LIYAKAT SHAH Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THESE are two appeals filed by the above mentioned appellants against penalties imposed on them by the Commissioner by his Order -in -Original dated 27 -7 -1998. Apart from the penalties on the appellants 230 gunny bags containing ball bearings value at Rs. 1,32,96,400/ - were ordered to be confiscated absolutely under Section 111(d) of the Customs Act, 1962. Personal penalties on 12 persons (including the present appellants) were also imposed under Section 112 of the Customs Act by the said order. The present appellants are not contesting the confiscation of the goods but are only challenging the personal penalties imposed on them. Shri Sandeep Sood had been imposed a penalty of Rs. 50 lakhs and Shri Liyakat Shah had been imposed a penalty of Rs. 25 lakhs.

(2.) SHRI S.N. Kohli, Sr. Advocate along with S/Shri Satpal Singh and K.K. Choukse, Advocates appeared for the appellants and Shri Mewa Singh, ld. SDR represented the respondent Commissioner.

(3.) BRIEF facts are: Shri Sandeep Sood, is the proprietor of M/s. Rattan Road Lines, with its headquarters at Indore and branch office at various other places. Acting on intelligence that a truck bearing registerarion No. NLO 5A 1865 coming from Nepal containing ball bearings of foreign origin had unloaded the said goods at the godown of M/s. Rattan Road Lines at New Kabadkhana at Bhopal on 13 -9 -96, the said premises were searched by the Customs Officers. The person incharge of the godown, Shri Ramashankar Dubey was interrogated on the spot and statement recorded from him. During the personal search of Shri Ramashankar Dubey, three bunches of keys were recovered from his pant pocket. He explained that one of the bunches of keys related to the office and the other bunch of keys was of the godown and the third bunch of keys was that of the office almirah and locker. On interrogation, he deposed that 230 gunny bags containing ball bearings were kept in the godown. However, he could not produce any valid duty paying documents relating to the said ball bearings. He disclosed that the documents which purported to accompany the ball bearings contained false description of the goods and ball bearings were never mentioned on any of those documents. On reasonable belief that the said goods were smuggled into India from outside India, the godown was opened with the keys of Shri Ramashankar Dubey and 230 gunny bags of ball bearings seized. The bags contained markings "made in China". These bags consisted of smaller plastic bags containing 10 ball bearings each. Shri Ramashankar Dubey disclosed that the goods belonged to one Har -bans Singh and that Shri Harbans Singh had come and opened one of the gunny bags and had taken some ball bearings with him. Shri Ramashankar Dubey further disclosed that the ball bearings were unloaded from truck No. NLO 5A 1865 by the driver Manta under direction from Shri Harbans Singh. Shri Ramashankar Dubey also disclosed that the driver had told him that the ball bearings were brought from Nepal. Shri Ramashankar Dubey however, could not produce any documents, Bill of Entry, or other documents showing duty payment on the said goods. In further statement given to the Superintendent of Customs, Bhopal under Section 108 of the Customs Act, Ramashankar Dubey stated that he was the manager of the Rattan Road Lines, Bhopal; that he was employed by Shri Sandeep Sood, proprietor of Rattan Road Lines; that he knew the residence and office telephone numbers of Sandeep Sood; that he was getting a monthly salary of Rs. 2,000/ - from Shri Sandeep Sood; that though the godown was in the name of M/s. Rattan Road Lines, it had actually been acquired by Shri Harbans Singh and that Rs. 10,000/ - mentioned in receipt for the rent was paid to Shri Mohd. Salim on instructions from Shri Sandeep Sood; that Sandeep Sood had told him (Ramashankar Dubey) that Harbans Singh needed a godown in Bhopal for unloading and loading of goods; that he (Ramashankar Dubey) had arranged for the renting of the godown from Shri Mohd. Salim at a monthly rent of Rs. 2,800/ -; that he was asked to look after the loading and unloading from the aforesaid godown and therefore the goods of the godown remained with him; that Shri Harbans Singh used to come personally at the time of loading and unloading of the goods and that Shri Harbans Singh used to give instructions. Shri Dubey further stated that the first consignment of ball bearings from Nepal had arrived on 5 -8 -96 which was unloaded in front of his office and transferred to other branches and sent to Delhi on instructions from Harbans Singh; that ball bearings started coming from Nepal at regular intervals and these were disposed of by him on instructions from Harbans Singh. As on 5 -8 -96, the date of seizure, he had handed over 80 consignments, some of which were recorded by him in the note book marked as Annexure 'A'. Shri Ramashankar Dubey also stated that Shri Harbans Singh had told him that the said goods came from outside Nepal and were manufactured in China and therefore the goods did not have any Bill of Entry or any other documents. Harbans Singh had also instructed him that while despatching the goods the original description of the goods should not be mentioned in the documents for further transportation. The drivers had also told Ramashankar Dubey that the goods were brought from Nepal. On 12 -9 -96, when truck bearing registeration No. NLO 5A 1865 containing 230 packages of ball bearings and other packages had been brought, driver Manta had informed that he had brought these ball bearings from Nepal. Shri Ramashanakar Dubey on instructions obtained from Harbans Singh had unloaded the ball bearings in his godown near Rani Jhansi Ki Building, New Kabadkhana, Bhopal. Shri Harbans Singh had come at about 2 PM on 12 -9 -96 along with the trucks and the gunny bags. He had also opened one of the gunny bags and taken out some ball bearings therefrom as samples.