Customs, Excise and Gold Tribunal - Delhi
Raj Kishore Gupta vs Collector Of Customs on 30 October, 1989
Equivalent citations: 1990(48)ELT64(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Since all the 4 appeals arise out of a common impugned order, a common order is being passed.
1.1 Brief facts of the case are as follows :-
1.2 Acting on a secret information, two persons namely Umesh Kumar Agarwal (U.K. Agarwal) and Mukesh Kumar Agarwal (M.K. Agarwal) were apprehended by the Station House Officer (Police) Vasant Vihar between 4.30 and 6.00 hrs. on 17-12-1981 in a taxi No. DLT-4940 which came from the side of Hilton Lodge Guest House. As the taxi came to a halt, a boy who later disclosed his identity as U.K. Agarwal tried to get out of the taxi with a cream-coloured suitcase in his hand. He was overpowered by the Police officer then and there. In the meantime, a person namely D.S. Sodhi, r/o B-4/6, Vasant Vihar happened to pass that way. He was also made to join the Police party. On questioning about the contents of the suitcase, U.K. Agarwal first gave some evasive replies but ultimately admitted that he was carrying some contraband gold and its sale proceeds. He further stated that another boy namely M.K. Agarwal was also with him and that they were going to catch a flight from Delhi Airport. Since the police station (Vasant Vihar) was at a stone's throw from the place of their interception, both of them were brought to the Police station in the same taxi. D.S. Sodhi also accompanied. From the cream-coloured suitcase in the presence of two witnesses contraband gold in the shape of bars with foreign markings (total number 55) and weighing 11,515.600 gms. were recovered. On further search Indian currency notes wrapped in six bundles amounting to Rs. 5,31,852/- were also recovered. From another suitcase carried out by U.K. Agarwal, a telephone diary, few papers and used clothes were recovered. Both these suitcases were taken by the Police officers under a seizure memo which was signed by the two witnesses namely Shri D.S. Sodhi and Shri Bhupender Singh, the taxi driver and U.K. Agarwal. One suitcase and one briefcase were found in the possession of U.K. Agarwal. On search of the suitcase, it was found to contain used clothing, some watch parts and a bundle of incriminating papers which were also taken under the seizure memo signed by the aforesaid two witnesses and M.K. Agarwal. On demand both of them namely U.K. Agarwal and M.K. Agarwal could not give any satisfactory explanation for the lawful import, acquisition, possession or custody and control of the said gold and Indian currency.
1.3 Both of them were detained by the police in the reasonable belief that they had committed some cognizable offence. They were later produced by the Police officer at the residence of Metropolitan Magistrate with a prayer for two days Police remand. The Assistant Director, Directorate of Revenue Intelligence, New Delhi also moved an application to the said Metropolitan Magistrate with a prayer to transfer the same for the purpose of enquiry under the Customs Act, 1962, Gold (Control) Act, 1968 etc. The learned Magistrate after hearing the arguments ordered for transfer of the seized case property alongwith the two persons namely U.K. Agarwal and M.K. Agarwal to the officers of the Directorate of Revenue Intelligence, New Delhi for making enquiries under the aforesaid Act.
1.3A The officers of the Directorate Revenue Intelligence thereafter took over the said gold, Indian currency, other articles and documents recovered from the above said two persons from the police officers in the presence of two independent witnesses, SectionH.O. Police Station at Vasant Vihar and the said U.K. Agarwal and M.K. Agarwal. These articles were seized by the officers under the Customs Act, 1962 and Gold (Control) Act, 1968 because the gold and the Indian currency and other articles were considered to be liable to confiscation under the said two Acts as the case may be.
1.4 A detailed statement was recorded under Section 108 of the Customs Act from U.K. Agarwal. In this statement he explained how he was operating as an associate of Chouth Mal Jatia and other persons and how he had been delivering the goods to various other parties at Bombay and Delhi. With particular reference to an appellant herein, firstly Omi Jalan, Shri U.K. Agarwal stated, inter alia, that he carried out about 200 tolas of gold from Delhi by air in the first week of November 1981 and delivered the same to one Omi Jalan in Kalba Devi whose telephone Nos. 322676 (office) and 813878 (residence); that these numbers are entered in his pocket diary which was recovered from him by the police on 17-12-1981 and bear his signatures; that he did not receive the sale proceeds of the said gold from Omi Jalan for said consignment as Omi Jalan told him that he would transfer the same directly to Chouth Mal Jatia; that the consignment of gold was given to Omi Jalan at his business premises; that Chouthmal Jatia told him in that connection that he would himself settle the account with Omi Jalan for that consignment of gold; that those 200 tolas of gold delivered by him at Bombay were received by him in Delhi from various carriers namely T. Gurung, Section Gurung and D. Gurung who were specifically engaged by Chouth Mal Jatia and his associates namely C. Gurung and Mohan Dhariwal for transporting gold from Kathmandu to Delhi; that he was fully aware that the gold bars received by him from the aforementioned persons bore foreign markings and were being smuggled into India; that earlier also he had visited Bombay to render accounts of the disposal of gold by him and to discuss other matters with Chouthmal Jatia. Secondly, with reference to the gold seized and two other appellants, Raj Kishore Gupta and Raghunandan Jalan he stated as follows :-
"On return to Delhi from Bombay on 14th December, 1981 he was staying in room No. 304 of Relax-Inn; that he had been shown the entry No. 1628 made in the record of Relax-Inn which he had identified as his own (Umesh Kumar Agarwal); that in token of his identification, he had signed this entry at the time of recording his statement; that the address and nationality had been wrongly mentioned by him against that entry; that Chouth Mal Jatia also stayed there in room No. 104 on 24-11-1981, thereafter in room No. 104 on 26-11-1981 and in room No. 305 on 16-12-1981; that he had been shown record of Relax-Inn where entries against C. Mal i.e. Chouth Mal Jatia have been made at Sl. No. 1536, 1500 and 1637 respectively (Annexure No. 1 & 2 N-2); that he identified the signature of Chouth Mal Jatia made against entry No. 1536; that between 14th and 17th December, 1981 another person by the name of Rajesh Kumar r/o Kathmandu came to Delhi and met him in Relax Inn; that Rajesh Kumar delivered him about 320 tolas of gold bearing foreign markings; that Rajesh Kumar brought the said gold concealed in a secret cavity made in the two suitcases which were later on recovered and seized from his possession by the Police on 17-12-1981; that he remembered to have made a trunk call to Bombay from his hotel on 14-12-1981 or thereafter on Bombay telephone No. 356161 at Chouth Mal Jatia's residence to inform of his safe return to Delhi; that about three-four days prior to 17-12-1981 a boy named M.K. Agarwal whom he knew earlier being resident of Kathmandu also arrived to Delhi for assisting in disposal of the said smuggled gold; that he (M.K.) stayed in Hilton Lodge under assumed name i.e. Harsh Bahadur; that Mukesh met him on arrival at Delhi; that Chouthmal Jatia was also staying in Relax-Inn who asked him (U.K. Agarwal) to go to Bombay with the gold which had been delivered to him by the carriers abovementioned; that he was asked to deliver the said gold to one Chowksi, a jeweller in Bombay having telephone No. 311517 and 818076 which numbers have been written on a visiting card of the said person (Chowksi) which was recovered from him (U.K. Agarwal) by the police on 17-12-1981; that the consignment of gold weighing 313 1/2 tolas equivalent to 11515.600 gms. was to be taken to Bombay, the full account of which was written on a document at Section No. 8 which has been recovered from the baggage of M.K. Agarwal by the police on 17-12-1981; that he had been shown the said documents which had been signed by him in token of his identification; that the said document was written by Chouth Mal Jatia on which portion marked 'X' shows an entry of 313 1/2 U.K. BBY which he (U.K. Agarwal) explained that the word U.K. stood for Umesh Kumar and BBY stood for Bombay; that at the bottom of the document the word '313 1/2' was also written which denoted the balance of the gold with them; that on the said document there was also a mention of the sales made to Kishore and Raghu: that besides the gold he was asked by Chouth Mal Jatia to take the sale proceeds of smuggled gold disposed of by him or by Chouth Mal Jatia directly to parties in Delhi; that in so far as he (U.K. Agarwal) was concerned, he delivered smuggled gold weighing 350 tolas (approx.) to one Raj Kishore Gupta in Mohalla Vakilpura, Jamamasjid area earlier. That he delivered the gold himself to Raj Kishore Gupta in his house which he would point out to the officers of the Directorate of Revenue Intelligence; that he also delivered smuggled gold to Raghunandan Jalan, a resident of Sagar apartments in New Delhi; that he personally went there (Raghunandan Jalan's residence) with the smuggled gold and delivered the same to Ranghunandan Jalan; that he has been shown a photo of Raghunandan Jalan which he identified and had signed in token of this identification that he would take the officers of Directorate of Revenue Intelligence to the residence of Raghunandan Jalan and point out the same; that the Indian currency amounting to Rs. 5,31,852/- seized from him by police represented the part of the sale proceeds of smuggled gold delivered by him and Chouth Mal Jalia to Delhi parties mentioned above; that he was asked to take aforesaid amounts to Bombay and to wait over there for further instructions for disposal of the same at Bombay; that he kept the above said smuggled gold and the Indian currency together in a suitcase of Creamish colour and kept the same duly locked in the room of Mukesh in Hilton Lodge that Chouth Mal Jatia directed Mukesh to go to Kathmandu with written instructions alongwith full account of the gold received and disposed of in India; that he had been shown documents bearing Sl. Nos. 1 to 5 which contained 23 points that these instructions were in his (U.K. Agarwal) handwriting which were written at the direction of Chouth Mal Jatia; that he had explained these 23 points (in his statement); that he was fully aware that acquiring, possessing, keeping, selling and dealing with smuggled gold is an offence under Indian Laws; that he did this act on account of his association with Chouth Mal as their employee for the last 4 years for extra renumeration which he had been receiving from him (Chouth Mali Jatia) for those activities".
Subsequent enquiries revealed that U.K. Agarwal is the brother-in-law (wife's brother of Chouth Mal Jatia).
1.5 In a detailed statement recorded under Section 108 other person apprehended on 17-12-1981 namely M.K. Agarwal largely corroborated the statement of U.K. Agarwal.
1.6 Statements were also recorded from Avinash Sehgal receptionist at hotel Relax-Inn Guest House, Vasant Vihar wherein both U.K. Agarwal and Chouth Mal Jatia (in the name of Shri C. Mal) were stated to have stayed a few days before 17-12-1981. This statement corroborates many of the details given by U. Kumar in his statement. Apart from this Shri Sehgal gave a statement of what he observed about these persons during their stay in the Guest House. He also recognised from a photograph as shown to him by the Directorate of Revenue Intelligence Officers as Mr. C. Mal who stayed in the Guest House and in token of identification of C. Mal (Chouth Mal Jatia) he put his signature on the photograph. He also recognised from a photograph U. Kumar i.e. Umesh Kumar Agarwal and in the same fashion he signed that photograph.
1.7 Similarly, Shri Sanjay Thapar, Manager Hilton Lodge, Vasant Vihar where M.K. Agarwal admitted to have stayed and he also stated that one Rajesh also stayed in the hotel.
1.8 Bhupcnder Singh, taxi driver corroborated some of the statements of U.K. Agarwal. Shri D.S. Sodhi, another panch witness corroborated what he had witnessed regarding search and seizure of gold and Indian currency and other articles from U.K. Agarwal.
1.8A On the basis of disclosures made by Shri U.K. Agarwal in his statement dated 18-12-1981 Directorate of Revenue Intelligence Officers searched the premises belonging to Raghunandan Jalan at 8th Floor, Sagar Apartment, Tilak Marg, New Delhi on 18-12-1981 and recovered certain documents, diaries, visiting cards and bank accounts/books. Shri Raghunandan Jalan was not present at the time of search. Summons under Section 108 were issued to him on 21-12-1981 asking him to appear before the Supdt. of Customs on 24-12-1981. He did not appear and was reported to be out of Delhi. Summons were again issued on 28-12-1982 for appearance on 31-12-1981. No appearance. Third time summons were issued on 2-1-1982 for appearance before the Asstt. Collector of Customs on 5-1-1982. Again reported to be out of station. Summons were again issued 4th time on 12-2-1982 for his appearance on 13-2-1982. During this period Shri Raghunandan Jalan filed anticipatory bail application before the Court of Additional Sessions Judge, New Delhi on 2-1-1982 which was opposed by the Directorate of Revenue Intelligence and the application was dismissed as withdrawn on 6-1-1982. Shri Raghunandan Jalan appeared on 13-1-1982 before the Asstt. Collector, Directorate of Revenue Intelligence and made a statement. He was summoned again on 15-1-1982 and gave a further statement. On 25-1-1982 when asked to appear again he pleaded for protection under Article 20 of the Constitution. But his plea was turned down and he was summoned for appearance on 14-2-1982. He failed to appear. He finally appeared on 5-3-1982. In his statements dated 13-1-1982, 15-1-1982 and 5-3-1982, he inter alia, stated that his eldest brother Mani Lal Jalan has a factory named and styled as M/s. Nepal Shoes and Rubber Industries Pvt. Ltd., Kathmandu; that he knew, Chouth Mal Jatia because his brother's residence and Chouth Mal Jatia's residence are very near to each other and he did not have any business relationship with Chouth Mal Jatia. He denied having received any gold from the two boys U.K. Agarwal and M.K. Agarwal. He also denied that he knew those boys or that he ever met them. He could not say as to why the elder boy U.K. Agarwal whose photo had been shown to him had given statement against him; that he was aware that dealing in foreign gold was an offence.
1.9 On the basis of disclosure by Shri U.K. Agarwal in his statement dated 18-12-1981, residential premises of Shri Raj Kishore Gupta, at 1298, Mohalla Vakil Pura, Jama Masjid Area, Delhi were searched on 18-12-1981 by the Directorate of Revenue Intelligence Officers. Certain documents were recovered during the search and were seized as being useful for the purpose of enquiries under the Customs Act. Raj Kishore Gupta was not present at the time of search. He was issued summons thrice on 18-12-1981, 29-12-1981 and 2-1-1982 for the appearance on different dates but he was always reported to be out of Delhi.
1.10 On 5-1-1982 acting on information his premises at 1219/6, Katra Satnarain, Chandni Chowk, Delhi were searched. As a result of search, textiles of foreign origin valued Rs. 2000/- were recovered from the said premises and are the subject matter of the separate proceedings under the Customs Act.
1.11 Letter dated 20-12-1981 was received from Raj Kishore Gupta from Kathmandu in which he requested to know the reasons as to why and for which purpose he was being summoned. Summons were thereafter issued to him at his Kathmandu address on 13-1-1982 for appearance on 26-1-1982 but he expressed his inability to appear on the ground of his illness. Summons again sent on 3-2-1982 for appearance on 8-2-1982. Smt. Geeta Gupta W/o Shri Raj Kishore Gupta informed that her husband was out of Delhi. Finally, he appeared on 11-2-1982 and tendered a voluntary statement before the Asstt. Collector of Revenue Intelligence. He gave a further statement on 12-2-1982. In his two statements dated 11-2-1982 and 12-2-1982, he, inter alia, stated that he was dealing in purchase and sale of timber since 1977-78 at Banbasa and was also doing the business of timber at Nepal; that he was most of the time in Kathmandu in connection with his business; that he knew Chouth Mal Jatia whom he had met once in connection with kidnapping case of Ravinder Kumar alias Pappu S/o R.K. Agarwal of Hongkong; that on 20-12-1981 he came to know about the seizure of gold and Indian currency at New Delhi and also about the search of his residence; that he also came to know that the boys apprehended in the aforesaid seizure cases also implicated him and that is why his house was searched; that in Kathmandu it was a talk of the town that the gold seized at Delhi belonged to Chouth Mal Jatia and one of the boys apprehended in the case was brother-in-law of Chouth Mal Jatia; that he tried twice to contact Chouth Mal Jatia his servant told him that he was busy; that Chouth Mal Jatia is one of the most influential multimillioner person in Nepal having very high contacts with the people of Nepal; that on the date of seizure (17-12-1981) Shri Raj Kishore Gupta was at Kathmandu; that he had not purchased any gold from U.K. Agarwal and M.K. Agarwal and he did not even know them. He further stated that the reason for implicating him in the seizure of gold was due to a conspiracy between Puran Mal Bansal and Chouth Mal Jatia and R.K. Agarwal on account of earlier kidnapping case referred to above.
1.12 On the basis of disclosures made by U.K. Agarwal in his statement dated 18-12-1981 residential as well as business premises of Shri Om Prakash Jalan (O.P. Jalan) at Bombay were searched on 19-12-1981. Nothing incriminating was discovered or seized from the said premises. However, some documents were recovered from his business premises at room No. 24, IInd Floor, Kanchwala Building, 63 Dhanjee Street, Bombay. In his statement dated 9-3-1982 Shri O.P. Jalan, inter alia, stated that he went to Kathmandu once and stayed in a hotel as he did not know any body in Kathmandu; that he did business with the firm Bansal Exports and knew Shri Puran Mal Bansal and his two sons Vinod and Suresh; that on the advice of Shri Puran Mal Bansal he did business of export of rapeseed oil; that except that business he did not do any business with Shri Puran Mal Bansal; that he did not know Chouth Mal Jatia. In his further statement dated 26-5-1982 he stated that he did not know Shri U.K. Agarwal; that telephone nos. of his business premises were 347556 and 322676 and that of his residence as 813878; that he did not know how his telephone nos. were available in the diary of U.K. Agarwal; that he did not receive any gold from U.K. Agarwal and that he did not even know U.K. Agarwal.
1.13 Scrutiny of the documents including the diary of U.K. Agarwal revealed that the name and telephone nos. of one Binod Bansal who on discreet enquiries traced as Vinod Kumar S/o Puran Mal Bansal r/o 12-E Kamla Nagar, Delhi, was actually engaged in disposal of smuggled goods on behalf of R.K. Agarwal of Hongkong and Chouth Mal Jatia of Kathmandu. Vinod Kumar Bansal's residence and business premises were searched on 30-12-1981 which resulted in recovery of foreign goods valued at Rs. 5000/- and several other incriminating documents. Vinod Kumar Bansal, inter alia, stated that he knew Chouth Mal Jatia and others as they used to come at Mr. Agarwal's office at Hongkong where he was employed as a Director in a Company named as Hudson Bay & Co. in 1980. The printed card belonging to him pertained to that period of his directorship but he had resigned from there because things did not materialise as he liked. During the course of this association with Shri R.K. Agarwal, stated Shri Vinod Bansal that he came, inter alia, in contact with Shri Chouth Mal Jatia because he used to come to Mr. R.K. Agarwal's office in Hongkong. He also identified Chouth Mal Jatia in a photograph showed to him. He also identified U.K. Agarwal because he had met the latter at Chouth Mal Jatia's residence in Kathmandu. The department has also alleged that discreet enquiries made from Hongkong revealed that Vinod Bansal had been disposing smuggled gold of Chouth Mal Jatia in India and remitting the sale proceeds thereof by Hawala system and that he had set up Varindra Company Ltd. a subsidiary concern of Hudson Bay & Co.
1.14 Both U.K. Agarwal and M.K. Agarwal who were remanded to judicial custody on 19-12-1981 were finally ordered to be released on bail by Delhi High Court. They were, however, released on bail in February 1982 which, it is alleged, they managed from Duty Magistrate fraudulently on holiday and after court hours in violation of the High Court order whereby only the trial Court had been authorised to admit them to bail. Both of the persons managed to abscond and a judicial enquiry was ordered by the District and Sessions Judge. Extradition proceedings have since been started against them.
1.15 In view of the aforesaid facts and circumstances, a show cause notice was issued to various persons including the appellants herein and the matter was decided by the Collector in the impugned order. Since the gold and the Indian currency to the tune of Rs. 5,31,852/- and the suit-cases and the articles recovered there were not claimed by any one and the charges in respect of them reMalned uncontested, the adjudicating authority held the charges as substantiated. He, therefore, confiscated the gold of foreign marking under Section 111(d) of the Customs Act, 1962, Indian currency of Rs. 5,31,852/- Under Section 121 ibid and the seized suit-cases and carbon papers Under Section 118 and 119 ibid.
1.16 After due consideration of the pleas made by the various appellants herein, he imposed among others the penaltiesUnder Section 112 of the Customs Act and Section 74 of the Gold (Control) Act as follows :-
_____________________________________________________________________________________ S.No. Name Penalty Under Section PenaltyUnder Section 74 of 112 of C.A. 1962 GCA, '68 _____________________________________________________________________________________
1. Shri Om Prakash Jalan 2,50,000/- nil
2. Shri Raghunandan Jalan -do- -do-
3. Shri Raj Kishore Gupta 2,50,000/- -do-
4. Shri Vinod Bansal 2,00,000/- -do-
_____________________________________________________________________________________
2. Learned advocate Shri N.C. Chawla appearing for Shri Raj Kishore Gupta has urged that the adjudicating authority has relied solely on the statements of U.K. Agarwal and M.K. Agarwal which were subsequently retracted. He has submitted that, according to the statement of U.K. Agarwal 350 tolas of gold were delivered to him by various carriers in Delhi. This gold has been seized by the Police/Customs officers on 17-12-1981/18-12-1981. It was, therefore, not possible that 350 tolas of gold could be delivered at all to Raj Kishore Gupta, the appellant herein. He, therefore, points out that averments made in the statement of Raj Kishore Gupta relied upon by the department are not correct. The statement, therefore, has obviously been taken under threat and coercion. In this connection, he further points out that while the taxi driver Bhupender Singh's statement talks of visit to Jama Masjid by U.K. Agarwal; the statement of U.K. Agarwal itself does not mention about his visit to Jama Masjid in the said taxi of Shri Bhupender Singh. He further points out that there is no admission by Shri R.K. (Raj Kishore) Gupta regarding receipt of any gold by him from either U.K. Agarwal or M.K. Agarwal.
2.1 Learned advocate further pleads that the notice is vague inasmuch as para 20 of the show cause notice speaks of the acts and omission 'above said'. It has not been stated in the show cause notice as to what specific acts and omission related to R.K. Gupta.
2.2 Learned advocate also points out that the adjudicating authority has not given any finding regarding the liability to confiscation of the alleged earlier delivery of gold made to the appellant Shri R.K. Gupta. In the absence of any such finding by the adjudicating authority penaltyUnder Section 112(b) of the Customs Act is not sustainable. He also pointed out that both U.K. Agarwal and M.K. Agarwal were handed over from Police custody to Customs custody by the Metropolitan Magistrate. In these circumstances, there possibly could not be a summon under Section 108 of the Customs Act to either of them and such statements of both of them under Section 108 of the Customs Act could not be recorded by the officers.
3. Arguing for Shri Raghunandan Jalan Shri Basu pointed out that no specific quantity has been mentioned in the show cause notice which is said to have been delivered to Raghunandan Jalan at Sagar Apartments, Delhi; nor does the show cause notice point out specifically the date on which the gold was delivered to Raghunandan Jalan. He, therefore, submits that the entire case against Raghunandan Jalan is based on vague charges. Such a show cause notice is not sustainable at all in view of Calcutta High Court's judgement in the case of Charan Dass Malhotra (AIR 1968 Cal 28).
3.1 He further points out that in view of the provisions of Section 139 of the Customs Act the statements of U.K. Agarwal and M.K. Agarwal and other documents cannot be looked into by the adjudicating authority for the purpose of arriving at its findings. Provisions of that Section 139 are applicable only in the prosecution case before a Court.
3.2 He further states that there is no reference in the impugned order as to why Raghunandan Jalan's statement should be disbelieved. Raghunandan Jalan's statement is also a part of the record and also relied upon in the show cause notice. He has clearly stated that he did not receive any gold from the two boys U.K. Agarwal and M.K. Agarwal and that neither he knew those boys nor he had ever met them. He also could not say as to why the elder boy U.K. Agarwal whose photo had been shown had given a statement against him (Raghunandan Jalan).
3.3 Yet another plea made by Shri Basu is that show cause notice is defective inasmuch as it has already concluded the charge against his client. He draws attention in this connection to sub-para (xi) of para 22 of the show cause notice which states as under :-
"And whereas Shri Raghunandan Jalan acquired possession of the smuggled gold and is concerned in purchasing and otherwise dealing with the said gold knowing and having reason to believe that the said gold is liable to confiscation is liable to penal action under Section 112(b) of the Customs Act, 1962"
He states that the aforesaid allegation against Shri Raghunandan Jalan clearly indicates that the Collector has already concluded about the guilt of Raghunandan Jalan and in these circumstances there can hardly be any fair trial on the part of the authority issuing the show cause notice who is the same authority as the adjudicating authority, namely the Collector of Customs and Central Excise, New Delhi.
3.4 Shri Basu further submits that the Collector on page 29 of the order-in-original has held that "Mukesh Kumar Agarwal in his statement projected the involvement of Om Prakash Jalan, Raghunandan Jalan and Raj Kishore Gupta in the matter of disposal of foreign marked gold in India." Reference to M.K. Agarwal by the Collector in the aforesaid finding is clearly non-application of mind because M.K. Agarwal nowhere in his statement mentions about the involvement of Om Prakash Jalan, Raghunandan Jalan and Raj Kishore Gupta regarding disposal of foreign marked gold. The Collector probably meant to say here U.K. Agarwal. This is not just a typing lapse in the impugned order but submits the learned advocate Shri Basu it shows non-application of mind by the adjudicating authority.
3.5 Lastly, he submits that penalty on Raghunandan Jalan has been imposed by the adjudicating authority merely on the ground that Raghunandan Jalan knew Chouth Mal Jatia and that he went to Kathmandu and met Chouth Mal Jatia. These grounds, according to the learned advocate, are not sufficient to warrant an allegation that Raghunandan Jalan had received gold from U.K. Agarwal. There is no evidence whatsoever of disposal of gold by Raghunandan Jalan. It is a matter of record that on a search of his house no gold was recovered from the premises of Raghunandan Jalan.
4. Shri Harjinder Singh appearing for Shri O.P. Jalan adopted the various arguments of Shri K.B. Basu urged in respect of Shri Raghunandan Jalan. Apart from that he submitted that U.K. Agarwal and M.K. Agarwal were apprehended in the first instance by the Police and they were produced before a Metropolitan Magistrate. This could not be done without there being an FIR lodged against the two persons U.K. Agarwal and M.K. Agarwal. It, therefore, follows that those persons were accused of an offence under Cr. P.C. Once those persons were accused of an offence no statement implicating a person could be taken either from U.K. Agarwal or M.K. Agarwal in view of the provisions of Article 20(3) of the Constitution. Provisions of this Article clearly state that no person accused of an offence can be compelled to be a witness against himself. He, therefore, submits that statements of both U.K. Agarwal and M.K. Agarwal should not be looked into at all because they are void and non-est. On a query from the Bench as to whether any copy of FIR lodged against the two persons has been brought on record by the appellants, learned advocate admitted that it had not been done so. He, however, undertook to inform the Bench by 20-7-1989 i.e. by two days after the hearing with regard to any such FIR. No such FIR against U.K. Agarwal and M.K. Agarwal has been brought on record so far. Accordingly, we shall ignore this plea of the learned advocate.
4.1 He further points out that principles of the Evidence Act which essentially incorporate principles of natural justice should be made applicable while appreciating the evidence before an adjudicating authority. For this proposition he relies on AIR 1961 SC 264 (Ambalal v. Union of India) which holds that fundamental principles of Criminal jurisprudence must apply in such cases under the Customs Act.
4.2 He further submits that statements of U.K. Agarwal and M.K. Agarwal who were co-accused could not be used as substantive pieces of evidence. Apart from that the statements are also retracted. There is no independent corroborative evidence against O.P. Jalan. No gold was recovered; nature of the gold alleged to be delivered by U.K. Agarwal to O.P. Jalan is also not stated i.e. whether it is a foreign marked gold or gold of Indian origin.
4.3 Lastly, he submits that the Collector of Customs, New Delhi had no territorial jurisdiction over O.P. Jalan to decide the case against him. It is clearly stated on record that delivery of gold to O.P. Jalan was made by U.K. Agarwal at Bombay. Therefore, only the Collector of Customs, Bombay could have appropriate jurisdiction over O.P. Jalan.
5. Arguing for Shri Vinod Bansal, the learned consultant Shri N.C. Sogani, has submitted that the evidence against Vinod Bansal is merely in the nature of hearsay evidence. Neither U.K. Agarwal nor M.K. Agarwal had even mentioned the name of Vinod Bansal. Para 18 of the order-in-original speaks of 'discreet enquiries made from Hongkong' without bringing on record any concrete evidence against Vinod Bansal. Mere knowledge/acquaintance of Vinod Bansal with Chouth Mal Jatia and others should not constitute enough evidence to connect him with the illegal activities of others. In these facts and circumstances of this case he submits that there is no case whatsoever for imposition of any penalty against Vinod Bansal.
6. Opposing the contentions of the learned advocates and the learned consultant appearing on behalf of the appellants, herein, learned SDR Ms. Renuka Mann reiterates the findings of the adjudicating authority. She states that apart from the statements of U.K. Agarwal and M.K. Agarwal which are admissible pieces of evidence and can be relied upon for the purpose of arriving at suitable findings in view of Kerala High Court's judgement in the case of Kolatra Abbas Haji v. Govt. of India [1984 (15) ELT 129]. There are other circumstantial evidences which prove the guilt of the appellants. For example she pointed out that despite repeated summons to the appellants they did , not appear before the investigating authorities. This consideration of the conduct of the appellants speaks volumes of their complicity in the whole affair. For this proposition she relies on the decision of the Tribunal in the case of Bhimraj Misri Lal Jain v. C.C.E. Belgaon [1986 (23) ELT 499].
6.1 She also relies on Madras High Court's decision in the case of Roshan Beevi and Ors. v. Joint Secy. to the Govt. of Tamil Nadu [1984 (15) ELT 289]. This deicision upholds the proposition, according to her, that Customs Officer, exercising authority either under Section 107 or 108 of the Customs Act is not a Police Officer and the person interrogated is not a person accused of an offence. It cannot, therefore, be held that summoning of a person from an officer was violative of Articles 20(3), 21 and 22 of the Constitution. She also relies on another observation of Madras High Court in the said judgement which holds that a version/statement made before a Customs Officer is admissible in law and not hit by Section 25 or Section 26 of the Evidence Act. She further urges that retraction of U.K. Agarwal and M.K. Agarwal from their statements after lapse of 10 to 12 days should not be given much credence because such a belated retraction is of no consequence. Similarly, she urges that the exculpatory statements of the appellants are of no use to them because these are statements which are made after a great deal of thought on legal advice as is apparent that the appellants had been evading the summons issued by the authority. Regarding the question of jurisdiction over Shri O.P. Jalan raised by the ld. advocate Shri Harjinder Singh, the learned SDR points out that seizure of gold and apprehension of the person was made in Delhi. Allegation against O.P. Jalan flows out of the statement of U.K. Agarwal and therefore, the allegations against him are part and parcel of the cause of action arising in Delhi on 17-12-1981. Collector of Customs, Delhi, therefore, got the full jurisdiction over the activities of O.P. Jalan so far as this case is concerned.
7. We have carefully considered the pleas advanced on both sides. Firstly we refer to some of the general pleas taken by the learned advocates across the Bar. We have already stated that the plea made by the learned advocate Shri Harjinder Singh that statements of U.K. Agarwal and M.K. Agarwal are void and non-est inasmuch as they were accused persons before their statements were recorded by the Customs Officers has not been substantiated by production of an FIR. It is also apparent from record that the Metropolitan Magistrate before whom U.K. Agarwal and M.K. Agarwal were produced by the Police officers were in connection with a cognizable offence. When the learned Metropolitan Magistrate on application from the Assistant Collector, Directorate of Revenue Intelligence directed the custody of the two persons to Directorate of Revenue Intelligence Officers it ipso facto means that the two persons were discharged of their cognizable offence by the learned Magistrate. It cannot, therefore, be said by any stretch of imagination that M.K. Agarwal and U.K. Agarwal were accused of any offence at the time when they were directed to be given to the custody of Directorate of Revenue Intelligence Officers. The Supreme Court in the case of Ramesh Chandra Mehta v. The State of West Bengal [AIR 1970 SC 940] under the Act has held as follows :-
"Under the Act of 1962 (Customs Act, 1962) a formal accusation can only be deemed to be made when a complaint is made before a Magistrate competent to try the person guilty of the infraction under Sections 132, 133,134 and 135 of the Act. Any statement made under Sections 107 and 108 of the Customs Act by a person against whom an enquiry is made by a Customs Officer is not a statement made by a person accused of an offence".
In view of the aforesaid proposition of law laid down by the Supreme Court we do not find any merit in the plea of the learned advocate Shri Harjinder Singh.
Another plea made before us was that fundamental principles of criminal jurisprudence must apply in deciding the case against the appellants for the purposes of penal action against them. There cannot be any quarrel with this broad proposition of law but the further proposition urged before us that the statements were retracted and these are statements of co-accused and therefore, these could not be used as substantive pieces of evidence but only to lend assurance to the guilt of the accused stands. Rebutted by the judgement of Kerala High Court in the case of K.A. Haji mentioned supra relied upon by the learned SDR. The following para in the said judgement [1984 (15) ELT 129] is a complete answer to the plea of the learned advocates submitted during the course of hearings :-
"The petitioner was given copies of statements of the co-accused. They had not retracted from their statements until they said in their reply to the show cause notice that they signed the statements under pressure. In the case of Abdulla Kunhi, his reply to the show cause notice was sent on 9-8-1974, whereas his statement had been recorded as early as 19-2-1974. The same was the case with Tajud-din. Theruvath Kasmi replied to the show cause notice on 10-8-1974 whereas his statement had been recorded on 11-2-1974. For nearly six months these persons, who apparently had obtained legal advice in the meantime, failed to retract in any manner from the statements made by them. As stated by the Supreme Court in A.I.R. 1968 SectionC. 832, such retraction has little value. In the case of Mammed and Abdul Khader and Abdulla the retraction was after a period of more than one month. Considering that these people also had the benefit of advice of competent lawyers, their retraction has to be regarded with suspicion. In any case the retraction of Theruvath Kasmi, Abdulla Kunhi and Tajuddin was far too belated to be of any value to the petitioner. Their statements cannot therefore be ignored. The fact that these persons were also proceeded against along with the petitioner in respect of the same incident does not make their testimony unacceptable. In the first place, the proceeding before the Collector of Customs is not of the same nature as a proceeding in a criminal court. Even in a criminal court the testimony of a co-accused, as stated by the Supreme Court, is evidence in generic sense and is useful for the purpose of lending assurance to the court in regard to the veracity of substantive. But in so far as an administrator is concerned, he is entitled to reply on any evidence so long as it has some probation value. It is important to remember in this connection that the petitioner had himself made a statement wherein he failed to deny the allegations made by these six persons in their statements. The fact that he failed to deny the allegations and merely stated that he had nothing particular to say in regard to the acceptance of the allegations. Such conduct on the part of the petitioner necessarily leads to a presumption of admission. Retraction from that admission would not detract from its value. Ext. P1 thus constitutes substantive evidence on the basis of which alone the petitioner could have been found guilty of the charges. Strangely enough there is no reference to Ext. P1 in Ext. P6 or in Ext. P9 or Ext. P10. Apparently the respondents chose to rely solely on the testimony of the co-accused. Whatever be the value of counsel's criticism against the acceptance of the testimony of the co-accused for the purpose of finding the petitioner guilty, the fact reMalns that the finding of the respondents can be justified, not only on the basis of the evidence they relied upon, but also on the basis of Ext. P1."
8. It may be mentioned here that it is not merely the statements of U.K. Agarwal and M.K. Agarwal which form the basis of findings of the Collector against the appellants but there are other pieces of evidence such as slip (S.No. 8) referred to in the statement of U.K. Agarwal, other incriminating documents like telephone diaries, statements of Sanjay Thapar, Avinash Sehgal which amply corroborate the statements of both U.K. Agarwal and M.K. Agarwal in several details. Apart from that there is circumstantial evidence of two of the appellants herein namely Raj Kishore Gupta and Raghunan-dan Jalan evading the service of summons for appearance before the investigating authorities for a long time. Similarly, the statement of O.P. Jalan was also recorded much later on 9-3-1982 i.e. long alter the incident of 17-12-1981 or of the incident of search of his residential and business premises on 19-12-1981. Important circumstance which is of relevance in this case is that both the persons U.K. Agarwal and M.K. Agarwal have jumped the bail. The circumstances in which they obtained the bail and then jumped that bail give rise to the inference that these two persons were being kept out of the way by the Maln two parties including Raj Kishore Gupta, Raghunandan Jalan and O.P. Jalan involved in this case. Case has been made out against the three appellants Raj Kishore, Raghunandan Jalan and O.P. Jalan not merely on the basis of statements of U.K. Agarwal and M.K. Agarwal but also on the basis of other evidence on record. Another plea made before us was that under Section 139 of the Customs Act, statements of U.K. Agarwal and M.K. Agarwal and other documents could not be looked into by the adjudicating authority. This plea is also not tenable in view of the judgements of Kerala High Court in the case of K.A. Haji mentioned supra. Hon'ble High Court has held that "Section 139 leaves no doubt that the Court shall presume, unless the contrary is proved, that the signature of the maker is genuine and every other part of the document is equally genuine. This is the principle on which the Court must act. Section 139 does not exclude the applicability of this principle in proceedings before an administrator. If it is open to a Court to draw the statutory presumption, it is equally open to an administrator in proceedings of this kind to draw a like presumption and conclude, in the absence of evidence to the contrary, that every word contained in the statement and the signature appearing on the face of it is that of the maker. This being the position in law, the respondents were entitled to rely upon every word in the statements signed by the witnesses, notwithstanding their attempt to retract therefrom, especially when there is no evidence of threat."
8.1 The aforesaid observations of Kerala High Court in K.A. Haji's case squarely applies to the facts and circumstances of this case as well. Accordingly, we hold that the statements of U.K. Agarwal and M.K. Agarwal have been rightly relied upon.
8.2 Now we shall take up the specific pleas raised in respect of each of the appellants before us.
Raj Kishore Gupta - It has been pleaded by the learned advocate Shri Chawla for the appellants that no identification of residence of Shri R.K. Gupta has been fixed by the department. U.K. Agarwal in his statement has merely stated that he would be able to identify the residence of Shri R.K. Gupta in Mohalla Vakil Pura in the department. He further points out a discrepancy between the statement of Shri Bhupender Singh and the statement of U.K. Agarwal. Learned advocate urges that while the taxi driver talks of his visit to Jama Masjid area, U.K. Agarwal's statement does not at all refer to this Jama Masjid area. He also points out to the fact that Shri R.K. Gupta has completely denied in respect of gold from U.K. Agarwal. There is no reason to disbelieve that statement. He has further pointed out that the allegation against Shri Raj Kishore Gupta speaks about the said acts and omissions on the part of the appellants but it does not clearly spell out specifically those acts and omissions. He had also mentioned that the statement under Section 108 could not be recorded because the two apprehended persons M.K. Agarwal and U.K. Agarwal were transferred from Police custody to Customs custody and therefore, the question of issuing a summon does not arise. Lastly he had submitted that there is no specific finding of liability to confiscation of the alleged delivery of gold made by U.K. Agarwal to Raj Kishore Gupta. In the absence of any such finding penalty could not be sustained.
8.3 We have carefully considered the above pleas but we do not find much force in those pleas. When U.K. Agarwal had stated clearly that he had made a delivery of smuggled gold weighing 330 tolas to one Raj Kishore Gupta in Mohalla Vakil Pura earlier. The question of further identification would not normally arise. It is not the case of Raj Kishore Gupta that there is any other Raj Kishore Gupta in Mohalla Vakil Pura in Jama Masjid area and as such there could be a confusion regarding the place of delivery of gold. On the question of discrepancy between the statement of Bhupender Singh and that of U. Kumar, we do not find any discrepancy whatsoever. In the face of clear statement of U.K. Agarwal of making delivery to Raj Kishore Gupta in Mohalla Vakil Pura in Jama Masjid area, it has to be automatically inferred that he did visit Jama Masjid area as corroborated by Shri Bhupender Singh nor is the plea of non-mention of specific allegations of acts and omissions is tenable. Before making this allegation at para 24 of the show cause notice the allegations have been clearly brought out in the earlier portion of the show cause notice. The specific allegation is contained in para 22(xii) which clearly states as follows :
"And whereas Shri Raj Kishore Gupta acquired prossession of the smuggled gold and is concerned in purchasing and otherwise dealing with the said gold knowing and having reason to believe that the said gold was liable to confiscation is liable to penal action under Section 112(b) of the Customs Act, 1962."
8.4 We also do not find any merit in the plea of the learned advocate that the statement under Section 108 could not be recorded from U.K. Agarwal and M.K. Agarwal because they were transferred from Police custody to Customs custody. We do not find anything in the wordings of Section 108 which prohibits serving a summon to a person under custody for the purpose of recording a statement under Section 108 of the Customs Act. Once the summon is served the statement recorded thereunder is to be deemed to have been taken under Section 108. Similarly, there is no merit in the learned advocate's plea that there is no finding regarding liability to confiscation of the gold alleged to have been delivered to Raj Kishore Gupta by U.K. Agarwal. With regard to the penal action against O.P. Jalan, Raghunandan Jalan and Raj Kishore Gupta the Collector has made the following finding :-
"Shri Mukesh Kumar Agarwal in his statement projected the involvement of Om Prakash Jalan, Raghunandan Jalan and Raj Kishore Gupta in the matter of disposal of foreign marked gold in India. He disclosed that he delivered 200 tolas foreign marked gold to Omi Jalan personally at Bombay and gave the residential and office telephone of Omi Jalan. These telephone Nos. of Jalan were written in the diary seized from Umesh Kumar Aggarwal/Mukesh Kumar Aggarwal. He further disclosed that he also delivered foreign marked gold previously to Raj Kishore Gupta at his residence at Vakil Pura and Raghunandan Jalan at his residence at Sagar Apartments, Delhi and identified their residence as well as photographs. The fact that Chouth Mal Jatia was known to Raghunandan Jalan and Raj Kishore Gupta and they went to Kathmandu and met Chouth Mal Jatia are sufficient to prove the involvement of Om Prakash Jalan, Raghunandan Jalan and Raj Kishore Gupta in the disposal of smuggled gold into India on behalf of Chouth Mal Jatia. I, therefore, hold Om Prakash Jalan, Raghunandan Jalan and Raj Kishore Gupta guilty in the disposal of smuggled gold in India".
8.5 From the aforesaid finding it is apparent that the gold in question alleged to be delivered, inter alia, to Raj Kishore Gupta was regarding "disposal of smuggled gold in India". It is implicit in the aforesaid extracted findings of the Collector and in particular his finding regarding disposal of smuggled gold that the gold delivered to Raj Kishore Gupta was liable to confiscation. It would have been appropriate to give an express finding regarding liability of confiscation to gold alleged to be delivered to Raj Kishore Gupta. However, this will not vitiate the order so long as a necessary implicit finding can be read into the findings of the adjudicating authority. Such an implicit finding we have mentioned above is apparent from Collector's findings. Accordingly, we uphold the penalty imposed on Shri R.K. Gupta.
Raghunandan Jalan and O.P. Jalan - One of the pleas urged before us was that the show cause notice against the appellants reads like foregone allegation and does not read like a chargesheet. It was, therefore, urged that the show cause notice is defective and therefore, the entire proceedings are vitiated. Reliance has been placed on Calcutta High Court's judgement in the case of Charan Dass Malhotra mentioned supra. It has also been stated that the Collector has not made any reference to the statements of the appellants who have denied any delivery of gold to them by U.K. Agarwal. No reasons have been given as to why their statements have been disbelieved. In case of Raghunandan Jalan it has also been urged by Shri K.B. Basu that the charge is regarding an unspecified gold and regarding delivery on an unspecified date at his residence at Sagar Apartments. It has also been urged that the mere circumstances of the appellants going to Nepal should not be considered sufficient for imposition of penalty.
8.6 We have carefully considered these pleas. We do not find any merit in the plea of the learned advocate that the show cause notice reads like a foregone conclusion. Had that been so, the appellants would not have been asked to show cause in the manner as has been in para 24 of the show cause notice. While there may be some point that show cause notice could be more appropriately worded but mere drafting error in the show cause notice would not vitiate the proceedings. While it is also true that the Collector in the impugned order has not given any reasons as to why the statements of the appellants should be disbelieved, it is apparent from his findings, as already extracted above while dealing with the penalty on Shri R.K. Gupta. No doubt is left that Collector has not believed the statements of the appellants herein and this is rightly so, as already referred to in the general discussions, these statements have been given by the appellants after a long time after the incident and by evading a number of summons. The findings of the Collector with regard to the panalty on Raghunandan Jalan and O.P. Jalan are cogent, convincing and based on sufficient evidence on record - oral, documentary and circumstantial. We, therefore, uphold the penalty imposed on Raghunandan Jalan and OP. Jalan.
Vinod Bansal - In so far as the question of penalty on this appellant Vinod Bansal is concerned, we find sufficient force in the pleas advanced by Shri N.C. Sogani, the learned consultant. Statements of U.K. Agarwal and M.K. Agarwal form the bed-rock of the charges against the various persons involved in this case. It is pertinent to note, as rightly pointed out by Shri N.C. Sogani, that the name of the present appellant does not figure in the statements of U.K. Agarwal and M.K. Agarwal. The Collector's findings in regard to imposition of penalty on Vinod Bansal are extracted below :-
"The telephone diary seized from Umesh Kumar Agarwal revealed the name of Bimal and later on it was disclosed that the correct name of Bimal was Vinod Bansal of 12-E, Kamla Nagar, Delhi. The residence of Vinod Bansal was searched and some incriminating documents were recovered. Vinod Bansal in his statement admitted that he knew Chouth Mal Jatia and he had met him in Kathmandu 2-3 times and identified the photographs of Chouth Mal Jatia. He further disclosed that he had met Umesh Kumar Aggarwal in Kathmandu and also identified his photograph. The diary seized from the residence of Vinod Ban sal also revealed the names of Chouth Mal Jatia, Umesh and Mukesh. In view of the above, I am convinced that Vinod Bansal was engaged in the disposal of smuggled gold on behalf of Chouth Mal Jatia and further hold him guilty that he had dealt with the foreign marked gold".
8.7 It is apparent from the aforesaid findings that the knowledge/acquaintance of Vinod Bansal with Chouth Mal Jatia and that he had met him in Kathmandu 2-3 times and had identified the photograph of Chouth Mal Jatia or U.K. Agarwal or that the diary seized from the residence of Vinod Bansal revealed the names of Chouth Mal Jatia, Umesh and Mukesh have been adopted the basis of imposition of penalty. These pieces of evidence are not sufficient in our opinion to warrant a penalty on a person. It is probable that Vinod Bansal might be knowing Chouth Mal Jatia, U.K. Agarwal and M.K. Agarwal and therefore, he was able to identify their photographs or may be having quite innocently, their telephone nos. and addresses in his diaries, yet he may not be aware of their illicit activities. It will be too far fetched from the aforesaid pieces of evidence alone to infer that Vinod Bansal was involved in the activities of the aforesaid three persons. The incriminating documents referred to by the Collector in his finding is only a diary seized from the residence of Vinod Bansal which revealed the names of Chouth Mal Jatia, U.K. Agarwal and M.K. Agarwal. As mentioned above, it will not be sufficient to indict Vinod Bansal. No other incriminating documents have been referred to by the Collector against Vinod Bansal in his findings. Para 18 of the show cause notice speaks of discreet enquiries made in Hongkong which show Vinod Bansal in guilty light.
9. We are afraid that the discreet enquiries by themselves cannot form the basis of imposing penalty on the appellant unless there is acceptable evidence on record.
9.1 Having regard to all the facts and circumstances, we do not think that any penalty is warranted on Vinod Bansal under the Customs Act. We order accordingly and set aside the penalty imposed on him.
9.2 In short, we reject the appeals of the three appellants namely R.K. Gupta, Raghunandan Jalan and O.P. Jalan. However, we accept the appeal of Vinod Bansal with consequential relief to him.