Page No.# 1/7 GAHC010085772019 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : C.Ex.App./2/2021 SRI MAHABIR PRASAD JAIN S/O- SHRI BHAWARLAL JAIN, AJMERA BROTHERS, M. G. ROAD, FANCY BAZAR, GUWAHATI, ASSAM, 781001 VERSUS COMMISSIONER OF CUSTOMS O/O THE COMMISSIONER CUSTOM (PREVENTIVE) NORTH EASTERN REGION CUSTOM HOUSE 110, MAHATMA GANDHI ROAD, SHILLONG, MEGHALAYA For the Appellant : Ms. P. Chakraborty, Advocate For the respondent(s) : Mr. S.C. Keyal, SC, Customs and Central Excise – BEFORE – HON’BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE N. UNNI KRISHNAN NAIR Date of Hearing and order : 25.02.2025 ORDER (Vijay Bishnoi, CJ) 1. This Excise Appeal is preferred by the appellant being aggrieved with the order dated 15.01.2018, passed by the Customs, Excise & Service Tax Appellate Tribunal (hereinafter to be referred as ‘CESTAT’), Kolkata, in Appeal No. Page No.# 2/7 C/75380/2014-SM, whereby the appeal preferred on behalf of the appeal has been dismissed. 2. This Court, vide order dated 05.03.2021, whiling admitting the appeal, has framed the following substantial question of law: “Whether the goods seized can be said to be in the possession of the appellant, under the provision of law?” 3. The brief facts of the case are that on 12.07.2009, the officers of the anti- smuggling Unit, Customs Division, Karimganj, intercepted a Truck near Assam Taxation Check Gate, Churaibari. On 13.07.2009, the customs officers checked the truck and recovered 235 plastic bags containing broken rice along with 250 cartons containing 25,000 bottles of Phensedyl Cough Linctus (PCL). The truck was found in abandoned condition without a trace of the driver or any other person. During detail investigation conducted by the customs officers, it was found that one Aziz Khan is the owner of the truck and a Road Challan dated 10.07.2009 was issued from a godown situated at Lokhra, Guwahati, in the name of M/s Loknath Traders, M.G. Road, Agartala, for 360 bags (18 MT) of broken rice. The appellant is the owner of M/s Ajmera Brothers of Fancy Bazar, Guwahati, from whose the rice was purchased and loaded in the truck in question from the godown and the said firm indeed issued the Road Challan dated 10.07.2009. 4. During the course of investigation, statements of the driver have also been recorded. However, before confiscating the seized goods, Show Cause notice under Section 124 of the Customs Act was issued to the appellant as well as the owner and driver of the truck seized. Reply to the Show Cause notice was filed on behalf of the appellant. However, the adjudicating authority, after Page No.# 3/7 considering the reply to the Show Cause notice filed on behalf of the recipients, including the appellant, passed the order darted 31.05.2011 directing confiscation of the truck along with the 235 bags of rice along with the consignment of PCL and imposed a penalty of Rs. 2 Lakh upon the appellant herein. In the said order dated 31.05.2011, the adjudicating authority recorded the following findings against the appellant: “9.6. Shri Mahabir Jain, proprietor of M/s Ajmera Brothers has stated in his reply to the show cause notice that he had supplied 360 bags of rice to the concern man agent of M/s Loknath Traders. Physical verification reveals only 235 bags of rice. Investigation also reveals that the consignee of the 18 MT (360) bags of rice, M/s Loknath Traders is non-existent. These shows the case memo issued by M/s Ajmera Brothers is fictitious in terms of quantity and non-existent consignee. The challan for 360 bags of rice issued by M/s Ajmera Brothers was handed over by the Dalal to the driver of the truck. In the light of this, I am of the view that M/s Ajmera Brother is very much aware of the fact that not 360 bags of rice, as reflected in the cash memo/challan were loaded from their godown, but only 235 bags of rice were loaded. M/s Ajmera Brothers did not load the remaining 125 bags of rice purposely to accommodate the 250 cartons of Phensedyl Cough Linctus. In my opinion, M/s Ajmera Brothers knowingly issued fictitious challan/cash memo of rice for concealing the consignment of Phensedyl Cough Linctus, concealed under bags of rice and therefore, Shri Mahabir Prasad Jain, proprietor of M/s Ajmera Brother cannot shrug of his responsibility by feigning ignorance about the seized consignment of Phensedyl Cough Linctus. He is trying to dissociate himself from the investigation to avoid penal actions as he is aware of the illegal nature of the seized Phensedyl Cough Linctus. I therefore find Shri Mahabir Prasad Jain, proprietor of M/s Ajmera Brothers involved in concealing, transporting and dealing with the Page No.# 4/7 seized goods and thus liable to penalty under Section 114 of the Customs Act, 1962.” 5. Against the order dated 31.05.2011 the appellant preferred an appeal before the Commissioner of Customs and Central Excise (Appeals), Guwahati. The aforesaid appeal was dismissed by the appellate authority vide order dated 27.11.2013. Aggrieved by the order dated 27.11.2013 passed by the appellate authority, the appellant preferred a Second Appeal, being Appeal No. C/75380/2014, before the CESTAT, Kolkata, which also came to be dismissed vide the impugned order dated 15.01.2018. 6. Assailing the impugned order passed by the CESTAT, Kolkata, learned counsel appearing on behalf of the appellant has argued that the appellate tribunal has erred in rejecting the appeal filed on behalf of the appellant and, therefore, the order passed by the appellate tribunal is liable to be set aside. Learned counsel for the appellant has placed reliance on the grounds, which have been taken in this appeal, which are as follows: “(i) For that the learned Tribunal completely ignored the material available on record regarding loading of the banned medicine from a different godown and there was absolutely nothing on record to establish any connection of the appellant and the said godown on the middleman who had loaded the goods along with the rice consignment of the petitioner which has vitiated the order requiring the same to be set aside and quashed. (ii) For that the learned Tribunal as well as the respondent No. 1 completely brushed away the statement of the driver and hold the appellant guilty in a very partisan manner which has rendered the Page No.# 5/7 finding illegal requiring the same to be set aside and quashed. (iii) For that in any view of the matter the impugned order being bad in law liable to be set aside and quashed. (iv) For that the learned Tribunal in Kolkata failed to appreciate that the appellant had fallen a scape goat in the entire episode and therefore, could not have been hold liable.” 7. Per contra, learned counsel appearing for the respondent revenue has submitted that the impugned judgment passed by the appellate tribunal is not liable to be interfered with. He has argued that as such no substantial question of law arises in this appeal and, therefore, this appeal is liable to be dismissed. 8. Heard the learned counsel appearing for the parties and perused the material available on record. 9. The fact of recovery of 235 bags containing broken rice as well as 250 cartons containing 25,000 bottles of PCL from the truck in question is not disputed by the appellant. In the reply filed by the appellant against the Show Cause Notice, the appellant has stated that he sold 360 bags of broken rice to a person on being paid in cash and, as asked by the purchaser of the rice, he prepared a Cash Memo in the name of M/s Loknath Traders of Agartala. It has also been admitted by the appellant that a Road Challan dated 10.07.2009 pertaining to 360 bags of broken rice was also issued by M/s Ajmera Brothers, of which the appellant is the proprietor. 10. The appellant has come up with a case that at his godown only 360 bags of broken rice were loaded in the truck and may be somewhere during the journey from Guwahati to Agartala, the driver of the truck, or the middleman, who purchased the 360 bags of broken rice from his firm, may have unloaded Page No.# 6/7 125 bags of rice and loaded 250 cartons of PCL. However, a scrutiny of the statements of the driver of the truck reveals that he has not stated that 250 cartons of PCL were not loaded from the godown of the appellant. He has stated that they were brought from some other godown, which means that may be the 250 cartons of PCL were brought from some other godown of the appellant. However, the fact remains that the 250 cartons of PCL were loaded in the truck at the place where the godown of the appellant is situated. 11. Be that as it may, the question from where the 250 cartons of PCL were loaded in the truck is purely a question of fact because the driver of the truck and the appellant have not revealed the truth before the customs authorities which they were supposed to do as per Section 108 of the Customs Act. The appellant in his reply to the Show Cause notice revealed only half truth by not disclosing the name of purchaser and there was no attempt on his part to verify the existence of M/s Loknath Traders, in whose name the Cash Memo and Road Challan were issued. 12. The adjudicating authority has found the appellant guilty under Section 114 of the Customs Act, which says that any person, who in relation to any goods, does or omits to do any act, which act or omission would render such goods liable to confiscation under Section 113, or abets the doing or omission of such an act, shall be liable to penalty as have been specified in Clause (i), (ii) and (iii) of Section 113. 13. The appellant has preferred this appeal on the premise that the adjudicating officer held him liable under Sections 113/119/115(2) of the Customs Act and also proposed substantial question of law to this effect only. However, from the order of the adjudicating officer it is clear that the appellant has been held liable under Section 114 of the Customs Act and not under the Page No.# 7/7 aforesaid Sections. 14. The findings recorded by the adjudicating authority and affirmed by the appellate courts cannot be said to be not tenable and, in fact, it is a plausible view in the facts and circumstance of the case. 15. Though this Court, while admitting the appeal has framed a substantial question of law as to “whether the goods seized can be said to be in the possession of the appellant, under the provision of law”, we are of the opinion that no such substantial question of law arises in this appeal, because the appellant is not held liable for possession of the goods liable for confiscation, but he is found liable under Section 114 of the Customs Act for attempting to export goods improperly. No other substantial question of law arises in this appeal. Hence this appeal is dismissed. JUDGE CHIEF JUSTICE Comparing Assistant