Customs, Excise and Gold Tribunal - Mumbai
Dinesh Kumar Uttamchand Samadadiya vs Collector Of C. Ex. And Customs on 8 March, 1988
Equivalent citations: 1989(19)ECC126, 1988(37)ELT583(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. As against the Order-in-Original bearing No. XXVII/8-30/Adj./79, dated 16-11-1981 passed by the Collector of Central Excise and Customs, Pune the two appellants herein originally filed one appeal before the Gold Control Administrator. The said appeal statutorily stood transferred to the Tribunal. After the transfer the said appeal came be registered as GC(T)Bom. 30 of 82. Realising the procedural defect, the appellant Gujanan Shankar Daine filed a separate appeal and the said appeal came be registered as G 267/87-Bom.
2. As these two appeals arise out of the same order and they involve common questions of law and facts they are clubbed together, heard together hence this common order. The brief facts necessary for the disposal of these appeals are:
On 13-2-1979 the Gold Control Officers of Pune Customs Collectorate visited the licensed premises of M/s. Anand Jewellers, Manchar. They scrutinised the statutory registers and found that both the registers were written up to 12-2-1979. They also scrutinised the purchase and sale vouchers. No purchases were noticed on 13-2-1979 but there was sale of 14.800 gms. under voucher No. 356, dated 13-2-1979. Thereafter the appellants verified the physical stock. The physical stock of gold ornaments tallied with the stock shown in the G.S. 11. But then the physical stock of new ornaments was found to be 2,753.500 gms. as against the stock of 1,038.650 gms. shown in G.S. 12 register. The manager of the shop Mr. Kumarpal who was present in his statement recorded on the same day, among other things, stated that his younger brother Dinesh is the Proprietor of the shop. He had gone to Bombay for a private work. He also admitted the excess in the physical stock and he could not give any satisfactory account. The Accountant who has been present could not satisfactorily explain as to the excess. The gold ornaments which did not find place in G.S. 12 were seized under a panchnama.
3. On 19-2-1979, the Assistant Collector received a representation dated 16-2-1979 sent by an Advocate Shri Solanki on behalf of the Proprietor Dinesh Samdadiva. in this representation it was sated that Dinesh had, on 13-2-1979 on his way to Bombay, purchased the following quantity of gold ornaments from the dealers mentioned against the entry:
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Sr. No. Name of the dealer Weight.
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1. M/s. Kantilal & Bros., Pune 163.000
2. M/s. Gumanlal & Sons, Pune 329.000
3. M/s. Ratanchand Dalichand, Pune 311.500
4. M/s. Natwarial Shamaldas Chokshi 775.500
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It was stated in that letter that Natwarial Shamaldas Chokshi who was from Ahmedabad delivered the gold at Pune. It was further stated that Dinesh gave the above ornaments to his nephew Shri Girish a student studying in Pune with instruction to carry the same to Manchar. It was also stated in that letter that Dinesh who is the appellant in appeal 30/82 returned to Manchar from Bombay on the night of 13-2-1979 and then he came to know that the purchase vouchers remained with him. He also came to know that the weight of the seized gold ornaments was more than the quantity purchased by him. He asked his Manager Shri Kumarpal about the excess seized. Shri Kumarpal could not give him any information but then Kumarpal however told him that his nephew Girish had come and had left for Pune at 12.30 hours and therefore he contacted Shri Girish on 14-2-1979. Girish informed him that he was at Manchar for an hour and a half and at that time he had received one packet, from a person who is the son of Shri M.G. Belhekar containing gold ornaments totally weighing 165.850 gms. and had further received a patli pair weighing 45.350 gms. from Gajanan Shankar Daine of Manchar for adjusting the size.
4. After the completion of investigation show cause notices were issued to the appellants. After the receipt of the reply and after consideration of the reply and after affording personal hearing, the Collector of Central Excise and Customs, Pune ordered confiscation of the seized gold ornaments, of the value of Rs. 1.35.180/- but allowed redemption on payment of fine of Rs. 50.000/-. He also imposed a penalty of Rs. 10.000/- on the appellant Dinesh Kumar Samadadiya. Feeling aggrieved by the order as stated earlier, Shri Dinesh Kumar and the other appellant Gajanan Shankar Daine who claimed the patli pair filed an appeal before the Gold Control Administrator.
5. During the hearing of these appeals, Shri Solanki firstly submitted that gold ornaments weighing 45.350 gms. which were claimed by the appellant Gajanan Shankar Daine was not liable to confiscation under Section 71 even if there had been any contravention of the Gold Control Act since there was no finding that Gajanan Shankar Daine had reason to believe that Dinesh Kumar had committed any offence in respect of the said gold. Further there was no finding that Gajanan had connived in the contravention of the provisions of the Gold (Control) Act by Shri Dineshkumar. Secondly, Shri Solanki submitted that satisfactory account had been given as to the excess in the physical stock. He submitted that during the investigation the statements of the dealers from whom the appellant Dinesh Kumar purchased the gold ornaments were recorded. They had corroborated the version of the appellant Dineshkumar their account books and vouchers were examined they tallied with the weight and description of the gold seized from the premises of the appellant. Shri Solanki stressed that even before the appellant sent the letter dated 15-2-1979 the Gold Control Administrator have recorded the statement of one Shri Mangilal Chunilal Solanki, partner of the firm M/s. Ratanchand Balchand of Pune. He had stated as to the purchase of gold ornaments weighing 350.000 gms. by the appellant Dinesh Kumar on 13-2-1979. This important aspect was lost sight of by the Collector. Shri Solanki further submitted that the Collector without examining the evidence on record characterised the defence as fiction. It was further submitted by Shri Solanki that the Collector's order contained factual error. His observation that excess gold was not segregated by the licensed dealer is opposed to the recital contained in the panchnama. It was also urged by Shri Solanki if the panchnama is to be read it would be dear that Girish had come to the shop on the morning and had delivered the gold purchased by the appellant. The Collector ought not to have placed any reliance on the statement of the accountant. It was also obtained by coercion. There was a criminal complaint filed by the Diwanji alleging coercion. Shri Solanki also submitted that the Collector's observation that the defence failed to cross-examine all the witnesses present was not correct. But then Shri Solanki made it clear that he is not seeking any remand on the ground of denial of principles of natural justice. Finally Shri Solanki submitted that since satisfactory explanation had been given as to the excess found, the Collector's order may be set aside. The gold may be ordered to be released without payment of fine, the penalty imposed may be set aside. Alternatively, Shri Solanki submitted that the fine levied in lieu of confiscation is highly excessive and so also the penalty. In any case, Shri Solanki urged that confiscation of a pair of patli by the appellant in appeal 267/87 Shri Gajanan S. Daine is opposed to the provisions of Section 71 and the same is required to be set aside and that gold should be released to the appellant Gajanan Daine. Incidently, Shri Solanki submitted that even though the appellant Dinesh Kumar was convicted by the Judicial Magistrate, Pune in the Criminal Prosecution launched against him, the Additional Sessions Judge in the appeal filed by Shri Dinesh Kumar had set aside the conviction and sentence and had ordered acquittal of Dinesh Kumar. The criminal appeal filed by the State against the acquittal order by the Additional Sessions Judge was not admitted by the High Court. He, therefore, urged that the criminal court judgment should be respected.
6. Shri Senthivel appearing for the Collector however supported the order. He contended that the Collector had rightly characterised the defence as fiction. He urged there is total improbability in the defence version. Elaborating his submission. Shri Senthivel submitted that the proprietor was supposed to have left Manchar for Bombay. But then instead of going to Bombay he was stated to have gone to Pune and made certain purchases at about 10 a.m. on 13-2-1979. The defence further was that the proprietor was stated to have sent the gold so purchased to the licensed premises through his nephew who was studying in pune. But then it was stated that the proprietor forgot to send the vouchers. The student who was stated to have carried the gold ornaments, does not inform any person and goes away at 12.30 p.m. Further, he also transacts business in the licensed premises but then, even though the accountant was present he does not come to know of the transactions. The purchase vouchers sees the light of the day three days after the search. Shri Senthivel submitted the inference to be drawn is that there were no purchases on 13-2-1979 and the purchases if at all were made subsequent to that date. Shri Senthivel also pointed out that no payments were made for purchases on 13-2-1979. It was also pointed out by Shri Senthivel that one transaction which had taken place on 13-2-1979 finds place in the statutory accounts. If that be so there is no ostensible reason for the non-entry of the purchases made at Pune and also about the receipt of the gold from a party at Ahmedabad and also the two transactions with the nephew of the appellant stated to have done during his short visit to the licensed premises. Shri Senthivel further urged that the accountant was present at the shop. In his earlier statement he denied the visit of Girish the nephew through whom the gold ornaments were stated to have been sent. Shri Senthivel contended that there is no merit in the contention that any statement . was obtained by coercion. It was also contended by Shri Senthivel that excepting the self-serving statement of the appellant in appeal 267 of 87, there is no other corroborative evidence to establish that a pair of patli belong to him. It is not even covered by any voucher. Shri Senthivel, therefore, prayed that both the appeals may be rejected. It was also submitted by Shri Senthivel that the Criminal-prosecution and adjudication proceedings are two independent proceedings. The finding of one is not binding on the other. In that connection he relied on the judgment of the Bombay High Court in Maneklal Pokhraj Jain's case -1986 (26) ELT 689 (Bom.).
7. In reply, Shri Solanki submitted that the appellant in Appeal 267 of 87 is a goldsmith and was not required to issue any vouchers.
8. We have carefully considered the submissions made on both the sides. The short question for our consideration is whether the Collector was unjustified in not accepting the defence and characterising the defence as a fiction.
9. The appellant herein did not dispute as to the visit of the (Sold Control Officers to the licensed premises on 13-2-1979. They further did not dispute as to the Gold Control Officer's finding excess new gold ornaments weighing 1714.650 gms. nett and 1825.500 gms. gross valued at Rs. 1,35,180/-. The appellant further did not dispute that at the time of the seizure of the excess gold ornaments there were no entries in the G.S. 12 Register and there were no vouchers covering the said excess gold. Out of the excess gold ornaments seized by the Gold Control Officers the appellant in Appeal 267/87 claimed a pair of patli weighing 45.350 gms. as belonging to him. As regards the remaining quantity the defence was that the appellant Dinesh Kumar had on 13-2-1979, on his way to Bombay, purchased new gold ornaments weighing 153 gms. from M/s. Kantilal & Bros., Pune, gold ornaments weighing 329 gms. from M/s. Gumanmal & Sons, Pune, gold ornaments weighing 311.500 gms. were purchased from M/s. Ratachand Dalichand, Pune, further he received gold ornaments weighing 775.500 gms. from Natwarlal Shamaldas Chokshi, Ahmedabad at Pune. The further defence was the appellant Dinesh Kumar's nephew Girish who carried the gold ornaments to Manchar from the licensed premises did not find his father in the shop and therefore waited in the shop for an hour and a half. During the short stay he received gold ornaments weighing 165.850 gms. from goldsmith Shri M.G. Behlekar who had prepared it out of the gold given by the appellant Dinesh earlier. Before the Collector as well as before us, the appellant Dinesh Kumar had contended that the purchases were supported by vouchers. Necessary entries were made by the sellers in their statutory registers. Payments were made by bank cheques. The Gold Control Officers who did the investigation had verified daily statutory register maintained by the Gold dealers from whom the appellant had purchased the gold ornaments and even recorded their statements and they were satisfied as to the genuineness of the transactions but the Collector without properly appreciating their evidence characterised the defence as fiction.
10. The defence put forward by the appellant Dinesh Kumar, on the face of it, appears attractive. It requires to be tested with reference to the evidence on record. It is true that the Collector had characterised the defects as a fiction. We are aware that truth is sometimes stranger than fiction. We, therefore, proceed to consider the defence of the appellant Dinesh Kumar without being influenced by the Collector's characterisation.
11. The visit of the Gold Control Officers to the licensed premises admittedly took place on 13-2-1979 at about 1.00 p.m. Appellant Dinesh Kumar was not present. But the Manager who is no other than the appellant Dinesh Kumar's brother as well as the appellant's Diwanji, Shankar Laxman Modwe, were in the shop. Both of them could not give any explanation as to the excess gold found by the Gold Control Officers. According to the statement of the accountant Laxman Modwe he has been in service for 12 years. He was preparing the purchase and sale vouchers and was making entries in G.S. 11 and G.S. 12 registers. He also maintains accounts as to the ornaments given to and received from certified goldsmith. As usual on 13-2-1979 he had come to the shop in the morning at 8.15 a.m. In his statement he had stated that on the evening of 12-2-1979 the appellant Dinesh Kumar had told him that he would be going to Bombay and returning after 2 or 3 days and he was asked to be attentive. It was also in his statement that on the morning of 13-2-1979 one sale transaction had taken place and he had prepared the voucher No. 356. He was emphatic that no other transaction had taken place in the shop. It was also in his statement that between 8.15 a.m. and 4 p.m. nobody had brought any gold ornaments to the shop. Now if the statement of this witness is to be believed the defence of the appellant Dinesh Kumar that he had sent the gold purchased by him at Pune and sent them to the licensed premises through his nephew Girish cannot be believed. Similarly the explanation that Shri Girish during his short visit of one and half hours received gold ornaments weighing 165.850 gms. from M.G. Mahalekar a goldsmith and patli pair weighing 45.350 gms. from the appellant in appeal No. 267/87 also cannot be believed. If Girish had come to the shop and had brought the gold and had carried on two transactions in gold the Diwanji who was present in the shop right through from 8.15 a. m. till the officers of the Gold Control finished writing of panchnama would have certainly come to know of Shri Girish's visit. That apart if Girish had brought gold the Diwanji would have made necessary entries in the register since according to Diwanji's statement only one transaction had taken place on that morning. Diwanji also would have come to know about the receipt of gold ornaments from goldsmith and from the appellant in appeal No. 267 of 87 by Girish.
12. The statement of the father of the appellant Dinesh Kumar was recorded on 14-2-1979. He did not state in his statement that Girish had brought gold to the shop. It is very unlikely that Girish who had come all the way from Pune would not even meet his old grandfather and would not even tell him as to the purpose of his short visit to Manchar.
13. According to the explanation of the appellant furnished in the representation dated 16-2-1979 through his advocate Shri Solanki the appellant Dinesh was stated to have gone to Pune on the morning of 13-2-1979. The exact time of his departure is not known. But then he made the purchases at about 10 a.m. at Pune. Thereafter he got his nephew who was a student staying in Pune and send the gold so purchased to his licensed premises. It is not clear as to why the appellant who was anxious to send the gold ornaments to the licensed premises did not think fit to send the vouchers evidencing the purchases. The explanation that he had forgotten to give them is rather difficult to believe.
14. The Manager Kumarpal is no other than the brother of the appellant Dinesh Kumar. Shri Girish through whom the ornaments were stated to have been sent is no other than the son of Kumarpal. Significantly when the Gold Control Officers visited the premises and went to the extent of seizing the gold, Shri Kumarpal who was present in the shop did not even whisper that the excess gold found were brought by Girish or related to two transactions carried out by Girish during his short stay. It is highly improbable that Shri Girish who had come all the way from Pune would not even meet his father would not even tell him as to the gold ornaments which he was brought or as to the two transactions he did during his short stay at Manchar. It is also highly improbable that Shri Girish did not even inform the Diwanji, Shankar Laxman Modwe who has present in the shop as to the gold brought by him or to the transactions which he is stated to have carried out during his short stay.
15. It is also not very clear as to why Shri Dinesh Kumar who was to go to Bombay should think of purchasing gold ornaments at Pune. It was not the case of the appellant Dinesh Kumar that the ornaments were available at a cheaper rate or that they were urgently required. It is too much of a coincidence to accept the appellant's Dinesh Kumar's version that he meet representative of a dealer from Ahmedabad at Pune at that hour and received from that person gold ornaments which he had ordered earlier. Significantly the appellant Dinesh Kumar would have it that he did not even weigh the ornaments given by the person who represented M/s. Natwarlal Shamaldas of Ahmedabad.
16. It is also improbable that the student staying in Pune would indulge in gold transactions particularly in the absence of his father the Manager of the shop. The defence put forward by the appellant Dinesh Kumar to our mind appears highly improbable and unbelievable. In any case, three persons namely the Diwanji of the shop, the Manager of the shop and the grandfather of Shri Girish who would have, in the normal course, known the visit of Girish and his bringing gold from Pune to Manchar did not state in their statements that Girish had brought gold from Pune. One of them was the father of the appellant Dinesh Kumar, the other was his brother and the third was his Diwanji. They have no particular reason not to tell the Gold Control Officer as to the visit of Dinesh or his bringing gold ornaments if really he had visited and brought gold ornaments. We are inclined to hold that the entire defence was got up for the purposes of this case.
16A. It is true that the appellant did produce certain vouchers to evidence the purchases of gold from the gold dealers at Pune. But then these vouchers were not sent through Girish they were produced only after 16-2-1979; the appellant had come to know of the seizure on 13th itself and therefore he could manage to get the vouchers from the known dealers, apparently by ante-dating the vouchers.
17. Since we are inclined to accept the Collector's finding that the defence put forward by the appellant is unbelievable it is not necessary to consider the other contentions urged by Shri Solanki. However, we may point out that the acquittal of the appellant by the Additional Sessions Judge cannot be made a valid ground for setting aside the order passed by the Collector. Suffice it to say that the adjudicating authority is not governed by the provisions of the Evidence Act or the Criminal Procedure Code. The evidence before the Criminal Court and the evidence before the adjudicating authority are not identical. The nature of proof required in adjudication proceeding is altogether different from the nature of proof required in the criminal code. In his order, the Additional Sessions Judge had referred to tests to be applied for judging the guilty or otherwise of the accused. The tests referred to are:
(1) that the onus lies affirmatively on the prosecution to prove a case beyond reasonable doubt and it cannot derive any benefit from weakness or falsity of the defence version while proving its case, (2) that in a criminal trial the accused must be presumed to be innocent unless he is proved to be guilty, (3) that the onus of the prosecution never shifts.
The learned Sessions Judge also had referred to the observation of the Supreme Court to the effect that the Evidence Act does not contemplate that the accused should prove his case with the same strictness and rigour as the prosecution is required to prove a criminal charge. Bearing the above test in mind, the learned Sessions Judge had proceeded to evaluate the evidence in the criminal case. Thus it is seen that the very approach of the Sessions Judge was on the basis of the requirement of the Evidence Act which was not made applicable in terms to the adjudication proceedings. As has been held by the Bombay High Court in the Maniklal Pokhraj Jain's case 1986 (26) ELT 689 (Bom.) that by its very nature the proceedings before the Criminal Court and the proceeding before the adjudicating authority are independent of each other. Therefore, the acquittal passed by the Trial Magistrate and confirmation of that order in appeal would not be sufficient for recording contrary and inconsistent findings by the adjudicating authorities. It may be pointed out here that the acquittal of the accused was by the Sessions Judge after the adjudication. Therefore even the principle of issue estoppel is not applicable. Suffice if we refer to the following observation of the Bombay High Court for not accepting the acquittal of the appellant Dinesh Kumar. The relevant observations reads:
"By its very nature, the two proceedings are independent of each other. In a given case, evidence which may be available for the purposes of proceedings under Section 112 may not be available or even if it is available, it may be admissible in regular Court of law in which the admissibility and relevance of the evidence is determined with reference to the provisions of the Evidence Act. In a Criminal prosecution the accused need not open his mouth nor make any statement while in the proceedings for adjudication or confiscation before the Customs Department, the statement made by the person from whom the contraband articles were seized can be looked into. The scheme of the Act, therofore, clearly indicated that the two proceedings have to be dealt with independently of each other on such material as is available and permissible in these proceedings."
18. Since we have disbelieved the defence put forward by Shri Dinesh Kumar, the appeal filed by the appellant Gajanan S. Daine should fall. His version that a pair of patil was given to Girish is unbelievable since Girish's visit to Manchar itself was not believable. Therefore, we unhesitatingly reject the appeal 267 of 87.
19. Having regard to our finding that the defence put forward by Dinesh Kumar is unbelievable the order of confiscation passed by the Collector requires confirmation.
20. The only other aspect that remains for consideration is as to the harshness of the fine and penalty ordered by the Collector. The total value of the excess gold found was Rs. 1,35,180. The Collector had allowed redemption on payment of fine of Rs. 50.000/- and had imposed a penalty of Rs. 10.000/-. If it was a case of mere non-accountal or not entering in the statutory register, some leniency could have been shown. But then the defence put forth is altogether a false defence. Having regard to the object of the Gold (Control) Act we will not be justified in interfering with the imposition of fine and penalty. We, therefore confirm the confiscation, the fine levied in lieu of confiscation as well as the penalty imposed on the appellant Shri Dinesh Kumar.
21. In the result, both the appeals fall and the same are rejected.