Customs, Excise and Gold Tribunal - Mumbai
Prem Narayan Doulatram Verma vs Collector Of Customs And C. Ex. on 26 October, 1988
Equivalent citations: 1989(23)ECR279(TRI.-MUMBAI), 1989(41)ELT116(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. The appeal 1427/83 arises out of order-in-original bearing No. 54/Collr./1983, dated 6-10-1983 passed by the Collector of Customs, Ahmedabad.
The appeal No. 110/83 arises out of and is directed against the order-in-original bearing No. 6/Gold/1983 dated 6-10-1983 pssed by the Collector of Central Excise/Customs, Ahmedabad.
2. The appellant in both the appeals is one and the same person. The respondent is also the same. Both the appeals involve identical facts and both the impugned orders are identically worded excepting that in the appeal 1427/83 the Collector had held the appellant guilty and is liable for penalty under the provisions of Section 112 of the Customs Act and in the appeal GC 110/83 the Collector of Customs had held that the appellant is guilty and is liable for penalty under Section 74 of the Gold (Control) Act. Hence we have clubbed both these appeals and heard together and hence this common order.
3. The subject of challenge in both the appeals is the imposition of penalty of Rs. one lakh under the Customs Act and imposition of penalty of Rs. one lakh under the Gold (Control) Act.
4. The material facts required for the disposal of these appeals lie in a small compass. On specific intelligence that one Shri Gopal Geharimal Mchta (to be hereinafter referred to as 'Gopal') was transporting foreign marked as well as indigenous gold from Udaipur to Ahmedabad in his Fiat Car bearing No. GTI6020, the officers of the Customs Division of Ahmedabad kept a watch during the early hours of 13-12-1977 on the Ahmedabad Himmatnagar Highway and on the approach of the car, they intercepted the same near Noroda Railway Crossing. They found Gopal and four others in the car. After preliminary questioning the car alongwith the occupants were taken to the' Assistant Collector of Customs at Paldi, Ahmedabad for a detailed search and examina- tion. In the presence of the panchas, the personal search of the five persons was carried out. The search resulted in the recovery of two cotton waste belt tied to the waist of one of the persons by name Chandwani. The belts were found to contain foreign marked 27 n lagdies each weighing ten tolas and also 18 pieces of gold bearing foreign marking and weighing 3.039.980 kgs. valued at Rs. 1,94,400/- primary gold of indigenous variety. Indian currency of Rs. 6,284/- were also recovered from a rexin hand bag found inside the car. In the statement recorded under Section 108 Sevaram stated that the seized gold belonged to Gopal and at his instance he was carrying the gold from Udaipur to Ahmedabad and for this work he was to receive a remuneration of Rs. 100/- per trip.
5. In his statement dated 13-12-1977 and 14-12-1977 recorded under Section 108 of the Customs Act, Gopal inter alia stated that the cash of Rs. 6,284/- found in the rexin handbag were given to him by one Shri Kundenlal Nahar of Udaipur for getting them exchanged for new currency notes from a dealer in old notes in Manekchowk, Ahmedabad. He further stated that the foreign marked gold carried on the person of Sevaram belonged to a person named Prem residing at the Jogiwala Mandir, Wakane , Ghantagher, Chandni Chowk, Delhi and also gave the telephone number of Prem bearing No. 269979. He further stated that he came in contact with Shri Prem about 6-7 months prior to this incident and had discussion with him regarding dealing in smuggled gold. Prem had subsequently came to Udaipur and after ascertaining his (Gopal G. Mehta's) reputation and started delivering gold to him. As per the understanding, he used to visit the appointed place at Delhi Gate in Udaipur with a view to ascertaining Prem's arrival at Udaipur. He further stated that on Prem's instruction he used to visit ' Delhi to bring foreign marked gold and dispose of the same to S/Shri Punamchand Lax-manji Marwadi and Narendra Vadilal Soni alias Bhagubhai of Ahmedabad. He also stated that the primary gold used to be in two different brands, namely, 'Trishul' and Sparrow. He gave details of previous transactions. He further stated that the Fiat car GTI 6020 belonged to him and he had purchased it from one Rao Saheb of Kusalgadh (Rajasthan) for Rs. 15,000/- about 3 to 4 months prior to the incident and the sale price was paid by the aforesaid Prem of Delhi for the transport of gold from Udaipur to Ahmedabad, and he had also paid Rs. 1,48,000/- as the sale proceeds for the previous consignment of smuggled gold supplied to him by Prem for disposal at Ahmedabad.
6. During the course of investigation a search of residential premise of the brother G.G. Mehta was carried out. It resulted in the recovery of primary gold Weighing 23.800 gms from an old trunk. In his further statement dated 22-12-1977 Shri G.G. Mehta identified the photograph of Prem. In his statement dated 24-12-1977, Shri Gopal inter alia stated that he purchased the car bearing No. GTI 6020 on payment of Rs. 15,000/- out of which he had received Rs. 10,000/- from his father-in-law and Rs. 5,000/--from his wife. In his statement recorded on 29-12-1977, Shri Gopal confirmed all his previous statement made to the Intelligence Officer.
7. The statement of the appellant Prem Narayan Daulatram Verma was recorded on 3-3-1979. He denied his acquaintance with Shri Gopal G. Mehta or with any merchant of Ahmedabad. He denied the connection with the seized gold. He further denied that he had any talk on telephone with Shri G.G. Mehta of Udaipur nor he received any trunk call on the phone installed in his father's shop at Delhi from Shri G.G. Mehta.
8. After the completion of the investigation show cause notices were issued to the present appellant and several others calling upon them as to why the seized goods and Indian currency should not be confiscated and why penalty should not be imposed on them under Section 112(a)(b) of the Customs Act. A separate show cause notice was also issued under the Gold (Control) Act against the appellant and Ors. as to why theseized gold should not be confiscated and why penalty should not be imposed on them under Section 74 of the Gold (Control) Act.
9. After the receipt of reply and after due compliance with the procedural aspects, the Collector of Customs and Central Excise, Ahmedabad vide his order dated 30-8-1981 ordered confiscation of the seized foreign gold and the Indian currency as well as the Fiat car which was used as a means of transport in the smuggling of the contraband gold. In the said order the learned Collector observed that the order of confiscation was issued without prejudice to any other action that may be taken against the person concerned under the provisions of Section 112 of the Customs Act as far as it relates to the penal liability of the persons to whom the show cause notices dated 5-6-1978 and 31-3-1981 were issued.
10. Thereafter the same learned Collector took up for consideration the penal liability of the persons to whom show cause notices were issued. After considering their reply to the show cause notice and after affording personal hearing including cross-examination of the witnesses passed the impugned orders.
11. During the hearing of this appeal, Shri Harbans Singh appearingfor the appellant firstly contended that the order under the Gold (Control) Act is the replica of the order under the Customs Act excepting that the Collector by ink struck off Section 112 of the Customs Act and inserted Section 74 of the Gold Control Act. Shri Harbans Singh submitted that there has been no application of mind on the part of the learned Collector. He urged that the offences under the Customs Act and the Gold Control Act are not identical. They would be different. The nature of two required are also different.
12. Secondly, Shri Harbans Singh contended that while ordering confiscation of seized foreign gold, the learned Collector has observed :
"All the respondents to the show cause notice have denied their interest in the gold which was seized from the Fiat car No. GTI 6020 on 13-12-1977. They further stated that they are not in any way concerned with the said gold or the said car or the Indian currency which was seized from the said car."
13. In the light of the facts stated above, the 27 bars of foreign marked gold weighing 270 tolas which, were imported into India contrary to the prohibitions stated in the show cause notice are liable for confiscation under Section lll(d) of the Customs Act, 1962...." Thereafter the learned Collector ordered confiscation of the foreign marked gold, the Fiat car as well as the Indian currency. Thus by implication, the Collector has accepted the present appellant's plea that he was in no way concerned with the seized gold, Fiat car and the Indian currency. That being so in a subsequent proceeding, the Collector cannot impose penalty on the appellant either under Section 112 of the Customs Act or under Section 74 of the Gold Control Act. Thirdly, Shri Harbans Singh urged that even though the Collector is supposed to have passed two different orders under the two different Acts, there is no clear finding as to the possession of primary gold by the appellant and therefore no penalty under Section 74 of the Gold Control Act could be imposed on the appellant. Fourthly, he contended that even under the Customs Act, all that the Collector did was to accept the statement of Gopal Mehta recorded on 13-12-1977 and 14-12-1977 and he did not consider the subsequent retraction made not only in the reply to the show cause notice but also in the cross-examination done at the instance of the appellant's counsel. Further, even under the Customs Act the Collector did not record any definite finding that there was nexus between the appellant and the seized gold or the Indian currency or the Fiat car. In the absence of such a finding no penalty could be imposed under the Customs Act.
Fifthly, Shri Harbans Singh urged that the Collector has proceeded with the statements of Gopal Mehta recorded during the investigation are two statements if that be so even according to the statement of Gopal Mehta there is contradiction regarding the receipt of cash amount for the purchase of Fiat car. In his earlier statement, Shri Gopal Mehta stated that Rs. 15,000/- was paid by the present appellant but later on in his state-mentrecorded on 22-12-1977 he stated that Rs. 10,000/- out of Rs. 15,000/- was paid by his father and Rs. 5,000/- paid by his wife. Even the appellant's contradiction which belies the truthfulness of the statement of Gopal Mehta was not at all considered by the learned Collector.
Sixthly, Shri Harbans Singh contended that the gold was not found with Gopal Mehta who was found with the Sevaram. The statement of Sevaram which remains un-controverted was that the gold belonged to Gopal Mehta. He was carrying for Gopal Mehta. The Collector had totally ignored this uncontroverted statement of Shri Sevaram.
Seventhly he contended that though the Collector did not record a specific finding as to the act or omission committed by the present appellant he seems to have proceeded to impose the penalty only on the statement of Gopal Mehta who is an accomplice and whose statement is not corroborated not only on material particulars of any particular person he was a self-condemned person and his statement should not have been made use against the present appellant in the absence of any other evidence either direct or circumstantial. Shri Harbans Singh further urged that even according to the statement of Gopal Mehta he was bringing gold from Udaipur and not from Delhi. If that be so, the appellant could not have been the supplier of the gold since he was the resident of Delhi and had a shop only at Delhi. Lastly, he urged that the residential premises as well as the shop premises of the appellant was searched; nothing incriminating was recovered, not even primary gold with the two markings spoken to by Gopal Mehta were found. In the said circumstances, the Collector was wholly unjustified in imposing the penalty on the appellant. Finally, he urged that the Collector did not discuss the evidence, he has totally ignored the cross-examination part of Gopal Mehta. He had n,ot considered the defence put forward by the appellant and the entire finding of the Collector is based on presumption and assumption and therefore he prayed that the penalties on the appellant under both the Acts may be set aside.
14. Shri Arya, the learned SDR for the Collector, however, supported the order of the Collector. He contended that immediately after Shri Gopal Mehta was apprehended he had come with the statement that the gold belonged to the present appellant. There was no reason for Gopal Mehta to falsely implicate the appellant and therefore the Collector was justified in relying on the statement of Gopal Mehta for imposing the penalty on the appellant. Shri Arya adopted the reasoning of the Collector given in the orders and contended that the appeals could be dismissed.
15. We have considered the submissions made on both the sides and perused the available records.
16. The Collector, after passing a separate order for confiscation of the foreign marked gold as well as the Fiat car and Indian currency, passed two separate orders. Both bore the same date, one under the Gold Control Act and another under the Customs Act and imposed a penalty of Rs. one lakh under Section 112 of the Customs Act and a penalty of Rs. one lakh under the Gold Control Act on the appellant who had challenged the penalties in the two appeals which are taken up for consideration together. The contention urged by Shri Harbans Singh that the order under the Gold Control Act is the replica of the order of the Customs Act except that the Collector had altered with the ink the provisions of law namely while passing the order under the Gold Control Act, he had struck off Section 112 of the Customs Act and inserted in its place Section 74 of the Gold Control Act. In all other respects, the orders are identically worded. There is considerable force in the contention of Shri Harbans Singh that the offence under the two Acts are different nature of proof and the extent of proof are also different. In the whole of his order under the Gold Control Act, the Collector did not even state as to the provisions of the Gold Control Act contravened by the appellant before us. In the said order no reference is also made to the show cause notice issued under the Gold Control Act. The offence if any committed by the appellant could be under Section 8(1) of the Gold Control Act. But then, there is neither evidence nor finding by the Collector as to , the possession of the primary gold by the appellant. In the circumstances, we unhesitatingly set aside the penalty under the Gold Control Act and allow the appeal filed under the said Act.
17. Now coming to the order under the Customs Act, there is considerable merit in each and every contention of Shri Harbans Singh.
18. In his order the Collector has imposed penalty under Section 112 on 13 persons. Penalty under Section 112 on a person can be imposed if the ingredient of Section. 112(a) or (b) or both are established. Therefore, the Collector is required to discuss in his order as to the acts or omission of each of the person on whom he had imposed the penalty which act or omission render the seized gold liable to confiscation. We have carefully gone through the Collector's orders. We are not able to find any discussion of the evidence against the appellant. From the order of the Collector, it is clear that he had accepted the statement of Shri Gopal Mehta recorded on 13-12-1977 and 14-12-1977. His finding was to the effect that the earlier statement of Gopal Mehta was voluntary and his subsequent statement, namely, statement made in the reply and during the course of the adjudication proceedings cannot be accepted. The learned Collector, however, failed to notice that it is not sufficient if the statement of a person is voluntary in order, to impose penalty on others. It is necessary to establish that that statement is true and reliable. The truthfulness and reliability of the statement requires to be judged in the light of other evidence as well as in the light of the proved circumstances. The learned Collector made no efforts to test the reliability of the statement made by Shri Gopal Mehta. He proceeded on the footing that Shri Mehta has told the whole truth. The very approach of the Collector, in our opinion, was erroneous. In fairness he ought to have discussed Shri Mehta's evidence with reference to the contradictory statement made by him during the course of investigation and subsequently in his reply to the show cause notice and again in the light of the answers given by him in cross-examination. We are unable to accept Shri Arya's contention that because in the initial stage itself Shri Mehta had implicated the appellant and therefore that part of the statement should be believed. It is not uncommon for a person who has been caught red-handed to falsely implicate others whom he knew or against whom he has animus just to escape from the clutches of the authorities.
19. In the instant case, even though Gopal Mehta implicated the appellant as early as on 13-12-1977 and 14-12-1977 the appellant's statement was not recorded till 3-3-1979. It was not the case of the Department that the appellant was not available for recording his statement. There was no allegation or finding that the appellant was absconding. It is in evidence that the residential premises and the shop premises of the appellant were searched. But then nothing incriminating was found. Even_primary gold bearing 'TrishuP marking of any quantity was not found. On the other hand, in the residential premises of the brother of Gopal Mehta, primary gold weighing 23 gms. were recovered. Though statements of several persons were recorded, none implicated the present appellant. The previous acquaintance between the appellant and Gopal Mehta were also not established; at one stage Gopal Mehta stated that for the purchase of Fiat car Rs. 15,000/- was paid by the present appellant. But later on, he stated that he got Rs. 10,000/- from his father and Rs. 5,000/- from his wife. Even this statement was accepted by the Department. If that be so, Shri Gopal Mehta has not been consistent. Significantly, the person from whose possession the gold were found at the initial stage itself stated that the gold belonged to Gopal .Mehta. He stood to his ground in the cross-examination also. If his statement is to be believed, then no penalty can be imposed on the appellant because gold according to Shri Sevaram belonged to Gopal Mehta. It is also necessary to remember that in the cross-examination Gopal Mehta frankly admitted that gold under seizure was not purchased by him from Delhi and it was not given to him by any person residing at Delhi. He does not know any person by name Prem or Daulatram. These answers were given during the adjudication proceedings and the adjudicating authority did not put any question to Shri Mehta and his attention was not even drawn to the earlier statement of his dated 13-12-1977 and 14-12-1977 wherein he had categorically stated that the gold belonged to one Prem. The Collector cannot totally ignored the answers given in the cross-examination. He has to give cogent reasons as to why he . would not accept the answers given in the cross-examination. There was neither allegation nor proof that Gopal Mehta was won over by the present appellant. According to the statement of Shri Gopal Mehta on previous occasion also he was receiving gold from the appellant. But then no efforts were made to verify that statement of Gopal Mehta.
20. Having regard to the contradictory statement made by Shri Gopal Mehta not only during the course of investigation but also during the personal hearing, it is hazardous to rely on his uncorroborated statement particularly having regard to his own ad- mission that he was indulging in smuggling gold earlier also. In the absence of any other corroborative evidence, the Collector, in our opinion, was not justified in imposing penalty on the appellant even under the Customs Act.
21. On consideration of all the aspects, we hold that the Collector's order so far as it relates to the appellant was wholly unjustified. We, therefore, set aside the penalty on the appellant under the Customs Act also.
22. In the result, we allow both the appeals and set aside the penalties imposed under both the Acts. It appears the appellant had deposited Rs. 5,000/- under the Customs Act and Rs. 5,000/- under the Gold Control Act. The penalties so paid shall be refunded to the appellant, after due verification as to the payments made.