidence of lawful import/possession was produced at the time of search, the goods recovered from all the four places were seized under the Customs Act.

4. The appellant, in his statement, stated that since 1983 he has been doing business of blank video cassettes in partnership with his brothers-in-law at Shop No. 257, Palika Bazaar under the name and style of M/s. Jordan Electronics. He disowned any connection with the goods seized from B-38, Nizamuddin West. Shri Rajesh Suneja in his statement dated 27-12-1985 stated that in May, 1985 he had rented premises No.B-38 (First Floor), Nizamuddin West, for a period of eleven months; that although the flat was rented in his name and he was made signatory to that, but he did not know the purpose for which the said flat was rented; that he simply signed on the dotted line at the behest of his brother-in-law (sister's husband) Shri Sohan Lal; that he was not aware as to what activities were being carried out in the said premises; that to the best of his knowledge the flat was rented for residential purposes of his brother-in-law, who wanted to shift there; that he had no concern/interest with regard to any activity which was being carried out there; that he knew that one servant by the name of Pappu who was employed by his brother-in-law, Shri Sohan Lal, who used to look after the flat as caretaker; that he did not know whether that caretaker was engaged in any illegal activity in connivance with some anti-social elements and was engaged in video piracy by using smuggled VCRs; that he had tried his best to locate the said servant, but had failed in his efforts.

5. After complying with the requirements of law and the principles of natural justice, the impugned order confiscating the goods seized from all the four places under Sections 111(d) and 111(p) of the Customs Act, 1962 was passed and a penalty of Rs. 50,000/- was also imposed on the appellant.

6. Shri M. Ganesan, the learned Advocate, for the appellant, submitted that the appellant had categorically denied any connection with premises No. B-38, Nizamuddin West and no documents linking the appellant with this premises were recovered. He also submitted that when the appellant's statement was recorded on 4-4-1986, he should have been informed that his brother-in-law Shri Rajesh Suneja had given a statement implicating him; in fact, the statement of Shri Rajesh Suneja should have been shown to the appellant in view of the allegations made against him. He submitted that it is well-settled that the confessional statement of a co-accused cannot form the basis for conviction of another accused person. He cited the Supreme Court decision in the case of Haricharan Kurrni (supra) and submitted that in the absence of any corroboration, the order imposing penalty on the appellant should be set aside.

7. The Bench considered it necessary to have a look at the Lease Deed for premises No. B-38, Nizamuddin West and ordered that the same may be produced by the Department. During the resumed hearing of the matter on 9th August, 1991, Shri G. Bhushan, the learned SDR produced a letter dated 29th May, 1991 from Deputy Director, Directorate of Revenue Intelligence stating that the Lease Deed was not seized during the search conducted by the DRI.8. Arguing on behalf of the Department, Shri G. Bhushan, the learned SDR, submitted that Sh. Rajesh Suneja's relationship with the appellant was important. Sh. Rajesh Suneja was only 23 years old and was working in a stationery shop and was not in a position to get so much money as to hire B-38, Nizamuddin West, or to purchase goods worth Rs. 3.84 lakhs, which were recovered from those premises. He further stated that the Indian currency worth Rs. 50,000/- seized from the appellant's residence was not released to him, but was taken over by the Income Tax authorities under provisions of the Income Tax Act. He also submitted that recovery of empty cartons of VCRs of the same model of VCRs which were recovered from B-38, Nizamuddin West go to show that these empty cartons were meant for packing the VCRs seized from B-38, Nizamuddin West. He also submitted that Shri Sohan Lal had not vehemently denied the allegations against him in all that his brother-in-law Shri Rajesh Suneja had said was false, He referred to the decision of the Supreme Court in the case of Collector of Customs, Madras v. D. Bhoormull - [1983 (13) E.L.T. 1546 (SC)] in which the Supreme Court had held that the prosecution is not required to prove its case with mathematical precision to a demonstrable degree. Shri Bhushan also referred to the decision of the Tribunal in the case of Kanwarjeet Singh and Ors. v.Collector of Central Excise, Chandigarh [1990 (47) E.L.T. 695 (Tribunal) in which the Tribunal had held that strict principles of evidence do not apply to quasi-judicial proceedings and that guilty can be punished if the evidence on record in the shape of various statements brings out involvement of the persons concerned. Shri Bhushan also referred to the decision in the case of M/s. Kanungo & Co.

v. Collector of Customs & Others - [1983 (13) E.L.T. 1486 (SC)]. In these circumstances, he submitted that imposition of penalty of Rs. 50,000/- on the appellant was fully justified.

9. Shri Ganesan submitted that recovery of empty cartons is no evidence against the appellant and the decision in Kanungo's case (supra) is not relevant to the present appeal.

10. We have carefully considered the submissions of both sides and perused the case records. The facts show that searches were simultaneously made on specific information at the shop of the appellant, his residence, the residences of his two brothers-in-law and at B-38, Nizamuddin West, which was hired in the name of Shri Rajesh Suneja, the third brother-in-law. Various electronic goods were seized at each of these four places. It is true that the only evidence connecting premises No. B-38, Nizamuddin West with the appellant is the statement of Shri Rajesh Suneja and it remains uncorroborated. It must be said that the investigating agency did not make any efforts to collect the Lease Agreement for this premises or to make any enquiries from the Landlord of this premises, which would have enabled them to find out the truth. To that extent, investigation has not been properly made. In the absence of any corroboration of the statement of Shri Rajesh Suneja, the appellant is entitled to the benefit of doubt. The circumstances do indicate that the appellant was found in possession of foreign goods which were notified goods under Chapter IVA of the Customs Act and in respect of which he had contravened the provisions of law.

11. The facts on record show that 7 video cassette sets along with 7 remote controls of Japanese origin, valued at Rs. 4200/- were recovered from the residence of the appellant; 4 video cassettes of foreign origin valued at Rs. 800/- were recovered from the shop of the appellant, and the confiscation of all these goods has also been ordered in the impugned order. The present appeal does not contain any plea about this part of the order. All these goods were also notified under Chapter IVA, in respect of which the appellant was required to give intimation etc. The confiscation of these goods has been ordered under Section 111(p) for contravention of the provisions of Chapter IVA. The imposition of penalty on the appellant for these contraventions is, therefore, fully provided in the law and is quite juistified. Keeping the fact that the appellant has been given the benefit of doubt in relation to goods recovered from B-38, Nizamuddin West, we reduce the penalty from Rs. 50,000/- to Rs. 20,000/- (Rupees Twenty Thousand only). The appeal is modified only to this extent and is otherwise rejected.

12. Before we part, we would like to mention that the Director General, Revenue Intelligence, New Delhi may like to look into the reasons why the investigating officers of his Directorate did not collect the Lease Agreement for B-38, Nizamuddin West for further investigation from the landlord and others, specially when Shri Rajesh Suneja had stated that he had signed the agreement at the instance of his brother-in-law and had really nothing to do with the premises. A copy of this order shall be sent to the Director General by name for this purpose.


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