Commissioner Of Cust... v. Shri Sainul Abideen ...

Prayer: Civil Miscellaneous Appeal filed against the order of the Customs, Excise & Service Tax Appellate Tribunal Bench, Chennai dated 12.10.2004 in Final Order No. 915/2004, under Section 130 of the Customs Act, 1962.

JUDGMENT

K. RAVICHANDRABAABU, J.

This appeal is preferred by the Revenue against the order of the CESTAT, whereby the Tribunal set aside the order of confiscation of an imported car and penalty. The following are the substantial questions of law raised in this appeal:

1. When the statement of Abdul Razak given in response to the summons issued is admissible in evidence, has not the Tribunal committed an error of law in ignoring that statement, while deciding the issue in question?

2. Whether the failure to take the statement of the first respondent made before the Income Tax Authorities, which is otherwise admissible in law, vitiates the judgment challenged in this appeal?

2. The subject car Viz., Toyota HI LUX SURI was imported by the the first respondent herein and cleared under a Bill of Entry dated 21.1.1998 based on the importer's declaration and the documents filed with the Bill of entry. The documents filed included the following (1) Invoice dated 12.11.1995 of M/s. Afghan Motor Co., Sharjah (U.A.E) issued in the name of the first respondent (2) Insurance Certificate dated 15.11.1995 issued to the first respondent by M/s. Umm AI Quwain Insurance Services (3) “Vehicle Export Certificate” dated 29.11.1997 issued by M/s. Umm AI Quwain Traffic Department to the first respondent (4) Private Vehicle Registration Book issued by M/s. Umm AI Quwain Traffic Department to the first respondent.

3. On specific intelligence that the said car was imported using false documents and was being used by one Abdul Razak, the DRI, Calicut directed the said Abdul Razak to produce the vehicle before them. On 22.2.2000 the said Abdul Razak produced the said vehicle and he was also subjected to a detailed examination. Consequently, the vehicle was seized under a Mahazar on the reasonable belief that the same was imported in contravention of the provisions of the Customs Act 1962. The said Abdul razak in his statement made on 22.2.2000 before the DRI, Calicut, informed that he purchased the said vehicle through his relative viz., the first respondent from Afghan Motor Co., Sharjah after paying an advance of 500 Dhs in cash for which a receipt in No. 002 dated 18.11.1997 was given in his favour. A further sum of 27, 000 Dhs was paid by him on 27.11.1997 and thereafter the vehicle was handed over to him on the same day and it was sent to Madras on 30.11.1997 and subsequently registered at Bangalore Registration Office with Registration No. KA 03P 5616. However, the said Abdul Razak retracted his statement on the very next day, by issuing a letter and claiming that he was using the said vehicle which was imported by the first respondent herein who is his nephew and that car had been purchased on 12.11.1995 as per Inv. 1000 issued by Afghan Motor Co., Sharjah. He also stated that the receipt in No. 002 dated 18.11.1997 issued in his name was not connected with the original purchase made by the first respondent. Summons were issued to the said person on 13.3.2000 and again on 29.5.2000 requiring his presence before the DRI, Calicut. However, he appeared on 8.6.2000 and gave a statement under Section 108 of the Customs Act stating that the earlier statement given on 22.2.2000 was correct and the retracted statement given on 23.2.2000 was not correct. He also stated that the receipt in No. 1000 dated 12.11.1995 issued in the name of the first respondent was not a true invoice. The first respondent was also issued summons dated 22.5.2000 and again on 29.5.2000 requiring his presence at the DRI Office, Calicut.

4. The Joint Commissioner of Customs, Chennai ordered provisional release of the said vehicle on furnishing a bond with 100% bank guarantee for the assessable value of Rs. 4,92,855/- pending issuance of show cause notice and adjudication. Accordingly, the bank guarantee was furnished and the vehicle was also provisionally released on 17.7.2000 In between, a show cause notice was issued on 5.7.2000 by the DRI, Calicut, calling upon the first respondent herein as well as the said Abdul Razak to show cause as to why the said Car should not be confiscated under the provisions of Section 111(d) and 111(m) of the Customs Act, 1992 read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992. The first respondent replied to the show cause notice on 18.9.2000 Thereupon, an Order-in-Original dated 26.11.2001 came to be passed by the Additional Commissioner of Customs, Chennai by holding that the car was liable to confiscation and as the same was provisionally released, he imposed redemption fine of Rs. 4,50,000/- and penalty of Rs. 50,000/- and Rs. 60,000/- on the said Abdul Razak and the first respondent herein respectively and also for enforcement of the P.D Bond and bank guarantee executed at the time of provisional release of the vehicle.

5. Aggrieved against the said order-in-original, the first respondent herein preferred an appeal before the Commissioner of Customs (Appeals) Chennai. The first appellate authority confirmed the order of the original authority through his order dated 30.5.2003, however, by reducing the penalty on the first respondent herein from Rs. 60,000/- to Rs. 25,000/-. The first respondent herein preferred further appeal before the Tribunal. By order dated 12.10.2004 the Tribunal set aside the order of the authorities below. Hence the present appeal is preferred before this Court by the Revenue by raising the above substantial questions of law.

6. Learned counsel appearing for the Revenue submitted that the statement made under Section 108 of the Customs Act is admissible in law and therefore the statement issued by Abdul Razak dated 22.2.2000 and reiterated once again by him on 8.6.2000 are to be taken as valid and admissible statements establishing the fact that the car was imported by the said Abudl Razak using false documents. The Tribunal is wrong in rejecting the statement given by the said Abdul Razak on 8.6.2000, only on the reason that it was made after four months period. The receipt issued by the Afghan Motor on 18.11.1997 showing the said Abdul Razak as the purchaser was a genuine receipt which was also authenticated by the Consul (Economics) at Dubai. Therefore, the learned counsel for the Revenue submitted that when the receipt dated 18.11.1997 issued in favour of Abdul Razak establishes the fact that he was the purchaser of the vehicle and hence the import made by the first respondent by using false documents contravenes the provisions of the Customs Act, 1962. He relied on a decision of the Hon'ble Supreme Court in Surjeet Singh Chhabra v. Union of India (1997 (89) ELT 646 (SC)) and a decision of this Court in Roshan Beevi v. Joint Secretary, Government of Tamil Nadu1984 (15) ELT 289 (Mad) in support of his submissions.

7. Per contra the learned counsel appearing for the first respondent/importer submitted that the findings rendered by the Tribunal based on the materials available on record are not canvassed by the Revenue as perverse and therefore there is no substantial question of law arises before this court for consideration in this appeal. Apart from the said preliminary objection, he further submitted that all the documents filed along with the Bill of entry show that the first respondent is the purchaser of the said vehicle and he had imported the same with valid and genuine documents which are not proved as not genuine by the Revenue by placing any other materials except the statement made by the said Abdul Razak and the receipt issued in No. 002 dated 18.11.1997 showing him as the purchaser of the said vehicle. He further contended that any statement made before the Income Tax Authorities cannot be relied on by the Customs Authorities for the purpose of implicating the first respondent. In support of such contention the learned counsel relied on the decision in K.T.M.S Mohd. v. Unionof India ((1992) 3 SCC 178). He invited our attention to the individual documents filed along with the Bill of Entry to establish that those documents are not false or forged one.

8. Heard the learned counsel appearing for the appellant as well as the first respondent.

9. In this case, the issue involves in respect of import of a car and its ownership at the time of import. According to the Revenue, the said Abudl Razak was the purchaser and owner of the said vehicle from the foreign car company viz., Afghan Car Company, Sharja and not the first respondent. Contra to the said claim, the first respondent contends that he is the owner of the said vehicle and imported the same with valid documents inside this country. In support of their contention in fixing the ownership on the said Abdul Razak, the Revenue relied on receipt in No. 0002 dated 18.11.1997 issued by the said foreign Car Company as well as his statement given on 22.2.2000 reconfirmed once again on 8.6.2000 On the other hand, the first respondent in support of his claim of ownership of the said vehicle, relied on the invoice dated 12.11.1995, Insurance Certificate dated 15.11.1995, Private Vehicle Registration Certificate, Vehicle Export Certificate dated 29.11.1997 In all those documents, the first respondent is shown as the purchaser of the vehicle. The Tribunal refused to accept the statement of Abdul Razak given both on 22.2.2000 and 8.6.2000, on the reason that the first statement given on 22.2.2000 was immediately retracted on the very next day and insofar as the second statement dated 8.6.2000 is concerned, the Tribunal pointed out that there was a gap of nearly four months from the date of original retraction and therefore the statements made with unexplained wide gap is not admissible in evidence.

10. Moreover the Tribunal upon factual verification of all the documents filed by the first respondent along with the Bill of Entry as well as the receipt dated 18.11.1997 issued in favour of Abdul Razak, declined to accept the said receipt dated 18.11.1997 on the ground that it was impossible to presume that the receipt issued on 18.11.1997 can carry further entries made on a subsequent date viz., 27.11.1997 and such non-genuineness coupled with the retraction statement given by the said Abdul Razak on 23.2.2000 is enough to conclude that the evidence in this case is heavily weighing in favour of the importer. The Tribunal further pointed out that the documents filed by the first respondent with the Bill of entry and their authenticity were not questioned or doubted by the Revenue. Therefore, the Tribunal pointed out that there is every possibility of presumption in favour of genuineness of the documents, especially, when such presumption is not rebutted by the Revenue.

11. We have perused the invoice dated 12.11.1995 issued by the Afghan Motor Company in favour of the first respondent. It shows that the car with unit price of 24,050/- Dhs was sold on the same day by receiving the entire amount. The Private Vehicle Registration Book also shows that the first respondent is the owner of the said vehicle with registration dated 15.11.1995 In the very same Registration Book, the Insurance Policy No. SH/P/1215/95 is also mentioned by indicating that such Policy expires on 14.11.1996 The said certificate was substantiated by another document, viz, Insurance Certificate showing the Policy Number as 1215.SH P/95. Though the insurance certificate was made in Arabic language, a translated version of the same was placed before this Court by the first respondent and a perusal of the same shows the above said details. Further, a perusal of the Vehicle Export Certificate also indicates that the first respondent is the owner of the said vehicle by showing the registration date as 15.11.1995 A perusal of all these documents unambiguously indicate that the first respondent was the purchaser of the said vehicle and the same was purchased on 12.11.1995 itself and got registered on 15.11.1995 and thereafter exported to India under Bill of Entry dated 21.1.1998

12. The Revenue, as found by the Tribunal, has not disproved these documents by placing any rebuttable evidence. On the other hand they relied on the receipt issued by the very same Afghan Car Company dated 18.11.1997 under receipt No. 002. We have also perused the said receipt issued by the very same Car Company. The said receipt indicates that a sum of Rs. 500/- Dhs. was received as advance from the said Abdul Razak on 18.11.1997 out of the total price of 29,000/- Dhs. However, in the very same receipt further entries were made on 29.11.1997 as if a further sum 27,000/- Dhs was paid. If any such sum had been paid, the Car Company would have certainly issued a separate receipt instead of making entry in the very same receipt dated 18.11.1997, which appears to be very unusual. Therefore such entry raises some doubt about the genuineness of the said transaction itself. Even otherwise, when the very same Car was already sold by the very same car company on 12.11.1995 to the first respondent, who in turn got it registered on 15.11.1995 itself in his name with a cover of insurance policy, we fail to understand as to how the Car Company can issue another receipt after two years to show as though the said car was sold to another person viz., Abdul Razak. Certainly, this receipt dated 18.11.1997 raises all reasonable doubts. Therefore, when there is a cloud in the said receipt issued on 18.11.1997, the Tribunal had rightly refused to accept the same. Insofar as the the statement given by the said Abdul Razak is concerned, it is needless to say that any statement made should be supported by materials. The Revenue cannot rely on the statement made in the absence of any substantiating documents, especially when the first respondent on the other hand proved that he is the purchaser of the said vehicle with valid documents and imported the same in this country with the support of such valid documents.

13. We cannot ignore the fact that the said Abdul Razak though gave a statement on 22.2.2000, had however immediately retracted the same on the very next day i.e On 23.2.2000 No doubt, after a period of four months he wanted to stick on to the earlier statement given on 22.2.2000 Such contradictions and inconsistency on the part of the Abdul Razak only shows that there is no bonafide on his part. Therefore, the Tribunal was right in rejecting those statements as inadmissible in evidence. Even otherwise such statement alone cannot prove the case of the Revenue especially when the presumption in favour of those documents filed by the first respondent were not rebutted by the Revenue. Consequently we find that the order of the Tribunal based on its factual finding need not be interfered with, especially when the Revenue has not placed any other materials to contradict such factual findings.

14. The learned counsel for the Revenue relied on the decision of the Hon'ble Supreme Court in Surjeet Singh Chhabra v. Union of India (1997 (89) ELT 646 (SC)) and the decision of this Court in Roshan Beevi v. Joint Secretary, Government of Tamil Nadu1984 (15) ELT 289 (Mad) in support of his contention that statement made before the Customs Officer under Section 108 of the Customs Act, though retracted later is an admissible evidence and binding. Certainly, there is no quarrel about the said proposition. The admissibility of such statement as evidence is always there. However, the question is whether the authorities can act on such statement alone in the absence of any corroborating materials to substantiate the contents of such statement. Therefore, the admissibility of an evidence cannot and should not be taken to mean its acceptability as well. As we have already pointed out, the statement made by Abdul Razak, especially when retracted subsequently and reiterated the original statement thereafter, certainly raises a doubt with regard to the genuineness of its contents. Therefore, even though such statement made under Section 108 of the Customs Act is admissible in evidence, the authorities are not necessarily bound to accept the same as such in the absence of further materials to substantiate the contents of such statement. Therefore, by applying the facts and circumstances of the present case, the reliance placed on those above two decisions by the Revenue will not help them in any way.

15. The learned counsel for the respondent importer cited a decision of the Hon'ble Supreme Court in K.T.M.S Mohd. v. Union of India ((1992) 3 SCC 178) and contended that the statement made before the Income Tax Authorities cannot be relied on by the Customs Authorities. As we have decided the appeal by accepting the factual findings rendered by the Tribunal, which was based on the materials contradicting the statement made by the said Abdul Razak, we find that there is no need to go into the above issue. Consequently, there is no necessity to go into the above said case law cited by the learned counsel for the respondent.

16. In the result, this Civil Miscellaneous Appeal is dismissed and the questions of law are answered accordingly. Consequently the connected C.M.P is closed. No costs.