Customs, Excise and Gold Tribunal - Mumbai
Mohamadbhai Chotubhai Cutpiecewala ... vs Additional Collector Of Customs on 7 November, 1985
Equivalent citations: 1986ECR396(TRI.-MUMBAI), 1986(25)ELT413(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. Two Revision Applications filed before the Government of India against the Order No. 630-31 of 1980 dated 5th August, 1980, passed by the Central Board of Excise & Customs, statutorily stood transferred to the Tribunal for being heard as appeals.
2. As these two appeals arise out of the common order and as they involve common questions of law and facts, they are clubbed together, heard together and hence this common order.
3. The brief facts necessary for the disposal of these appeals may be stated as under:
During the early hours of 9.6.74 on previous information the Customs Officers of Broach Mobile Squad intercepted two motor vehicles bearing registration Nos. MRW-5687 and GJD-7985. On thorough search the vehicles found to contain contraband goods such as synthetic fabrics of foreign origin of the value of Rs.1,05,608/-, and the occupants of the vehicles could not produce proof of licit import. The Customs Officers, therefore, seized the goods in the reasonable belief that they were smuggled into India and they also seized the two vehicles as they were used in the carriage of smuggled goods. The statements of the drivers of the two vehicles and the statements of the other occupants were also recorded. After further investigation show cause notices were issued to the present appellants and others. The Additioinal Collector of Customs, Ahmedabad, who held the enquiry ordered absolute confiscation of the goods as well as two motor cars. He imposed a personal penalty of Rs.25,000/- each on the two appellants. He further imposed a personal penalty of Rs.25,000/-, Rs.2,000/-, Rs.2,000/-, Rs.2,000/- and Rs.500/- on five others. Being aggrieved by the penalty the appellants filed two separate appeals before the Central Board of Excise & Customs. The appeals were clubbed and heard by the Board. The Board on consideration of the material on record and the arguments addressed rejected the appeals and confirmed the personal penalties imposed on the appellants. As stated earlier the appellants being aggrieved by the order of the above preferred two revision applications before the Central Government which are under consideration as appeals.
4. In the Revision Application filed by the appellant, Shri Mohamadbhai Chotubhai it was contended inter alia that the Board erred in relying upon the statements of co-accused which were subsequently retracted.
The Board further erred in relying upon the observation of the Additional Collector that enquiries made by the department did not confirm his stay in a hotel at Bombay. The enquiry if any was held behind the back of the appellant. The papers regarding the enquiry if any, were not supplied to the appellants and were also not relied on in the show cause notice, and therefore, the enquiries so made cannot be relied upon.
The Board erred in placing the burden of proof on the appellant.
The findings of the Board were not based on proper and reliable evidence.
The penalty imposed is disproportionate to the value of the smuggled goods seized.
The Board ought to have held that the appellant was in no way concerned with the alleged smuggling of the goods found in the two cars.
5. In his Revision Application the appellant, Shri Hasmukh T. Gandhi contended among other things that the Board has ignored the positive evidence as to the stay of the appellant at hotel Apsara at Ahmedabad from 3.6.74 to 9.6.74. Besides the hotel bill there was an affidavit filed by the Manager of the Apsara Hotel which conclusively proved that the appellant stayed at Apsara Hotel from 3.6.74 to 11.6.74.
The Board committed an error in holding that there was independent evidence to implicate the appellant. The evidence relied on by the Board is the statement of co-accused, and therefore, that evidence cannot be considered as independent evidence. It is a tainted evidence and should not have been relied upon. In any case, the Board should have preferred the affidavit of the Manager of the Apsara hotel to the statements of co-accused persons.
The Board committed an error in not relying on the judgment of the Criminal Courts. The Criminal Courts have held that the charges levelled against the appellant were not established by the prosecution. The learned Judicial Magistrate had discharged the appellant holding that there was no prima facie case and the revision filed by the department was rejected by the Session Judge.
The Board committed an error in not bearing in mind the general principal of law that where a finding of fact is given by a competent judicial court, the Quasi-Judicial Tribunals are required to accept such decisions without reservations.
One of the co-accused Shri Ashraf had not implicated the appellant. Therefore, the question of other three witnesses corroborating the appellant's implication by corroborating the evidence of Ashraf would not arise. The statement of Shri Ramesh, the driver would indicate that it was Mohd. Chotu who had instructed him to take the car to Baroda and Mohd. Chotu who was also present when the car was taken away by the driver, but in his statement the name of the appellant has been deliberately introduced. The Board failed to consider this aspect.
The Board further failed to notice that 'Mohan Devkar not only did not implicate the appellant but categorically stated that it was Mohd. Chotu who had entrusted the car to Ramesh and excepting Ramesh and himself there was none else in the car.
The Board erred in relying upon the statement of Shri Mohmad Salim. Mohd. Salim gave a false name at the time of the preparation of the search list, and also when his statement was recorded in the first instance. He is therefore not a trustworthy witness. No credence should have been given to his version. Further, his statement that he had a talk with the appellant on the night of 9.6.74 cannot be true, because the appellant was at Ahmedabad staying in a hotel. The appellant had been deliberately involved by these appellants. The Board has also failed to consider that at the earliest instance the appellant had made his stand clear and established that he was at Apsara hotel. He had even produced the hotel bill and the evidence regarding the treatment he got from a local doctor. The Board failed to take into account that the Customs authorities have suppressed the statement of the doctor recorded on 9.8.74 and the enquiries they made at Apsara hotel.
The Board erred in taking into consideration the statement of co-accused ignoring the answers given by them in the cross-examination. There was no evidence that the appellant was present when the two cars left Surat. The Board further erred in not considering that the burden of establishing the implication of the co-accused was on the Customs authorities and that the Customs Authorities have failed to discharge that burden. There was evidence of the Customs Inspector in the form of an affidavit filed before the Gujarat High Court to the effect that the Memon Group Syndicate was concerned in the transport of the smuggled goods. In the circumstances the Board ought to have held that the appellant was not concerned in the smuggling activities. The Board also failed to take into consideration the affidavit filed by the Collector of Customs, Ahmedabad, before the Gujarat High Court wherein the Collector had stated that the Memon Group of Surat had consigned smuggled goods in one car.
The Board further failed to take into account that at the time of seizure the appellant was not present.
6. During the hearing of these appeals, Shri Kapadia the appellants' learned Advocate besides reiterating the contentions taken in the two Revision Applications urged that the Board committed an error in relying on the exculpatory statements of the co-accused. He further urged that the Board ought to have drawn an adverse inference for non-examination of Rajendra Kumar" Vasantlal. If the statement of Rajendrakumar had been recorded it would have been made clear as to the ownership of the car. Shri Kapadia also urged that when the appellants had taken a specific plea as to their stay in a hotel, the Customs ought to have investigated the defence and they ought to have recorded a statement of the Hotel Manager and inspected the registers maintained in a hotel. It was also urged by Shri Kapadia that the goods seized are not those mentioned in Section 123(2), and, therefore, the burden is on the department to establish that they are smuggled goods. Finally, Shri Kapadia urged that the Additional Collector had taken into consideration the previous involvements of the appellants, and, therefore, his findings are biased and the Board failed to take that aspect into consideration.
7. Shri Pattekar appearing for the respondent Collelctor submitted that the statements of the drivers and the occupants clearly implicated both the appellants. They had no reasons to falsely implicate the appellants. They have not retracted their statements till they sent a reply to the show cause notice. Shri Pattekar further urged the defence plea that the appellants were not at Surat on the relevant day and they were at Ahmedabad had been considered by the adjudicating authority and had been rightly rejected. In other aspects Shri Pattekar supported the orders passed by the adjudicating authority and the Board.
8. In reply Shri Kapadia urged that even if the plea of alibi is not accepted, the evidence on record would not implicate the appellants. The Additional Collector had relied on a chit which was said to have been given by the appellant, Chotu and the chit was not made as a piece of evidence in the show cause notice and there was no occasion for the appellant, Chotu to make any representation regarding the said chit.
9. I have carefully considered the submissions made on both sides and perused the records of the case. The short question for consideration is whether the order of imposition of penalties on the appellants made by the Additional Collector and confirmed by the Board is required to be interfered with?
10. The two appellants did not dispute the interception of two vehicles by the Customs officers. They also did not dispute that the cars were carrying the contraband goods (of foreign origin) totally valued at Rs. 1,05,808/-. They also did not challenge that one of the cars was driven by Ramesh and the other was driven by Mohamed Salim. They further did not dispute that besides the drivers there were two other persons in the two cars. Their main contention is and has been that they were in no way concerned with the transport of contraband goods and at the relevant time one was staying at Bombay and the other at Ahmedabad, and therefore, the statements of the drivers and the occupants of the cars that instructions were given to them by the appellants to carry the goods in the two vehicles cannot be true. It was also their contention that there was no legal evidence to hold that they were concerned in the smuggling or in the carriage of the smuggled goods. The statements of the drivers and the occupants ought not to have, been relied upon as their statements are in the nature of confession statements of co-accused and besides they are exculpatory. The appellant, Hasmukh Gandhi further urged that in the prosecution lodged against him, the learned Magistrate did not even find prima facie case against him, and therefore, he was discharged and the revision filed by the department was rejected by the Session Judge and that the finding of facts recorded by the Criminal Courts is binding on the quasi-judicial authority.
11. Let me proceed to consider the above main defences and the other grounds which were set out earlier. Immediately after the cars were intercepted the statements of the drivers of the two cars and the two persons sitting in the cars were recorded. The driver Ramesh stated among other things that the appellant Chotu gave instructions to transport contraband smuggled fabrics from Surat to Baroda. He was further instructed to contact Dudhwala of Supreme Electric Stores, Surat, on the way to Baroda near Miagam Karjan. It was also stated in his statement that there was a pilot car in which Dudhwala and one of the appellants' namely Hasmukh Gandhi were travelling. The investigation carried out as to the ownership of the car which Ramesh was travelling revealed that it was originally registered in the name of Mohd. Sadiq Gulam of Bombay, later transferred in the name of Rajendrakumar Vasantlal, and employee of Supreme Electric Stores, Surat. The investigation further revealed that the said car was agreed to be purchased by the present appellants and Dudhwala for Rs. 5,500/-. The driver of the other car Mohd. Salim stated that he was transporting the contraband goods at the instance of the appellant, Hasmukh. He further stated that the appellant Hasmukh instructed him to drive the car behind the other car driven by Ramesh. He too stated that both the cars were piloted by a Fiat Car. It was also in the statement of Mohd. Salim that he was involved in a couple of Customs case earlier along with the present appellant, Hasmukh. Now if the statements of these two drivers are accepted then the appellants' contention that they were not concerned in the transport of contraband goods cannot be accepted. On behalf of the appellants it was contended that the two drivers Ramesh and Salim are co-accused and their statements should not be accepted to implicate them without further corroboration. The contention that the drivers Ramesh and Salim are co-accused appears not appropriate. The proceedings before the adjudicating authority is not a criminal prosecution. There was no trial before the adjudicating authority. Neither the provisions of the Criminal Procedure Code nor the provisions of Evidence Act are applicable to an adjudicating proceedings, but then the fundamental principles of the criminal jurisdiction embodied in the Criminal Procedure Code and the natural justice shall have to be complied with. At one stage it was argued that the statements of the two drivers are exculpatory, and therefore, their statements should not be relied upon. Yet at another breath it was contended that the statements of the two drivers are confessional statements and since the confessions are that of co-accused they could only lend assurance to the other evidence and they cannot be relied upon against the present appellants. There is no merit in the contention that the statements of the two drivers are 'exculpatory. They have clearly stated that they were told that they were carrying contraband goods by the two appellants herein. Therefore, they knowingly carried the goods in the cars driven by them and in the said circumstances it is difficult to accept the contention of. the learned Advocate that they are exculpatory. I have already observed that the proceedings before an adjudicating authority is not a criminal trial, and therefore, the 'two drivers cannot be considered as co-accused. At best they can be treated as accomplices. It is not the law that the evidence of an accomplice cannot be made a basis for conviction, but then prudence reguires that accomplice evidence needs corroboration. This corroboration may be by direct evidence or by circumstantial evidence. The statement of a car broker, Babu Motorwala would go to show that one of the cars intercepted was agreed to be purchased by the present two appllants and Thakurbhai Dudhwala on whom the Additional Collector had imposed a penalty of Rs.25,000/- and who had not preferred any appeal against that order. The ownership of the car lends corroboration to the statements of the drivers. It is significant to know that the appellants did not take a contention that Ramesh and Salim were not the drivers of the car. There was no need for Ramesh and Salim to state that they were instructed by the appellants to carry or transport the goods, if really, they were instructed by someone other than appellants. It was not the contention of the appellants that these drivers are the drivers of someone else or the goods which they carried either belonged to the drivers or to someone else. It is true that the two drivers and the other two persons retracted their statements subsequently, but then the retraction being belated the retraction has not the effect of wiping out the earlier statement. It is quite possible that the appellants prevailed over these persons who are their drivers to retract their statements. It may be pointed out here the retraction was that the cars were given to them by some persons of Ahmedabad, but they were not able to give full address or furnish the particulars of the said persons. The Additional Collector had rightly rejected this retraction. It may also be mentioned that in the cross-examination these two drivers alleged coercion and threat, but then neither in their reply to show cause notice nor earlier such allegations have been made. Further, there was no reason for the Customs Officers to falsely implicate the present appellants and Dudhwala while recording the statements of the drivers. The Customs Officers caught red handed the drivers while transporting the contraband goods. They were only interested in knowing the real owners of the goods. The drivers spontaneously mentioned the names of the present appellants and Dudhwala. The spontaneous statement should deserve some consideration. The statements were given without pre-meditation and reflection. No illwill or bias is alleged against these drivers. There was no justifiable reasons for those drivers to falsely implicate the present appellants. Therefore, I would even accept their statements without any further corroboration. But then as stated earlier there was corroboration, namely, that one of the vehicles intercepted was purchased at the instance of the present two appellants and another who was also penalised.
12. The appellants, however, sought to destroy the version of the drivers by stating that on the date of transport they were not at all at Surat and one of them was at Bombay and the other at Ahmedabad. The Additional Collector had considered the plea of alibi. During the personal hearing the Advocate who appeared for the appellant, Mohd. Chotu was informed that the investigation carried out revealed that Mohd. Chotu was not at hotel Claridge, but then no evidence was adduced in support of the so-called stay at hotel Claridge. It is settled law that the burden of establishing the plea of alibi is on the person who puts up the plea except producing certain documents they have not chosen to examine anybody from the hotels in which they stayed or the Doctor who was stated to have administered the medicine to the appellant Hasmukh. The learned Additional Collector had considered the documents produced in proof of the plea of alibi put forward by the two appellants. In paragraph 12 of his order he had considered this plea and he had come to the conclusion that the documents would not establish that it was the present appellant, Chotu who had stayed in hotel Claridge. This finding was not shown to be erroneous. The plea of alibi put forward by Hasmukh Gandhi was considered in para 15 of the Order-in-original. The Additional Collector had come to the conclusion that the bill or the medical certificate would not be themselves establish the plea of alibi. He had observed that the name of Hasmukh Gandhi is common in that part of the country. The finding of the Additional Collector cannot be considered as not justified in the circumstances of the case.
13. During the hearing of this appeal, Shri Kapadia appearing for Hasmukh Gandhi vehemently contended that the hotel -bill, affidavit of Shri Arvind Patel, Assistant Manager of the hotel, the medical certificate given by Shri Ranjit Oza and the statement of Ranjit Oza recorded on 9.8.74 established that the appellant, Hasmukh Gandhi was at Ahmedabad between 3.6.74 to 11.6.74, and therefore, the statements of the two drivers that Hasmukh was at the pilot car on the date of seizures or that the statement of the driver Salim that Hasmukh instructed him to transport the contraband goods cannot be true. The bill of the hotel had been considered by the Additional Collector. The appellant on whom is the burden of establishing the plea of alibi did not coose to examine any person from that hotel. The doctor who gave the statement was-also not examined. The medical certificate was to the effect that Hasmukh. Gandhi was suffering from fever, he was under the doctor's treatment from 7.6.74 to 10.6.74. This certificate does not bear the identification marks of the person treated by the doctor. According to the Additional Collector, Hasmukh Gandhi is a common name in that part of the country. Now coming to the statement of the doctor recorded on 9.8.74, the doctor had stated that he did not know Hasmukh Gandhi. Whoever comes to him for medicine he writes his name in the case paper as given by that person. He cannot know whether the person gives the right name or wrong name. This statement does not further the case of the appellant, Hasmukh Gandhi. Having taken the plea of alibi he ought to have examined Dr.Oza as his witness. It is significant to note that on 11.6.74 a person who took the treatment from the doctor obtained a fitness certificate. It is not the case of the appellant Hasmukh Gandhi that he was employed in any department of Government or in any firm. Ordinarily fitness certificate is required if a person is employed in some firm or the department of Government or under some other person. It is quite possible that the certificate given by the doctor ' light relate to another Hasmukh.
14. Now coming to the affidavit of Arvind C. Patel, Assistant Manager it purported to have been made on 2.1.76. In the first para of this affidavit Shri Patel says that he was serving as Manager in Apsara hotel in Ahmedabad since last three years. The very next sentence reads: 'since 1.7.75 I have left service". These two are irreconciliable statements. That apart, it is very clear that on the date Shri Arvind filed the affidavit he was not in the service of Apsara hotel. If a person was prepared to file an affidavit he would have been prepared to be examined before an authority. No reason is given why Hasmukh did not choose to adduce evidence of this witness at the time of adjudication. It is also not clear why this affidavit was not filed before the adjudicating authority. This affidavit appeared to have been got up subsequently for the purpose of this appeal.
15. Now coming to the Criminal Court judgement suffice it to say that prosecution and adjudication are two independent proceedings. The possibility of certain evidence not placing before the Criminal Court and the possibility of placing those evidence before the adjudicating authority cannot be altogether ruled out.. Further, in a criminal trial the criminal court is bound by the Criminal Procedure Code and the Evidence Act. Those two legislations are not applicable to adjudicating proceedings. The burden of proof in the two proceedings would be different, the contention of the learned Advocate that the finding of the facts recorded by the Criminal Court is binding on quasi-judicial authority is rather difficult to accept. This very argument was urged before the Division Bench of the Bombay High Court in Criminal Writ Petition No. 1004 of 1981, Maniklal Pokhraj Jain v. Collector of Customs (P) Bombay and two others. Before the Bench of the Bombay High Court relying on the judgement of the Madras High Court reported in AIR 1965, Madras, p.502, it was urged that since the petitioner in that case has been acquitted on merit by the trial court and the said acquittal has been confirmed by the High Court, the Customs department cannot rule contrary findings in adjudication proceedings as it would lead to anamolous situation. The Division Bench in its order dated 12.2.85 observed 'this argument must be rejected in view of the judgement of the Division Bench of this Court in Misc-Petition No. 85 of 1978 (Chandurkar & Mehta J.J.) delivered on 27th/28th November and 1st December, 1981 which fairly and squarely answers the argument raised by Shri Parkar before us and we prefer to follow the Division Bench judgement of our High Court'. Thereafter their Lordships referred to the ratio of the Division Bench judgement. The relevant portion reads:
"At the very outset, Mr. Singhvi, appearing on behalf of the Petitioner, has contended that Captain Khan having been acquitted by the Additional Chief Presidency Magistrate and that acquittal having been confirmed by the learned Single Judge, it was not now open to the Central Government to proceed on the footing that diamonds were found in the coat brought by Captain Khan on 2nd November, 1966 and that it was not permissible for the Central Government to proceed on the assumption that the finding was incorrect ... according to the learned Counsel, it was wholly improper on the part of the Central Government as quasi-judicial tribunal not to take into consideration of the finding recorded by the High Court.
A very exhaustive and elaborate judgement has been delivered by Chandurkar J. as he then was. The Division Bench has also considered in its judgement various authorities of the Supreme Court as well as of other High Courts on this question. The Division Bench has also construed the ambit of Sections 111, 112 and 135 of the Customs Act and after taking into account all these factors the Division Bench observed as follows:
"15. Section 112 is an express provision which authorises the levy of penalty in respect of acts or omissions referred to therein. The procedure with regard to adjudication of confiscation and penalties is expressly provided for in Section/ 1212 of the Act. The power to be exercised by the Collector of Customs or Deputy Collector of Customs or by an Assistant Collector of Customs or by Gazetted Officer of Customs lower in rank than an Assistant Collector of Customs in accordance with the value of the goods liable to confiscation. The procedure to deal with confiscation or imposition of penalty is prescribed in Section 124 and under that provision a notice in writing has to be given to the concerned person informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty, and he is to be given a reasonable opportunity of being heard in the matter. Then comes Section 127 which expressly provides that even though an order of confiscation and an order of penalty is made by the Customs Officer that does not affect the liability to punishment under the provision of Chapter XVI or under any other law. We already reproduced the provisions of Section 135 make it pointedly clear that the power to prosecute under Section 135 is without prejudice to the action which may be taken independently under the provisions relating to confiscation and penalty. Now, it cannot be the argument that while independent powers of making an order of confiscation and penalty can be made by the appropriate officer of the Customs, irrespective of a prosecution under Section 135 being resorted to or not, in case there is a prosecution and there is an acquittal, the power expressly bestowed under Section 1.12 must be treated as ineffective. Unless we are able to hold that even inspite of the express provisions of Section 112 and Section 127, in case there is an acquittal in prosecution instituted under Section 135, those powers cannot be exercised the contention on behalf of the petitioner could not be accepted. We see no warrant for the view that there is a prohibition against the Customs Officers to perform their statutory functions and exercise their statutory powers under the Act because of a failure of the prosecution started under Section 135 and the acquittal of the person concerned. By its very nature, the two proceedings are independent of each other. In a given case, evidence which may be available for the purposes of proceedings under Section 112 may not be available or even if it is available, it may be inadmissible in regular Court of law in which the admissibility and relevance of the evidence is determined with reference to the provisions of the Evidence Act. In a criminal prosecution the accused need not open his mouth nor make any statement while in the proceedings for adjudication or confiscation before the Customs Department, the statement made by the person from whom the contraband articles were seized can be looked into. The scheme of the Act, therefore, clearly indicated that the two proceedings have to be dealt with independently of each other on such material as is available and permissible in these proceedings'.
16. Having regard to the above judgement of the Bombay High Court the contention of Shri Kapadia that the Criminal Courts findings are binding on the quasi-judicial authority cannot be accepted.
17. It is true that the Board's order is not very satisfactory. The Board was of the view that the stay at Bombay and Ahmedabad was immaterial for the purpose of levying penalty on the appellants. The Board failed to notice that according to the evidence of the drivers one of the appellant travelled in a Flat car on the date of seizure and another gave instructions to carry the contraband goods in one of the cars. If the appellants had established their stay at Bombay and Ahmedabad then the versions given by the drivers would have been false. Further, Shri Kapadia was right in contending that the Board considered the statements of the drivers and the occupants of the cars as independent evidence and independent of each other. The Board failed to notice that all those persons stand in the character of accomplices. The corroboration required is independent corroboration and not the corroboration of one accomplice's statement by the statement of another accomplice.
18. The contention of Shri Kapadia that since the provisions of Section 123(2) are not applicable to the seized goods, the burden is on the department to establish that the goods are smuggled goods and that the department had not discharged that burden is not relevant for the purposes of these two appeals. Neither the appellants had claimed ownership of the goods nor did they contend that the goods seized are not the goods of foreign origin nor did they contend that they were licitly imported into India.
19. There is no merit in the contention of Shri Kapadia that the burden has been wrongly cast on the appellants. The department had discharged the initial burden rested on it. In respect of the plea of alibi the burden has been rightly cast on the appellants and that they have failed to discharge that burden.
20. I have considered afresh the entire evidence. The infirmities in the order of the Board do not affect its final conclusion.
21. On consideration of all the aspects I see no reason to interfere with the order passed by the Additional Collector and confirmed by the Board in so far as imposition of penalties on to appellants.
22. In the result these appeals fail and they are rejected.