Customs, Excise and Gold Tribunal - Mumbai
Shri Vinodkumar C. Soni vs Collr. Of Customs (P) on 26 July, 2000
Equivalent citations: 2000(71)ECC561, 2001(138)ELT1362(TRI-MUMBAI)
ORDER J.N. Srinivasa Murthy, Member (J)
1. These two appeals are filed by the appellant Vinod Soni as against the Order-in-Original No. 224/Collr./89 dated 22.12.89 of Respondant praying for setting aside the penalty imposed there under of Rs. 10,000 under Section 112(b) of Customs Act and of Rs. 5,000 under Section 74 of Gold Control Act and for any other order deemed fit. Facts of the case in brief are that on the basis of information received by the Custom Officers of Head Quarters office, Ahmedabad, in the morning of 23.1.89 a survelliance was kept by two officers on the Satellite Road, Near Jodhpur Char Rasta, Ahmedabad, at about 10.30 a.m., they saw one Khed Bramwala boarding an autorikshaw, who was known to one of them very well. Autorikshaw started towards the city, and they chased it on their motorcycle. The speed of Autorikshaw was increased after little distance, knowing the chase. The above person alighted and started running away throwing something. Officers apprehended him and brought to the place of throwing and recovered 13 gold lagadies having marks of foreign origin. It was brought along with the above person to the customs office and enquired. He disclosed his name as Vinod Kumar Chotalal Soni, residing at 18-A, Indira Park Society, Satellite Road, Jodhpur Char Rasta, Ahmedabad, before Panchas. He confessed that he was apprehended by Customs Officers, and had thrown the said 13 gold lagadies of foreign origin, during the course of chase by above officers. On receipt of further information, the Customs Officers visited the same place in the evening of 23.1.89 and on further search could recover 6 more gold lagdies of 10 totals each with foreign markings, valued Rs. 2,22,000.
2. Statements of under Section 108 of Customs Act of the following persons were recorded, (a) Appellant on 23.1.89, (b) Amratlal Devdan Soni on 25.1,89, (c) Manjulaben A. Soni on 23.1.89, (d) Pardmaben Vinod Kumar Soni and others. All 19 gold lagdies of foreign origin weighing 190 tolas, collectively worth Rs. 7,03,000 were seized under the Panchanama, in the presence of Panchas on 23.1.89, on the reasonable belief that they were liable for confiscation under Section 111(d) of Customs Act as imported into India in contravention of restrictions imposed under Section 13(1) of FERA, 1973, without possessing general or special permission of RBI, as per Section 67 of FERA, the restriction imposed under Section 13 of the said Act, shall be deemed to have been under Section 11 of Customs Act and all provision of that Act shall have effect accordingly. Gold lagadies seized are imported contrary to above restrictions or prohibition imposed as above. Efforts made to locate Kishanlal Marwadi were in vain for want of full address. From the statements recorded above, it is seen that all the above three persons appellant, Amritlal Deveanbhai Soni alias Amrat Mama and Kishanlal Marwadi are found to have acquired possession and owned primary Gold as described above, and are concerned/connected with the Import/Purchase/Acquisition/Possession and have deal with the said gold of foreign origin, in contravention of prohibition imposed as above, and there by contravened Section 8(1) of Gold Control Act, and seized gold is liable to be confiscated under Section 74 of Gold Control Act. They have committed acts and made omission as enumerated under Section 112(a) and or (b) of Customs Act. With regard to the said foreign marked gold, which is certified by Deputy General Manager, Bombay Mint, Govt. of India with the fineness of gold on assay ranging from 998.8 to 999.1 as per the certificate dated 24.2.89. They are liable for penalty under Section 112 of Customs Act and also under Section 74(i) of Gold Control Act. Provision of Section 123 of Customs Act would apply to the facts of the cases, and burden of proof that the seized goods gold lagadies are not imported lies on the above three persons or who claim their ownership.
3. Show Cause Notice was issued on 5.7.89 to the appellant, Amratlal D. Soni alias Amrat Mama, and Kishanlal Marwadi to show cause to Collector of Customs Preventive as to why seized gold lagadies should not be confiscated under Section 111(d) of Customs Act and under Section 71 Gold Control Act and why penalty should not be imposed under Section 112(a) and (b) of Customs Act and also under Section 74 of Gold Control Act. With Annexure 'A' showing the text documents relied on such as (Panchnamas) statements and Test Reports (copies were also supplied). The appellant replied it on 6.10.89 in detail denying the case specifically, and setting up his defence in 46 pages, and also produced six documents in support of it. Amritlal Devanbhai Soni submitted his reply on 26.9.89. Show Cause Notice was not served in Kishnlal Marwadi. In the personal hearing held on 28.9.89,6.10.89, 23.10.89, 16.11.89, 28.11.89, Panchas, Customs Officers, Appellant, his wife Padmaben, Smt. Jayashreeben D. Soni (brother's wife of appellant), Amritlal D. Soni were cross-examined. Appellant's counsel argued on 19.12.89, and written submission was filed on 22.12.89. After considering all the available material on record, the impugned order was passed on 22.12.89, absolutely confiscating the seized gold lagadies under Section 111(d) of Customs Act and Section 71(1) of Gold Control Act and imposing penalty on appellant and Amritlal Devanbhai Soni alias Amrat Mama of Rs. 10,000 each under Section 112(b) of Customs Act and of Rs. 5,000 each under Section 74 of Gold Control Act. Hence this appeal.
4. In support of the appeal, Sri R.J. Trivedi, learned Counsel for appellant has filed case synopsis and defense on 22.10.99, and submitted oral arguments in detail in the light of the paper book filed. He has contended that inspite of information received on 22.1.89, customs officers, have not taken any Panchas, for surveillanve and apprehension of the appellant. It is not clear who are the officers by names, who identified the appellant, and who apprehended and brought him to customs office. No independent witness were present when 13 gold lagadies were recoverded from the place, where it was thrown. As per the statement of appellant dated 23.1.89, he had acquired the 19 gold lagadies at 7.00 p.m. on 22.11.89 on road near law garden, Ahmedabad from Amirtlal Davdan Soni, who had acquired them from Kishanlal Marwadi of Bombay as per the statement dated 25.1.89 recorded before C.R. Desai, Superintendent of Amritlal Devdan Soni and delivered to appellant. Search of the house of appellant at Khedbrahma, and his elder brother Dilipbhai Doshi in Ahmedabad . did not yield any incriminating interest. As per the statement of Smt. Manjulaben Amratlal Soni, on 22.1.89 her husband was at home only and had not gone out any where. Appellant has retracted his statement at the earliest point of time. His first statement is suppressed by two customs officers, as admitted by C.R. Desai, Superintendent in his cross-examination, which contain vital admissions supporting the defense. Appellant has complained to Chief Metropolitan Magistrate (Additional), Ahmedabad on 24.1.89 in writing. Cross-examination of Customs Inspector Shri. A.P. Modi, doesnot speak of 19 samples of gold sending to Mint, and Test reports does not refer the same. The defense of alibi set up by appellant that he was in Khedbrahma on 22.1.89 and carried out his business in gold smith is supported by the cross-examination of Inspectors, G.M. David and Jadeja. Receiving gold lagadies on 22.1.89 in Ahmedabad is falsified. Appellant's wife has corroborated in her cross- examination. G13 register also supports with entries.
5. It is further pointed by the learned Counsel for the appellant in the arguments that applicant has produced bus tickets with application and south summon to examine witness in support of it, showing journey on 23.1.89, and it was rejected. Defense witness list was also filed, but they were not summoned. They have filed affidavits in support of the appellant. Cross-examination of Panch Praveen Kumar Bhogilal Soni supports alibi set up by appellant, and also receipt of gold as Khed Brahmawale. Post card copy produced also supports appellant's journey on 23.1.89. Cross- examination of appellant's wife Padmaben also supports it. Cross-examination of O.C.R. Desai, Superintendent shows appellant was in their custody from 10.30 p.m of 23.1.89 to 1.30 p.m on 24.1.89 when he was produced before Court. It was beyond 24 hours, not lawful. Recording statement was over on 23rd itself. There was no need to retain. Evidently residential address of appellant is not correct, as per show cause notice and investigation. I.O. has admitted in cross-examination that 1 st statement of appellant was suppressed by two customs officers, when appellant was produced before superintendent. Evidently no gold lagadi was seized from appellant. As to smuggled nature, cross-examination of A.P. Modi, Inspector shows he cannot connect five mint certificates to the 19 samples taken. Appellant has challenged the gold lagadies as to its smuggled nature. Test reports do not connect to all the samples taken. There is no evidence at all. Order-in-Original is a predetermined one. The request of appellant for copies of documents is not complied with. None of the 6 officers, cross-examined, say that they kept watch and apprehended the appellant. A.M. Molvi only speaks of raid. C.R. Desai has not gone out of office. A.P. Modi is not a seizing officer. S.M. David was not done anything. J.V. Parmar has only searched appellant's house. P.P. Jadeja has not participated in seizure. Show cause notice is not at all supported by any one of the above officers. There is no evidence against him. Annexure 'A' is silent on production memo, relied on copy is not given. So also the statement of AmritlalSoni. Defence witness are not summoned. According to Panch Chotalal Soni Panchnama is written in English whereas it is in Gujarati. Other Panchas say in cross-examination not helps the department. Order-in-Original is contradictory. Retraction requires independent witness in support of statement, which is not forthcoming. Penalty imposed is very meagre, when compared to value of goods seized. Various contentions raised in the defence is enlisted in the Synopsis at points 1 to 32 in Pages 4 to 11 which are considered in the below paras.
6. The learned JDR has also filed Synopsis in support of department's case and argued in detail. Appellant resides in Khed Brahma and so referred as Khedbrahmawala in show cause notice and order. Appellant gave Ahmedabad address, which is his elder brother Dijipbhai's address, when brought to customs house. Smt. Jayashreeben Dilipbhai Soni has told, appellant is her brother-in-law (Devar). Appellant owns Gayathri Jewellers in Khed Brahma as per his statements. Appellant's stand that he is not Khedbrahmawala, and not resides in Ahmedabad does not help. Appellant admits finding of lagadies, which is corroborated by Amrit alias Mama Soni. Appellant has disclosed the telephone No. of Amrit Soni's house. There is no immediate retraction after arrest and production before Magistrate. It is made only by letter, later on. Appellant has produced bus reservation slip for his journey on 23.1.89. There is no evidence that his statement was recorded under threat or coercion which is denied by Superintendent Mr. Desai in cross-examination. Appellant is implicated by Amrit Soni; that he has delivered Gold lagadies to appellant. GS13 register does not contain any entry for 23.1.89 to show appellant has transacted with customers in Khed Brahma, last entry was of 22.1.89. Mr. Kishanlal Marwadi, who gave gold lagadies to Amrit Soni as per his say, could not be traced for want of full address. As per Bhoormul's case in 1983 ELT 1545 (SC) smuggling cannot be proved by mathematical accuracy. It is not expected to bring out every chain to conclude smuggling. As per Tapankumar's case of Calcutta High Court Judgment non-allowance of cross examination of Panchas does not prejudice natural justice. Retraction of inculpatory statement does not render the statement involuntary, nor loses any value as per Naresh Shukhwani's case in 1996 (83) ELT. Seized lagadies have foreign marks. Mint report shows its nature of foreign origin on the basis of Purity/assay. Appellant's contention cannot be accepted. Case law cited is not relevant. Gold purity with 999 cannot be claimed as gold received for ornaments. Show Cause Notice and appellant's statement denotes both address and appellant's surname is immaterial. Residential address is important. Appellant's say is supported by Amrit Soni. Tickets for journey can be picked up. SI. No. 32 is the last entry for 22.1.89. G 13 Register of appellant his presence cannot be ruled out at Ahmedabad at proper time. There was only 2 hours journey. Somebody might have made entry. Amrit Soni implicates himself and also appellant. His say is substantial and admissible. So also Test reports with seized gold lagadies having foreign markings as per Panchnama. Customers gave gold for ornaments to appellant is not substantiated. In the reply arguments, the learned Counsel has pointed out at 6.30 p.m. on 22.1.89--the appellant has made entry in his shop in Khedbrahma at SI. No. 31 on gold register (GS 13). He went to Ahmedabad only on morning on 23.1.89 and he could not have received gold lagadies as alleged.
7. Point for consideration is whether there are different and satisfactory ground to disturb the Impugned order. My answer is in the affirmative.
8. Perused the Impugned order, appeal memorandum, Paper book and the ruling in D. Buramal's case 1983 ELT 1546 (SC) and the synopsis of both sides, contentions raised by both sides are taken note of. Show Cause Notice dated 30.6.89. Panchnamas dated 23.1.89, 24.1.89. Statements under Section 108 of Customs Act, Assay Reports, reply to Show Cause Notice, Officers record of cross-examination, Complaint on 23.1.89 of appellant against customs officers before Additional Chief Metropolitan Magistrate, Ahmedabad, application of Appellant and Amritlal Soni to the Court and Commissioner, Additional Chief Secretary. Home Department, Gujarat, Extract of GS 13 Register of appellant, Post card of 13.3.89 by appellant to Narayandas, S. Barot in the paper book of appellant are also perused. They are considered in below paras in the light of Impugned orders, contention of both sides, Appeal memorandum.
9. Show Cause Notice and Impugned order reveals that on the basis of information, the apprehension of appellant, after surveillance, by two officers, on Satellite Road, Near Jodhpur Char Rasta, Ahmedabad on 23.1.89 at about 10.30 a.m., was made. As contended by the appellant, in his reply to show cause notice, written submission in personal hearing, and appeal memorandum, there is no material on record in the form of oral or documentary evidence that it was against the appellant, and what was the actual information received, and when it was received. But, one thing is clear that it is with respect to even that have taken place on 23.1.89, and even the customs officers were not aware at that time as to what had happened on 22.1.89 at 7.00 a.m. between the appellant and Amritlal Soni alias Mama. It has come out only in the statement of appellant, as alleged in show cause notice. From the discussion and findings in the Impugned order it is seen that the whole case rests upon the statements under Section 108 of Customs Act of appellant, Amritlal Soni and Panchnamas. As per the Impugned order, 13 gold lagadies with foreign marks were recovered, not from any person, but from a place, allegedly pointed out by appellant. The recovery of 13 gold lagadies on 23.1.89 and recovery of 6 lagadies in the evening of same day from same place, on further information received by the customs officers, does not look to be natural course of events. The allegation against the appellant is that after alighting from Autorikshaw, started running away throwing something; and after apprehension he was brought to the place where he had thrown something while running and recovered 13 Gold lagadies. On enquiry, appellant stated that he had thrown them during the chasing by officers. So, from this it is clear that even as per departmental case, appellant is concerned with only 13 gold lagadies. Regarding other 6 gold lagadies allegation is, they were recovered from the same place, in the presence of Panchas. Appellant's presence is not alleged.
10. Statements recorded under Section 108 of Customs Act, connecting the appellant to the charge levelled requires consideration. As per the Impugned order, as already pointed out in the above Para more particularly statement of 23.1.89 of only appellant and Amritlal Soni alias Mama dated 25.1.89 are relevant. Para 4 & 5 of show cause notice narrate the same. According to it "Appellant owns Gayathri Jewellers in Khed Brahama village, and comes to Ahmedabad for business purpose. On 22.1.89 he came there and went to his elder brother's house at 18A, Indira Park Society, Near Jodhpur Char Rasta, and called phone No. 334784 and talked with Amritlal Devdan Soni, known as Amrit Mama. In his earlier visit he had talked to him, who had asked him to contact the phone No. given, if he needs foreign gold. The appellant told him that he will reach near law garden at about 7.00 p.m or 7.30 p.m. Quantity and number, value was not clarified. Accordingly he went there at 7.00 p.m. Amritlal Soni alias Mama was alone there. He gave 19 gold lagadies of foreign origin in three packets, One pack of 7 lagadies and two packets of 6 lagadies each. Each lagadi costed Rs. 37,000. Amount was to be paid after disposal. Appellant took them and kept in his bag and kept with him in his brother's house, without informing any body in the house, and stayed in the night. On 23.1.89 after bath, he left the house with bag containing gold lagadies at about 10.30 a.m. to Kheda Brahma. He took autorikshaw to go to bus stop. Motor cycle was following the rikshaw. Customs officers were riding, as he had seen one officer earlier. He told the Auto driver to speed up. Accordingly it turned towards left side of Jay-Shafali Raw House. When there was long distance between Motor cycle and Autorikshaw he got down near Anand Vihar flats on the rough road of T.P. Scheme 180 ft. Road, behind Jay Shafali Raw house, and tried to run away, throwing gold biscuits. In the meanwhile custom officers chasing him on the Motor cycle, apprehended him, and took him to the place where he had thrown gold lagadies, and recovered 13 gold lagadies having foreign markings from that place and brought to Navrangpura Customs office, and placed under seizure in his presence, on reasonable belief that they are liable to confiscation under Customs Act and Gold Control Act, as they were smuggled into India. "Appellant identified Amritlal Devdan Soni, referred him on showing zerox copy of his photograph and he was first dealing in foreign marked gold with Amritlal Devdan Soni. His brothers are independently doing their business, and they are not concerned.
11. According to the statement of Amritlal Devanbhai Soni alias Mama dated 25.1.89, he has agreed to the facts stated by appellant before customs officers under Section 108 of Customs Act, as true. Panchnama dated 23.1.89 is also seen. He stated that he gave 19 gold lagadies to appellant with foreign marks, at 7.00 p.m. on 22.1.89 near raw garden, Ahmedabad. It was his first meeting and dealings with appellant, sale price for them was not received. There was mutual understanding that after disposal of 19 gold lagadies, payment was to be made. 19 lagadies of gold were delivered to him by Kishanlal Marwadi; commission agent, Zaveri market, Mumbai, at the gate of his society in Ahmedabad, whom he knew for the last 5-6 years, and price of those lagadies were not paid. He was 32 years old, 5.1-1/2 feet in height, Medium built, wheetish colour, Straight hair and thin Moustache. Kishanlal Marwadi met him 8-10 days earlier, and requested him to dispose of smuggled gold in Ahmedabad, for which he agreed fixing the amount of Rs. 50 per one gold lagadi, as his commission, and after completion of talk gave his telephone No. Saturday, 21.1.89 evening, Kishnanlal phoned him 19 gold lagadies would be delivered on Sunday, and on Sunday he talked with appellant, and finalised the deal. On receipt of phone from appellant on evening, he asked appellant to come to appointed place and fixed Rs. 37,000 per one gold lagadi and as decided at about 7.00 p.m. near law garden, delivered 19 gold lagadies for foreign origin to appellant, and no sale proceeds were received. He used to meet Kishnanlal Marwadi in the afternoon near Zaveri Bazar, Satta Galli-1, Mahajanwadi, Bombay. He used to work as commission agent. He had not seen his residence or business premises. Whenever needed he used to contact him and talk on phone. Later on Kishanlal met him, and he has seen his house and his telephone No. It was his first dealing with Kishanlal. Till, then he did not find any necessity to contact him on phone. As per para 6 of show cause notice, Kishanlal Marwadi could not be traced for want of full address and proceedings are kept in abeyance. The assay report from Minit dated 24.2.89 shows fineness of gold ranging from 998.8 to 999.1. 5 certificates are produced. 19 gold lagadies are recovered. To which of the lagadies they refer is not made clear as pointed by learned Counsel for appellant. So, even if the entire case of department is accepted, the infirmities glaring are (a) recovery of 6 gold lagadies in the evening of 23.1.89 at whose instance, (b) The source of gold lagadies involved in this case is not satisfactorily established, (c) The purity gold of all the 19 gold lagadies are wanting, (d) Appellant having brought 19 gold lagadies in a bag in 3 packets and kept with him in his brother's house and took it, while going to Khed Brahama and on the way throwing something, (e) The finding of the 19 gold lagadies by customs officers at a different time, in what condition viz. whether in 3 packets and bag, or in loose gold lagadies. The show cause notice and impugned order are silent in this regard. In the absence of it, it is necessary to examine the Panchnamas under which they are recovered.
12. First Panchnama is drawn between 12.00 noon to 2.00 p.m. in the chambers of Superintendent C.R. Desai, regarding the appellant with gold lagadies, and Panches examining on to its purity and foreign mark seal and opinions on such gold is not available in India and smuggled one, and the appellants confirming the truth of narration by customs officers, as to what has happened. 3 lagadies were taken as sample and packed separately in a card board box, and 10 lagadies were packed in another card board box and sealed and signed on the chits and the appellant failure to produce licit document in that regard. Details of intelligence was narrated by those two officers (who are not named in the Panchnama to the effect that) on 22.1.89 Amrit Devedan Soni alias Amrit Mama residing at A-79, Raghullani Society, Shahibag, Ahmedabad, is active in the business of gold of foreign origin, and he or his reliable person was to give delivery of foreign marked gold to the person Khed Brahamma Wala, and he would take foreign marked gold lagadies from his residential premises situated in Jodhpur cross road on 23.1.89 between 9.30 to 11.00 a.m. and would dispose of the said lagadies". It was signed by Panchas Dwarkadas Bhagawandas Soni and Chotalal Chaganlal Soni. It is written by A.P. Modi, Inspector (Preventive) and signed by C.R. Desai. There is signature of appellant below an endorsement that "I was present during Panchnama. Details stated in Panchnama are true. I have received a copy of Panchnama". According to this Panchnama, Appellant gave address of his elder brother Dilipbhai, with his name "Markings on legadies in front portion is mentioned, with assay and weight 9 lagadies had "Credit Suissee", 3 lagadies had "Union Bank of India, Switzerland, MELTER & ASSAYER"--and 1 lagadi had "Johnson Mathew--London"--words. Second Panchnama is dated 23.1.89 drawn by between 7 to 9 p.m. on the road opposite to block No. L-11/123, Ground Floor, Anand Vihar Flats, Oppo. Himmatlal Park, Bus Stand, Vastrapur, Ahmedabad, regarding search of heap of lime remnants with torch, 6 gold lagadies weighing 10 tolas each were recovered, in the presence of Panchas Purushottam Das Ramanlal Trivedi and Aswinibhen Ramanlal Trivedi, having foreign marking in front side, one lagadi with "4 SBS Union Bank of Switzerland MELTER + ASSAYER" and 5 lagadies having "John Mathew, London" Panchas have examined them in detail, as gold smiths, on their experience, and estimated the value of Rs. 3700 per tola. They are separated as samples in thickness and 4 lagadies are packed separately in cardboard box. This is also written by A.P. Modi, Inspector (Preventive) and A.A. Maulvi, Inspector (Preventive) has signed it.
Third Panchnama dated 23.1.89 drawn between 10.00 to 11.30 p.m. Purity of 6 gold lagadies was ascertained by the Panchas Dilipkumar Himatlal Soni and Ganapat Somabhai Soni in Customs House office, Navrangpura, Ahmedabad as called by Inspector (Preventive) Headquarters. Both are goldsmiths, working as certified gold smiths. They are tested by apparatus and found to be 24 carats. They are not easily available in India. They are of foreign origin, based on their experience. Mr. A.A. Maulvi, Inspector was present there. So from the above Panchnamas the only factor emanates is that appellant has admitted before Panchas about the narration of Inspector (Preventive) regarding 13 gold lagadies recovery and his confession that he threw them before running away after alighting from Autorikshaw, when custom officers chased, and the seizure of it and taking sample in the office. Cross examination of Panchas and officers are relevant to decide the weight of the above factor.
13. Cross-examination of Panch Dwarakadas Soni, regarding seizure of 13 gold lagadies shows, he only witness the seizure of above legadies in the Customs office, which was already in possession of customs officers, and he was not taken outside, and no person was searched in his presence. He heard that biscuits like foreign gold biscuits could be manufactured, similar design could be made, but not exact replica. He was sitting outside, when Panchnama was prepared and after completion he signed and he did not know anything more than that, no samples were drawn in his presence. He did not apply touchstone method to ascertain fineness. Cross-examination of Chotlal Chaganlal Soni, Panch for Panchnama completed at 11.00 p.m. on 23.1.89 discloses, he went to Customs office at 7 to 7.30 p.m. when he was taken to Superintendent's room, one Assistant Collector was sitting and some gold biscuits were lying on table. Panchnama was prepared in his presence and left at 11.00 p.m. Exact purity of gold biscuits could be ascertained by the Mint. Touchstone method test might not give exact purity. Cross-examination of Ganapath Bhai Somabai Soni, Panch for seizure of 6 gold biscuits at 9.30 p.m. in customs officers on 23.1.89 discloses two different categories bearing foreign marks were there, and of 24 carats. He did not test by touch-stone method. Purity (actual) can be ascertained only by mint. He could not say whether such marking were inscribable in India. Another Panch Dilipkumar Himatlal Soni has also replied in cross-examination as above. Search of houses of appellant, his brother, and shop of appellant did not yield any incriminating material. So also from the house of Amritlal Soni alias Mama. The above evidence only proves panchnamas drawn, and does not any way incriminate appellant, as alleged. Regarding gold seized with foreign marking, there is a positive admission by Dwarkadas Soni, for seizure of 13 gold lagadies, that biscuit like them could be manufactured in India as heard, of similar design. So foreign marking by itself cannot be the basis to conclude that the seized gold lagadies are smuggled one into India.
14. Now coming to the cross-examination of Custom Officers, C.R. Desai, Superintendent of Customs, has stated that he had not visit the exact spot from where gold was recovered, nor recorded statement of officers concerned with it, when brought the gold along with person and handed over to him. They told only about the incident. Gold was not recovered from the body as per investigation. He has admitted that one rickshaw was figuring in the case and asked the officers to ascertain identity of driver and rickshaw, but could not be established, as it filed away. Investigation carried out from the person, who lived around the spot of recovery revealed that one Rabari had hidden six gold biscuits there, but his identity could not be established. He has admitted that show cause notice information did not specifically indicate the name of appellant, and he was not interrogated whether he was known as Khed Brahamawala. No statement of occupants of Dilip Kumar's house was recorded. The above material supports the defense set up by appellant as contended by his counsel. So the appellant cannot be penalised regarding six gold lagadies involved in this case. Appellants case in this regard, has to be, and, is upheld. Sri A.P. Modi, Inspector in his cross-examination, has deposed that he has written both the parties names on 23.1.89, on the dictation of Panchas, and articles seized there under were not recovered from the personal search of anybody and on, search of appellant, nothing was found. There were foreign markings on gold seized showing foreign origin. This evidence does not any way improve the case of department, but to some extent helps the appellant in support of defense. Sri. P.P. Jadeja, Inspector in his cross-examination has stated that he has not participated in the seizure or any activity, except writing the statement of appellant. Superintendent was putting questions to appellant and he was writing in narrative form. He does not remember whether Superintendent enquired the appellant about the telephone number he dialled. He was asked about luggage/baggage for which he stated he had thrown three packets from the rickshaw. While running appellant was apprehended on the road. Appellant's signature was taken on statement and photograph. After statement was recorded it was given to appellant to read. He does not remember whether Desai interrogated appellant whether he was known as Khed Brahmawala and whether he was asked to make endorsement on statement by his hand. He has admitted that appellant told Desai that he came to Ahmedabad 23.1.89 by bus from Khed Brahma in the morning. Defense set up by appellant by way of suggestion is denied. His evidence throws light on two aspects: (a) appellant throws gold lagadies in 3 packets frightenedly, (b) appellant came to Ahmedabad in the morning of 23.1.89 by bus, which are against the show cause notice allegations, supporting the appellant.
15. Now coming to veracity of the statement of appellant and reliability, it is seen from the Impugned order on the discussion and finding that appellants retraction is accepted, but rejected as an after-thought, on the ground appellant did not report to the Magistrate on production before him for remand about the same and no complaint was made about the threat, force and duress, in recording statement and taking signature and endorsement. Appellant was apprehended by custom officers on 23.1,89 and taken to custom house and his statement was recorded between 3 p.m. to 5.30 p.m., as per the cross-examination of custom officers, he was produced before the Additional Chief Metropolitan Magistrate on 24.1.89. As per the learned Counsel for the appellant written complaint was made on the same day, a copy of which is produced. In that petition he has denied the charge against him as totally false, baseless, and no contraband goods or gold of foreign origin has been recovered from him, and he has no concern or connection with the alleged seized goods, either directly or indirectly, nor really connected with the persons or knows them, He was illegally detained and arrested and locked up for 24 hours in customs house, beat, tortured and threatened him and obtained his signature forcibly against his will on the papers, written by them as per their wish and induced him to help in getting releases in Court, and while taking signature, Coerced him not to complain against them in Court or else remand will be taken and further beat him. Without reading he gave signature in the papers written by them; copies of which are not supplied to him. He has sought protection from the Court with a request to remand him for 15 days in a safe place in jail and thereafter release on bail. He has sought protection from customs officers. On 31.1.89 he has filed bail application, where in para 8 he has stated that his alleged confession before customs officers is not voluntary, At that time he was in Sabarmati Jail. He is a graduate. Another bail application was filed on 26.4.89 from Ahmedabad Central Jail, which shows he withdrew the bail application filed earlier, at the instance of customs officers. There is no material on record to show that appellant has stated before the magistrate, when produced, that there was no ill-treatment to him during his custody with the customs officers. The appellant has taken immediate acting in filing the application, So under these circumstances, the observation in the impugned order in Page 24 and 25 that "Mere retraction at a later date is not subject to render statement under Section 108 of Customs Act suspect in these proceedings, These statements are detailed and material facts brought out are corroborated by each other. Mental frame of a person immediately after seizure is different, compared to his state after a lapse of few hours or days. Any substantial seizure would have an impact psychologically on the person would have recovered from his initial shock and had time to think over and decide what answer he should furnish. Restraction made in the application dated 24.1.89 before Additional Chief Metropolitan Magistrate, Ahmedabad has no face value. Vinod Kumar Soni had an opportunity to retract his statement, when he was produced before the magistrate immediately after his arrest, which he did not do so. He retracted by writing a letter to the magistrate on 24.1.89. If he had been coerced or threatened he ought to have lodged a private complaint, if the Magistrate failed to record the complaint made before him against officers, when he was produced after arrest, who picked him up on his way to the house of Sitaram Bhikhaji and also against the officers, who has coerced or threatened him, to their superior offices which he had not done so, though literate. He was 36 years old and father of four children, while giving statement", and also in page 24 that--It is evident from the arrest memo dated 24.1.89 that he had been explained that he was arrested in connection with the seizure of 13 gold biscuits. The Hon'ble Addl. Chief Metropolitan Magistrate, Ahmedabad had made an endorsement in the production memo--"produced before me at 1.30 p.m. No complaint of ill-treatment against the customs officers. To be remanded to Judicial custody"--clearly makes out the appellant had sufficient reason to be silent about ill-treatment as explained in his applications referred in the previous para, and his application for protection was immediate. The retraction of his statement is also immediate, on the same day of production before Additional Chief Metropolitan Magistrate in Judicial custody. It is not influenced by any external agency. It has the effect of diluting the statement recorded under Section 108 of Customs Act makings it involuntary and not true. The finding contrary to it in the Impugned order cannot be upheld. So the statement before customs officers is not solely reliable, and requires independent corroboration.
16. Regarding the corroborative statement of Amritlal Soni alias Amrit Mama, as narrated in the above paras, he has addressed applications on 27.1.89 and 28.1.89 to Collector of Customs, Ahmedabad, and on 30.1.89 to the Court of Additional Chief Metropolitan Magistrate, and affidavit dated 30.1.89 to the Court, and the order of that court on 30.1.89 for sending to medical examination and for production of medical certificate on his 28.1.89, strengthens the defense in this case, about the alleged ill-treatment by Customs authorities and his retraction, denying the acquaintance with the appellant, and giving gold lagadies on 22.1.89 at 7.00 p.m. in the garden in Ahmedabad, which were having foreign markings. The observation in the impugned order that it is purely an after-thought, and does not weaken the effect of the statement under Section 108 of Customs Act, does not hold stood in view of the prompt and quick action taken by the said Amritlal, immediately after recording the statement. It becomes not a voluntary and not a true statement. Added to it, failure to locate his vendor Kishanlal for want of full address makes the case more weak. From his statement, it is apparent he is a commission agent in Zaveri Bazar with telephone connection, regularly dealing with contraband gold. As per the Panchnama drawn between 12.00 noon to 3.00 p.m. in the chambers of C.R. Desai, Superintendent, the two customs officers, who produced appellant alongwith recovered 13 gold lagadies have given the details of Intelligence as--"on 22.1.89 Amrit Devdan Soni alias Amrit Mama of Ahmedabad is active in the business of gold of foreign origin and he or his some reliable person was to give delivery of foreign marked gold to the person Khed Brahmanwala and he would take foreign marked gold lagadies from his residential premises situated in Jodhpur cross Road on 23.1.89 between 9.30 to 11.00 p.m. and would dispose of the said lagadies". In the light of the above, it is clear Khedbrahmawala referred is not by name of appellant. That person is referred only as resident of Khed Brahma having a house in Jodhpur cross road. There is clear evidence in cross-examination of Panchas and Customs officers that appellant is called like that. There was no reason as to why inspite of the above specific intelligence why customs officers did not keep surveillance on 22.1.89 and apprehended red handed both the above persons with the foreign marked gold, which would have strengthened the case to maximum extent, instead of waiting till 9.00 a.m. of 23.1.89 to apprehend the appellant. This goes a long way in improbablising the case of department against the appellant. As contended by the learned Counsel of appellant, even on 23.1.89 inspite of above intelligence, two customs officers have not chosen to collect some private persons and take them, to apprehend the appellant while chasing the rikshaw, who would have corroborated the incident, giving credibility to the department's case. So also rickshaw driver who was neither secured nor enquired to support the case. So under these circumstances, the department's case as per the show cause notice is not probablised by the two retracted statements of 2 notices. The impugned order against the appellant regarding the discussion on the point of concerns, possession of foreign marked, smuggled gold lagadies is not supported any substantial evidence even as per two customs officers, who apprehended him. Appellant threw something, while alighting autoricksha, and running. It is why appellant was caught and went to the place, it was to be 13 gold lagadies with foreign marking. In that regard no Panchnama is drawn. No reason is forth coming for the omission. It would have been the important link, coupled with the admission of appellant. It appears the whole case is based on two statements under Section 108 of Customs Act of two persons involved in the case, implicating mutually, and immediately retracting by applications to all the concerned as above discussed, setting up circumstances to show as not a voluntary and true statements. So even on merits, the appellant cannot be penalised as discussed above, in the light of cross-examinations of Panchas and custom officers as pointed in the above paras.
17. The appellant in his reply to show cause notice, and application dated 23.2.89 to Collector and application dated 1.3.89 to Additional Chief Secretary has set up alibi that on 22.1.89, he was in Khed Brahma and attending his goldsmith business, and only on 23.1.89, in the morning he left for Ahmedabad to see his acquainted former neighbourer in Khed Brahma viz. Sitaram Bhikaji Soni who was not in good health earlier. It is supported by 3 Bus tickets and Post card written by appellant on 20.1.89 about his visit and affidavits of that person and customers and GS 13 Register extract showing entries No. 29 to 32 showing transaction made on 22.1.89. He has sought for the examination of twelve persons as his witnesses in support of his defense in his application dated 3.11.89 to the adjudicating authority, which was not allowed as per the written submission of appellant. The affidavits of customers and old neighbour of appellant filed in this case at pages 549 to 604 fully supports the above documents produced by the appellant. In the impugned order, the adjudicating authority has observed that appellant should have got produced reservation chart of the bus showing his journey and examined supporting witness in that regard. Evidently Khed Brahma is a village. It is not known whether there is any reservation procedure in that place. Admittedly journey to Ahmedabad is of three hours duration. Post card dated 20.1.89 and affidavit of Sitaram Bhikaji Soni substantiates the alibi set up. The observation in the impugned order and contention of JDR regarding GS 13 Register entries that somebody might have written, is negatived by the affidavit of customers of appellant. There is an admission by Customs Inspector, Mr. P.P. Jadeja in his cross-examination that appellant told Mr. C.R. Desai, Superintendent that he came from Khed Brahma by morning bus on 23.1.89 to Ahmedabad. It is for the department to first establish the presence of appellant in Ahmedabad on 22.1.89 and he received gold lagadies involved in the case as alleged and kept with him, and threw it away on 23.1.89 after customs officers chased him. In that regard there is no positive evidence or circumstances independent of the statements of two noticees. On the other hand, the appellant has produced abundant material in the form of bus ticket, post card, GS 13 Register and supporting evidence of customers and old neighboured So under these circumstances, the appellant has substantiated his defence of alibi. There are no compelling reasons to discard it. The contention of JDR and findings in the Impugned order cannot be upheld, and it is rejected.
18. The goods involved i.e. foreign marked 19 gold lagadies is valued Rs. 7,03,000. The penalty imposed on both the notices is Rs. 10,000 each and Rs. 5,000 each, both under Customs Act and Gold Control Act. The observation in page 267 Impugned order that the appellant purchased the above gold lagadies. Knowing to be smuggled is not supported by any material. On the other hand even the statement of noticees show that no payment was made for them, and there was no actual sale as such, but only on commission basis at Rs. 50 per lagadi. Appellant is alleged to have received them, and the sale proceeds was to be given only after disposal. Amritlal Soni has a past history as pointed out in the Impugned order. Still, the meagre penalty was imposed on both noticees. The department has not filed any appeal against the said order. The contention of the appellant supports his defence that he is only involved in this case and the department is satisfied with the result. Appellant is an educated goldsmith by profession and has properly maintained the GS 13 Register and has even the permission of Superintendent was sought from jail regarding the transfer from his register to that of his brother Suryakant C. Soni for delivery of ornaments to the customer, by the letter dated 22.2.89, and authorised him to do so. This shows his bona fide conduct in his business. His correspondence with various authorities by application, and his consistent defence through out the proceedings, substantiated by corroborating evidence, makes his case acceptable. So accordingly, it is accepted. The point raised is answered in the affirmative. Hence I pass the following order.
ORDER For the reasons discussed above, both the appeals as a allowed according to law, with consequential relief if any. Impugned order is set aside against the appellant, regarding the imposition of penalty under Customs Act and Gold Control Act.