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2015 Supreme(Del) 459
HIGH COURT OF DELHI
S. RAVINDRA BHAT AND R.K. GAUBA, JJ.
Mahender Jain & Others – Appellants
Versus
The Commissioner of Customs (Import & General) – Respondents
CUSAA Nos. 24 to 30 of 2014
Decided On : 20-03-2015
For the Appellants:Shailendra Bhardwaj, Aroma S Bhardwaj, Advocates
For the Respondent: Satish Kumar, Sr. Standing Counsel
The main legal point established in the judgment is the interpretation and application of Section 112(b) of the Customs Act, 1962, in determining the guilt of the traders in knowingly dealing with smuggled goods based on telephonic conversation records and circumstantial evidence.
Headnote:
Customs Act - Smuggling - Section 112(b) of the Customs Act, 1962 - Summary of Acts and Sections: Customs Act, 1962, Section 108, Section 111, Section 112(b) - The court discussed the provisions of Section 112(b) of the Customs Act, 1962, which deals with possession, removal, keeping, selling, purchasing, etc. of imported goods that are liable for confiscation under Section 111 of the Act. The court interpreted the crux of the matter to be whether the noticee had knowledge of being involved in possessing, removing, keeping, selling, purchasing, etc. of imported goods that are liable for confiscation under Section 111. The court also highlighted the significance of telephonic conversation records and circumstantial evidence in imputing knowledge of the illegal character of imported goods to the noticees.
Fact of the Case:
The case involved a network of smuggling activities uncovered by intercepting a Uzbek national at Delhi airport, leading to the issuance of show cause notices to textile traders in Chandni Chowk. The adjudicating Commissioner imposed penalties on the traders, which were later considered by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT upheld the penalties with a modification, reducing the penalty amount.
Finding of the Court:
The court found that the evidence, including telephonic conversation records and circumstantial evidence, was sufficient to establish the guilt of the traders in knowingly dealing with smuggled goods. The court dismissed the appeals, concluding that no substantial question of law arose.
Issues: The issues included the sufficiency of evidence to establish the guilt of the traders in knowingly dealing with smuggled goods, the denial of cross-examination of witnesses, and the interpretation of Section 112(b) of the Customs Act, 1962.
Ratio Decidendi: The court held that the evidence, including telephonic conversation records and circumstantial evidence, was sufficient to establish the guilt of the traders in knowingly dealing with smuggled goods. The court also concluded that no substantial question of law arose, dismissing the appeals.
Final Decision: The appeals were dismissed, upholding the penalties imposed on the traders by the adjudicating Commissioner and the CESTAT.
S. Ravindra Bhat, J.
1. In these appeals the grievance articulated is in respect of order dated 22.10.2013. It appears that the previous order of the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as “CESTAT”) dated 25.11.2011 was set aside (to the extent of the appeals filed by these assessees) in CUSAA No.8/2011 and connected cases on 25.4.2012.
2. The Court had directed re-examination of the contentions and issues urged by the present appellants holding that the reasoning contained in para 27 of the CESTAT’s order was insufficient. In these circumstances the CESTAT considered the contentions urged on behalf of the present appellants. There was a divergence of opinion between the two members of CESTAT which led to a reference to a third member. The third member agreed with the view of the member who held that the appeals required dismissal. The CESTAT’s majority orders modified the direction vis-a-vis penalty reducing it from Rs. 5 lakhs to Rs. 2.20 lakhs in each case.
3. On 28.8.2000 Olga Kozireva, a Uzbek National, was intercepted at Delhi airport, attending to smuggle a large quantity of prohibited Chinese silk. Her statement under Section 108 led the agencies unraveling a network of smuggling which had in the past managed to ensure that similar large quantities of article were smuggled in on several occasions. During the course of investigation statements of those suspected, including Olga Kozireva and other foreign nationals Dil Agha, Mamoor Khan, Nazira, Valichko were recorded. They were of diverse nationalities i.e. from Kazakhistan and Afghanistan. On the basis of these statements, the statements of certain custom officers too were recorded. The investigations led the summoning of call details from various service providers; besides, the statements of transporters and shopkeepers in Chandni Chowk and other places were recorded eventually on 9.1.2000. Eventually, show cause notices were inter alia issued on 23.8.2001 to the present appellants-all of them are textile traders in Chandni Chowk. The statements of these appellants too had been recorded in the course of investigations. The appellants replied denying various allegations.
4. After considering the submissions of the parties-which included those on behalf of present appellants/traders, the adjudicating Commissioner on 27.9.2007 imposed penalty upon each of them to the tune of Rs. 5 lakhs. Whilst doing so, the Commissioner in a 317 page order on 27.9.2007 exhaustively analysed the materials available in respect of each noticee. The noticees as mentioned earlier were not only the offenders i.e. smugglers of the prohibited articles, but also those part of the conspiracy, such as customs officers and the receivers/traders. The Commissioner discussed the statements, the call detail records in respect of each of the noticees and in his adjudication order, made a detailed analysis in charts and tables for the sake of convenience to link the role of each of the noticees. Some noticees were exonerated whereas in respect of the others guilt was established. The findings in respect of the present appellants were summarized as follows:
“546. The show cause notice has also been issued to 8 persons (Noticee No. 26 to 33) alleging that these noticees were involved in knowingly acquiring, possession, dealing or selling of smuggled silk textiles rendering them liable for penal action under Section 112(b) of the Customs Act, 1962. These 8 persons are, namely, Nitish Kedia @ Bunty, Anup Singh, Khem Singh, Arun Dokania, Gopal Dokania, Mahender Jain, Sanjiv Jain & Anudeep Singh, all traders of textiles operating in Chandni Chowk, Nai Sarak & Model Town areas. The evidence against these noticees is analyzed as below:
(i) Abdul Qahar, an Afghan National, who used to buy silk textiles from them and carrying it to Afghanistan has testified in his statement dated 30.11.2000 against the traders named above. One of the noticees, Anudeep Singh has admitted
