Gujarat High Court
Kashyap A Patel vs The Commissioner Of Customs on 15 October, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/TAXAP/927/2007 ORDER DATED: 15/10/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 927 of 2007
With
R/TAX APPEAL NO. 928 of 2007
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KASHYAP A PATEL
Versus
THE COMMISSIONER OF CUSTOMS.
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Appearance:
KUNTAL A PARIKH(7757) for the Appellant(s) No. 1
MR CB GUPTA(1685) for the Opponent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 15/10/2025
COMMON ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr.Kuntal A. Parikh for the appellants and learned advocate Mr.C.B.Gupta for the respondent.
2. These Appeals are filed under Section 130 of the Customs Act, 1962 against the Judgment and Order dated 11.05.2006 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai (for short Page 1 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined 'the CESTAT') in Appeal No.C/532/531/665 of 1999.
3. By order dated 21.08.2007 the Appeals are admitted on the following two substantial questions of law :
"(a) Whether in the facts and circumstances of the case it was open to the Tribunal to have imposed Penalty vide the Impugned Penalty Order dated 11.5.2006 and the Impugned Rectification Order dated 9.4.2007.
(b) Whether Tribunal exceeded its jurisdiction in not considering it self bound by the findings in the judgment dated 15.9.2004 passed by this Hon'ble Page 2 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Court.?"
4. The CESTAT disposed of total three Appeals arising out of the Order-in-Original No.10/COMMR/1999 dated 30th March, 1999 passed by the Commissioner of Customs, Ahmedabad. Arising from the other Appeal disposed of by the CESTAT, Tax Appeal No.870 of 2008 was admitted and tagged along with these Appeals, however, the same has been disposed of separately by order of even date as the appellant of the same was a Doctor by profession and was found involved in manufacturing of contraband drugs and was convicted by the Trial Court as well as the Appeal filed by the him was also dismissed by this Court and the conviction was also upheld Page 3 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined by the Hon'ble Apex Court in Criminal Appeal No.1477 of 2005 by order dated 7th September 2006.
5. The brief facts of the present Appeals are as under:
5.1. On receipt of the specific information, Office of Director of Revenue Intelligence, Bombay (for short 'the DRI') intercepted a consignment consisting of 10 cartons from the warehouse situated at Bombay Airport which were meant for export to Nairobi, Kenya. 5.2. The cartons were declared to contain Magnesium Trisilicate U.S.P tablets. However, on detailed examination of the contents of the cartons, it was noticed by the DRI that carton Page 4 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Nos.2, 3, 5, 6 and 8, out of 10 cartons which were serially numbered as 1 to 10, were found to contain 40 plastic containers in each carton and each container was found to contain light brown tablets bearing marking 'M' on one side and symbol of "swastik" on the other side. Therefore, some tablets were selected at random for testing with field testing kit available with DRI Officer which gave positive results for presence of Methaqualone, whereas, carton Nos.1, 4, 7, 9 and 10 were found to contain 50 plastic containers in each carton in which white colored tablets with no marking but showing a diametric line on one side were found and random samples of such tablets contained in carton No.2 were ascertained Page 5 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined similar to the test of other contents. 5.3. Therefore, after drawing the representative samples from all 10 cartons, the same were placed under seizure under Panchnama under the provisions of the Customs Act, 1962 and NDPS Act, 1985 on the reasonable belief that the cartons contained the Narcotics tablets and Methaqualone tablets which are prohibited psychotropic substances notified at Serial No.20 in the Schedule annexed to the NDPS Act, 1985 which was being exported under guise of Magnesium Trisilicate tablets.
5.4. Subsequently, the samples were tested at Customs House Laboratory at Bombay and Page 6 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Forensic Science Laboratory, Ahmedabad which confirmed the presence of Methaqualone in such samples and Magnesium Trisilicate in the rest of the samples.
5.5. Since the exporter M/s.Advance Export was situated at Ahmedabad and the consignment was booked from Air Cargo Complex, Ahmedabad, the investigation was carried out by DRI, Ahmedabad. During the course of the investigation, it was found that one Shri Mahesh Shah was proprietor of M/s.Advance Export, though he did not know any other address of the M/s.Advanced Export and in course of the interrogation of Shri Mahesh Shah, he admitted that his correct name was Achint Navinbhai Patel and he posed as Mahesh Page 7 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Shah being proprietor of M/s.Advance Export so as to escape safely in case the goods are caught and his motive to open the firm was to export Mandrax tablets in the guise of medicines. It was also admitted by him in his statement that he was working on instruction of one Yogesh Chaudhari and that one Bupendra Bhatia had fabricated the export orders in name of M/s.Pharco Kenya Limited. 5.6. On the basis of the statement of Mr.Achint Patel that the Methaqualone tablets were supplied by the Dr.Bipin Shantilal Panchal, Dr.Bipin Panchal was summoned on 06.11.1993 to record his statement, where he admitted the supply of Mandrax tables to Mr.Achint Patel in May, 1993. It was also Page 8 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined stated in his statement that the tablets were manufactured at Coral Pharma, Kheda and the same were manufactured by one Sri Kashyap Patel of Ruchi Pharma, Patan with the help of one Shri Deepak of Coral Pharma. 5.7. The Managing Director of Coral Pharma Private Limited-Mr.Hitesh Mehta in his statement stated that he rented his factory to Dr.Bipin Panchal during April, 1993 to June, 1993 for manufacture of Paracetamol tablets for export. He also stated that the appellants herein, i.e. Kashyap Patel and Piyush Pandya were working for Dr.Bipin Panchal and he had heard from the neighbors that Kashyap Patel and Piyush Pandya were running the factory in the night hours and nobody was allowed inside. Page 9 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025
NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined 5.8. Shri Kashyap Patel and Piyush Pandya in their statements recorded on 1st February, 1994, 2nd February, 1994, 3rd February, 1994 and 2nd March, 1994 confessed that on the instruction of Dr.Bipin Panchal, they had given the delivery of 8 to 10 bags to Yogesh Chaudhary and Achint Patel from Coral Pharma, Kheda in May, 1993. It was also admitted by them that though they are employed by M/s.Ruchi Pharmaceutical, Patan, they sit in the Office of M/s.Shanti Export run by Dr.Bipin Panchal and followed his instructions as directed by one Prahlad Patel, partner of M/s.Ruchi Pharmaceutical. It was also admitted by them that the factory of Coral pharma, Kheda was hired by Dr.Bipin Panchal and they Page 10 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined had done the cleaning work in night as per the instruction of Dr.Bipin Panchal. However, there was denial regarding manufacturing activities done by them.
5.9. The factory of M/s.Coral Pharma was searched on 16th February, 1994 which yielded in recovery and seizure of 22 Mandrax tablets and two pieces thereof, from different places in the factory.
5.10. The DRI also searched the premises at Ahemdabad in possession of Achint Patel on 05.11.1993 which resulted in recovery of 13 cartons of Magnesium Trisilicate tablets, which according to Mr.Achint Patel were the cartons which were replaced with the Page 11 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Methaqualone tablets on two occasions in May, 1993 and October, 1993. Further, in addition to 13 cartons remains of Methaqualone tablets/ powders, other picking materials/instruments were also recovered and seized from the said premises.
5.11. Shri Achint Patel and Dr.Bipin Panchal were arrested on 08.11.1993 and Shri Kashyap Patel and Shri Piyush Pandya were arrested on 2nd March, 1994 under the provisions of the NDPS Act, 1985. Shri Bhupendra Bhatia and Shri Yogesh Chaudhari could not be traced out for further inquiry in the case.
5.12. On the basis of the investigation carried out by the DRI, a show-cause notice Page 12 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined dated 13th January, 1997 was issued upon (i) M/s.Advance Exports, (ii) Achint N. Patel @ Mahesh Sureshbhai Shah, (iii) Dr.Bipin S. Panchal, (iv) Shri Bhupendra Bhatia, (v) Shri Kashyap Patel, (vi) Yogesh Chaudhari and (vii) Piyush Pandya asking them to show cause as to why penalty should not be imposed upon them under Section 114 of the Customs Act, 1962. 5.13. In response to the show-cause notice, Achint Patel, Kashyap Patel and Piyush Pandya submitted reply dated 17th February, 1997 denying all the allegations and charges levelled against them.
5.14. However, Dr.Bipin Panchal, Bhupendra Bhatia and Yogesh Chaudhari did not file any Page 13 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined reply to the show-cause notice in spite of the repeated reminders issued by the Adjudicating Authority. During the personal hearing, only Kashyap Patel and Piyush Pandya appeared and submitted similar written submissions and requested for cross-examination of all the witnesses and Officers without giving any specific names and grounds/disputed facts and on being asked, they did not mention anything on this aspect and therefore, the Adjudicating Authority rejected such request on the ground that it was only to delay the adjudication proceedings.
5.15. The Adjudicating Authority by the order dated 30th March, 1999 imposed penalty of Rs.10 Lakhs upon Dr.Bipin Panchal and Rs.5 Page 14 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Lakhs each on Kashyap Patel, Piyush Pandya and Yogesh Chaudhari and Rs.30 Lakhs each on Achint Patel and Bhupendra Bhatia. 5.16. Being aggrieved, Dr.Bipin Panchal, Kashyap Patel and Piyush Pandya preferred Appeals before the CESTAT. The CESTAT by the impugned order dated 11.05.2006 dismissed the three Appeals confirming the order passed by the Adjudicating Authority by arriving at a findings of fact that the case of the Revenue is based upon the statements made by the appellants and also by the co-accused which corroborate the allegations regarding the involvement of the appellants in illicit export of Narcotics Drugs which is established by the Adjudicating Authority and therefore, Page 15 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined no leniency was shown in the levy of penalty in view of the offenses committed by the appellants.
5.17. After the decision of the CESTAT rendered on 11.05.2006, the appellants preferred Rectification Application before the Tribunal pointing out that this Court has acquitted both the appellants and therefore, the order dated 11.05.2006 suffers from a mistake while rejecting the Appeals filed by the appellants and therefore, the Tribunal ought to have allowed the Appeals in view of the acquittal order passed by this Court. 5.18. By the order dated 09.04.2007, the CESTAT dismissed the Rectification Application Page 16 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined on the ground that criminal proceedings for prosecution of the appellants require higher degree of evidence and are based on altogether different grounds, whereas, the proceedings before the Tribunal are quasi-judicial proceedings and merely, because there is no reference to the decision of the High Court in the order of the Tribunal, it cannot be stated to be the mistake apparent on record. 6.1. Learned advocate Mr.Kuntal Parikh appearing for the appellants submitted that the Tribunal has not assigned any reason for confirming the Order-in-Original of levy of penalty of Rs.5 Lakhs upon each of the appellants and without considering the facts that the appellants are acquitted by this Page 17 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Court in the Criminal Appeals filed against the conviction, on the same set of facts, the Tribunal could not have taken a different view for levy of the penalty by merely reproducing the findings of the Adjudicating Authority. 6.2. Learned advocate Mr.Kuntal Parikh submitted that the appellants were not in knowledge of the contraband goods being manufactured in M/s.Coral Pharma by Dr.Bipin Panchal as they were performing the actions only at the instructions of Dr.Bipin Panchal. It was submitted that on perusal of the statements of both the appellants, the appellants never admitted that they were in knowledge of production of mandrax tablets at M/s.Coral Pharma and merely, on the basis of Page 18 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined the statement of Mr.Hitesh Mehta, M.D. of M/s.Coral Pharma, the Adjudicating Authority has come to the conclusion that the appellants have abetted Dr.Bipin Panchal for production of the mandrax tablets at the factory. 6.3. It was submitted that vide common Judgment and Order dated 03.05.2004/15.09.2004 rendered in Criminal Appeal No.711 of 2002 filed by the appellants, this Court allowed the Criminal Appeal by setting aside the conviction and sentence recorded by the Trial Court and the appellants were ordered to be released from the custody. Learned advocate Mr.Kuntal Parikh referred to and relied upon the findings of this Court recorded in paragraph No.127 of the said Judgment and Page 19 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Order to acquit the appellants, which read as under:
"127. While considering the appeal of accused Kashyap Patel (accused No. 6) and Pivush Pandva (accused No.7) and in light of the evidence as discussed and considering the submission of Mr. Raju, it transpires that both the accused were serving and getting salary of Rs. 3, 000/- per month and the patrol charge from Dr. Bipin Shantilal Panchal in respect of the work of Dr. Bipin Shantilal Panchal and even during the pendency of the trial, they were released on bail, though their participations, as per the instruction of their master Dr. Bipin Shantilal Panchal and both have carried out the instruction from their master. There is no evidence on record to suggest that Page 20 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined these accused persons were aware about the nature of substance being manufactured or the nature of the activity being carried out by Dr. Panchal and others. It would therefore not be possible to base their convictions on the available material. Suspicion cannot be converted into conviction. Even from their statements recorded under Section 67 of the N.D.P.S. Act, it suggests that they carried out the instruction of his master namely Dr. Bipin Shantilal Panchal, as they have no alternative to carry out the instruction as they were working with him. In these statements also the prosecution has not been able to bring out anything self incriminating against these accused. Thus, apart from a strong possibility of these statements not being totally voluntary since both the accused have Page 21 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined given verbatim identical answers to series of questions, the statements themselves do not link these accused with the offences since prosecution has not established their participation with the knowledge that contraband drugs were being manufactured or transported. In our view, having closely considered the case of these two accused as well examined the conviction recorded by the learned trial Judge, we are unable to uphold the conviction of accused Nos. 6 and
7."
6.4. Referring to the above findings, it was submitted that when the Division Bench of this Court has recorded that there is no evidence on record to suggest that the appellants were aware about the nature of the substance being Page 22 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined manufactured or the nature of the activity being carried out by Dr.Bipin Panchal and others, it cannot be said that the appellants have abetted Dr.Bipin Panchal in manufacture of the mandrax tablets. It was also submitted that when there is a finding of fact given by this Court on the same set of facts and statements, which was considered by the Adjudicating Authority and Tribunal, the findings of this Court would prevail and therefore, the penalty levied upon the appellants is liable to be quashed and set aside.
6.5. In support of his submissions, reliance was placed on the decision in case of Capt. M. Paul Anthony Versus Bharat Gold Mines Limited Page 23 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined and Another reported (1999) 3 SCC 679 wherein, the Hon'ble Supreme Court by considering the facts of the case held that departmental proceedings and proceedings in criminal case launched on the basis of same set of facts can be continued simultaneously, however, in the departmental proceedings the standard of proof is one of preponderance of the probabilities, in a criminal case, the charge has to be proved by the prosecution beyond the reasonable doubt and only little exception may be where the departmental proceedings and criminal case are based on the same set of facts and evidence in both the proceedings is common without there being a variance. 6.6. It was therefore submitted that in the Page 24 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined facts of the present case also, on the same set of statements and facts before the Adjudicating Authority and before this Court in Criminal Appeal, where conviction was imposed by the Trail Court was set aside and there was no variance in the set of evidence considered by this Court for the acquittal of the appellants, the impugned order of levy of penalty need not be sustained. 6.7. Reliance was placed on the decision in case of Gopaldas Udhavdas Ahuja and Another Versus Union of India and Others reported in (2004) 7 SCC 33 wherein, the Hon'ble Apex Court relying upon the decision in case of Capt. M. Paul Anthony (Supra) in the facts of the case and in view of Section 98-B of the Page 25 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Gold (Control) Act, 1968, came to the conclusion that the appellants had to prove beyond reasonable doubt, which they did that they had no knowledge of the gold hidden in the ornamental top of the cupboard in the eastern bedroom and therefore, it would be unjust, unfair and oppressive to allow the decision of the Authorised Officer in confiscation proceedings to stand against acquittal by the competent criminal court, which acquittal was confirmed by the High Court and by the Apex Court. It was further held that merely because there was acquittal in the trial before the Magistrate, due to paucity of evidence or otherwise, would not entail nullification of the order of Page 26 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined confiscation of the seized articles in every case, however, on a plain reading of Sections 8(1) and 71(1) of the Gold (Control) Act, 1968, it is clear that Authorised Officer was required to be satisfied that the offence under the Act had been committed and that the confiscation proceedings were separate and distinct from prosecution in the Act. However, the difference did not entitle the Authorised Officer to proceed arbitrarily in making an order for confiscation. The Apex Court therefore, set aside the order of confiscation on the ground that recovery of the Gold was not proved and appellants were held to be not in conscious possession of the primary Gold and they are entitled to benefit of provisio Page 27 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined to Section 71(1) of the of the Gold (Control) Act, 1968.
6.8. Referring to the above decision, it was submitted that in the facts of the case, the statements of the appellants and other co- noticee recorded by the DRI do not reveal that the appellants were having the knowledge of manufacturing of the mandrax tablets and Methaqualone tablets by Dr.Bipin Panchal and therefore, on the same set of facts and statements, when the Division Bench of this Court has passed an order of acquittal holding that suspicious cannot result into conviction, the impugned orders of levy of penalty upon the appellants would not survive. Page 28 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025
NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined 6.9. Reliance was also placed on the decision in case of Maharana Pratap Singh Versus State of Bihar reported in 2025 (0) AIJEL-SC 75144 wherein, the Hon'ble Apex Court after considering the Bihar and Orissa Subordinate Services (Discipline and Appeal) Rules, 1935 held that while acquittal in a criminal case does not automatically entitle the accused to have an order of setting aside the order of dismissal from public service following disciplinary proceedings, it is well- established that when the charges, evidence, witnesses, and circumstances in both the departmental inquiry and the criminal proceedings are identical or substantially similar, the situation assumes a different Page 29 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined context. It was therefore submitted that in facts of the present case, when the charges evidence, witnesses and circumstances relied upon by the Adjudicating Authority and the Trial Court as well as this Court in criminal proceedings are identical, the entire situation assumes different context wherein, the order of acquittal passed by this Court would prevail to set aside the levy of penalty by the Adjudicating Authority confirmed by the CESTAT.
6.10. Relying upon the decision of the Hon'ble Madras High Court in case of M.K.S. Abubacker Versus Secretary to Government of India, Ministry of Finance, New Delhi and Other reported in 1987 (32) E.L.T. 640 (Madras), it Page 30 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined was submitted that acquittal of accused by Criminal Court substantially on merits and not on mere technical grounds have to be treated as conclusive in proceedings before the quasi- judicial Tribunal and therefore, levy the penalty on the same facts and charges on which this Court while allowing the Criminal Appeal filed by the appellants having acquitted them, is not permissible under the provisions of Section 114 of the Customs Act, 1962. 6.11. Reliance was also placed on the decision of the Hon'ble Madras High Court in case of D. V. Kishore Versus The Commissioner of Cutoms reported in (2017) 350 ELT 527 wherein, in the facts of the said case, it was held that the confessional statement given by the accused Page 31 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined persons including the appellant could not have been relied upon once the criminal prosecution has failed to prove the case against the appellant beyond the reasonable doubt. It was therefore submitted that the appellants have been acquitted and therefore, on the same set of facts and circumstances, no penalty could have been levied upon the appellants on the ground that the appellants have abetted Dr.Bipin Panchal in manufacturing the contraband drugs.
6.12. Reliance was also placed on the decision of Hon'ble Delhi High Court in case of Rajeev Khatri Versus Commissioner of Customs (Export) reported in (2024) 133 GSTR 537 (Delhi) wherein, the Hon'ble Delhi High Court has Page 32 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined explained in detail the expression 'abet' in Section 112(a) of the Customs Act, 1962 which means instigating, conspiring, intentionally aiding the acts of commission or omission that render the goods liable for confiscation and therefore, the knowledge of a wrongful act of omission or commission, is a necessary element for the offence of abetting the doing of such an act. It was therefore submitted that in the facts of the case, there is no finding recorded by the Adjudicating Authority that the appellants had knowledge of the wrongful act of manufacture of the contraband drugs which were sought to be exported by Achint Patel procured from Dr.Bipin Panchal resulting into confiscation of such goods under Section Page 33 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined 113 of the Customs Act, 1962. It was submitted that the Adjudicating Authority and the CESTAT have merely drawn the inference on the basis of the statements of the appellants and other witnesses including Shri Hitesh Mehta, M.D. of Coral Pharma to come to the conclusion that the appellants have abetted in manufacture of the contraband drugs without there being any involvement of the appellants in manufacturing process of such drugs.
6.13. Reliance was also placed on the decision of the Apex Court in case of Shri Ram Versus The State of U.P. reported in (1975) 3 SCC 495 which was referred by the Hon'ble Delhi High Court in case of Rajeev Khatri (Supra) to point out that Section 107 of the Indian Penal Page 34 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Code which defines abetment provides to the extent material that a person abets the doing of a thing who intentionally aides, by any act or illegal omission, the doing of that thing and therefore, to constitute abetment, the abettor must be shown to have intentionally aided the commission of the crime and mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of Section 107 of the Indian Penal Code. It was submitted that in the facts of the case, merely because the appellants have acted upon the instruction of Dr.Bipin Panchal, would not result into abetment of manufacture of the mantrax tablets Page 35 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined by Dr.Bipin Panchal in the factory situated at M/s.Coral Pharma, more particularly, when on the same set of facts and statements, this Court acquitted the appellants from the charge of abetment.
7.1. On the other hand, learned advocate Mr.C.B.Gupta for the respondent-Commissioner of Customs submitted that it is true that this Court has acquitted the appellants, however, the standard of proof in the criminal case is different than the standards for levy of penalty under the provisions of the Customs Act, 1962.
7.2. It was pointed out from the Order-in- Original that the Adjudicating Authority has Page 36 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined arrived at a finding of fact which is upheld by the CESTAT which clearly shows that the appellants in their statements have admitted that they had given delivery of eight to ten bags of medicines/drugs to Mr.Achint Patel from the factory of M/s.Coral Pharma as directed by Dr.Bipin Panchal and also from the corroborative statement of Shri Hitesh Mehta, it is found that both the appellants were instrumental in having the factory of M/s.Coral Pharma on rent for the month of April, 1993 to June, 1993 and they had brought the tableting machines in the factory and they were running the factory in the night time only and no outsider was allowed inside the factory. It was therefore submitted that on Page 37 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined conjoint reading of all the statements of the appellants as well as the co-noticee and witnesses, involvement of the appellants in illicit export of Narcotic Drug is established and therefore, it cannot be said that the appellants did not abet Dr.Bipin Panchal in manufacture of the Narcotic Drugs. 7.3. It was submitted that this Court while passing an order of acquittal has considered the case of the appellants as pleaded by the prosecution and there was a failure on part of the prosecution to prove the case beyond all reasonable doubt resulting into acquittal. It was therefore submitted that no interference is required to be made in the impugned orders passed by the Adjudicating Authority confirmed Page 38 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined by the CESTAT and both the questions may be answered in favour of the Revenue by dismissing the appeal.
7.4. In support of his submissions, reliance was placed on the decision of the Hon'ble Madras High Court in case of K.V. Rajagopal versus Commissioner of Customs, Trichy reported in 2015 (318) E.L.T. 48 (Madras) wherein, Hon'ble Madras High Court after considering the decision of the Hon'ble Apex Court in case of Gopaldas Udhavdas Ahuja (Supra) and the decision of the Hon'ble Madras High Court in case of N. Jayathilakan Versus Additional Secretary reported in 1987 (31) E.L.T. 47 has held that the Customs Act contemplates two separate proceedings for the Page 39 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined same act or omission and therefore, there is no question of double jeopardy and mere acquittal in the criminal proceedings in every case cannot result into setting aside, ipso facto, the orders of the confiscation passed by the competent authority under the Act and therefore, the contention of the appellants that the judgment of acquittal is not binding upon the departmental authorities, adjudicating the question under the confiscation and levy of penalty under the Customs Act, is not correct.
7.5. It was further submitted that the contention raised on behalf of the appellants that the appellants were not having the knowledge of the manufacture of the Narcotic Page 40 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Drugs by Dr.Bipin Panchal is also without any basis as the events narrated by the appellants in their statements depict the intention and knowledge of the appellants as they were working as per the instructions given by Dr.Bipin Panchal. It was pointed out that even Shri Hitesh Mehta, in his statement, has implicated the appellants by stating that the appellants have taken the factory of M/s.Coral Pharma on rent for Dr.Bipin Panchal and have also paid Rs.11,000/- to him for clearance of the outstanding electricity dues, they brought the tableting machines and were running the factory at night and were not allowing anyone to enter in the factory premises. 7.6. Reference was also made to cross- Page 41 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025
NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined examination of the Shri Hitesh Mehta wherein, he has denied the suggestion that he had never given the factory on rent at any time to the appellants as well as M/s.Shanti Export of Dr.Bipin Panchal and he further denied the suggestion that he has deposed falsely that the appellants had come to meet him in April, 1993. He also denied that he had falsely deposed that the appellants had given an amount of Rs.11,000/- for electricity bill and thereafter, given Rs.15,000/- twice. It was therefore submitted that the statements of Shri Hitesh Mehta was proved even before the Trial Court and reliance placed by the appellants on findings of this Court is also applicable to the standards of proof to be Page 42 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined applied to the criminal trial as this Court has rightly held that the suspicion cannot be converted into conviction. However, in the facts of the case, the Adjudicating Authority has relied upon the statements recorded under Section 67 of the NDPS Act which are admissible as evidence.
7.7. It was submitted that this Court, only relying upon the statements, has recorded that there is nothing incriminating against the appellants as they were carrying out the instructions of Dr.Bipin Panchal and further held that apart from a strong possibility of such statements not being voluntary as both the appellants have given verbatim identical answers to series of questions, the statements Page 43 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined themselves do not link the appellants with the offences as prosecution has not established their participation with the knowledge that contraband drugs were being manufactured or transported.
7.8. It was also submitted that the standard of proof relied upon by this Court should not be applied to the facts while exercising the jurisdiction of the quasi-judicial authority for levy of penalty as it is an admitted fact that the appellants were carrying out the instructions of Dr.Bipin Panchal and they have also delivered the goods to Shri Achint Patel which is not considered by this Court while arriving at a conclusion of acquittal of the appellants in the criminal case. It was Page 44 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined therefore submitted that the Appeals are liable to be dismissed.
8. Having heard the learned advocates for the respective parties and considering the submissions made by them and on perusal of the impugned Order-in-Original as well as the order passed by the CESTAT together with the Judgment and Order passed by this Court in Criminal Appeals whereby, the appellants have been acquitted, it appears that this Court while arriving at a conclusion that the appellants are not liable to be convicted, though it based upon the same set of evidence in form of the statements of the appellants and the co-noticee and other witnesses, has not taken into consideration that the Page 45 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined participation of the appellants was admitted in their statements for delivery of the goods to Achint Patel as per the instructions of Dr.Bipin Panchal resulting into the abetment of the appellants in exporting the contraband Narcotic Drugs.
9. It is true that this Court while considering the case of the appellants has recorded that the prosecution has not established the participation of the appellants with the knowledge that the contraband drugs were being manufactured or transported but at the same time, the statements of the appellants with regard to their involvement in delivery of the drugs to Shri Achint Patel, who exported by Page 46 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined impersonation as Shri Mahesh Shah, was not pleaded by the prosecution and which has resulted into the acquittal. However, the Adjudicating Authority as well as the CESTAT in the impugned orders have arrived at a findings of fact that the appellants have not carried out the instructions of Dr.Bipin Panchal in hiring the factory of M/s.Coral Pharma but have brought the tableting machines and have running the factory at night and have also participated in delivery of the contraband drugs to Achint Patel for the export. Thus, the link from the place of manufacture till the export of the goods is established in the impugned orders.
10. Reliance was placed by learned advocate Page 47 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined for the appellants to canvass that the CESTAT could not have upheld the decision of levy of penalty in view of the order of acquittal passed by this Court in same set of facts and statements but the fine distinction in facts of the case has been missed by the appellants to the effect that the statements which are relied upon by the Adjudicating Authority for levy of penalty also include the statements of Dr.Bipin Panchal and other co-noticee while recording the acquittal by this Court. It also appears that the levy of penalty with regard to the abetment of the appellants as provided under Section 114 of the Act has rightly been considered by the Adjudicating Authority considering the statements of the appellants Page 48 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined which are admissible under the provisions of the Customs Act and the NDPS Act.
11. Considering the facts of the case, the statements made available on record and cross- examination of the witnesses, it appears that this Court has come to the conclusion that the prosecution has failed to prove beyond reasonable doubt about the involvement of the appellants in manufacture and transport of the Narcotic Drugs, however, the Adjudicating Authority has rightly exercised the preponderance of probability on the basis of the statements recorded by the Investigating Agency to hold that the appellants have abetted Dr.Bipin Panchal in manufacture and transport of the Narcotic Drugs. Page 49 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025
NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined
12. In that view of the matter, when there is a concurrent findings of fact arrived at by the CESTAT, we are of the opinion that in the facts and circumstances of the case, the Tribunal has rightly upheld the levy of penalty and it cannot be said that the Tribunal has exceeded its jurisdiction in not considering the findings recorded in the Judgment dated 15.09.2004 passed by this Court resulting into the acquittal of the appellants in the criminal case.
13. It would also be germane to refer to the findings recorded by the Hon'ble Apex Court in case of Capt. M. Paul Anthony (Supra), which read as under :
Page 50 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025
NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined "13. As we shall presently see, there is a consensus of judicial opinion amongst the High Courts whose decisions we do not intend to refer in this case, and the various pronouncements of this Court, which shall be copiously referred to, on the basic principle that proceedings in a criminal case and the departmental proceedings can proceed simultaneously with a little exception. As we understand, the basis for this proposition is that proceedings in a criminal case and the departmental proceedings operate in distinct and different jurisdictional areas. Whereas in the departmental proceedings, where a charge relating to misconduct is being investigated, the factors operating in the mind of the Disciplinary Authority may be many such as enforcement of discipline or to Page 51 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined investigate the level of integrity of the delinquent or the other staff, the standard of proof required in the those proceedings is also different than that required in a criminal case. While in the departmental proceedings the standard of proof is one of preponderance of the probabilities, in a criminal case, the charge has to be proved by the prosecution beyond reasonable doubts. The little exception may be where the departmental procedings and the criminal case are based on the same set of facts and the evidence in both the proceedings is common without there being a variance."
14. The Hon'ble Apex Court, after recording the above findings, concluded as under :
"34. There is yet another reason for discarding the whole of the case of the Page 52 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined respondents. As pointed out earlier, the criminal case as also the departmental proceedings were based on identical set of facts, namely, 'the raid conducted at the appellant's residence and recovery of incriminating articles therefrom.' The findings recorded by the Inquiry Officer, a copy of which has been placed before us, indicate that the charges framed against the appellant were sought to be proved by Police Officers and Panch witnesses, who had raided the house of the appellant and had effected recovery. They were the only witnesses examined by the Inquiry Officer and the Inquiry Officer, relying upon their statements, came to the conclusion that the charges were established against the appellant. The same witnesses were examined in the criminal case but the court, on a consideration of the entire Page 53 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined evidence, came to the conclusion that no search was conducted nor was any recovery made from the residence of the appellant. The whole case of the prosecution was thrown out and the appellant was acquitted. In this situation, therefore, where the appellant is acquitted by a judicial pronouncement with the finding that the "raid and recovery" at the residence of the appellant were not proved, it would be unjust, unfair and rather oppressive to allow the findings recorded at the ex-parte departmental proceedings, to stand.
35. Since the facts and the evidence in both the proceedings, namely, the departmental proceedings and the criminal case were the same without there being any iota of difference, the distinction, which is usually drawn as Page 54 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined between the departmental proceedings and the criminal case on the basis of approach and burden of proof, would not be applicable to the instant case."
15. However, in the facts of the present case, the Adjudicating Authority while passing the Order-in-Original has only considered the statements recorded by the DRI during the course of the investigation to conclude, on the basis of the defense which was taken by the appellants, which read as under:
"They have disputed the contentions and verasity of the statement and panchanama of various persons and other documents relied upon in the SCN. They have claimed the SCN to be time Page 55 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined barred under the provisions of Customs Act, 1962.
They have not been provided with all the documents, account papers and other papers confiscated by the department. The burden is on the department to show that there was material suppression with an intent to evade duty. The SCN does not mention that the cartons were transferred by them out of India and that they were involved in the manufacturing of any type of goods directly or indirectly.
They were not aware about the consignee Page 56 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined as well as the consigned and the movements of the goods for export. They have not admitted the correctness of the said Panchanama since the cartons No.2,3,5,6 & 8 totally weighing 162 Kgs. Of tablet (under seizure) were not sealed in presence of them. They are not aware of the replacement of cartons by Shri Achint Patel. The Methaquolone were manufactured at M/s Alps Pharma, Mehsana. Shri Bhupendra Bhatia and Lalitbhai had participated in manufacturing of these tablets and Shri Bhatia and Yogesh Chaudhary prepared and sealed identical cartons. Page 57 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025
NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined They have never done manufacturing of medicine tablets on behalf M/s Coral Pharma since they are employee of M/s Ruchi Pharma. They had never done any manufacturing of any type of drug/medicine at M/s Coral Pharma factory in the night time."
16. The appellants have not taken any other defense except what is reproduced herein above whereas, in the criminal trial, the appellants have cross-examined the various witnesses and on the basis of such cross-examination and conducting of full-fledged trial, the conviction was made by the Trial Court which was reversed by this Court on appreciation of the evidence, giving a benefit of doubt to the Page 58 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined appellants that suspicion cannot be converted into the conviction by observing as under :
"There is no evidence on record to suggest that these accused persons were aware about the nature of substance being manufactured or the nature of the activity being carried out by Dr. Panchal and others. It would therefore not be possible to base their convictions on the available material. Suspicion cannot be converted into conviction. Even from their statements recorded under Section 67 of the N.D.P.S. Act, it suggests that they carried out the instruction of his master namely Dr.Bipin Shantilal Panchal, as they have no alternative to carry out the instruction as they were working with him. In these statements also the prosecution has not been able Page 59 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined to bring out anything self incriminating against these accused. Thus, apart from a strong possibility of these statements not being totally voluntary since both the accused have given verbatim identical answers to series of questions, the statements themselves do not link these accused with the offences since prosecution has not established their participation with the knowledge that contraband drugs were being manufactured or transported."
17. The above observations and findings of this Court while recording the acquittal of the appellants were not available before the Adjudicating Authority. However, it is a matter of fact that the appellants had relied upon this findings before the CESTAT and have also preferred an application for Page 60 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined rectification, which was dismissed by the CESTAT on the ground that in criminal proceedings for prosecution of the appellants, higher degree of evidence was required whereas, the Tribunal which is a quasi- judicial authority has taken into consideration the findings of the Adjudicating Authority to hold that involvement of the appellants in illicit exports of Narcotic Drugs is fully established as per the discussion made by the Adjudicating Authority in the Order-in-Original. The Tribunal has recorded the facts of the case as well as the findings of the Adjudicating Authority as under :
"2. As per facts on record, officers of Page 61 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined DRI intercepted a consignment at EIV Air India Warehouse, Airport, on 4.11.1993. The said consignment consisting of 10 cartons, was declared as containing Magnesium Trisilicate U.S.P. Tablets. However, on testing, 5 of the cartons gave positive results for the presence of 'Methaqualone'. The test results received from the Custom House Laboratory at Mumbai and Forensic Science Laboratory, Ahmedabad, confirmed the presence of Methaqualone in the goods under seizure.
3. Post seizure investigation were conducted by the officers in detail, which resulted in exposure of fact that the factory premises of M/s.Coral Pharma were rented by its Managing Director Shri Hitesh Mehta to Dr.Bipin Panchal for the manufacture of Paracetamol Tablets. However, the said Page 62 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined factory was actually being run by Shri Kashyap Patel and Shri Piyush Pandya for Dr.Panchal at night hours, Mandrax Tablets were being manufactured by them but cleared at night only. Search of the said factory premises on 16.2.1994 yielded in recovery and seizure of 22 Mandrax Tablets.
4. Statements of Shi Kashyap and Shir Piyush Pandya were recorded where under they confessed the delivery of 8-10 bags of Methaquclone Tables to Yogesh Chaudhari and Achint Patel.
5. Based upon the above investigation proceedings were initiated inter alia, against the appellant by way of issuance of show cause notice. The said proceedings resulted in imposition of penalties upon the present appellant.
6. While discussing their role, the Page 63 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined adjudicating authority has observed as under :
"As regards Noticees No.5 and 6 viz. Shri Kashyap Arunbhai Patel and Piyush Mulshankar Pandya, I find that Shri Kashyap Patel in his statements dt. 1.2.1994, 2.2.94 and 2.3.94 interalia stated that he alongwith one Shri Piyush Pandya had given the delivery of 8-10 bags of medicine/drug to Shri Achint Patel from the factory of M/s. Coral Pharma as directed by Dr.Bipin Panchal. It is further evident from the statement of Shri Hitesh Metha M.D. of M/s. Coral Pharma that the factory was taken on rent by Shri Bipin Pachal, Kashyap Patel and Piyush Pandya for the period from April to June 1993 and they had brought a tabletting machine in the Page 64 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined factory and the said Shri Kashyap Patel and Piyush Pandya were running the factory in the night time only and no outsider was allowed inside the factory. In their various statements Shri Kayshap Patel & Piyush Pandya have confessed that they were employed by M/s. Ruchi Pharma & they used to sit in the office of M/s. Shanti exports run by Dr. Bipin Panchal and followed his instructions, as directed by Shri Prahlad Patel, partner of M/s. Ruchi Pharma. Though they denied any manufacturing activities of narcotics drug by them the search of the factory i.e. M/s. Coral Pharma on 16.2.94 resulted in recovery and seizure of 22 mandrax tablets and 2 pieces thereof from the factory. Hence the denial of Shri Kashyap Patel and Piyush Pandya are also Page 65 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined baseless. Shri Kashyap Patel and Piyush Pandya in reply to SCN denied their connection with the said seizure of narcotic drugs. However, I find that all these defence arguments of both the noticees are vague and unclear. They did not produce any evidence to support their stand. Their involvement in the illicit export of narcotic drugs is corroborated in the statements of other co-accuse like Shri Achint Hitesh Mehta. The facts narrated by other co-accusse regarding the abatement of Shri Kashyap Patel and Piyush Pandya in their respective statements are corroborated with other evidences where it has been admitted that the mandrax tablets were manufactured at M/s. Coral Pharma by Dr. Bipin Panchal, Shri Kashyap Patel etc. and it was they Page 66 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined who delivered the goods to Shri Achint Patel. Moreover, Shri Kashyap Patel and Piyush Pandya are silent in their defence reply on their suspicious activities carried out during the night hours at M/s. Coral Pharma as confirmed by various persons in their statements. Moreover, Shri Kashyap Patel and Shr Piyush Pandya had confessed their involvement in the said operation with other co-accused, in their various statement which were never retracted till the date of filing their reply to the SCN. In light of Supreme Court's decision in the case reported at 1996 (CPN) P No. 76 I find that statements of both the noticees as well as other co-accuse are a fundamental evidence against them. Though Shri Kashyap Patel and Piyush Pandya asked for cross Page 67 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined examination of all the officers, test laboratory persons, panchas, witnesses I find that they requested for the same without giving any specific name and grounds. Even during the personal hearing on 17.12.98 when they were specifically asked the names of persons to be cross-examined as well as the disputed contentions they chose to remain silent on this aspect and therefore, the request for cross examination at the time of personal hearing was not granted, as it was only to delay the adjudicating proceedings. The facts narrated above prove beyond doubt that Shri Kashyap Patel and Piyush Pandya had knowingly conspired and abetted in the manufacturing and exporting of the Mandrax Tablets, in contravention of the provisions of Page 68 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Section 11 of Customs Act, 1962 read with Section 3 of import and Export (Control) Act, 1985, and have rendered themselves liable for penal action under Section 114 of Customs Act, 1962 since the goods were liable for confiscation under Section 113 of Customs Act, 1962. I therefore, hold that Shri Kashyap Patel and Piyush Pandya are liable for penalty under Section 114 of the Customs, Act, 1962".
7. As is clear from the above findings, the Revenue's case is based upon the statements made by the appellants themselves as also by the co-accused, which corroborate the allegations. The appellants involvement in the illicit export of narcotic drugs is fully establish discussed by the Commissioner. No leniency in the Page 69 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined quantum of penalties is also required for, in view of the offences committed by the appellants. As such, we are not inclined to interfere with the impugned order, imposed penalties upon the appellants. All the appeals are accordingly rejected."
18. The decision of the Hon'ble Apex Court in case of Capt. M. Paul Anthony (Supra) which was further referred to and relied upon by the Madras High Court in case of D. V. Kishore (Supra) and decision of the Hon'ble Supreme Court in case of Maharana Pratap Singh (Supra) would not be applicable in the facts of the case because while arriving at a conclusion of acquittal by this Court, the standard of proof beyond all reasonable doubts was applied as against the preponderance of probability Page 70 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined applied by the CESTAT being the quasi-judicial authority.
19. The Hon'ble Apex Court in case of Gopaldas Udhavdas Ahuja and Another (Supra) after referring to the decision of Captain M.Paul Anthony (Supra) has held as under :
"20. In the case of Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. it has been held that where department and criminal proceedings are based on identical facts and where charges were sought to be proved by the policy officers and the panchas who raided the house and effected recovery and where same set of witnesses were examined in both the proceedings but the criminal court on examination of the evidence came to the conclusion that no recovery was made Page 71 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined from the house and that raid was not proved it would be unjust, unfair and oppressive to allow the findings recorded by the enquiry officer to stand against acquittal by judicial pronouncement. The present case is on the stronger footing than the case of Capt. M. Paul Anthony (supra). In the present case, in view of section 98B, a very heavy burden was placed on the appellants in the criminal proceedings. It was for the appellants to rebut the statutory presumption of the culpable mental state placed on them by section 98B. Under section 98B, the appellants had to prove beyond reasonable doubt, which they did. that they had no knowledge of the gold hidden in the ornamental top of the cupboard in the eastern bedroom. Hence, it would be unjust, unfair and oppressive to allow the decision of the Authorised Officer Page 72 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined in confiscation proceedings to stand against acquittal by the competent criminal court, which acquittal was confirmed by the High Court and by this Court.
21. We may clarify that our above observation should not be taken to mean that there is no difference between departmental proceedings under Section 71(1) and prosecution for illegal possession under Section 85(1). A combined reading of Sections 8(1), 71(1) and 85 of the 1968 Act made it clear that the legislature intended to provide for two separate proceedings before two different forums and there is no conflict of jurisdictions between the Authorised Officer acting under Section 71(1) to direct confiscation on being satisfied that an offence has been committed and the magistrate making an Page 73 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined order on conviction of an accused under Section 85(1) and that mere acquittal in the trial before the Magistrate, in every case, cannot result in setting aside, ipso facto, of the orders of confiscation passed by the competent authority under the Act. That merely because there was acquittal in the trial before the Magistrate, due to paucity of evidence or otherwise, would not entail nullification of the order of confiscation of the seized articles in every case. (See Divl. Forest Officer v. G. V. Sudhakar Rao). In any event, on a plain reading of Sections 8(1) and 71(1) it is clear that the Authorised Officer was required to be satisfied that an offence under the Act had been committed. That the confiscation proceedings were separate and distinct from prosecution under the Act. However, that difference did not entitle the Page 74 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Authorised Office to proceed arbitrarily in making an order for confiscation.
22. In the light of the above discussion, the first point for determination is whether from the circumstances one can say that the appellants were in conscious possession of primary gold. As indicated above, the adjudication proceedings under section 71(1) concluded before the criminal case. The judgment of the criminal court was not before the Authorised Officer. However, the basic controversy before the Authorised Officer was whether the entire primary gold (bars) was recovered from the ornamental top of the cupboard in the eastern bedroom as alleged by the appellants, or whether some of the gold bars were also recovered from the cupboards in the western bedroom and the room in which the telephone was placed Page 75 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined as alleged by the department. According to the department, appellants were in conscious possession of the gold bars because some of the bars were found from the cupboards in the western room which were opened with the keys handed over by Ishwaribai, appellant No. 2 herein. According to the department, since primary gold was recorded from western bedroom and telephone room in addition to the recovery from the ornamental top of the cupboard in the eastern bedroom, the appellants were in conscious possession. The orders of the Authorised Officer and the Gold Control Administrator show that even according to the department, gold bars hidden in the ornamental top of the cupboard in the eastern bedroom were not apparently visible but the fact that some of the remaining gold bars were recovered from the other rooms proved that the Page 76 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined appellants had knowledge of the gold bars. Therefore, the key question to be answered is whether recovery of the gold from western bedroom and telephone room was proved by the department. At the outset, it may be stated that the evidence on record shows that the officers who took part in the raid were officers from Income-tax department. They saw the collection of gold and not the place from which the gold was recovered. There was no exact record to show from where the items of gold were found. Each witness gave different versions. Their versions are self- contradictory and conflicting with each other. The original panchnama was not produced. The copy of the panchnama did not indicate the place from which the items were recovered. Even the specific key supplied by appellant No.2 herein, Ishwaribai, with which the locker in the Page 77 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined western bedroom was allegedly opened, was not separately seized. There was no contemporaneous record to show from which place what was recovered. In all, eight gold bars were seized. According to Mahadeshwar, one of the key witnesses from the Income- tax department, five of the bars were recovered from the ornamental top of the cupboard in the eastern bedroom. This statement was made before the Authorised Officer. However, later on in the criminal trial he has deposed that two to three bars were recovered from that place. Before the Authorised Officer, Mahadeshwar stated that two gold bars were recovered from the western bedroom whereas in the criminal trial he has deposed that one gold bar was recovered from the western bedroom. Before the criminal court, he deposed that two bars were found in the telephone room, whereas before the Page 78 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Authorised Officer he deposed that he was not sure. According to Ms.Thadani, one of the witnesses in the raiding party from the Income-tax department, only one gold bar was recovered from the telephone room. No recovery memo was prepared by her. According to Kundalgaonkar, one of the witnesses to the recovery, one gold bar was recovered from the western bedroom. However, in his confidential record, he stated that two gold bars were recovered from that room. Similarly, in his report to Shri Vaidya, Kundalgaonkar has stated that Ishwaribai gave the keys to him whereas in the criminal trial he has deposed that she gave the keys to Mahadeshwar.
All these contradictions have taken
place because there was no
contemporaneous record to prove the
recovery and the panchnama prepared was faulty as it did not indicate the place Page 79 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined from which the gold was recovered, in conclusion, none of the witnesses were able to give a coherent story as to where the primary gold was found. Therefore, recovery of three gold bars from the telephone room and western bedroom was not proved."
20. The Hon'ble Madras High Court in case of K. V. Rajagopal (Supra) after referring to the decision in case of Gopaldas Udhavdas Ahuja and Another (Supra) has come to the conclusion as under :
"22. From the above said law laid down by the Hon'ble Supreme Court and finding of this Court, we are of the view that the Act contemplates two separate proceedings for the same act or omission and therefore, there is no question of double jeopardy involved, as rightly Page 80 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined pointed out by the learned counsel appearing for the first respondent. The Hon'ble Supreme Court also considered various provisions of the Act and finally held that mere acquittal in the criminal proceedings before Magistrate court in every case cannot result in setting aside, ipso facto, the orders of the confiscation passed by the competent authority under the Act. Therefore, the contention of the appellant that the judgment of the Judicial Magistrate acquitting the appellant was binding on the Departmental Authorities, adjudicating the question of confiscation is not correct. As rightly pointed out by the learned counsel appearing for the first respondent, the fact of seizure of gold and silver bars recovered from the appellant's residence is not in dispute. In the criminal proceedings, it is the duty of the Page 81 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined prosecution to prove the case beyond any reasonable doubt and also to prove the mensrea for the above said criminal act by adducing reliable evidence. In the instant case, the respondents have discussed in detail about the seizure of gold and silver bars from the residence of the appellant and the above said fact was not disputed by the appellant. Therefore, the appellant cannot be exonerated from adjudication proceedings."
21. The Hon'ble Delhi High Court in case of Rajeev Khatri (Supra) has analysed the word 'abet' as appearing in Section 112(A) of the Customs Act as under:
"30. Thus, indisputably, persons who have committed the acts of omission or commission in relation to goods that Page 82 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined rendered them liable for confiscation, are liable to pay the penalty as stipulated under Section 112(a) of the Customs Act, without any requirement to establish their mal intent. However, the same principle would not apply to persons who are alleged to have abetted such acts of omission or commission. This is because, abetment, necessarily requires, at the minimum, knowledge of the offending Act.
31. The use of the expression 'abet' in Section 112(a) of the Customs Act, makes it implicit that the person charged, who is alleged to have abetted the acts of omission or commission, has knowledge and is aware of the said acts. A plain meaning of the word 'abet' means instigation, aid, encouragement of an offence2. It necessarily involves the knowledge that Page 83 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined the act being abetted is wrong.
32. The Black's Law Dictionary defines the expression 'abet' as under:
"1. To aid, encourage, or assist (someone), esp. in the commission of a crime <abet a known felon>. 2. To support (a crime) by active assistance <abet a burglary>."
33. In Queen v Coney: the Court for Crowned Cases Reserved held as under:
"To constitute an aider or abettor, some active steps must be taken, by word or action, with intent to instigate the principal or principals. Encouragement does not, or necessity, amount to aiding and abetting. It may be intentional or unintentional. A man may unwittingly Page 84 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined encourage another in fact by his presence, by misinterpreted gestures, or by his silence or non-
interference-or he may encourage intentionally by expressions, gestures, or actions, intended to signify approval. In the latter case, he aids and abets; in the former he does not. It is no criminal offence to stand by a mere passive spectator of a crime, even of a murder. Noninterference to prevent a crime is not itself a crime. But the fact that a person was voluntarily and purposely present witnessing the commission of a crime, and offered no opposition to it, though he might reasonably be expected to present it, and had the power so to do or at least to express his dissent, might, under some circumstances, afford cogent evidence upon which a jury Page 85 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined would be justified in finding that he willfully encouraged, and so aided and abetted. But it would be purely a question for the jury whether he did so or not."
34. Section 3(1) of the General Clauses Act, 1897 expressly provides that the expression 'abet' would have the same meaning as in the Indian Penal Code, 1860 (hereafter 'the IPC').
35. Section 107 of the IPC explains the meaning of the expression 'abetment of a thing'. The said Section of the IPC reads as under:
"107. Abetment of a thing.-A person abets the doing of a thing, who- First-Instigates any person to do that thing; or Page 86 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Secondly-Engages with one or more other person or persons in any conspiracy for the doing of that thing, if an act or illegal omission takes place in pursuance of that conspiracy, and in order to the doing of that thing; or Thirdly.-Intentionally aids, by any act or illegal omission, the doing of that thing.
Explanation 1.-A person who, by wilful misrepresentation, or by wilful concealment of a material fact which he is bound to disclose, voluntarily causes or procures, or attempts to cause or procure, a thing to be done, is said to instigate the doing of that thing. Illustration-A, a public officer, is Page 87 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined authorised by a warrant from a Court of Justice to apprehend Z, B, knowing that fact and also that C is not Z, wilfully represents to A that C is Z, and thereby intentionally causes A to apprehend C. Here B abets by instigation the apprehension of C. Explanation 2.-Whoever, either prior to or at the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to aid the doing of that act."
36. Thus, in the context of Section 112(a) of the Customs Act, by definition, the expression 'abet' means instigating, conspiring, intentionally aiding the acts of commission or Page 88 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined omission that render the goods liable for confiscation.
37. It is apparent from the above that the knowledge of a wrongful act of omission or commission, which rendered the goods liable for confiscation under Section 111 of the Customs Act, is a necessary element for the offence of abetting the doing of such an act.
38. In Shree Ram v. State of U.P., the Supreme Court held as under:
"6........Section 107 of the Penal Code which defines abetment provides to the extent material that a person abets the doing of a thing who "Intentionally aids, by any act or illegal omission, the doing of that thing". Explanation 2 to the section says that "whoever, either prior to or at the time of the commission of Page 89 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to aid the doing of that act". Thus, in order to constitute abetment, the abettor must be shown to have "intentionally" aided the commission of the crime. Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of Section 107. A person may, for example, invite another casually or for a friendly purpose and that may facilitate the murder of the invitee. But unless the invitation was extended with intent to facilitate the commission of the murder, the person inviting cannot be said to have abetted the murder. Page 90 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025
NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined It is not enough that an act on the part of the alleged abettor happens to facilitate the commission of the crime. Intentional aiding and therefore active complicity is the gist of the offence of abetment under the third para of Section
107."
39. In Amritlakshmi Machine Works v. The Commissioner of Customs (Import), Mumbai, a Full Bench of the Bombay High Court had considered the aforesaid issue and held that the word 'abetment' is required to be assigned the same meaning as under Section 3(1) of the General Clauses Act, 1897. The court further opined as under:
"31. .....Mere facilitation without knowledge would not amount to abetting an offence. Parliament has Page 91 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined specifically included abetment in Section 112(a) of the Act, to include acts done with knowledge, otherwise the first portion thereof "Any person
- (a) who in relation to any goods does or omits to do any act ...."
would cover acts done or omitted to be done on account of instigation and/or encouragement without knowledge. However, the first portion of Section 112(a) of the Act is only to make person of first degree in relation to the act or omission strictly liable. Persons who are not directly involved in the act or omission to act, which has led the goods becoming liable for confiscation cannot be made liable unless some knowledge is attributed to them. Therefore, it is to cover such cases that Section 112(a) of the Act also includes a person who abets Page 92 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined the act or omission to act which has rendered the goods liable to confiscation. Imposing penalty upon an abettor without any mens rea on his part would bring all business to a half as even innocent facilitation provided by a person which has made possible the act or omission to act possible could result in imposing of penalty."
40. We respectfully concur with the aforesaid view. This view has also been consistently followed by the Tribunal.
41. In Commissioner of Customs (Import) v. Trinetra Impex Pvt. Ltd, a Co- ordinate Bench of this Court had rejected the Revenue's appeal against an order of the Tribunal setting aside the levy of penalty on a CHA under Section 112(a) of the Customs Act. This Page 93 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Court had referred to the decision of the Bombay High Court in Amritlakshmi Machine Works v. The Commissioner of Customs (Import), Mumbai (supra) and held as under:
"11. In respect of the show cause notice dated 8-7-2011, the imposition of the penalty has been made under Section 112(a) of the Act in respect of the goods which have been held to be liable to be confiscated under Section 111 of the Act. Here, the imposition of the penalty on the CHA is founded on the ground that he has abetted the offence. Though, for imposition of penalty in respect of the cases falling under Section 112(a) of the Act, mens rea may not be required to be provided as condition precedent, however, when it comes to imposition Page 94 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined of the penalty on an abettor, it is necessary to show that the said essential element/ingredient is present.""
22. Applying the above decisions in the facts of the case, it is apparent that the appellants were the employees of the Ruchi Pharmaceuticals and at the instance of the partner of the said firm, Shri Prahlad Patel, the appellants were sitting in the Office of Shanti Exports of Dr.Bipin Panchal and were carrying out the work of Dr.Bipin Panchal as per his instructions. The appellants have taken on rent the factory of M/s.Coral Pharma from Shri Hitesh Mehta from April, 1993 to June, 1993. The appellants have brought tableting machines in the factory and as per Page 95 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined the statements of the appellants, they also called the electrician to start the machines. It is very significant to note that the appellants have stated in the statements that they had gone to the factory of M/s.Coral Pharma at night time only for cleaning purpose as per the instructions of the Dr.Bipin Panchal and they have pleaded ignorance about the activity being carried out in the factory at night time though Shri Hitesh Mehta, in his statement, has categorically stated and has stuck to the same in his cross-examination that the appellants were running the factory at night and nobody was permitted to enter in the factory premises. The appellants have also accepted in their statements about the fact Page 96 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined that they had gone to the factory at night for the cleaning purpose. Such statements of the appellants were rightly not considered by the CESTAT for the purpose of not believing the fact that the appellants had abetted into Dr.Bipin Panchal for manufacturing of the Narcotic Drugs as the factory is not required to be cleaned at night time.
23. Moreover, it is also admitted by the appellants that they had gone to the factory with Shri Achint Patel for delivery of the goods of eight to ten cartons. It is also admitted by the appellants that they had also delivered fifty cartons, which were identified in the goods seized by the DRI containing the Page 97 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Narcotic Drugs. In view of such undisputed facts emerging from the record which could not have been taken into consideration by this Court while applying strict proof of beyond all reasonable doubt for arriving at a conclusion to acquit the appellants, it cannot be said that only because on the Adjudicating Authority as well as this Court considered the same set of facts, no penalty can be levied in view of acquittal from criminal offences granted to the appellants by the Division bench of this Court.
24. The facts recorded in the statements of the appellants were considered only from the point of view of manufacture and transportation of the Narcotic Drugs by this Page 98 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Court whereas, the facts emerging from the record clearly show that the appellants have also accepted that the cartons, which were found by the DRI in the month of January, 1994, were the same cartons which were delivered by the appellants at the instructions of Dr.Bipin Panchal at Ahmedabad. In such circumstances, reliance placed by the learned advocate for the appellants on the decision of the Hon'ble Apex Court in case of Capt. M. Paul Anthony (Supra) that on the same set of facts, once the acquittal is granted, the same would also apply to the quasi- judicial proceedings would not apply in the facts of the case.
25. From the order of the Adjudicating Page 99 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined Authority, it is also revealed that the statement of Dr.Bipin Panchal has also implicated the appellants for manufacture of the Narcotic Drugs. It is also confessed by Dr.Bipin Panchal in his statement dated 08.11.1993 that one Kashyap Patel of Ruchi Pharma with assistance of one Shri Deepak of M/s.Coral Pharma had manufactured these tablets in the factory of M/s.Coral Pharma and delivery of these tablets was taken directly by Achint Patel and Yogesh Chaudhari whereas, the appellants have admitted that they accompanied them for delivery as per the instructions of Dr.Bipin Panchal.
26. It also emerges from the statements of the appellants, which are read exhaustively by Page 100 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined learned advocate for the appellants before us, that the appellants were manufacturing the tablets in a partnership firm prior to joining M/s.Ruchi Pharmaceuticals as sales persons. It also appears from the statements that in the year 1985, the appellants had dealt with Shri Hitesh Mehta for purchase of the goods. Thus, on perusal of the statements of the appellants, it cannot be said that the appellants were not having the knowledge of manufacture and transport of the Narcotic Drugs which were meant for export. It also emerges from the statements that after the production of the Narcotic Drugs, the appellants had shifted the tableting machines to the original supplier of the machine as per Page 101 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025 NEUTRAL CITATION C/TAXAP/927/2007 ORDER DATED: 15/10/2025 undefined the instructions of Dr.Bipin Panchal.
27. In view of foregoing reasons, we are of the opinion that the CESTAT has not committed any error in arriving finding of facts. We therefore, answer both the questions in favour of the Revenue and against the appellants. The Appeals therefore, being devoid of any merit, are accordingly dismissed.
(BHARGAV D. KARIA, J) (PRANAV TRIVEDI,J) PALAK Page 102 of 102 Uploaded by PALAK BRAHMBHATT(HC01391) on Thu Oct 16 2025 Downloaded on : Fri Oct 17 01:27:25 IST 2025