Custom, Excise & Service Tax Tribunal
Shri Pragnesh R. Choksi vs Commissioner Of Customs, Ahmedabad on 5 August, 2015
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad Appeal No.C/160/2007- SM [Arising out of OIO No.1/COMMR./OA/2007, dt.01.10.2009, passed by Commissioner of Customs, Ahmedabad] Shri Pragnesh R. Choksi Appellant Vs Commissioner of Customs, Ahmedabad Respondent
Represented by:
For Appellant: Shri Mayur Shroff, Advocate For Respondent: Shri G. Jha, Authorised Representative For approval and signature:
Honble Mr. H.K. Thakur, Member (Technical)
1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen the order?
4. Whether order is to be circulated to the Departmental Yes authorities?
CORAM:
HONBLE MR. H.K. THAKUR, MEMBER (TECHNICAL) Date of Hearing: 28.07.2015 Date of Decision: 05.08.2015 Order No. A/11159 / 2015, dt.05.08.2015 Per: H.K. Thakur This appeal has been filed by the Appellant against OIO No.1/COMMR./OA/2007, dt.01.10.2009, passed by Commissioner of Customs, Ahmedabad as the Original Adjudicating Authority. This OIO dt.12.01.2009, has been passed by the Adjudicating authority, as per the specific remand directions of CESTAT under Order No.A/592-596/WZB/2006/CSTB/C II, dt.30.06.2006, under which 40 TT Gold Bars (valued at Rs.19,70,000.00) were absolutely confiscated under Section 111(d) of the Customs Act, 1962 and a penalty of Rs.1,50,000.00 was imposed upon Shri Pragnesh R. Choksi, Proprietor of M/s Shreya Traders, Ahmedabad.
2. Shri Mayur Shroff (Advocate) appearing on behalf of the Appellant argued that on 08.04.1999, Officers of Customs intercepted two persons Shri Vishnubhai Ishwardas Patel and Shri Madhusudan Jayantilal Raval of M/s Vishnu Ambalal, Angadia at Ahmedabad Railway Station, on the basis of specific information when they were about to board the train for Mumbai. That 115 foreign marked Gold biscuits were recovered from eight packets carried by the said two persons. That out of total foreign marked gold biscuits, 40 TT gold bars of PAMP SUISEE markings were found to be accompanied by a paper on which M/s Sreya Traders/M/s Krupa Traders M/s Krupa Ornaments was written. Statement of the intercepted person, who was an employee of M/s Vishnubhai Ambalal & Co, was recorded to the effect that the said parcel was collected by him from M/s Krupa Ornaments. Statement of Shri Pragnesh R. Choksi was recorded on 09.04.1999 in which he denied the ownership of the 40 TT Bars of PAMP SUISEE Mark but stated that all the transactions of his firm were being carried out by one Shri Dilipbhai P. Vyas of M/s Krupa Ornaments and his elder brother Shri Deepakbhai P. Vyas of M/s Krupa Traders. That Shri Pragnesh R. Choksi also stated that the paper under his firms name, in which the gold bars were wrapped, was neither written by him nor signed by him. Later by a letter dt.12.04.1999, Shri Pragnesh R. Choksi retracted the statement dt.09.04.1999 and claimed ownership of the 40 seized gold bars and contended that the same were purchased by him from M/s Amrapali Industries Ltd vide Bill No.G/254/99, dt.08.04.199. That Adjudicating authority under his first OIO No.30/COMMR/2000, dt.29.12.2000 did not accept the claim of the Appellant and absolutely confiscated the seized gold bars. That this Bench vide Order dt.30.06.2006 remanded the case back to the Adjudicating authority with the specific direction that Appellants claim should have been further examined and investigated at the Amrapalis end instead of rejecting the same at the threshold itself. That remand proceedings ordered by the Bench were only with respect to authenticity of Bill No.G/254/99 DT.08.04.1999 which has been confirmed by the supplier of gold bars M/s Amrapali Industries Ltd. It was the case of the learned Advocate that Adjudicating authority got the matter investigated from an Additional Commissioner and the facts which came out during investigation confirmed the purchase of seized gold bars by the Appellant but Adjudicating authority by improper construction of facts arrived at a wrong conclusion that the bill of M/s Amrapali Industries Ltd is created only to cover the seized gold bars. Learned Advocate made the Bench go through the statements of various persons of M/s Amrapali Industries Ltd, recorded the cross examination of Shri S.T. Gurusahani, Superintendent (Investigating Officer), the report of Additional Commissioner etc to argue that 40 seized gold bars were purchased from M/s Amrapali Industries Ltd. That there is no other claimant of the said goods.
2.1 Learned Advocate also made the Bench go through the statement dt.26.05.1999 of Shri Deepakbhai P. Vyas, Proprietor of M/s Krupa Traders, in which he stated that gold bars were delivered to the Angadia by Shri Pragnesh and that he has nothing to do with the seized 40 TT gold bars. He also made the Bench go through cross examination of Shri S.T.Gurusahani held on 16.06.2000 to bring home the point that M/s Amrapali Industries Ltd in fact purchased gold bars of the same mark from a recognized bank as per their order dt.08.04.1999.
2.2 Learned Advocate relied upon the following case laws to argue that the seized goods were properly accounted for in the registers and Appellant has discharged the burden of proof under Section 123 of the Customs Act, 1962:-
i) S.K. Chairs Vs CC (Prev.) Mumbai [2001 (127) ELT 415 (Tri-Mum)]
ii) CC (P) W.B. Vs Golak Chandra Kamila [2006 (205) ELT 665 (Tri-Cal.)]
iii) Rasilaben H. Rathod Vs CC Ahmedabad [2008 (226) ELT 641 (Tri-Ahmd)]
3. Shri Govind Jha (A.R.) appearing on behalf of the Revenue argued that Appellant in the very first statement did not claim the ownership of the seized gold bars. That as per Apex Courts order in the case of Surjeet Singh Chhabra Vs UOI [1997 (89) ELT 646 (S.C.)] to argue that confession given is an admissible evidence. Learned A.R. made the Bench go through Para 3 of this case law. He also relied upon the following case laws of Apex Court to argue that an admission made by the Appellant need not be proved as there is no claim of first statement being recorded under coercion or duress:-
i) CCE Madras Vs Systems & Components Pvt. Ltd [2004 (165) ELT 136 (S.C.)]
ii) CCE Mumbai Vs M/s Kalvert Foods India Pvt. Ltd [2001-TIOL-76-SC-CX] That Adjudicating authority has given detailed reasons in Pages 33.5, 35, 38, & 40 of the OIO dt.12.01.2007 as to why claim of ownership of the seized goods of the Appellant was not accepted.
4. As a counter to the argument made by the learned A.R., Advocate appearing on behalf of the Appellant also relied upon the case law of Apex Court in the case of Vinod Solanki Vs UoI [2009 (233) ELT 157 (S.C.)], where it is held that confession once given can be retracted if retraction is corroborated by independent and cogent evidences. He made the Bench go through Paras 22, 34, 35 & 37 of this case law to argue that in the present proceedings there are ample corroborative evidences to show that retraction was correct especially in view of the bill of M/s Amrapali Industries Ltd produced by the Appellant and the verification done from the Bank read with cross examination of the investigating officer.
5. Heard both sides and perused the case records. There are mainly three issues involved in these proceedings to be deliberated upon, as follows:-
i) Whether Appellant Shri Pragnesh R. Choksi, Proprietor of M/s Shreya Traders is the owner of the seized goods?
ii) Whether the seized goods were purchased by Shri Pragnesh R. Choksi from M/s Amrapali Industries Ltd under Bill No.G/254/99, dt.08.04.1999?
iii) Whether penalty upon Shri Pragnesh R. Choksi can be imposed under Section 112(a) and 112 (b) of the Customs Act, 1962, in case he is not the owner of the seized goods?
6. Regarding issue at Para 5(i), Appellant in the very first statement dt.09.04.1999 disowned the 40 gold bars seized on 08.04.1999 by the Customs officers. However, in this statement dt.09.04.1999, Shri Pragnesh R. Choksi also stated, inter alia, that he do purchase gold/silver bars from M/s Amrapali Industries Ltd, Vishal James and M/s Krupa Traders, all of Manek Chowk, Ahmedabad. It was also stated by him that all transactions of his firm are looked after by two brothers Dilip P. Vyas and Shri Deepak P. Vyas of M/s Krupa Traders and that his name is only used for entering into gold transactions and they take his signatures on cheques. Both Shri Dilip P. Vyas and Shri Deepakbhai P. Vyas, denied the ownership of the seized goods vide statements dt.09.04.1999 and dt.26.05.1999 respectively. However, Shri Deepak P. Vyas confirmed that on 08.04.1999, Shri Pragnesh gave delivery of 40 gold TT bars to one person of Shri Vishnu Ambalal Angadia. Shri Mukesh Mangaldas Panchal, Employee of M/s Shreya Traders vide statement dt.18.06.1999 confirmed to be the creator of paper on which name and address of M/s Shreya Traders was printed, as per the instructions of Shri Pragnesh and that he signed as Pragnesh on behalf of Shri Pragneshbhai. It is observed from the case records that on 12.04.1999, Appellant claimed the ownership of the seized goods and also filed anticipatory bail application before Court of City & Sessions Judge, Ahmedabad. It is the case of Revenue that the retraction made by the Appellant is not acceptable in view of Apex Courts case law in the case of Surjeet Singh Chhabra Vs UOI (supra). It is observed from Para 3 of this case law that Honble Apex Court has denied the request of cross-examination of Panch witness by the petitioner when it was a case of import of gold through baggage. It was only a passing reference that Supreme Court made that confession though retracted is an admission. However, in view of Supreme Courts judgment in the case of Vinod Solanki Vs UOI (supra), it has been specifically ruled that evidence brought out by confession if retracted must be corroborated by other independent and cogent evidences. Following were the observations of Supreme Court in this regard:-
22.?It is a trite law that evidences brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidences, which would lend adequate assurance to the court that it may seek to rely thereupon. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention but we must also notice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded. {See Pon Adithan v. Deputy Director, Narcotics Control Bureau, Madras [(1999) 6 SCC 1]} 6.1 In view of the above case law, it has to be observed whether there were corroborations to the effect that retraction of Shri Pragnesh R. Choksi was justified. It is observed from the case records that there was a paper bearing Appellants name alongwith the seized goods regarding the firm M/s Shreya Traders. On that basis only, the Customs officers reached the Appellant and recorded his statement. In his very first statement, Shri Pragnesh though denied ownership of seized gold but did state that he is buying and selling gold/silver from M/s Amrapali Industries Ltd. Statement of employees of Angadia also confirmed the source of seized gold to be M/s Krupa Traders. Both the brothers looking after the activities of M/s Krupa Traders denied ownership of seized gold bars but confirmed that Shri Pragnesh has delivered the seized gold to the representative of the Angadia. It is also on record that Appellant did file an anticipatory bail on 12.04.1999 before Session Courts fearing arrest. In view of the above corroboration, there was an apparent arrest threat to the Appellant for giving statement denying ownership. Apex Court in the case of Vinod Solanki Vs UoI (supra) on Para 35 & 35 held as follows:-
34.?A person accused of commission of an offence is not expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as an outcome of threat, etc. if the same is to be relied upon solely for the purpose of securing a conviction. With a view to arrive at a finding as regards the voluntary nature of statement or otherwise of a confession which has since been retracted, the Court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the manner in which such retraction has been made and other relevant factors. Law does not say that the accused has to prove that retraction of confession made by him was because of threat, coercion, etc. but the requirement is that it may appear to the court as such.
35.?In the instant case, the Investigating Officers did not examine themselves. The authorities under the Act as also the Tribunal did not arrive at a finding upon application of their mind to the retraction and rejected the same upon assigning cogent and valid reasons therefor. Whereas mere retraction of a confession may not be sufficient to make the confessional statement irrelevant for the purpose of a proceeding in a criminal case or a quasi criminal case but there cannot be any doubt whatsoever that the court is obligated to take into consideration the pros and cons of both the confession and retraction made by the accused. It is one thing to say that a retracted confession is used as a corroborative piece of evidence to record a finding of guilt but it is another thing to say that such a finding is arrived at only on the basis of such confession although retracted at a later stage. In the light of law laid down by the Apex Court, there was corroboration and justification for retraction on the part of the Appellant. Name of the Appellant was existing on the paper accompanying the gold bars seized. Employee of the Appellant confirmed to have prepared the paper found alongwith the seized packet. All others who were investigated have denied the ownership and have not claimed the seized gold bars afterwards. Accordingly, it is held that Appellant was the rightful owner/claimant of the seized goods.
7. The next issue mentioned at Para 5(ii) above is whether Bill No.G/25/1999, dt.08.04.1999 of M/s Amrapali Industries Ltd was the proof of purchase of gold bars by the Appellant. This document was not produced by the Appellant while recording his first statement dt.09.04.1999. Adjudicating authority in Paras 38, 39 & 40 of the OIO dt.12.01.2009 held that no payments were made by the Appellant to M/s Amrapali Industries Ltd as per statement of Shri Satish Amrutlal Patel, Accountant of M/s Amrapali Industries Ltd and that amount of Rs.19,70,000.00 has not been reflected in their balance sheet. It is Revenues case that entry of Rs.19,70,000.00 in the books of account could be with respect to Bill No.216, dt.07.04.1999. It is observed from report dt.27.10.2006 of Additional Commissioner submitted to the Adjudicating authority that Appellant was regularly purchasing gold from M/s Amrapali Industries Ltd and making payments in cheque or cash. As per the statement of Shri Yashwant Amrutlal Thakkar, M.D. of M/s Amrapali Industries Ltd, Rs.19,69,800.00 is indicated as pending against M/s Shreya Traders as on 1999-2000. This amount cannot be pending with respect to Bill No.216, dt.07.04.1999 which was realized by cash payment in cash on 09.04.1999, as claimed by the Revenue. An amount released in April 1999 cannot be pending at the end of Financial Year 1999-2000. Appellant has also brought on record letter dt.08.04.1999 from M/s Amrapali Industries Ltd under which an order was placed for 3000 gold bars before Branch Manager, Allahabad Bank, S.P. Nagar, Ahmedabad, which were received by the authorised person of M/s Amrapali Industries Ltd. As per the cross-examination dt.16.06.2000 of Shri S.T. Gurusahani, Superintendent, it has come on record that Bank has sold the gold bars to M/s Amrapali Industries Ltd. The source of the seized gold biscuits has been traced out to a genuine purchase from an authorised Bank. The same has also been accounted for in the records maintained by M/s Amrapali Industries Ltd. Under the existing factual matrix, it cannot be said that Appellant has failed to explain the licit acquisition of seized gold bars, when he was regularly buying such gold bars from M/s Amrapali Industries Ltd in the past.
7.1 In the case of S.K. Chains Vs CC(P) Mumbai [2001 (127) ELT 415 (Tri-Mum)], CESTAT Mumbai held in Para 10 as follows:-
10. Shri Kothari also claimed to have purchased 85 gold? biscuits on 17-10-97 from one Bhulchandani for which payment was made by 3 cheques. The Show Cause Notice makes the claim that these cheques were not debited in the account of the appellants. Shri Nankani submits that at that time also one cheque was realised and later the total realisation was made. The Show Cause Notice in para 8 admits to one of the 3 cheques being realised. The Show Cause Notice also alleges that such long credit to a buyer is questionable. While this observation might have had merit in the earlier days when there was no import of gold or where the import was totally controlled, in the present days when the market is flooded with gold imported through baggage it is not unusual that a seller may have to wait for sometime before realisation of the consideration. Therefore, late realisation of the consideration to Shri Bhulchandani does not establish mala fide on behalf of the appellants nor does it establish the smuggled nature of the gold. It is nowhere alleged in the Show Cause Notice that Bhulchandani did not exist or that the baggage receipts under which Bhulchandani had imported the gold was not a genuine baggage receipt. Bhulchandani has not been made a noticee to the Show Cause Notice. Therefore, it has to be held that by proving lawful acquisition, the burden cast upon the appellants has been discharged. 7.2 Similarly, in the case of CC Vs Kapildeo Prasad [2011 (272) ELT 31 (Pat), Hon'ble Patna High Court held in Para 7 as follows:-
7.?While assailing the order of the Tribunal, Mr. Rakesh Kumar Singh contends that the Tribunal ought not to have accepted the plea put forth by claimant Kapildeo Prasad that the gold biscuits belonged to him and were legally purchased. He points out that vouchers showed sale of T.T. Bars, whereas the seized gold was in the form of biscuits. Variation in weight and purity was also pointed out to show that the vouchers produced by claimant was not worthy of reliance. The Tribunal on appraisal of the materials came to the conclusion that in business world there is no distinction between biscuits and bars and further discrepancies of 2 grams in 16 pieces of biscuits shall not make the vouchers to be unworthy of reliance. 7.3 In the case of Motilal @ Mohanlal Khatri Vs CC Jaipur [2005 (192) ELT 1119 (Tri-Del)], CESTAT Delhi in Para 3 held as follows:-
3. both sides and gone through the record.?I have heard From the record, it is evident that Shri Lalit Khatri, appellant, at the time of his apprehension did not admit of having smuggled the gold bars seized from him from any foreign country. When he was produced before the Magistrate, in the bail application, he disclosed the source of acquisition of the seized bars and stated that the same had been purchased from appellant, Shri V.K. Patel. He produced the Bill No. 202 dated 1-6-1998 in the name of his father, Shri Motilal Khatri @ Mohanlal Khatri issued by Shri V.K. Patel. Even Shri V.K. Patel in his statement admitted the issuance of that Bill on receipt of full sale consideration in favour of Shri Motilal Khatri @ Mohanlal Khatri, appellant. He further disclosed the name of Shri Choksi Ranchodlal Kishoredas from whom he purchased these bars and Shri Choksi Ranchodlal Kishoredas was also examined by the Customs Officers and he also admitted the transaction and disclosed the name of Zaveri & Co. from whom he acquired the gold bars legally. The company, M/s. Zaveri & Co. acquired the gold bars from the Corporation Bank who imported the same. The mere non-production of the bill by Shri Lalit Khatri, at the time of apprehension, did not in any manner reflect adversely on its genuineness which had not been even disputed by the adjudicating authority, in the order, especially when Shri V.K. Patel, appellant, had admitted the issuance of the bill and the person from whom he purchased also accepted the sale of the bars to him. The Bill dated 14-5-1998 which the appellant, Shri Lalit Khatri, was carrying with him also pertained to the legal acquisition of the 8 gold bars purchased earlier from M/s. Mahavir Bullion Co., Ahmedabad, and the correctness of that Bill was even accepted by the said company. 7.4 In view of the above observations, the bill of M/s Amrapali Industries Ltd produced by the Appellant is held to be the proper document of purchase and acquisition of 40 gold bars and seizure and confiscation of the same is not justified.
8. Point No. mentioned at Para 5(iii) above is not required to be answered in view of the opinion expressed in Para 7.4 above.
9. In view of the above observations and the settled proposition of law, appeal filed by the Appellant is allowed with consequential relief.
(Pronounced in Court on 05.08.2015) (H.K. Thakur) Member (Technical) cbb 12