Shri R.N Zutshi v. Cc, New Delhi .

PROCEEDING Per. D.N. Panda :- This case was consecutively heard on 26th, 27th and 28th May 2009. Learned Counsel Shri Bipin Garg appearing for Shri R.N. Zutshi submitted his synopsis and prayed that the same may be considered for disposal of this appeal alongwith following documents placed by him for consideration :- (1) Statement of Shri R.N. Zutshi, (2) Rebuttal by Shri Zutshi, (3) Statement of Shri Dil Agha (4) Letter dated 27/12/2000 received from Kyrgyzstan Airline (5) Pictorial presentation about the functioning in the airport. (6) Letter dated 29/1/01 received from Kyrgyzstan Airlines. (7) Letter dated 18/1/01 received from the office of Additional Commissioner of Customs, IGI Airport, New Delhi detailing information under RTI Act, 2005. (8) Letter dated 25/3/1991 from the office of Additional Collector of Customs, IGI Airport, New Delhi. (9) Office Order No. 158 dated 7/6/05 issued by the office of Additional Commissioner of Customs, IGI Airport, New Delhi. (10) Order of adjudication dated 15/5/2000, 24/7/2000, 1/8/2000, 21/8/2000 in a bunch. (11) Judgment of Apex Court in Amrit Foods.

2. Shri Garg submits that there was seizure of some goods on 28/8/2000 from Olga at the airport. Basing on that event, this appellant was questioned, alleging his involvement. He was summoned on 17/1/2001. On that day, he was examined from 11 A.M. to 11 P.M. and his statement was recorded under duress as well as coercion. Therefore, such statement was retracted on 19/1/2001. Basing on certain phone calls on 15/5/2000, 10/7/2000, 24/7/2000, 1/8/2000 and 21/8/2000, this appellant was charged stating that he was in conversation with certain people to make evasion fruitful on those five days. 2.1 He draws our attention to table 14 at page 181 to 183 of show cause notice to demonstrate the manner how this appellant was implicated to charges. The charged was that this appellant shall be liable to penalty under Section 112 (a) of the Customs Act, 1962 for abetting the confiscation of the goods under section 111 of that act without mentioning the sub-clause of that section. The show cause notice at page 184 deals with the table 14. This does not indicate under which sub-clause of Section 111, this appellant was responsible to make the goods confiscable. 2.2 On the above five days this appellant as an officer of Customs was discharging his duty as an Inspector under the Superintendent Shri R.K. Tyagi, Shri Yashvir Singh, Shri Anil Madan and Shri Yashvir Singh on the aforesaid dates. There was no show cause notice issued to Shri R.K. Tyagi for the event of 15/5/2000. The proceeding initiated against Shri Yashvir Singh for the event of 10/7/2000 was dropped by the learned Commissioner. Similarly, the proceeding drawn against Shri Yashvir Singh on 21/8/2000 was dropped by the learned Commissioner. Shri Garg gave a chart showing how this appellant was discharging his duty. That chart in two pages exhibits that on 15/5/2000 he worked under Shri Y.S. Reddy, A.C.O. and the goods that was subject matter of adjudication on that day was proposed by Shri Reddy. This appellant was not found to be an abettor on that day but has been penalised for no ground of evasion. 2.3 Similarly the adjudication on 24/7/2000, 1/8/2000 and 21/8/2000 did not make any allegation against this appellant even though order of adjudications were passed on those days to deal with the respective offending goods. Therefore, according to Shri Garg, when this appellant was brought to charges on those days, he cannot be dealt subsequently on any extraneous considerations like phone calls and statement recorded from different persons. The statement recorded from Dil Agha appearing in para 158 at page 99 of the order in original when recorded was not attested by the Jail Superintendent on 23/5/01. He dispute this entire statement recorded from Shri Dil Agha showing that none of the signatures of Shri Dil Agha was proved to be his signature for various defects. The statement of Shri Dil Agha was recorded on 22/5/2000 in the presence of Shri U.K. Mishra and the appeal folder at page 4 does not prove that Dil Agha has signed the statement. His signature does not appear. There is no attestation of any recorded statement by the Jail Superintendent. Similarly all the pages beginning from page 6 to page 32 were not attested by the Jail Superintendent. Signature of Shri Dil Agha what is claimed to have been made also varies. He specifically points out that none of the statement beginning from page 1 to page 32 of the bunch of document filed being signed by Shri Dil Agha nor attested by the Jail Superintendent, that cannot be used as evidence against this appellant. 2.4 Shri Garg submits and there was a specific request made by the appellant for cross examination Shri Dil Agha and also other officers to find out veracity of the statement and materials used against the appellant. He drew our attention to page 295 in the appeal folder and submits that a letter was addressed to the learned Commissioner to allow cross examination of 20 witnesses. This letter was before the Commissioner on 16/3/05. But none of the officers were allowed to be cross examined by this appellant. This denial appears in para 414 at page 256 of the order of adjudication. Such a denial results in denial of justice for which this appellant should not be guilty of being in connivance. Learned Commissioner specifically observed in para 416 of order of adjudication that denial of opportunity of cross examination shall not jeopardise adjudication. But this is not law following the decision cited in his synopsis in paragraph 8. He draws our attention to Shri Dil Aghas statement and submits that there are several doubts in the deposition which is not creditable evidence for Revenue. He took us to show cause notice para 156 at page 111. There he says that when Shri Dil Aghas statement is not creditable, that cannot be a basis to use against the appellant. This he states from sub-para 1 at page 111 of show cause notice. Only at page 157 of the appeal folder which exhibits page 111 of show cause notice name of this appellant appears. When Mamoor Khan was not subjected to cross examination, this appellant cannot be brought to the charges even if he is alleged as Khas Adami. When the Bench questioned as to whether the case is covered by Section 133 of the Customs Act, 1962, he says no and submits that when Mamoor Khan was not examined by Revenue entire burden rests with Revenue to prove that Mamoor Khans evidence was creditable and beyond doubt when this appellant was implicated without cogent evidence on record. 2.5 He refers to page 177 of the show cause notice which deals with the telephone calls in table 7 of show cause notice. He says that the telephone No. 9810136977, 6322294 if at all used, that was to find the informer for the interest of Revenue. None of the witnesses of Revenue even including Olga and Party named this appellant. Ms. Olgas statement at page 482 has not named this appellant. When Olgas statement was recorded in Jail before Joint Superintendent, she did not name the appellant. When Ms. Olga was in distress she would have uttered name of this officer. But that was not done. She even stated that she does not recall Mamoor Khan and Dilbar Khan of Afghanistan. 2.6 He refers to para 2 of show cause notice at page 1 showing Ms. Olga was coming to India from the last three years. Never in the last three years this appellant was brought to charge as being directly involved in the evasion. Revenue has not recorded any telephonic conversations to find out whether such conversations have resulted with abetment aiding/abetting the telephone receivers. There is no evasion caused by this appellant even by telephone calls because the outgoing calls was not for smuggling. Smuggling if any is independent of the telephone calls. 2.7 The RTI information through letter dated 18/1/01 is a referable evidence which goes against the Revenue. Revenue has explained how the packages were checked. The manner of explanation of package checking with the accompanying documents does not approve that this appellant was directly involved in clearance of the alleged quantity appearing in table 2 of the order of adjudication. When this appellant was not an agent to make the evasion possible and even to escape the goods, he cannot be brought to charges. 2.8 Shri Garg submits that order-in-original does not speak of abetment of the appellant. There is no evidence. The manifest was also not available to find out appropriate quantity if any imported and such quantity whether has escaped duty for reasons attributable to this appellant is not on record. Therefore, no allegation in respect of quantity escaped by this appellant can be made. He submits that when manifest is handed over to Customs Authority that must be in their custody. But the same not being made available to the appellant, he was denied justice. The manifest collected from Kyrgyzstan Airlines was also manipulated which is seen from copies he has submitted in the list of documents aforesaid. The airline documents being manipulated, that cannot be used as evidence against this appellant. 2.9 He refers to para 378 at page 540 of the appeal folder dealing with para 375, 378 and 381 about the retraction of this appellant. He proves that this retraction was available with the authorities within two days of recording of his deposition on 17/1/2000.Therefore, the retracted statement which gives truth cannot be brushed aside. He draws our attention to para 419 at page 258 and page 179 as well as page 275 of order-in-original to mention about the events of the five days. Further he refer to para 458 and 460 in respect of these events. Explaining the events of those five days, he explains that on none of those days, this appellant has abetted any evasion to fall under Section 112 (a) of the Customs Act, 1962. Similarly, Section 112 (b) also does not allege this appellant when there is no specific sub-clause of Section 111 invoked in the case.

3. He refers to page 605 and page 306 of order-in-original which deals with para 158 to submit that sub-clause (d) and sub-clause (l) were not invokable at all. Therefore there shall be no penalty following the Apex Courts judgment in Amrit Foods. Shri Atul Gupta appearing on behalf of Shri Bipin Garg submitted on 29/5/09 that Revenue has not recorded any statement from Nazira, Shahlo and Merkulova.

4. Learned DR Shri Sumit Kumar has filed a detailed memo showing that penalty of Rs. 2.5 lakhs imposed by order-in-original dated 27/9/07 was on careful examination of the charges in terms of the show cause notice dated 24/8/01. The evidence gathered has been analysed in para 5 of his notes. He submits the entire link of the evidence self speak that beginning from the contacts made by these appellants to the offenders till the goods reach to the ultimate buyer in Delhi they were on track. This proved active involvement of this appellant in the offence. The evidence like phone call, manifest details, statement of Shri Zutshi, statement recorded from Dil Agha are direct evidence to suggest that this appellant has abetted commitment of the offence to make the goods liable to confiscation under Section 111 of the Customs Act, 1962 for which penalty was imposable under Section 112 (a) and (b) of said Act. Goods of sizable quantity have escaped from imposition of duty for which those goods were liable to confiscation. This appellant was held guilty for his role in aiding and abetting smuggling of textiles valued Rs. 17,78,785/- on 27/2/2000. Shri Mamoor Khan, Shri T.R.K. Reddy, Shri V.K. Khurana and this appellant were the prime abetter to cause evasion. 4.1 The statement recorded from Shri Zutshi under Section 108 of the Customs Act, 1962 cannot be brushed aside on the plea of being retracted. All citations made by Revenue in note deserves consideration for disposal of appeal of this appellant. He has specifically drawn attention to para 13 of the analysis of evidence which demonstrate that established link with Olga made the evasion fruitful and this established link also shows the involvement of the Appellant resulting in seizure of goods on 28/8/2000. He also drew attention specifically to para 16 of his note to demonstrate that this officers among others was Khas Adami. 4.2 Learned DR Shri Sumit Kumar on 26/5/09 has explained the import policy for the relevant period 1997-2002. He draws our attention to para 156 of Chapter 5 dealing with import of passengers package. He submits that the China Silk imported is a restricted item under Part II under Para 15.2 of the policy. He has placed copy of Baggage Rule 1998 and draws our attention to para 2.2 to demonstrate how the goods arriving at the Airport undergoes the process of screening. He states that counter No. 4,5 and 6 is meant to deal the offending goods. The goods on all the five occasions that is on 15/5/2000, 10/7/2000, 24/7/2000, 1/8/2000 and 21/8/2000 has undergone screening through these three counters. There is an assessment procedure for clearance of the package that is in para 2.3 of the manual. He specifically says that disembarkation card is an essential document submitted by a passenger under his/her signature. Customs Authorities thereafter examine the passengers to find out the veracity and such process is done by oral declaration. The passenger when confirms the oral declaration the cards gets approval and any deviation to the declaration calls for adjudication. In appropriate cases, X-Ray is also done in respect of packages. Wherever there is any questionable package, detention thereof is done under para 2.3.1 of the Manual. He draws attention to para 2.5.1 to show the duty of Baggage Officers. An elaborate guideline is given to the Baggage Officer and the manner how he deals the passenger is exhibited by para 2.5.2 of the Manual. 4.3 The appellants Shri R.N. Zutshi as an officer of Customs was engaged in the duty was expected to be aware of all these provisions of Departmental Manual. Not only that, this officer was also expected to know the Baggage Rule thoroughly and all norms and procedure of clearance. An officer is answerable under the law if he deviates from the defined procedure. It was found from various primary evidence as well as collateral evidence that this appellant was cause of evasion on all those five days bringing the offenders to close scrutiny on 28/8/2000. The modus operandi followed by this appellant was consequent upon introduction by an officer called Shri T.R.K. Reddy. He get himself involved alongwith four other officers in the smuggling racket. From the day of introduction by Shri Reddy, this appellant was in conversation with smugglers through his telephones as detailed in Table 2 by the Adjudicating Authority. 4.4 His active involvement through telephone calls was not to find any informers but to cause evasion aiding smugglers to operate in India. The print out received from the telephone companies proved that this appellants telephone was in connection with the organisers of the smugglers and such conduct has resulted with five adjudications on the aforesaid dates. When investigation was made soon after these adjudications, which is three months after from the first evasion committed by this appellant, Revenue was bound to investigate the reason why this appellant was involved in the telephone calls. The first date evasion on 15/5/2000 also proved the evasion of 10/7/2000 by the telephone call print outs. This is the chain of event of the Appellants involvement. 4.5 When this officer could make the offending goods possible to escape in connivance and abetment with other officers, he should not claim innocence. He being incharge of counter No. 4, 5 & 6 respectively, he cannot plead that he was innocent when he could notice that a part of the luggage of the passenger should be subject matter of adjudication. As a man of prudence and diligence, this officer should have brought out requirement for further enquiry suo moto when offending goods were reaching this country frequently. 4.6 Drawing attention to Circular, he says that the officers are expected to deal with the offending package to protect interest of Revenue. Following the guidelines in the Circular No. 9/01-CUS dated 22/1/01, which has reiterated instructions dated 6/5/96 and 22/6/99, it was expectation of law that customs officers were to curb illegal import. When the Bench put a specific question to the learned DR that why Circular of 22/2/01 shall govern the case, learned DR replied that this clarification on 22/2/01 was reiteration of 1996, 1997 and 1999 and 2000 instructions. When the appellant did not act bonafide to achieve the purport of the Circular he cannot be a innocent person for which he has been brought to charges. 4.7 Also learned DR submits that the call details depicted in the show cause notice on all the five days brought out the nexus of the appellant with the smugglers who occasioned the smuggle through their conduits i.e., Olga & Party. All the telephone calls resulted adjudication on the five days in question. The appellant could have claimed innocence had he curbed evasion. The conduct of the appellant could not prove that he was after the informers. There is a specific procedure to record outcome of dialogue with the informers. That is not brought by this appellant to record. 4.8 Shri Sumit Kumar, Learned DR submits that natural justice was followed by the Adjudicating Authority all along. Mere pleading of no cross examination shall not make the proceeding fatal for the reasons stated by the learned Adjudicating Authority in the order. The burden of proof was well discharged by Revenue bringing out the charges and evidence in the show cause notice itself. Pre-ponderence of probability was all along in favour of Revenue. He submits that analysis of evidence clearly demonstrate connivance of the appellant and that is elaborately depicted by Revenue in submission dated 26/5/09 under paragraph 3. 4.9 Learned DR specifically submits that the retraction statement of Shri Zutshi, the appellant is incredible when his deposition was 17/1/2000 itself and his involvement was proved from telephone calls and those calls occasioned the adjudication of five days by the conduit of the organisers, such fact itself prove against him which is supported by his confession. Had the conduit not being the part of smugglers, the appellant could have taken advantage of being an innocent and not involved. Therefore his retraction shall not lend any defence to him. When the retraction was not in accordance with law and such document not filed with the authorities who recorded that. The same shall not benefit this appellant.

5. The statement recorded from Shri Mamoor Khan and Dil Agha directly bring this appellant to the record for charge. Plea of no cross examination of these two witnesses of Revenue does not support case of Appellant in view of proved circumstances of evasion by the order of adjudication of those five days bringing the offending passengers to record. This offender has allowed movement and escapement of offending goods for storing of the same in the Guest House and finally being destinated to Chandni Chowk Market through transporter who were also brought to charge. The plea of the appellant that they were not brought to proper sub-clause of Section 111 is of no value since the goods was liable to confiscation which is evident from five adjudications itself.

6. The arrival of quantity of goods over and above the quantity adjudicated were bound to be liable for confiscation for which the appellant were to face the charge under Section 112 (a). Learned DR has given a summary of statement of Shri Zutshi under paragraph 12 to 24 of his notes of arguments. In paragraph 25 (b) he specifically says that the letter of retraction is of no value. In para 26, various evidence which were submitted by the offender passengers prove that those goods were subject matter of smuggle on the five days. This appellant with the aid and abetment of others made the goods to escape from the Customs Control, resulting in deliberate breach of law.

7. He has filed a list of judgments to support his contention. Specifically, he submits the decision of the Apex Court in the case of K.T.M.S. Mohammed and others vs. UOI reported in 1992 S.C. (3) 178 to submit that merely because a statement is retracted, he cannot be said to have not given voluntary statement or his statement unlawfully recorded. Had there been any coercion and undue influence on the appellant, he should have brought the same by application immediately to higher authorities since he is an officer of customs. He also relies on the Apex Court decision in the case of Surjeet Singh Chhabra vs. UOI reported in 1989 E.L.T. 646 (S.C.) to submit that non-tendering of witness for cross examination shall not make the confessional statement void. Drawing attention to the judgment of the Tribunal in the case of K.P. Abdul Majeed vs. CC reported in 2000 (123) E.L.T. 960 (CESTAT), he submits that statement of co-noticee shall provide a better substantive evidence and the recorded statement under Section 108 of Customs Act is a material piece of evidence. On 29/05/09, Shri Sumit Kumar, learned DR submits that judgment of Apex Court in the case of Naresh Sukhwani vs. UOI reported in 1996 (83) E.L.T. 258 (S.C.) is also on the same point of statement relating to co-noticees recorded under Section 108 of the Customs Act, 1962. On 28/5/09, he had drawn our attention to the Apex Court judgment in the case of Bhagwan Swarup and others vs. State of Maharashtra reported in AIR 1965 S.C. 682. Relying on these decisions, he submits that an agreement between the conspirators need not be directly proved when that has resulted with hatched conspiracy. The offence committed by conspiracy can even be proved by circumstantial evidence. The case of the appellant submits to such a ratio and should be penalised.

8. He prays that all the judgments cited by him in his written note may be considered. It was on 29/5/09, Shri Sumit Kumar provides a chart showing the events and documents for assistance of the Bench.

9. This proceeding has been recorded in the open court. Both parties are entitled to the copies of the same. Registry is directed to give them copies under appropriate identification number. This proceeding forms part of order sheet and record. (Dictated and pronounced in open court) (D.N. Panda) Judicial Member (Rakesh Kumar) Technical Member