Customs, Excise and Gold Tribunal - Mumbai
Shantilal U. Siroya vs Collector Of Customs (Prev.) on 7 September, 1988
Equivalent citations: 1989(24)ECR198(TRI.-MUMBAI), 1989(41)ELT144(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. This appeal arises out of and is directed against Order-in-Original bearing F.No. XVII(GC)8-19/81/396, dated 3-2-1983 passed by the Collector of Customs (Preventive), Bombay. The subject of challenge of this appeal is the order of confiscation of 936.150 gms. of gold and the fine of Rs. 25,000/levied in lieu of confiscation as well as the penalty of Rs. 2,500/- imposed on the appellant.
2. During the hearing of this appeal, Shri Wazifdar made the following submissions. Firstly, he urged that the Department's case that the appellant was intercepted ear Stock Exchange Building with the seized gold and account books and thereafter he was brought to the Gold Control Office is totally false. Elaborating his contentions, Shri Wazifdar referred to the statement of the appellant recorded immediately after the seizure. In the statement, among other things, the appellant has stated :-
"Today on 28-4-81 you and your officers came to my shop and held me and brought me to the office and in the presence of two Panchas and opened my bag and leather bag of maroon coloured...."
He then referred to the letter that the appellant had written to the Superintendent on 1-5-81. In this letter, among other things, the appellant stated : "I was forcibly brought down stairs with gold ornaments and cash in one bag, and in another thelli (bag of cloth)my books of accounts. After bringing me down stairs I was made to sit in one oil shop with two officers and one officer went to fetch taxi".
Shri Wazifdar then relied on the affidavit of the shopkeeper in whose shop the appellant was made to sit. The shopkeeper Kesavbhai Daudbhai doing business in oil and flour in his statement stated that on 28th April, 1981 at about 10.30 a.m. a person who was standing near a shop asked his permission to sit in the shop. Since he told that he was a Gold Control Officer he was allowed to sit. After about an hour, 3 other persons brought the appellant and he was also made to sit in the shop. The appellant was protesting as to why he was taken from his shop with his legal and lawful remarks. The persons who brought him told the appellant that they were taking him to the Gold Control Office as per the order of higher officers.
3. Shri Wazifdar contended if the appellant was intercepted in the busy locality like Kalbadevi, several persons would have seen he being apprehended and the Gold Control Officers would have made atleast two persons from that locality as witnesses but then none were picked up from that locality. In this connection, Shri Wazifdar referred to Section 69 of the Gold (Control) Act which made applicable to the provisions of search seizure of the Criminal Procedure Code to the Gold Control precedings. Shri Wazifdar further submitted even though the letter d ted 1-5-81 was sent by registered post with acknowledgement due and acknowledged by the Department the same was not referred to in the show cause notice nor produced before the adjudicating authority. The file itself did not contain this letter. Thus the Department was guilty of suppression of material facts. Shri Wazifdar urged that the learned Collector committed an error in relying on the statement contained in the panchnama which is not admissible in evidence.The learned Collector further committed a grave legal error in not considering the affidavit filed by the shopkeeper and rejecting that affidavit as an after thought. He, therefore, prayed that the Department's case that the appellant was apprehended near Stock Exchange Building at Kalbadevi was a got up case and the same should be rejected.
4. As regards the charge of not maintaining account, Shri Wazifdar admitted that in respect of 3 transactions there was violation of Section 55. He submitted 89.800 gms. purchased 24-4-81 was not entered in G.S. 11 register. Similarly sale of 221.650 gms. made on 25-4-81 was also not entered in the statutory register. Further, purchase of standard gold bar weighing 200 gms. on the previous day of seizure was also not entered in the register. Shri Wazifdar submitted that the entries were not made because the Mehtaji who was a part-time employee did not turn up. The offence if any committed by the appellant is only technical. Shri Wazifdar submitted that the purchase and sale are supported by vouchers which were verified by the Department and were atisfied as to the genuineness. In that connection, Shri Wazifdar referred to the cross-examination of the Gold Control Superintendent who was one of the officers who offended his...Shri Wazifdar finally prayed that the confiscation and the fine levied in lieu of confisca tion as well as the penalty may be set aside.
5. Shri Mondal appearing for the respondent, however, supported the order passed by the Collector. He submitted that there was no valid reason as to why the Gold Control Officers should foist a false case against the appellant. He urged that the three officers have made three separate reports immediately after the incident and their reports supported the Department's case regarding the apprehension of the appellant near the Stock Exchange Building at Kalbadevi. Though those officers were offered for cross-examination that appellant's advocate declined to cross-examine them. Shri Mondal further submitted that immediately after the seizure a panchnama was drawn up and in the presence of the panchas the appellant admitted having been intercepted and caught hold of at Kalbadevi. The panchas were also not cross-examined though offered. Shri Mondal also urged that no reliance can be placed on the affidavit on the merchant since it was produced late.
6. It was also the submission of Shri Mondal that the Collector's order indicate that even in respect of 800 gms. of standard gold there was no voucher. In respect of other admitted transactions there was contravention of Section 55. He, therefore,pleaded that the appeal may be dismissed.
7. I have considered the submissions made on both the sides and perused the available record. The only contraventions alleged against the appellant in the show cause notice were the contraventions of provisions of Section 36 read with Rule 13(1) of the Rules as well as the provisions of Section 55. There is neither any allegation nor proof that the appellant was taking the seized gold for disposal outside his licensed premises.Section 27(7) was not one of the Sections invoked by the Department. In the absence of such an allegation nothing turn out even if the appellant had been intercepted at the place stated by the departmental officers. But then, from the available record considerable doubt arises as to the truthfulness of the story put forward by the departmental officers. According to the report of the Departmental Officers and the record created by them which was accepted by the learned Collector, the appellant was found coming from Ramwall and going towards Dagim bazaar with two bags in his possession. He was followed and was intercepted near Cotton Exchange. Thereafter along with the two bags he was taken to the office of the Gold Control. The panchas were called to the said office. The bags were examined. One of the bags contained the records including the vouchers and the other contained standard gold and gold ornaments. Strangely none belonging to that locality was cited as a witness The panchas who were called to the Gold Control Office were also not from that locality. However, a recital was in corporated in the panchnama that the appellant admitted before the panchas that he was intercepted at Kalbadevi. But then, immediately after the seizure panchnama the statement of the appellant was recorded. The appellant at that time was in the custody and control of the Gold Control Superintendent. Among other things the appellant slated that the Gold Control Officers came to his shop and held him and brought him to the office of theirs. If really the appellant was inteiccnled and annrehended on the road as alleged by the Departmental Officers, the appellant could not have been allowed to make such a statement by the very Gold Control Supdt. in whose presence the statement was made and recorded. It is settled law that panchnama is not a substantive evidence. It can be used either for corroborating or contradicting the statements of the persons who are parties to the panchnama. It is a document which evidences the seizure. It has no further evidenciary value. In the circumstances, if the learned advocate had not shown his inclination for cross-examination of the panchas no adverse inference can be drawn. The Collector in his order observes that the learned advocate had declined the offer ofcross-examining the seizing officer. His observation is factually not correct. The seizing party consisted of a Superintendent and three Inspectors. The Superintendent was cross-examined. He was the highest officer among the seizing party. There was no need for the appellant to cross-examine the other officers. Therefore, no adverse inference can be drawn for not availing the opportunity of cross-examination of the Inspectors who accompanied the Superintendent. The Collector then relied on the reports of the three Inspectors. I have perused those reports. They are identically worded. It is not clear when the Superintendent himself had made a report why the Inspector also thought it fit to write separate report though identically recorded. It again raises suspicion that the Department was interested in creating some evidence against the appellant. In any case,the Collector was wholly unjustified in drawing an adverse inference against the appellant for non-cross-examination of the panch witnesses and the other seizing officers.
8. Though the initial burden was on the Department to establish by satisfactory evidence that the appellant was apprehended with gold and gold ornaments as well as statutory register at a public place that too in a crowded locality, the appellant took upon himself the burden of disproving the Department's case. He got filed an affidavit of the shopkeeper in whose shop according to the appellant was made to sit by one of the officers till the taxi was brought. The learned Collector brushed aside this affidavit by observing that it is an afterthought. It is not understandable what the Collector meant by observing "afterthought". An evidence cannot be an afterthought. It could either be true or false. Section 83 of the Gold (Control) Act provides for receiving evidence on affidavits. If the Collector had any doubt as to the correctness of the affidavit he should have summoned the person who had sworn to the affidavit and subjected him to the cross-examination by the Department. No such procedure was adopted. The Collector could have even examined the affidavit independently even without cross-examining the deponent. Even this elementary thing was also not done by the Collector. If only the Collector had an effort to find out the truthfulness or otherwise of the contents of the affidavit with reference to the other evidence, we would have been satisfied that his observation that it was an 'afterthought' was not justified. In his letter dated 1-5-81 which again was suppressed by the Department the appellant had clearly stated that he was made to sit in an oil shop. This was done within three days after the seizure. This letter was sent by registered post with acknowledgement due. Though the Departmental Officers pretended that they have not received this letter the appellant could produce the postal acknowledgement. If in the light of the statement made by the appellant immediately after the seizure and the letter written on 1-5-81 and the affidavit of the shopkeeper the department's case is examined, it would be clear that the story that the appellant was apprehended near Stock Excha- e Building at Kalbadevi was a got up and concocted.
9. On the date of search and seizure, the shop premises of the appellant wasalso searched and according to the Collector's order nothing incriminating was noticed.All that the Department was able to establish in this case was not making entry with regard to the two purchases and one sale. But then, all these transactions were covered by vouchers. These vouchers were with the records which were brought to the Gold Control Officer on the date of seizure itself. From the cross-examination of the Super-intendent who was one of the seizing officers, it appears that genuineness of the vouchers were verified. He did not state that the vouchers produced were not genuine or were got up for the purpose of the case. What is strange is about the observation of the Collector in his order that in respect of 300 gms. which were accounted for in G.S. 11 register there was no proper voucher. The Collector apparently failed to realise that there was no allegation against the appellant that what was noticed in the statutory records were not covered by vouchers or that the entries were falsely made. It was totally uncharitable on the part of the Collector to observe that the 300 gms. which were accounted were not covered by proper voucher.
10. The findings of the Collector that there had been a contravention of Section 36 of the Act and Rule 13(1) of the Rules is not based on any evidence. Therefore, that part of the finding requires to be set aside and the same is set aside.
11. The contravention of Section 55 was admitted by the appellant atleast in respect of three transactions referred 4o earlier. The appellant had given an explanation that he had a part-time accountant and he did not turn up. Therefore, the entries were not made. This explanation was not given either on the date of seizure or on 30-4-81 when his further statement was recorded or on 1-5-81 when he wrote a letter to the Gold Control Office. This explanation comes up for the first time in the letter dated 26-1-82. Much reliance cannot be placed on this belated explanation. The appellant had ot even chosen to file the affidavit of the part-time 'Mehtaji'. From the evidence, I am atisfied that there was contravention of Section 55. Since there was contravention in espect of the seized gold of Section 55 they became offended gold and liable to confiscation. As such, the order of confiscation for contravention of Section 55 cannot be eriously challenged. But looking to the proximity of the transaction in respect of which he account was not maintained and the date of seizure, a nominal fine would have served he purpose. Apparently, the imposition of fine of Rs. 25,000/- by the Collector was on ccount of his finding that there was contravention of Section 36, Rule 13(1) and Section 55. I, therefore, while upholding the order of confiscation reduces the fine from Rs.25,000/- to Rs. 2,500/- (Rupees two thousand five hundred only).
12. As regards the penalty, the Collector has imposed a penalty of Rs. 2,500/-apparently because of his finding that the appellant was taking gold outside his licensedpremises and he was guilty of Section 36 and Rule 13(1). I have not accepted that finding of the Collector. I hold that there was only a contravention, in respect of three transaction, of Section 55. The facts and circumstances of the case in my opinion does not arrant imposition of any penalty. I, therefore, set aside the penalty on the appellant.
13. The appellant be granted consequential relief if the fine and penalty werepaid.