Customs, Excise and Gold Tribunal - Delhi
Jagir Singh vs Collector Of Customs And Central Excise on 21 January, 1987
Equivalent citations: 1987(13)ECR1008(TRI.-DELHI), 1987(28)ELT521(TRI-DEL)
ORDER G.P. Agarwal, Member (J)
1. The appeal in hand is directed against the Order-in-Original No. 36-Cus./84 passed by the Collector, Customs & Central Excise, Chandigarh rejecting the claim of the appellant regarding the ownership of the seized gold pieces (primary gold) in question.
2. Factual Backdrops: Amarjit Singh and Nirmal singh are the sons of the appellant Jagir Singh. On 15-5-80, in pursuit of secret information, the Customs Preventive Officers, Amritsar apprehended the said Amarjit Singh of M/s. Jagir Singh Nirmal Singh, Gold dealers, at the Railway Station, Amritsar when he alighted from Howrah Express Train. He was carrying a brief-case of brown colour. As a result of search of his brief case, 15 bundles of Indian Currency notes amounting to Rs. 85,000/- were recovered. Above these bundles of notes, there was a foam pillow of cream colour. In the said pillow, 2 big pieces of gold were found to be concealed. When the personal search of Amarjit Singh was effected, 8 pieces of gold concealed in the inner part of the waist belt of the pant which he was wearing were also recovered. Besides the said gold and currency notes, a railway ticket and 6 cheques amounting to Rs. 32,445/- were also found in the brief case. On weighment, gold pieces recovered from the pillow and the person of Amarjit Singh were found to be of 757.300 gms. Its purity was also got verified and found to be 99 touch. As Amarjit Singh could not give the satisfactory explanation regarding the acquisition of the gold and the Currency notes, the same were seized under the provisions of the Customs Act. In his statement Amarjit Singh, however, stated that his brother Nirmal Singh, who was in Howrah had given him the gold pieces, Currency notes and other articles found and it was at his behest that he brought them to Amritsar. Shri Nirmal Singh was also examined by the Customs authorities on 28-5-80. He stated that Kartar Singh, Harbans Singh and Kirpal Singh of Chitranjan had given him ornaments for preparing new ones and that those old ornaments were melted by him at the house of Kirpal Singh at Chitranjan weighing about 750 gms. During further investigation it was alleged by Shri Jagir Singh appellant, the father of Shri Nirmal Singh and Amarjit Singh that ornaments at Chitranjan were procured by him from S/Shri Kartar Singh, Harbans Singh and Kirpal Singh on 8-5-80; that he had given the same to his son on 12-5-80 and that Nirmal Singh had gone back to Chitranjan and had converted the old ornaments into primary gold by melting the same at his house. Not satisfied with the said explanation, separate cases under the Customs Act, 1962 and the Gold (Control) Act, 1968 were booked aginst the said S/Shri Amarjit Singh and Nirmal Singh.
3. In gold case, Show Cause Notices were issued to Nirmal Singh and Amarjit Singh. In reply, they took the same stand. It appears that in gold case the present appellant also claimed the ownership of the seized gold and Currency notes in question alleging that the currency detained from Amarjit Singh were the sale proceeds of the jewellery manufactured by him and sold to their customers according to the provisions of the Gold (Control) Act. As regards the gold in question he stated that while on tour S/Shri Kartar Singh, Harbans Singh and Kirpal Singh of Chitranjan gave old ornaments to their firm known as M/s. Jagir Singh Nirmal Singh, Gold Dealers, Amritsar for preparing new ornaments and the same were duly covered by the valid vouchers. Nirmal Singh melted the old ornaments in the presence of the customers concerned and according to the instructions of the customers, voucher was issued in favour of Nirmal Singh who had plan to go to Amritsar while Jagir Singh proceeded on tour. Nirmal Singh had to make collections from the customers. He handed over the cash, cheques and gold derived from melting old ornaments to Amarjit Singh who had to go to Amritsar due to urgent work. Nirmal Singh forgot to give the concerned voucher to Amarjit Singh inadvertently before the train steamed off. After the usual adjudication proceedings the Adjudicating Authority held that, - "Taking all these facts into consideration I hold that the defence story that Shri Nirmal Singh had obtained primary gold under seizure by melting old gold ornaments belonging to S/Shri Kartar Singh, Kirpal Singh and Harbans Singh duly reflected in the statutory accounts of M/s. Jagir Singh Nirmal Singh is a hoax and I reject the same as untenable." After recording the said finding the Adjudicating Authority ordered for the absolute confiscation of the 10 pieces of primary gold weighing 757.300 gms. and also ordered for the absolute confiscation of the recovered Indian Currency of Rs. 8.5,000/- u/s 71 of the Gold (Control) Act, 1968. Besides, personal penalties were also imposed u/s 74 of the Gold (Control) Act on the said Amarjit Singh and Nirmal Singh vide Order-in-Original No. 10/Gold/1981 dated 7-7-81. Against that, the appellant [Appeal No. GC/Del(T)/129/81-NRB] as well as Amarjit Singh [A.No. GC/ Del(T)/131/81-NRB] and the said Nirmal Singh (A.No. GC/Del(T)/130/81-NRB] filed their respective appeals before this Tribunal. Appeals of S/Shri Nirmal Singh and Amarjit Singh were disposed of by this Tribunal by a common order No. A-39-40/84-NRB dated 16-4-1984 in the following terms :-
(i) The confiscation of the amount of Rs. 85,000/- was not justified and the order to that extent cannot be sustained (para 6).
(ii) Nirmal Singh was the principal actor in the whole proceedings. Even if the defence put-forth by Nirmal Singh is accepted, still he cannot escape liability since he had melted the ornaments at Chitranjan at the house of Kartar Singh where he could not legally do it. He tried to utilise the services of his minor brother for transporting the illicit pieces of primary gold from Howrah to Amritsar. This shows his mens rea. Thus, Nirmal Singh had violated the provisions of Section 8(1) of the Gold (Control) Act and therefore was liable to penalty u/s 74 of the Act (para 9).
(iii) As regards the penalty imposed on Amarjit Singh, who had been acting under the shadow of his elder brother Nirmal Singh and is also a minor, it is noticed that he was the person who actually carried the primary gold in pieces (para 11).
(iv) As regards the confiscation of the contraband 10 pieces of primary gold, it is held that the confiscation was correct but under the circumstances of the case the absolute confiscation is harsh and therefore the contraband primary gold be released to the appellants on payment of a fine of Rs. 40,000/- in lieu of confiscation (para 12).
4. In. Appeal No. 129/81-NRB filed by the present appellant before the Tribunal, the appellant while challenging the Order-in-Original No. 10/Gold/1981 dated 7-7-81, ibid, made the following prayer :-
"...Primary gold and Indian currency absolutely confiscated by the Collector of Customs and Central Excise, Chandigarh may kindly be ordered to be released to the appellant who is the original owner of the same."
But the appellant did not press the said appeal and consequently it was dismissed by this Tribunal vide Order No. A-24/84-NRB dated 16-4-84 in the following terms :-
"Shri Beri, learned counsel for the appellants states that he does not want to press this appeal. In view of his statement, this appeal is dismissed as not having been pressed."
Thus from the resume of the aforesaid facts it is clear that the confiscation of the gold in question with an option to redeem the same on payment of a fine of Rs. 40,000/- in lieu of confiscation by S/Shri Nirmal Singh and Amarjit Singh has become final under the Gold (Control) Act and the claim of ownership of the appellant with respect to the gold in question under the Gold (Control) Act stands rejected finally. In other words, these orders have become final and binding on the parties, that is to say, S/Shri Nirmal singh, Amarjit Singh and the present appellant Jagir Singh having not been challenged, as admitted by Shri Beri, counsel for the appellant in any other legal proceedings.
5. As regards the Customs' case, Show Cause Notices were issued to the said S/Shri Nirmal Singh and Amarjit Singh to show cause as to why the 10 pieces of primary gold weighing 757.300 gms. be not confiscated and why personal penalties be not imposed. In reply, they took the same stand which were taken in the gold case as stated above. The present appellant also claimed the ownership of the primary gold in question taking the same stand which was taken in the gold proceedings. After the adjudication proceedings the Adjudicating Authority vide his Order-in-Original No. 7/CUS/1981 dated 7-7-81 ordered for the confiscation of the 10 pieces of primary gold in question absolutely u/s 111 of the Customs Act and also ordered for the confiscation of the pant, foam pillow, brief case etc. Personal penalties were also imposed on the said Nirmal Singh and Amarjit Singh. Being dis-satisfied, the appellant as well as the said Nirmal Singh and Amarjit Singh preferred their respective appeals to the Central Board of Excise & Customs, New Delhi. The Central Board of Excise & Customs, New Delhi vide common order No. 65-67/1982 dated 8-2-82 upheld the confiscation of gold as ordered by the Adjudicating Authority but set aside the order of penalty on S/Shri Amarjit Singh and Nirmal Singh. The Board by the same common order rejected the claim of the appellant regarding the ownership of primary gold in question by observing as follows :-
"... The Board also finds that the evidence adduced by Jagir Singh in support of his claim that the gold was obtained from old ornaments has not been established."
Being dis-satisfied, the present appellant Jagir Singh filed his appeal before this Tribunal against the said order-in-appeal No. 65-67 of 1982 dated 8-2-1982 passed by the Board. On appeal, the appellant made a grievance that an opportunity to prove his allegation regarding the ownership was not given to him by the lower Authorities. Agreeing with the said contention this Tribunal vide Order No. A-34/84-NRB dated 17-4-84 remanded the case for re-decision in accordance with law after setting aside that part of the order which relates to the claim of the appellant regarding the ownership of the primary gold in question in the following terms :-
"3. In the result, we allow the appeal, set aside part of the order relating to ownership of the gold and remand the case for redecision in accordance with law."
On remand, the Adjudicating Authority afforded full opportunity to the appellant to prove his case relating to the ownership of the primary gold in question. It appears from the impugned order that the appellant reiterated the same stand which he took earlier without adducing any new evidence before the Adjudicating Authority after remand. The Adjudicating Authority, after discussing the entire evidence on the record, rejected the claim of the appellant regarding the ownership of the primary gold in question and held that the appellant is not the owner of the primary gold confiscated under the Customs Act. Being dis-satisfied with this impugned order, the appellant has filed the present appeal.
6. We have heard Shri C.L. Bed, learned counsel for the appellant duly assisted by Shri A.N. Sharma, consultant and Smt. Nisha Chaturvedi, SDR for the respondent.
7. Before we proceed to consider the respective arguments made by the parties it would be useful to mention at the outset that in the present appeal the appellant has stated against column No. 10 of the form of appeal providing for "Reliefs claimed in appeal" as under :-
(i) The appellant Jagir Singh may be accepted as owner of gold weighing 757.300 gms.
(ii) The gold ordered to be confiscated may be released to the appellant Jagir Singh."
After stating as aforesaid the appellant has made the following prayer at the end of the appeal :-
"I again pray that gold may kindly be ordered to be delivered to me on payment of redemption fine of Rs. 40,000/- imposed under the order-in-appeal passed under Gold Control Act."
8. Shri C.L. Beri, learned counsel for the appellant vehemently contended that during the adjudicating proceedings the appellant made his claim regarding the ownership of the primary gold in question by way of representation to the Collector. But no show cause notice was ever issued to the appellant in terms of Section 124 of the Customs Act, 1962. We are afraid this contention has no force for the following reasons :-
(i) The plea that no show cause notice was issued to the appellant cannot be raised at this stage in the appeal in hand for the reason that no such grievance was made at the time of hearing of the appeal filed by the appellant before this Tribunal which was allowed by remand vide Order No. A-34/84-NRB dated 17-4-84. The only grievance which was made was that the appellant was not given any opportunity to prove his ownership before the Adjudicating Authority. From the operative portion extracted above, it is clear that the case was remanded for limited purposes to the Adjudicating Authority for redecision in accordance with law. Under these circumstances the scope of remand was very limited. It also appears from the Order No, 65-67 of 1982 dated 8-2-1982 passed by the Central Board of Excise and Customs, New Delhi against which the said earlier appeal was filed by the appellant that the same contention relating to the issuance of the show cause notice was advanced before the Board but it was not accepted. This finding of the Board was not challenged in the earlier appeal and what was challenged was that the appellant was not afforded any opportunity to prove his ownership. Under these circumstances this Tribunal remanded the case after expressly holding that "We feel that the appellant should be given an opportunity to prove his allegation regarding ownership and the lower authorities have the right to pass any order." From the impugned order also it is clear that no such plea was advanced and we think rightly so before the Adjudicating Authority.
(ii) Section 124 of the Customs Act, 1962 provides that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty. In the instant case, admittedly, the contraband primary gold was recovered from the possession of Amarjit Singh on 15-5-80 and Amarjit Singh in his statement tendered on the Spot while admitting the recovery of the contraband primary gold, inter alia, revealed that his father Shri Jagir Singh, appellant herein and his brother Nirmal Singh jointly held a Gold Dealer's licence and his brother Shri Nirmal Singh had handed over the contraband primary gold to him on 13-5-80. Under these circumstances the contraband primary gold was seized being liable to confiscation under Section 111 of the Customs Act, 1962 and the said Amarjit Singh and Nirmal Singh were considered to be the persons concerned in acquiring, possessing, keeping, carrying and dealing with the gold which they knew and had reason to believe were liable to confiscation and were also liable to penal action under Sections 111 and 112 of the Customs Act, 1962 respectively. As a follow-up action, Show Cause Notices were issued to the said Amarjit Singh and Nirmal Singh calling upon them to show cause as to why the contraband primary gold etc. be not confiscated and penal action be not taken against them. It appears from the record and admitted to the appellant that the appellant made a representation regarding the claim of the ownership before the issuance of the show cause notice. Thus, it stands to reason that at the stage of taking a decision for the issuance of the show cause notice u/s 124 the Adjudicating Authority never treated the appellant as the owner of the contraband primary gold. But on the other hand treated the said Amarjit Singh and Nirmal Singh as the owner of the gold in question. Under these circumstances it was not obligatory on the Adjudication Authority to issue any show cause notice to the appellant. Further it is significant to note that the term "Owner" has not been defined in the Customs Act, 1962. In the absence of any definition of the term "Owner" it cannot be said I by any stretch of imagination that the expression "owner of the goods" used in Section 124 includes every person who informs at the stage of investigation that he is the owner of the goods in question. In other words, from the stage of investigation till the date of taking the decision for the issue of show cause notice as provided in Section 124, the Authority concerned has to take a decision on the basis of the enquiries made and evidence collected during the investigation relating to the ownership of the goods. The person claiming ownership of the goods in question at the stage of investigation but not treated as owner of the goods at the stage of taking decision for the issue of show cause notice can still participate in the adjudication proceedings by lodging his claim before the Adjudicating Authority and in that case the Adjudicating Authority is bound to decide the case after affording reasonable opportunity to defend to the person concerned and this in fact was done in the instant case, that is to say, the appellant did appear along with his counsel and submitted his claim of ownership and it is only after affording the opportunity and considering the case of the appellant on merits that the Adjudicating Authority by its impugned order had concluded that it is not proved by the appellant that he was the owner of the contraband primary gold. Looked from another angle if the contention of the learned counsel for the appellant is accepted for the sake of arguments that whenever any person informs the authorities concerned claiming the ownership of the goods in question, a show cause notice must be issued to him irrespective of the other considerations which are to be formed on the basis of the enquiries made and evidence collected during the investigation would make the provisions of Section 124 of the Customs Act a mockery.
9. Shri C.L. Beri, learned counsel for the appellant also contended before us that in the instant case principal of natural justice were offended. When it was pointed out to him as to how the principle of natural justice were offended when after the remand of the case by this Tribunal vide Order No. A-34/84-NRB dated 17-4-84, full opportunity was given to the appellant by the Adjudicating Authority regarding the claim of ownership, he failed to point out any such violation of the principle of natural justice and curiously enough cited the leading case of Leary v. National Union of Vehicle Builders reported in (1972) All. E.R. 713 and also the case of Shri Laxmidhar Panigrahi V. State of Orissa, AIR 1974 Orissa 127 and the Order No. A-55 to 56/86-NRB dated 6-2-1980 rendered, in the case of Shri Rohit Mehra and Ors. v. Collector of Central Excise & Customs, Chandigarh in which the said cases were also considered. A perusal of the said authorities would show that the ratio of all the decisions is that deficiencies of natural justice before trial Tribunal cannot be cured in subsequent proceedings. In other words, if the opportunity to defend is not afforded by the trial Tribunal, the affording of the opportunity to defend by the Appellate Court in subsequent proceedings would not cure the deficiency of natural justice which was not granted by the trial court. There can be no quarrel with the said ratio. On the other hand, all the courts including this Tribunal have cherished the said principle of law as and when occasion arose and whenever it was found that an opportunity to defend was not afforded by the trial Tribunal the case was always remanded to the trial Tribunal itself to decide the case de novo after affording the reasonable and proper opportunity, to defend. To quote, in the case of Rohit Mehra and Ors. v. Collector of Central Excise and Customs, Chandigarh, supra the Tribunal in fact remitted back the case to the Collector of Central Excise & Customs for deciding the case in the light of the observations made therein. In the instant case also when the appellant filed his appeal against the order of the lower Appellate Authority, that is to say, the Board's Order No. 65-67 of 1982 dated 8-2-82 confirming the Order-in-Original No. 7/CUS/81 dated 7-7-81 and complained that he was not given an opportunity to prove his case regarding the ownership of the contraband gold in question, this Tribunal immediately set aside that part of the order which related to the ownership of the gold and remanded the case to the Adjudicating Authority itself, that is to say, to the Trial Tribunal and not to the lower Appellate Authority. Thus, in our considered opinion the contention raised and the cases cited as aforesaid have no relevancy to the instant case.
10. On merits also the appellate has no case. It is settled law that the burden to prove the ownership rests on the person claiming the goods. In the instant case, the Adjudicating Authority has categorically recorded a finding ... view for valid reasons that in view of the various major contradictions in the statements of Nirmal Singh, Jagir Singh (appellant) and Kartar Singh the claim of the appellant cannot be accepted. The contention of the appellant that he had received the old gold ornaments from S/Shri Kartar Singh, Harbans Singh and Kirpal Singh against receipt voucher Nos. 101, 102 and 103 all of dated 8-5-80 cannot be believed for the reasons mentioned in the impugned order and nothing was pointed out to us to take a contrary view. We are also satisfied that the evidence adduced by the appellant in support- of his claim that the primary gold in question was obtained from old gold ornaments has not been established. The fact that there has been a tampering of the date of transactions with M/s. Parshad Jewellers in GS. 12 Register clearly proves the falsity of the claim of the appellant. It stands proved on the record that a different voucher book with new serial numbers was used when the voucher book in use during the relevant period was not used for these alleged transactions. There is also evidence on record that the aforesaid three parties were related to the appellant. It is an admitted fact on record that Amarjit Singh did not have any voucher at the time of recovery of the contraband primary gold and the defence that Nirmal Singh inadvertently failed to hand over the voucher concerned to Amarjit Singh appears to be a cooked up story. The manner in which the gold ornaments were acquired and melted also appears to be a cooked up story. The deficiencies as pointed out in the impugned order also goes to the root of the case and the inconsistencies in the versions given by the appellant and the aforesaid persons also belie the claim of the appellant. Under these circumstances, the Adjudicating Authority, in our opinion, has rightly concluded that the appellant has failed to prove his claim regarding the ownership of the gold in question.
11. Before we part with the case it deserves to be mentioned here that the claim of the appellant in appeal that the contraband primary gold in question be ordered to be delivered to him on payment of a Redemption Fine of Rs. 40,000/- as ordered in the Gold Case is also not understandable in the teeth of the admitted facts that in the Gold case also the appellant preferred his appeal before this Tribunal which was dismissed as not pressed as stated earlier. It is made clear that since we find no force in the appeal on the merits, we are not recording any finding on this point and whatever we have said about it is in passing.
12. In the light of the foregoing discussions the appeal is dismissed being devoid of any merits.